Comfort Systems USA Reports First Quarter Results.Business Editors HOUSTON--(BUSINESS WIRE)--May 9, 2001 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 revenues for the first quarter ended March 31, 2001, of $368,128,000 as compared to $362,566,000 in the first quarter of 2000. Net income was $1,100,000 or $0.03 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, as compared to $4,008,000 or $0.11 per diluted share in 2000. Bill Murdy, Comfort Systems USA's chairman and chief executive officer, said, "Our first quarter results mark a return to overall profitability and show positive free cash flow for the fourth consecutive quarter. We expect continuing improvement in operating results during the rest of 2001." Mr. Murdy continued, "While we believe our progress is on track, our first quarter results did come in at lower levels than last year. This resulted both from our restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activity and from shortfalls at certain operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon ." During the second half of 2000, the Company performed a thorough review of its operations and undertook restructuring steps including the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of selected operations. These operations reported aggregate operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $17.1 million in fiscal 2000. Although the Company has substantially completed these efforts, first quarter results included operating losses and costs associated with continuing shut-down and merger efforts at certain locations. In addition, the Company experienced year over year declines in income at four ongoing operations. These included a larger operation involved in multi-unit markets in the South and Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. , the Company's largest operating unit which is based in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , and one of the Company's mid-sized operations in the South. Management believes these entities will show improved results over the balance of this year. The Company also saw weak performance in an additional market where its operations are undergoing operational and management consolidation. More broadly, the Company noted a modest increase in the amount of project deferrals in certain markets while in other, stronger markets, skilled and technical labor availability continued to be tight. Mr. Murdy added, "We are continuing our intensive campaign to improve operational execution, with steady progress on that front. In our strategic initiatives, including energy efficiency and multi-location service, we are seeing more and more success." Energy Efficiency The nation's energy challenges take a higher profile with each passing week. The Company's ability to help customers adapt their energy-consuming facility systems and infrastructure to more volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. energy markets offers the Company a significant growth opportunity. So far this year, the Company has booked approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $26 million in new energy-efficiency-related projects as compared to approximately $30 million for the full year of 2000. Examples of the Company's capabilities include the following: -- An $11 million expansion of a plant that supplies chilled water to the heating and cooling systems for downtown buildings in a major Western city. This expansion has eliminated the need for at least one megawatt of new generation capacity the regional utility would have been required to build. -- A $2 million building system energy retrofit at four properties for a large, national owner/developer of retail and office projects. These are among the first sites in the owner/developer's portfolio to be retrofit for improved energy efficiency and management. The Company also arranged the financing for these projects. In addition, the owner/developer has retained the Company's energy consulting group to advise it on energy supply strategy in California and in connection with a substantial project it is considering for the Midwest. -- Identification and certification of more than $2 million in energy infrastructure rebates and incentives available to our customers from energy suppliers. A leading international consumer products company for whom the Company won incentives expanded the Company's assignments to include an additional $6 million of related mechanical design and installation work this quarter. Multi-Location Service Comfort Systems USA's national scope and service expertise offer significant value to multi-location property owners interested in reducing the number of their supplier relationships, and improving their costs and service levels. With these capabilities, the Company won a major contract to service almost half the U.S. for a large national retailer. Preventative maintenance alone on this account will be approximately $4 million annually, with retrofit ret·ro·fit v. ret·ro·fit·ted or ret·ro·fit, ret·ro·fit·ting, ret·ro·fits v.tr. 1. To provide (a jet, automobile, computer, or factory, for example) with parts, devices, or equipment not in and repair activity expected to add at least $10 million in revenues over the next twelve months. Mr. Murdy concluded, "We continue to be enthusiastic about improvement in our core HVAC operations and about expanding opportunities associated with our energy, national account and building automation strategies. The operational and organizational changes we made in the year 2000 have made us a stronger and better functioning operating company operating company A business that engages in transactions with outsiders. ." Comfort Systems USA will host its quarterly conference call to discuss first quarter results on Thursday Thursday: see week. , May 10 at 9 a.m. Central Standard Time. To participate in the call, dial 312/470-0022 ten minutes before the conference call begins and ask for the Comfort Systems USA conference. A replay of the entire call will be available until 9 a.m. Central Standard Time Thursday, May 17 by calling 402/998-1736. Comfort Systems USA is a premier provider of business solutions addressing workplace comfort, environments, processes and energy services, with more than 125 locations in 90 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 acquired businesses, retention of key management, a national downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. or one or more regional downturns in construction, shortages of labor and specialty 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 . , 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 , 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, 2001 & 2000
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
------------------------------------
2001 % 2000 %
-------- ----- -------- -----
Revenues $368,128 100.0% $362,566 100.0%
Cost of services 304,231 82.6% 291,699 80.5%
-------- --------
Gross profit 63,897 17.4% 70,867 19.5%
SG&A 52,494 14.3% 54,828 15.1%
Goodwill amortization 3,021 0.8% 3,183 0.9%
Restructuring charges 238 0.1% -- --
-------- --------
Income from operations 8,144 2.2% 12,856 3.5%
Interest expense, net 6,185 1.7% 5,926 1.6%
Other (income) expense (144) -- (102) --
-------- --------
Income before taxes 2,103 0.6% 7,032 1.9%
Income taxes 1,003 3,024
-------- --------
Net income $1,100 0.3% $4,008 1.1%
======== ========
Net income per share:
Basic $0.03 $0.11
Diluted $0.03 $0.11
Shares used in computing net
income per share:
Basic 37,385 37,560
Diluted 37,386 37,560
EBITDA $14,351 3.9% $18,963 5.2%
Note 1: The diluted earnings per share data presented above reflect
the dilutive effect, if any, of stock options and convertible
notes which were outstanding during the periods presented.
Note 2: EBITDA is defined as income from operations, excluding
restructuring charges, depreciation and amortization.
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