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TheStreet Open House

Comfort Systems USA Reports Fourth Quarter And Full Year Results

Note 2: Net income (loss) from continuing operations attributable to Comfort Systems USA, Inc. is income (loss) from continuing operations less net income (loss) attributable to noncontrolling interests.

Note 3: 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 EndedDecember 31,   Twelve Months EndedDecember 31,
2012   %   2011   % 2012   %   2011   %
Net income (loss) including noncontrolling interests $ 5,145 $ 2,085 $ 11,849 $ (36,492 )

Discontinued operations

(592 ) 2,532 (355 ) 4,018
Income taxes 4,014 701 10,045 (5,463 )
Other expense (income), net (63 ) (1,003 ) (145 ) (934 )
Changes in the fair value of contingent earn-out obligations (767 )

38

(662 )

(5,528

)
Interest expense, net 361 392 1,571 1,758
Gain on sale of assets (53

)

(74 ) (491 ) (236

)

Goodwill impairment 2,220 57,354
Depreciation and amortization   5,140   5,283   20,569   18,982
Adjusted EBITDA $ 13,185 4.2 % $ 12,174 3.9 % $ 42,381 3.2 % $ 33,459 2.8 %
 

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

 
 

December 31,2012

  December 31,2011
 
Cash and cash equivalents $ 40,757 $ 51,237
Accounts receivable, net 256,959 260,145
Costs and estimated earnings in excess of billings 26,204 26,602
Assets related to discontinued operations 1,582 11,407
Other current assets   47,051   41,159
Total current assets 372,553 390,550
Property and equipment, net 41,416 41,693
Goodwill 114,588 107,093
Identifiable intangible assets, net 44,515 48,349
Other noncurrent assets   7,682   6,295
Total assets $ 580,754 $ 593,980
 
Current maturities of long-term debt $ 300 $ 300
Current maturities of notes to former owners 332
Accounts payable 100,641 111,683
Billings in excess of costs and estimated earnings 73,814 70,635
Liabilities related to discontinued operations 767 4,257
Other current liabilities   93,065   93,577
Total current liabilities 268,587 280,784
Long-term debt, net of current maturities 2,100 2,400
Notes to former owners, net of current maturities 5,000 12,349
Other long-term liabilities   17,761   15,341
Total liabilities   293,448   310,874
Comfort Systems USA, Inc. stockholders’ equity 270,405 264,591
Noncontrolling interests   16,901   18,515
Total stockholders’ equity   287,306   283,106
Total liabilities and stockholders’ equity $ 580,754 $ 593,980
 
 

Selected Cash Flow Data (in thousands):

 
  Three Months EndedDecember 31,   Twelve Months EndedDecember 31,
(unaudited)
2012   2011 2012   2011
Cash provided by (used in):
Operating activities $ 27,078 $ 51,645 $ 30,510 $ 29,680
Investing activities $ (2,195 ) $ (29,417 ) $ (23,168 )

$

(35,750 )
Financing activities $ (19,791 ) $ (14,683 ) $ (17,822 ) $ (29,039 )
 
Free cash flow:
Cash from operating activities $ 27,078 $ 51,645 $ 30,510 $ 29,680
Purchases of property and equipment (2,377 ) (2,214 ) (11,782 ) (8,666 )
Proceeds from sales of property and equipment   139   106   1,106   717
 
Free cash flow $ 24,840 $ 49,537 $ 19,834 $ 21,731
 

Note 1: Free cash flow is defined as cash flow from operating activities excluding items related to the acquisition of businesses 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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