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Comfort Systems USA Reports Second Quarter Results

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As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Wednesday, August 3, 2011 at 10:00 a.m. Central Time. The call-in number for this conference call is 1-888-680-0890 and enter 88250415 as the passcode. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PWNVGQ3B4 . Pre-registrants will be issued a pin number to use when dialing in to 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, August 10, 2011 by calling 1-888-286-8010 with the conference passcode of 18596721, 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 OperationsFor the Three Months and Six Months Ended June 30, 2011 and 2010(in thousands, except per share amounts)(unaudited)

 
Three Months Ended Six Months Ended
June 30, June 30,

2011

    %     2010     % 2011     %     2010     %
Revenues $ 312,148 100.0 % $ 249,588 100.0 % $ 594,207 100.0 % $ 486,063 100.0 %
Cost of services   264,638 84.8 %   207,623 83.2 %   512,488 86.2 %   404,590 83.2 %
Gross profit 47,510 15.2 % 41,965 16.8 % 81,719 13.8 % 81,473 16.8 %
 
SG&A 41,928 13.4 % 35,611 14.3 % 84,550 14.2 % 73,020 15.0 %
Goodwill impairment 4,446 1.8 % 4,446 0.9 %
Gain on sale of assets   (19 )   (468 ) (0.2 )%   (104 )   (473 ) (0.1 )%
Operating income (loss) 5,601 1.8 % 2,376 1.0 % (2,727 ) (0.5 )% 4,480 0.9 %
 
Interest expense, net (443 ) (0.1 )% (209 ) (0.1 )% (904 ) (0.2 )% (430 ) (0.1 )%
Other income (expense)   517 0.2 %   (6 )   437 0.1 %   6
Income (loss) before income taxes 5,675 1.8 % 2,161 0.9 % (3,194 ) (0.5 )% 4,056 0.8 %
Income tax (benefit) expense   2,513   515   (1,186 )   1,245

Income (loss) from continuing  operations

3,162 1.0 % 1,646 0.7 % (2,008 ) (0.3 )% 2,811

0.6

%

 

Gain on disposition of discontinued  operation, including income tax  benefit of $—, $—, $— and $29

        762
 
Net income (loss) $ 3,162 $ 1,646 $ (2,008 ) $ 3,573
 
Income (loss) per share:
Basic-

Income (loss) from continuing  operations

$ 0.08 $ 0.04 $ (0.05 ) $ 0.08

Gain on disposition of discontinued  operation

        0.02
Net income (loss) $ 0.08 $ 0.04 $ (0.05 ) $ 0.10
 
Diluted -

Income (loss) from continuing  operations

$ 0.08 $ 0.04 $ (0.05 ) $ 0.07

Gain on disposition of discontinued  operation

        0.02
Net income (loss) $ 0.08 $ 0.04 $ (0.05 ) $ 0.09
 

Shares used in computing income (loss)  per share:

Basic 37,630 37,598 37,584 37,566
Diluted 37,742 37,848 37,584 37,834
 

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 Six Months Ended
June 30, June 30,
2011   %   2010   % 2011     %   2010   %
Net income (loss) from continuing operations $ 3,162 $ 1,646 $ (2,008

)

 

$ 2,811
Goodwill impairment (after tax)     2,674       2,674

Net income (loss) from continuing operations  excluding goodwill impairment

$

3,162

1.0

%

$

4,320

1.7

%

$

(2,008

)

 

(0.3

)%

$

5,485

1.1

%

 

Diluted earnings (loss) per share from  continuing operations excluding goodwill  impairment

 

$

 

0.08

 

$

 

0.11

 

$

 

(0.05

 

)

 

$

 

0.14

 

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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