UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
|
Date
of Report (Date of earliest event reported)
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November
3, 2009
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|||
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Comfort
Systems USA, Inc.
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||||
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(Exact
name of registrant as specified in its charter)
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||||
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Delaware
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1-13011
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76-0526487
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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675
Bering Drive, Suite 400
Houston,
Texas
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77057
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(713)
830-9600
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition
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Attached and incorporated herein by
reference as Exhibit 99.1 is a copy of a press release of Comfort Systems USA,
Inc., a Delaware corporation (the “Company”) dated November 3, 2009 reporting
the Company’s financial results for the third quarter of 2009.
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Item
8.01
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Other
Events
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Attached and incorporated herein by
reference as Exhibit 99.2 is a copy of a press release of the Company dated
November 3, 2009 reporting the Company’s declaration of a quarterly dividend on
the Company’s common stock to shareholders of record as of the close of business
on the record date, November 27, 2009.
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Item
9.01
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Financial
Statements and Exhibits
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The following
Exhibits are included herein:
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Exhibit
Number
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Exhibit
Title or Description
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|
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Exhibit
99.1
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Press
Release of Comfort Systems USA, Inc. dated November 3, 2009 reporting the
Company’s financial results for the third quarter of 2009.
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Exhibit
99.2
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Press
Release of Comfort Systems USA, Inc. dated November 3, 2009 reporting the
Company’s declaration of a quarterly dividend on the Company’s common
stock to shareholders of record as of the close of business on the record
date, November 27, 2009.
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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.
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COMFORT
SYSTEMS USA, INC.
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||
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Date: November
3, 2009
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By:
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/s/ Trent T.
McKenna
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Trent
T. McKenna
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Vice
President and General Counsel
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Comfort
Systems USA, Inc.
Current
Report on Form 8-K
Dated
November 3, 2009
EXHIBIT
INDEX
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Exhibit
Number
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Exhibit
Title or Description
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|
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Exhibit
99.1
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Press
Release of Comfort Systems USA, Inc. dated November 3, 2009 reporting the
Company’s financial results for the third quarter of 2009.
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|
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Exhibit
99.2
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Press
Release of Comfort Systems USA, Inc. dated November 3, 2009 reporting the
Company’s declaration of a quarterly dividend on the Company’s common
stock to shareholders of record as of the close of business on the record
date, November 27, 2009.
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Exhibit 99.1
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CONTACT:
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William
George
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675
Bering Drive, Suite 400
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Chief
Financial Officer
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Houston,
Texas 77057
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713-830-9600
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713-830-9600
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713-830-9696
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FOR IMMEDIATE
RELEASE
COMFORT
SYSTEMS USA REPORTS THIRD QUARTER RESULTS
-- Solid
Earnings and Cash Flows --
Houston, TX – November 3, 2009 –
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 $9,540,000 or $0.25 per diluted share,
for the quarter ended September 30, 2009, as compared to net income of
$13,765,000 or $0.34 per diluted share, in the third quarter of
2008. The Company reported revenues from continuing operations of
$291,591,000 in the current quarter, as compared to $346,705,000 in
2008. The Company also reported free cash flow of $23,143,000 in the
current quarter, as compared to $17,709,000 in 2008. Backlog as of
September 30, 2009 was $554,280,000 compared to $639,769,000 as of June 30,
2009. Backlog as of September 30, 2008 was $803,728,000.
Bill
Murdy, Comfort Systems USA’s Chairman and CEO, said, “Our operations maintained
solid profitability and success in a challenging environment. Our
workforce continues to deliver quality and results that set a high standard for
our industry. As expected, we continue to experience revenue and
backlog declines, although we are encouraged by our solid absolute backlog
levels and by our ability to book smaller projects and service
work. Free cash flow improved both sequentially and year-over-year,
with $23.1 million of cash flow in the quarter and an increase in cash balances
to $140 million as of September 30, 2009. The strength of our
workforce combined with our financial resources leave us confident that we will
earn more than our share of available business in the coming
months.”
The
Company reported net income for the nine months ended September 30, 2009 of
$26,580,000 or $0.69 per diluted share, as compared to net income of $37,199,000
or $0.92 per diluted share in 2008. Net income from continuing
operations for the nine months ended September 30, 2009 was $27,060,000 or $0.70
per diluted share as compared to $37,084,000 or $0.92 per diluted share for the
first nine months of 2008. The Company also reported revenues of
$872,214,000 from continuing operations for the first nine months of 2009, as
compared to $993,862,000 in 2008. Free cash flow for the nine months
ended September 30, 2009 was $38,834,000 as compared to free cash flow of
$36,834,000 in 2008.
Bill
Murdy concluded, “We remain optimistic that we will be solidly profitable and
can improve our competitive position in the markets we serve. We will
continue to invest in new and existing operations and we believe that over the
coming months we can 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 Wednesday, November 4, 2009 at
10:00 a.m. Central Time. The call-in number for this conference call
is 1-888-680-0878 and
enter 64503046 as the passcode. Participants may pre-register
for the call at https://www.theconferencingservice.com/prereg/key.process?key=P8JUFUDJG. 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, November 11, 2009 by calling
1-888-286-8010 with the conference passcode of 12896285, 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
75 locations in 71 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,
difficulty in obtaining or increased costs associated with bonding and
insurance, shortages of labor and specialty building materials, retention of key
management, our backlog failing to translate into actual revenue or profits,
errors in our percentage-of-completion method of accounting, the result of
competition in our 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 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, 2008. 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 –
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Comfort
Systems USA, Inc.
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Consolidated
Statements of Operations
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For
the Three Months and Nine Months Ended September 30, 2009 and
2008
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(in
thousands, except per share amounts)
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(unaudited)
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Three
Months Ended
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Nine
Months Ended
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|||||||||||||||||||||||||||||||
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September
30,
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September
30,
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|||||||||||||||||||||||||||||||
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2009
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%
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2008
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%
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2009
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%
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2008
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%
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|||||||||||||||||||||||||
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Revenues
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$ | 291,591 | 100.0 | % | $ | 346,705 | 100.0 | % | $ | 872,214 | 100.0 | % | $ | 993,862 | 100.0 | % | ||||||||||||||||
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Cost
of services
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234,186 | 80.3 | % | 280,011 | 80.8 | % | 701,335 | 80.4 | % | 806,784 | 81.2 | % | ||||||||||||||||||||
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Gross
profit
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57,405 | 19.7 | % | 66,694 | 19.2 | % | 170,879 | 19.6 | % | 187,078 | 18.8 | % | ||||||||||||||||||||
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SG&A
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41,713 | 14.3 | % | 45,078 | 13.0 | % | 126,175 | 14.5 | % | 128,397 | 12.9 | % | ||||||||||||||||||||
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Gain
on sale of assets
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(101 | ) | ― | (183 | ) | (0.1 | )% | (98 | ) | ― | (311 | ) | ― | |||||||||||||||||||
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Operating
income
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15,793 | 5.4 | % | 21,799 | 6.3 | % | 44,802 | 5.1 | % | 58,992 | 5.9 | % | ||||||||||||||||||||
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Interest
income (expense), net
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(184 | ) | (0.1 | )% | 188 | 0.1 | % | (454 | ) | (0.1 | )% | 1,004 | 0.1 | % | ||||||||||||||||||
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Other
income
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3 | ― | ― | ― | 5 | ― | 158 | ― | ||||||||||||||||||||||||
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Income
before income taxes
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15,612 | 5.4 | % | 21,987 | 6.3 | % | 44,353 | 5.1 | % | 60,154 | 6.1 | % | ||||||||||||||||||||
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Income
tax expense
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6,072 | 8,250 | 17,293 | 23,070 | ||||||||||||||||||||||||||||
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Income
from continuing operations
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9,540 | 3.3 | % | 13,737 | 4.0 | % | 27,060 | 3.1 | % | 37,084 | 3.7 | % | ||||||||||||||||||||
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Discontinued
operations:
Operating
income (loss), net of income tax (expense) benefit of $―, $(46), $133, and
$(145)
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― | 28 | (387 | ) | 115 | |||||||||||||||||||||||||||
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Estimated
loss on disposition, net of tax of $—, $—, $—, and $—
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― | ― | (93 | ) | ― | |||||||||||||||||||||||||||
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Net
income
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$ | 9,540 | $ | 13,765 | $ | 26,580 | $ | 37,199 | ||||||||||||||||||||||||
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Income
per share:
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||||||||||||||||||||||||||||||||
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Basic-
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||||||||||||||||||||||||||||||||
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Income
from continuing operations
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$ | 0.25 | $ | 0.35 | $ | 0.71 | $ | 0.94 | ||||||||||||||||||||||||
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Discontinued
operations -
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||||||||||||||||||||||||||||||||
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Income
(loss) from operations
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― | ― | (0.01 | ) | ― | |||||||||||||||||||||||||||
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Estimated
loss on disposition
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― | ― | ― | ― | ||||||||||||||||||||||||||||
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Net
income
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$ | 0.25 | $ | 0.35 | $ | 0.70 | $ | 0.94 | ||||||||||||||||||||||||
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Diluted
-
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||||||||||||||||||||||||||||||||
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Income
from continuing operations
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$ | 0.25 | $ | 0.34 | $ | 0.70 | $ | 0.92 | ||||||||||||||||||||||||
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Discontinued
operations -
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||||||||||||||||||||||||||||||||
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Income
(loss) from operations
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― | ― | (0.01 | ) | ― | |||||||||||||||||||||||||||
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Estimated
loss on disposition
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― | ― | ― | ― | ||||||||||||||||||||||||||||
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Net
income
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$ | 0.25 | $ | 0.34 | $ | 0.69 | $ | 0.92 | ||||||||||||||||||||||||
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Shares
used in computing income per share:
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||||||||||||||||||||||||||||||||
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Basic
|
37,995 | 39,403 | 38,135 | 39,625 | ||||||||||||||||||||||||||||
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Diluted
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38,382 | 40,048 | 38,533 | 40,296 | ||||||||||||||||||||||||||||
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):
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Three
Months Ended
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Nine Months
Ended
|
|||||||||||||||||||
|
September
30,
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September
30,
|
|||||||||||||||||||
|
2009
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%
|
2008
|
%
|
2009
|
%
|
2008
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%
|
|||||||||||||
|
Net
income
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$ | 9,540 | $ | 13,765 | $ | 26,580 | $ | 37,199 | ||||||||||||
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Discontinued
operations
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― | (28 | ) | 480 | (115 | ) | ||||||||||||||
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Income
taxes
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6,072 | 8,250 | 17,293 | 23,070 | ||||||||||||||||
|
Other
income
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(3 | ) | ― | (5 | ) | (158 | ) | |||||||||||||
|
Interest
(income) expense, net
|
184 | (188 | ) | 454 | (1,004 | ) | ||||||||||||||
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Gain
on sale of assets
|
(101 | ) | (183 | ) | (98 | ) | (311 | ) | ||||||||||||
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Depreciation
and amortization
|
3,250 | 3,659 | 9,802 | 9,494 | ||||||||||||||||
|
Adjusted
EBITDA
|
$ | 18,942 |
6.5%
|
$ | 25,275 |
7.3%
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$ | 54,506 |
6.2%
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$ | 68,175 |
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 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.
|
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Condensed
Consolidated Balance Sheets
|
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(in
thousands)
|
|
September
30,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
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(unaudited)
|
||||||||
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Cash
and cash equivalents
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$ | 139,863 | $ | 117,015 | ||||
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Accounts
receivable, net
|
228,250 | 266,602 | ||||||
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Costs
and estimated earnings in excess of billings
|
17,373 | 19,123 | ||||||
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Other
current assets
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44,792 | 40,905 | ||||||
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Assets
related to discontinued operations
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438 | 1,544 | ||||||
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Total
current assets
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430,716 | 445,189 | ||||||
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Property
and equipment, net
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34,083 | 35,650 | ||||||
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Goodwill
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95,590 | 90,940 | ||||||
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Identifiable
intangible assets, net
|
13,841 | 16,281 | ||||||
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Other
noncurrent assets
|
7,096 | 10,432 | ||||||
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Total
assets
|
$ | 581,326 | $ | 598,492 | ||||
|
Current
maturities of long-term debt
|
$ | ― | $ | ― | ||||
|
Current
maturities of notes to former owners
|
2,018 | 1,336 | ||||||
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Accounts
payable
|
75,291 | 98,190 | ||||||
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Billings
in excess of costs and estimated earnings
|
89,647 | 97,505 | ||||||
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Other
current liabilities
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98,993 | 100,957 | ||||||
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Liabilities
related to discontinued operations
|
― | 397 | ||||||
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Total
current liabilities
|
265,949 | 298,385 | ||||||
|
Long-term
debt, net of current maturities
|
― | ― | ||||||
|
Notes
to former owners, net of current maturities
|
6,607 | 9,363 | ||||||
|
Other
long-term liabilities
|
5,677 | 4,273 | ||||||
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Total
liabilities
|
278,233 | 312,021 | ||||||
|
Total
stockholders’ equity
|
303,093 | 286,471 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 581,326 | $ | 598,492 | ||||
Selected Cash Flow Data (in
thousands) (unaudited):
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Cash
provided by (used in):
|
||||||||||||||||
|
Operating
activities
|
$ | 24,803 | $ | 20,943 | $ | 44,754 | $ | 46,956 | ||||||||
|
Investing
activities
|
$ | (1,438 | ) | $ | (15,514 | ) | $ | (7,241 | ) | $ | (61,121 | ) | ||||
|
Financing
activities
|
$ | (3,917 | ) | $ | (4,637 | ) | $ | (14,665 | ) | $ | (23,166 | ) | ||||
|
Free
cash flow:
|
||||||||||||||||
|
Cash
from operating activities
|
$ | 24,803 | $ | 20,943 | $ | 44,754 | $ | 46,956 | ||||||||
|
Purchases
of property and equipment
|
(1,986 | ) | (3,773 | ) | (6,420 | ) | (10,778 | ) | ||||||||
|
Proceeds
from sales of property and equipment
|
326 | 539 | 500 | 656 | ||||||||||||
|
Free
cash flow
|
$ | 23,143 | $ | 17,709 | $ | 38,834 | $ | 36,834 | ||||||||
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.
Exhibit 99.2
|
675
Bering Drive, Suite 400
|
|||
|
CONTACT:
|
William
George
|
Houston,
Texas 77057
|
|
|
Chief
Financial Officer
|
713-830-9600
|
||
|
713-830-9600
|
713-830-9696
|
||
FOR IMMEDIATE
RELEASE
COMFORT
SYSTEMS USA DECLARES QUARTERLY DIVIDEND
Houston, TX – November 3, 2009 –
Comfort Systems USA, Inc. (NYSE: FIX), a leading provider of commercial,
industrial and institutional heating, ventilation and air conditioning (“HVAC”)
services, today announced that its board of directors declared a quarterly
dividend of $0.05 per share on Comfort Systems USA, Inc. common
stock. The dividend is payable on December 21, 2009 to shareholders
of record at the close of business on November 27, 2009.
Comfort
Systems USAÒ
is a premier provider of business solutions addressing workplace comfort, with
75 locations in 71 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, difficulty in obtaining or increased
costs associated with bonding and insurance, shortages of labor and specialty
building materials, retention of key management, our backlog failing to
translate into actual revenue or profits, errors in our percentage-of-completion
method of accounting, the result of competition in our 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 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, 2008.
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.