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Comfort Systems USA Reports Second Quarter Results

Note 2: The tax rate on these items was computed using the pro forma effective tax rate of the Company exclusive of these charges.

 

Supplemental Non-GAAP Information – Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) (Unaudited):

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2011   %   2010   % 2011   %   2010 %
Net income (loss) $ 3,162 $ 1,646 $ (2,008 ) $ 3,573
Discontinued operation (762 )
Income taxes 2,513 515 (1,186 ) 1,245
Other expense (income), net

(517

)

6 (437 ) (6 )
Interest expense, net 443 209 904 430
Gain on sale of assets (19 ) (468 ) (104 ) (473 )
Goodwill impairment 4,446 4,446
Depreciation and amortization   4,713   3,444   9,532   7,080
Adjusted EBITDA $ 10,295 3.3 % $ 9,798 3.9 % $ 6,701 1.1 % $ 15,533 3.2 %
 

Note 1: The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net income (loss), excluding discontinued operation, income taxes, other (income) expense, 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 (loss), net income (loss), 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)

 
June 30, December 31,
2011 2010
(unaudited)
 
Cash and cash equivalents $ 50,101 $ 86,346
Accounts receivable, net 255,286 233,893
Costs and estimated earnings in excess of billings 26,423 26,648
Other current assets   54,090   56,061
Total current assets 385,900 402,948
Property and equipment, net 41,039 43,620
Goodwill 148,986 147,818
Identifiable intangible assets, net 37,388 39,616
Other noncurrent assets   8,231   6,018
Total assets $ 621,544 $ 640,020
 
Current maturities of long-term debt $ 300 $ 300
Current maturities of notes to former owners 460 967
Accounts payable 98,202 101,134
Billings in excess of costs and estimated earnings 61,558 63,422
Other current liabilities   97,545   102,387
Total current liabilities 258,065 268,210
Long-term debt, net of current maturities 2,700 2,700
Notes to former owners, net of current maturities 24,919 25,969
Other long-term liabilities   30,477   30,357
Total liabilities 316,161 327,236
Total stockholders’ equity   305,383   312,784
Total liabilities and stockholders’ equity $ 621,544 $ 640,020
 
   

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

 
Three Months Ended Six Months Ended
June 30, June 30,
2011   2010 2011   2010
Cash provided by (used in):
Operating activities $ (4,377 ) $ 762 $ (23,443 ) $ (10,699 )
Investing activities $ (1,892 ) $ 1,302 $ (3,766 ) $ (1,252 )
Financing activities $ (7,266 ) $ (4,232 ) $ (9,036 ) $ (8,297 )
 
Free cash flow:
Cash from operating activities $ (4,377 ) $ 762 $ (23,443 ) $ (10,699 )
Purchases of property and equipment (1,544 ) (860 ) (3,904 ) (2,082 )
Proceeds from sales of property and equipment   134   1,115   381   1,218
 
Free cash flow $ (5,787 ) $ 1,017 $ (26,966 ) $ (11,563 )
 

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.

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