Comfort Systems USA Reports First Quarter Results; Increased Backlog; Improved Outlook for the Rest of 2003.Business Editors HOUSTON--(BUSINESS WIRE)--May 5, 2003 Comfort Systems USA Inc. (NYSE NYSE See: New York Stock Exchange :FIX), a leading provider of commercial/industrial heating, ventilation ventilation, process of supplying fresh air to an enclosed space and removing from it air contaminated by odors, gases, or smoke. Proper ventilation requires also that there be a movement or circulation of the air within the space and that the temperature and and air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. ("HVAC (Heating Ventilation Air Conditioning) In the home or small office with a handful of computers, HVAC is more for human comfort than the machines. In large datacenters, a humidity-free room with a steady, cool temperature is essential for the trouble-free ") services, today announced a net loss of $4,816,000 or $0.13 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the quarter ended March 31, 2003, as compared to a net loss of $217,254,000 or $5.79 per diluted share, in the first quarter of 2002. These amounts include results of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . The 2002 results include two significant charges for unusual items - one relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the adoption of a new accounting standard for reporting of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , and another relating to the Company's sale of certain operations, principally 19 units sold to Emcor Group EMCOR Group NYSE: EME is a Fortune 500 company based in Norwalk, Connecticut. This company's businesses include mechanical and electrical construction, energy infrastructure, and facilities services. Inc. in March 2002. Excluding these items, net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the quarter was $4,003,000 or $0.11 per diluted share in the first quarter of 2003 as compared to a loss of $4,001,000 or $0.11 per diluted share in the first quarter of 2002. The Company reported revenues from continuing operations of $182,414,000 in the current quarter as compared to $189,626,000 in 2002. Bill Murdy, Comfort Systems USA's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "As we've we've Contraction of we have. we've have previously noted, our industry experienced further slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. through the first quarter amid renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. uncertainty over the economy and international events. We also had cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor on certain projects in two of our operations. With these developments occurring in what is already our traditionally slowest seasonal quarter during the year, we reported a net loss from continuing operations in the first quarter." Murdy continued, "While our first quarter results were disappointing, we are already seeing indications that activity levels in our industry will improve over the course of this year. Our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the first quarter was up 6% compared to both the beginning of the quarter as well as the comparable period in the prior year. In addition, we have launched significant new cost reduction efforts. Based on these developments along with continued strong emphasis on operational execution, we expect to be profitable in the second quarter, to produce positive free cash flow for the year as a whole, and to post improved operating results for 2003 as compared to 2002. With a strong balance sheet and a proven ability to generate profits and positive cash flow in very challenging industry conditions, we believe we are well positioned to produce increased net income, especially as economic conditions improve." The Company will host a conference call to discuss its financial results and position in more depth on Tuesday Tuesday: see week. , May 6, 2003 at 9:00 a.m. Central Time. The call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. number for this conference call is 773/756-4705. A replay of the entire call will be available until 9:00 a.m. Central Time, Tuesday, May 13, 2003 by calling 402/220-4182. Comfort Systems USA is a premier provider of business solutions addressing workplace comfort, with 84 locations in 57 cities around the nation. For more information, visit the Company's website at www.comfortsystemsusa.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on the current plans and expectations 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 lack of a combined operating history and the difficulty of integrating formerly separate businesses, retention of key management, national and regional declines in non-residential construction activity, difficulty in obtaining or increased costs associated with debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay or bonding, shortages of labor and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . , seasonal fluctuations in the demand for HVAC systems and the use of incorrect Incorrect means to not be correct and may also refer to:
- Financial table follows -
Comfort Systems USA Inc.
Consolidated Statements of Operations
For the Three Months Ended March 31, 2003 and 2002
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
-----------------------------------------
2003 % 2002 %
---------- -------- --------------------
Revenues $182,414 100.0% $189,626 100.0%
Cost of services 154,662 84.8% 159,376 84.0%
---------- -----------
Gross profit 27,752 15.2% 30,250 16.0%
SG&A 30,949 17.0% 32,393 17.1%
Restructuring charges 1,162 0.6% 1,878 1.0%
---------- -----------
Loss from operations (4,359) (2.4%) (4,021) (2.1%)
Interest expense, net 1,364 0.7% 1,869 1.0%
Other expense (income) 249 0.1% (312) (0.2%)
---------- -----------
Loss before taxes (5,972) (3.3%) (5,578) (2.9%)
Income tax benefit (1,969) (1,577)
---------- -----------
Loss from continuing
operations (4,003) (2.2%) (4,001) (2.1%)
Discontinued operations:
Operating income, net of
applicable income tax
benefit (expense) of $(54)
and $1,723 99 255
Estimated loss on
disposition, including
income tax expense of $231
and $25,978 (912) (10,987)
---------- -----------
Loss before cumulative effect
of change in accounting
principle (4,816) (14,733)
Cumulative effect of change
in accounting principle, net
of income tax benefit of
$26,317 - (202,521)
---------- -----------
Net loss $(4,816) $(217,254)
========== ===========
Income (loss) per share:
Basic-
Loss from continuing
operations $(0.11) $(0.11)
Discontinued operations -
Income from operations - 0.01
Estimated loss on
disposition (0.02) (0.29)
Cumulative effect of change
in accounting principle - (5.40)
---------- -----------
Net loss $(0.13) $(5.79)
========== ===========
Diluted -
Loss from continuing
operations $(0.11) $(0.11)
Discontinued operations -
Income from operations - 0.01
Estimated loss on
disposition (0.02) (0.29)
Cumulative effect of change
in accounting principle - (5.40)
---------- -----------
Net loss $(0.13) $(5.79)
========== ===========
Shares used in computing
income (loss) per share:
Basic 37,622 37,531
Diluted 37,622 37,531
Loss from operations $(4,359) $(4,021)
Restructuring charges 1,162 1,878
---------- -----------
Loss from operations,
excluding restructuring
charges $(3,197) (1.8%) $(2,143) (1.1%)
Loss from operations $(4,359) $(4,021)
Depreciation 1,336 1,611
Restructuring charges 1,162 1,878
---------- -----------
EBITDA $(1,861) (1.0%) $(532) (0.3%)
Loss from continuing
operations (after tax) $(4,003) $(4,001)
Restructuring charges (after
tax) 755 1,221
---------- -----------
Loss from continuing
operations (after tax),
excluding restructuring
charges $ (3,248) (1.8%) $ (2,780) (1.5%)
Diluted earnings per share-
loss from continuing
operations (after tax),
excluding restructuring
charges $ (0.09) $ (0.07)
Note 1: The diluted earnings per share data presented above
reflects the dilutive effect, if any, of stock options, convertible
notes, warrants and contingently issuable restricted stock which were
outstanding during the periods presented.
Note 2: Loss from operations excluding restructuring charges is
presented because it reflects operating results excluding items the
Company believes to be unusual. However, loss from operations
excluding restructuring charges is not considered as a primary measure
of an entity's financial results, and accordingly, this amount should
not be considered an alternative to operating income as determined
under generally accepted accounting principles as reported by the
Company.
Note 3: EBITDA is defined as income (loss) from operations,
excluding depreciation and restructuring charges. EBITDA may be
defined differently by other companies. EBITDA is presented because it
is a financial measure that is frequently requested by capital market
participants in evaluating the Company. However, EBITDA is not
considered under generally accepted accounting principles as a primary
measure of an entity's financial results, and accordingly, 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.
Note 4: The bottom two calculations in the above table show loss
from continuing operations (after tax) and related earnings per share
information excluding restructuring charges. The tax rate on these
items was computed using the pro forma effective tax rate of the
Company exclusive of these charges.
Comfort Systems USA Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31, Dec. 31,
2003 2002
--------- ---------
Cash and cash equivalents $11,329 $6,083
Accounts receivable, net 155,229 167,177
Costs and estimated earnings in excess of
Billings 16,868 17,881
Assets related to discontinued operations 1,397 2,643
Other current assets 29,431 30,759
--------- ---------
Total current assets 214,254 224,543
Property and equipment, net 15,361 16,072
Goodwill 112,545 112,545
Other noncurrent assets 12,575 13,375
--------- ---------
Total assets $354,735 $366,535
========= =========
Current maturities of long-term debt $1,980 $1,780
Accounts payable 53,759 56,496
Billings in excess of costs and estimated
Earnings 25,822 26,672
Liabilities related to discontinued
Operations 301 1,017
Other current liabilities 50,563 61,688
--------- ---------
Total current liabilities 132,425 147,653
Long-term debt, net of discount 19,274 10,604
Other long-term liabilities 2,931 3,192
--------- ---------
Total liabilities 154,630 161,449
Total equity 200,105 205,086
--------- ---------
Total liabilities and equity $354,735 $366,535
========= =========
Selected Cash Flow Data (in thousands):
Three Months
Ended
March 31,
-------------------
2003 2002
-------------------
Cash flow from operating activities $(2,343) $(9,262)
Cash flow from investing activities $(1,084) $142,499
Cash flow from financing activities $8,652 $(134,007)
Cash flow from operating activities $(2,343) $(9,262)
Taxes paid related to the sale of businesses 10,371 -
Purchases of property and equipment (1,087) (2,134)
Proceeds from sales of property and equipment 79 171
-------------------
Free cash flow $7,020 $(11,225)
Note 1: Free cash flow is defined as cash flow from operating
activities less items related to nonrecurring transactions such as
sales of businesses and customary capital expenditures plus the
proceeds from asset sales. Free cash flow may be defined differently
by other companies. Free cash flow is presented because it is a
financial measure that is frequently requested by capital market
participants in evaluating the Company. 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.
Note 2: Cash flow information for 2002 includes the results of
discontinued operations, including the 19 operations sold to Emcor in
the first quarter of 2002.
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