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TheStreet Open House

Comfort Systems USA Reports Fourth Quarter And Full Year Results

Stocks in this article: FIX

Bill Murdy concluded, “Nonresidential building construction experienced a very tough year, and we were solidly profitable, had excellent cash flow, and achieved material incremental growth through acquisitions. Despite same store revenue declines, particularly in new construction, we believe that our ability to preserve and add to the fundamental strength and core of our business in 2010 will result in Comfort Systems USA continuing to be an increasing force in the mechanical contracting business. Although challenging conditions have not yet subsided, we look forward to stabilization and profitability in 2011. We feel that we are poised to take advantage when markets strengthen.”

As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Wednesday, March 2, 2011 at 10:00 a.m. Central Time. The call-in number for this conference call is 1-888-680-0893 and enter 86991463 as the passcode. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key= PG8FT4GWU . 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, March 9, 2011 by calling 1-888-286-8010 with the conference passcode of 48502563, and will also be available on our website on the next business day following the call.

Comfort Systems USA ® 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 and Twelve Months Ended December 31, 2010 and 2009

(in thousands, except per share amounts)

   
Three Months Ended

December 31,

Twelve Months Ended

December 31,

  (unaudited)  
  2010 %     2009 %   2010 %     2009 %
Revenues

$

314,571

100.0% $ 256,693 100.0% $ 1,108,282 100.0% $ 1,128,907 100.0%
Cost of services   257,671 81.9%   202,022 78.7%   919,600 83.0%   903,357 80.0%
Gross profit 56,900 18.1% 54,671 21.3% 188,682 17.0% 225,550 20.0%
 
SG&A 48,526 15.4% 42,848 16.7% 163,431 14.7% 169,023 15.0%
Goodwill impairment 1,288 0.4% 5,734 0.5%
Gain on sale of assets   (23 )   (8 )   (525 )   (106 )
Operating income 7,109 2.3% 11,831 4.6% 20,042 1.8% 56,633 5.0%
 
Interest expense, net (283 ) (0.1)% (163 ) (0.1)% (1,506 ) (0.1)% (617 ) (0.1)%
Other income   1,166 0.4%   12   1,841 0.2%   17
Income before income taxes 7,992 2.5% 11,680 4.6% 20,377 1.8% 56,033 5.0%
Income tax expense   2,196   4,144   6,360   21,437
Income from continuing operations 5,796 1.8% 7,536 2.9% 14,017 1.3% 34,596 3.1%
 

Discontinued operations:

Operating income (loss), net ofincome tax benefit of $―, $48,$―, and $181

 

 

48

 

 

(339

)

Estimated gain (loss) on disposition,net of tax expense of $―, $(214),$(166) and $(214)

   

18

  723   (75 )
 
Net income $ 5,796 1.8% $ 7,602 3.0% $ 14,740 1.3% $ 34,182 3.0%
 
Income per share:
Basic-
Income from continuing operations $ 0.15 $ 0.20 $ 0.37 $ 0.91
Discontinued operations -
Loss from operations (0.01 )
Estimated gain (loss) on disposition       0.02  
Net income $ 0.15 $ 0.20 $ 0.39 $ 0.90
 
Diluted -
Income from continuing operations $ 0.15 $ 0.20 $ 0.37 $ 0.90
Discontinued operations -
Loss from operations (0.01 )
Estimated gain (loss) on disposition       0.02  
Net income $ 0.15 $ 0.20 $ 0.39 $ 0.89
 
Shares used in computing income per share:

 

Basic 37,505 37,780 37,549 38,046
Diluted 37,699 38,208 37,790 38,451

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 – (Unaudited):

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
  2010   %     2009   %   2010   %     2009   %
Income from continuing operations $ 5,796 $ 7,536 $ 14,017 $ 34,596
Goodwill impairment (after tax)   642     3,316  
Income from continuing operations excluding goodwill impairment

$

6,438

2.0%

$

7,536

2.9%

$

17,333

1.6%

$

34,596

3.1%

 
 

Diluted earnings per share from continuing operations excluding goodwill impairment

 

$

 

0.17

 

 

$

 

0.20

 

 

$

 

0.46

 

$

 

0.90

Note 1: Operating results from continuing operations, excluding goodwill impairment, is presented because the Company believes it reflects the results of the core ongoing operations of the Company, and because we believe it is responsive to frequent questions we receive from third parties. However, this measure is not considered a primary measure of an entity’s financial results under generally accepted accounting principles, and accordingly, this amount should not be considered an alternative to operating results as determined under generally accepted accounting principles and as reported by the Company.

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