Comfort Systems USA Reports First Quarter Results; Strong Increases in Net Income and Revenues.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- Comfort Systems USA, Inc. (NYSE NYSE See: New York Stock Exchange :FIX), a leading provider of commercial, industrial and institutional 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 net income of $4,327,000 or $0.11 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, 2006, as compared to net income of $529,000 or $0.01 per diluted share, in the first quarter of 2005. 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, "Strong commercial construction market fundamentals and outstanding execution by our team members helped us post substantial same quarter increases in virtually all of our activity and profit measures. We are especially pleased to demonstrate outstanding improvement in earnings and revenues over the same quarter last year." The Company reported revenues 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 of $237,854,000 in the current quarter, an increase of 21.8% as compared to $195,260,000 in 2005. Following a very strong fourth quarter cash flow, the Company reported negative free cash flow of $15,428,000 in the current quarter which was funded entirely by existing cash balances. 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. as of March 31, 2006 was a record $727,188,000, up 6.7% from $681,668,000, as of December December: see month. 31, 2005. Murdy continued, "As in past first calendar quarters we made a sizeable investment in working capital as same store revenues increased substantially. Our cash metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. remain strong and we expect to translate (1) To change one language into another; for example, assemblers, compilers and interpreters translate source language into machine language. (2) In computer graphics, to move an image on screen without rotating it. our earnings into good cash performance as the year progresses." Bill Murdy concluded, "We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our strong backlog and expected industry fundamentals give us a solid foundation for continued strong results as 2006 progresses." As previously announced, the Company will host a conference call to discuss its financial results and position in more depth on Thursday Thursday: see week. , May 4, 2006 at 10:00 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 1-210-234-0008. A replay of the entire call will be available until 6:00 p.m. Central Time, Thursday, May 11, 2006 by calling 1-203-369-3390. Comfort Systems USA is a premier provider of business solutions addressing workplace comfort, with 56 locations in 50 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, retention of key management, national or regional weakness in non-residential construction activity, difficulty in obtaining or increased costs associated with 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:
Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any forward-looking statement contained herein to reflect any change in Comfort Systems USA, Inc.'s expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or any change in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statement is based.
-- Financial table follows --
Comfort Systems USA, Inc.
Consolidated Statements of Operations
For the Three Months Ended March 31, 2006 and 2005
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
-------------------------------------
2006 % 2005 %
--------- -------- ---------- -------
Revenues $237,854 100.0% $195,260 100.0%
Cost of services 201,010 84.5% 167,884 86.0%
---------- ----------
Gross profit 36,844 15.5% 27,376 14.0%
SG&A 30,134 12.7% 26,119 13.4%
Gain on sale of assets (16) - (29) -
---------- ----------
Income from operations 6,726 2.8% 1,286 0.7%
Interest expense (income), net (492) (0.2%) 247 0.1%
Other expense (income) (19) - (10) -
---------- ----------
Income before taxes 7,237 3.0% 1,049 0.5%
Income taxes 2,910 497
---------- ----------
Income from continuing operations 4,327 1.8% 552 0.3%
Discontinued operations:
Operating loss, net of income
tax expense of $8 - (23)
---------- ----------
Net income $4,327 $529
========== ==========
Income per share:
Basic-
Income from continuing
operations $0.11 $0.01
Discontinued operations-
Loss from operations - -
---------- ----------
Net income $0.11 $0.01
========== ==========
Diluted-
Income from continuing
operations $0.11 $0.01
Discontinued operations-
Loss from operations - -
---------- ----------
Net income $0.11 $0.01
========== ==========
Shares used in computing income
per share:
Basic 39,857 38,990
Diluted 40,862 40,062
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 - Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("Adjusted EBITDA") (Unaudited):
Three Months Ended
March 31,
---------------------------------
2006 % 2005 %
--------- ------ --------- ------
Net income $4,327 $529
Discontinued operations - 23
Income taxes 2,910 497
Other expense (income) (19) (10)
Interest expense (income), net (492) 247
Gain on sale of assets (16) (29)
Depreciation and amortization 1,258 976
--------- ---------
Adjusted EBITDA $7,968 3.3% $2,233 1.1%
========= =========
Note 1: The Company defines adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) as net income,
excluding discontinued operations, income taxes, other expense
(income), interest expense (income), net, gain on sale of assets 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, net income, 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)
March 31, December 31,
2006 2005
-------------- --------------
(unaudited)
Cash and cash equivalents $58,361 $55,593
Accounts receivable, net 206,410 197,121
Receivable from sale of operations - 23,800
Costs and estimated earnings in excess
of billings 25,249 22,992
Assets related to discontinued
operations 469 506
Other current assets 24,970 25,387
-------------- --------------
Total current assets 315,459 325,399
Property and equipment, net 13,547 12,844
Goodwill 62,954 62,954
Other noncurrent assets 7,180 7,486
-------------- --------------
Total assets $399,140 $408,683
============== ==============
Current maturities of long-term debt $- $-
Accounts payable 67,945 72,154
Billings in excess of costs and
estimated earnings 57,150 53,440
Liabilities related to discontinued
operations 62 63
Other current liabilities 55,451 69,503
-------------- --------------
Total current liabilities 180,608 195,160
Long-term debt - -
-------------- --------------
Total liabilities 180,608 195,160
Total equity 218,532 213,523
-------------- --------------
Total liabilities and equity $399,140 $408,683
============== ==============
Selected Cash Flow Data (in thousands) (unaudited):
---------------------------------------------------
Three Months Ended
March 31,
-----------------------------
2006 2005
-------------- --------------
Cash flow from operating activities $(20,508) $(5,541)
Cash flow from investing activities $22,655 $(4,633)
Cash flow from financing activities $621 $52
Cash flow from operating activities $(20,508) $(5,541)
Purchases of property and equipment (2,049) (2,043)
Proceeds from sales of property and
equipment 109 148
Taxes paid related to the sale of
businesses 7,020 -
-------------- --------------
Free cash flow $(15,428) $(7,436)
============== ==============
Note 1: Free cash flow is defined as cash flow from operating
activities excluding items related to sale 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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