Comfort Systems USA Reports Fourth Quarter and Full Year Results; Significant Increases in Earnings, Cash Flow and Backlog.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 $2,006,000 or $0.05 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 Dec. 31, 2004, as compared to a loss of $3,511,000 or $0.12 per diluted share, in the fourth quarter of 2003. Both current and prior year fourth quarters included income relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Excluding these items, income 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 in the fourth quarter of 2004 was $1,388,000 or $0.03 per diluted share as compared to a loss of $2,038,000 or $0.08 per diluted share in 2003. Both the current and prior year fourth quarters contained charges that are not typically seen in every quarter. Both periods included noncash goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges. In addition, fourth quarter 2003 results also included net noncash charges Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. associated with the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the Company's previous credit facility. Excluding these items, net income in the fourth quarter of 2004 was $4,735,000 or $0.12 per diluted share as compared to $2,135,000 or $0.05 per diluted share in 2003. Excluding the effect of nondeductible non·de·duct·i·ble adj. Not deductible, especially for income-tax purposes. Adj. 1. nondeductible - not allowable as a deduction deductible - acceptable as a deduction (especially as a tax deduction) goodwill charges, both of these periods also benefited from unusually low tax provisions resulting from reduced reserves against deferred state tax benefits in 2004, and reduced tax contingency contingency n. an event that might not occur. reserves net of an increase in deferred state tax benefit reserves in 2003. Applying a tax rate of 42% against pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income in both periods, fourth quarter 2004 net income was $3,688,000 or $0.09 per diluted share as compared to $1,078,000 or $0.03 per diluted share for the fourth quarter of 2003. 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, "We are pleased to cap a strong 2004 with a solid fourth quarter performance. We continued to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. rebounding activity in our markets, posting our largest 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. increases to date on the way to our fourth consecutive record backlog. Revenue growth and margin improvement, led by our continuing emphasis on safety and risk management, contributed to improved earnings. And we produced a significant amount of free cash flow during the quarter, reflecting a notable increase over last year's fourth quarter and widening our strong net cash position on the balance sheet. We have now generated positive free cash flow in fifteen of our last nineteen quarters." Murdy continued, "We did record a noncash goodwill impairment charge of $3,347,000 in the fourth quarter, comparable to a similar charge of $2,726,000 in last year's fourth quarter. This charge related to our conclusion that profit levels at three of our smaller operations were likely to remain lower for an extended period of time as compared to the levels these units earned when we acquired them in the late 1990s in stronger overall market conditions. We would note that the new accounting rules relating to goodwill that went into effect in 2002 contemplate periodic impairments of goodwill for business units that have declined in value, while allowing no recognition of increases in business unit values that may have occurred. As a result, we may record additional goodwill impairments in future years, even when the aggregate value of our business units and our company as a whole may be increasing." The Company reported revenues from continuing operations of $211,273,000 in the current quarter, an increase of 7.0% as compared to $197,363,000 in 2003. The Company also reported free cash flow of $11,847,000 in the current quarter as compared to $8,362,000 in 2003. Backlog as of Dec. 31, 2004 was a record $573,426,000, up 11.1% from $516,344,000, the previous record as of Sept. 30, 2004, and up 42.0% from $403,896,000 on a same-store basis as of Dec. 31, 2003. The Company reported net income for the year ended Dec. 31, 2004 of $10,713,000 or $0.27 per diluted share as compared to a loss of $5,579,000 or $0.17 per diluted share in 2003. Excluding discontinued operations, net income from continuing operations was $10,193,000 or $0.26 per diluted share as compared to a loss of $1,136,000 or $0.05 per diluted share. Excluding goodwill impairment charges in both years and excluding charges in 2003 for 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). , debt cost writeoff writeoff A reduction to zero in the value of an asset carried on a firm's financial statement. Companies often hesitate to make writeoffs because profits reported to stockholders are reduced. , and divested units not reported in discontinued operations, net income from ongoing operations in 2004 was $13,540,000 or $0.34 per diluted share as compared to $6,158,000 or $0.16 per diluted share in 2003. Excluding the effect of nondeductible goodwill charges, both of these periods also benefited from unusually low tax provisions resulting from reduced reserves against deferred state tax benefits in 2004, and reduced tax contingency reserves net of an increase in deferred state tax benefit reserves in 2003. Applying a tax rate of 42% against pre-tax income in both periods, 2004 net income was $12,648,000 or $0.32 per diluted share as compared to $4,971,000 or $0.13 per diluted share for the full year of 2003. The Company reported revenues of $819,552,000 from continuing operations for 2004 as compared to $783,171,000 in 2003. Excluding divested units not reported in discontinued operations, same-store revenues were up 5.2% from $779,130,000 in 2003. Free cash flow for 2004 was $21,731,000 as compared to $21,534,000 in 2003. Bill Murdy further noted, "We are also pleased to have reached an important milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. in today's heightened accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. environment for public companies. Consistent with the expectations and requirements of the Sarbanes-Oxley Act See SOX. of 2002, we conducted an extensive evaluation of the Company's internal controls over financial reporting, which led to management's conclusion, and our auditors' concurrence CONCURRENCE, French law. The equality of rights, or privilege which several persons-have over the same thing; as, for example, the right which two judgment creditors, Whose judgments were rendered at the same time, have to be paid out of the proceeds of real estate bound by them. Dict. de Jur. h.t. , that these controls were operating effectively as of Dec. 31, 2004." Murdy continued, "As we start 2005, we see some indications that our first quarter results will be off compared to last year primarily due to extended inclement in·clem·ent adj. 1. Stormy: inclement weather. 2. Showing no clemency; unmerciful. in·clem weather in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , and uneven customer project schedules at a large operation of ours with a significant backlog. More broadly, though, industry indicators including nonresidential Adj. 1. nonresidential - not residential; "the commercial or nonresidential areas of a town"; "community colleges are typically nonresidential" residential - used or designed for residence or limited to residences; "a residential hotel"; "a residential quarter"; "a activity and equipment trends reported by HVAC manufacturers continued to strengthen at the end of 2004. These factors together with our strong backlog imply that we will have increased revenues in 2005. In addition, we believe our ongoing productivity and execution efforts will continue to help our margins. For 2005 as a whole, we expect to build on the strong year we just completed in 2004 and again produce better year-over-year results." 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. , March 3, 2005 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 1-212-287-1615. A replay of the entire call will be available until 6:00 p.m. Central Time, Thursday, March 10, 2004 by calling 1-203-369-1780. Comfort Systems USA is a premier provider of business solutions addressing workplace comfort, with 60 locations in 49 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 and regional weakness 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:
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 and Twelve Months Ended Dec. 31, 2004 and 2003
(in thousands, except per share amounts)
Three Months Ended
December 31, (Unaudited)
---------------------------------------
2004 % 2003 %
---------- -------- ---------- --------
Revenues $211,273 100.0% $197,363 100.0%
Cost of services 176,094 83.3% 167,246 84.7%
---------- ----------
Gross profit 35,179 16.7% 30,117 15.3%
SG&A 28,541 13.5% 27,031 13.7%
Restructuring charges - - - -
Goodwill impairment 3,347 1.6% 2,726 1.4%
---------- ----------
Income from operations 3,291 1.6% 360 0.2%
Interest expense, net 281 0.1% 1,155 0.6%
Other expense (income) (2) - 73 -
Write-off of debt costs and
discount, net - - 3,349 1.7%
---------- ----------
Income (loss) before taxes 3,012 1.4% (4,217) (2.1%)
Income taxes 1,624 (2,179)
---------- ----------
Income (loss) from continuing
operations 1,388 0.7% (2,038) (1.0%)
Discontinued operations:
Operating income, net of
income tax expense of
$0, $32, $27 and $486 - 52
Estimated gain (loss) on
disposition, including
income tax benefit of
$247, $807, $12 and $533 618 (1,525)
---------- ----------
Net income (loss) $2,006 $(3,511)
========== ==========
Income (loss) per share:
Basic-
Income (loss) from
continuing operations $0.03 $(0.05)
Discontinued operations-
Income from operations - -
Estimated gain (loss) on
disposition 0.02 (0.04)
---------- ----------
Net income (loss) $0.05 $(0.09)
========== ==========
Diluted-
Income from continuing
operations $0.03 $(0.08)
Discontinued operations-
Income from operations - -
Estimated gain (loss) on
disposition 0.02 (0.04)
---------- ----------
Net income (loss) $0.05 $(0.12)
========== ==========
Shares used in computing
income (loss) per share:
Basic 38,740 37,831
Diluted 39,908 38,240
Twelve Months Ended
December 31,
---------------------------------------
2004 % 2003 %
---------- -------- ---------- --------
Revenues $819,552 100.0% $783,171 100.0%
Cost of services 687,948 83.9% 657,325 83.9%
---------- ----------
Gross profit 131,604 16.1% 125,846 16.1%
SG&A 108,000 13.2% 114,030 14.6%
Restructuring charges - - 3,223 0.4%
Goodwill impairment 3,347 0.4% 2,726 0.3%
---------- ----------
Income from operations 20,257 2.5% 5,867 0.7%
Interest expense, net 1,394 0.2% 3,827 0.5%
Other expense (income) 403 - 178 -
Write-off of debt costs and
discount, net - - 4,172 0.5%
---------- ----------
Income (loss) before taxes 18,460 2.3% (2,310) (0.3%)
Income taxes 8,267 (1,174)
---------- ----------
Income (loss) from
continuing operations 10,193 1.2% (1,136) (0.1%)
Discontinued operations:
Operating income, net of
income tax expense of
$0, $32, $27 and $486 39 767
Estimated gain (loss) on
disposition, including
income tax benefit of
$247, $807, $12 and $533 481 (5,210)
---------- ----------
Net income (loss) $10,713 $(5,579)
========== ==========
Income (loss) per share:
Basic-
Income (loss) from
continuing operations $0.27 $(0.03)
Discontinued operations-
Income from operations - 0.02
Estimated gain (loss) on
disposition 0.01 (0.14)
---------- ----------
Net income (loss) $0.28 $(0.15)
========== ==========
Diluted-
Income from continuing
operations $0.26 $(0.05)
Discontinued operations-
Income from operations - 0.02
Estimated gain (loss)
on disposition 0.01 (0.14)
---------- ----------
Net income (loss) $0.27 $(0.17)
========== ==========
Shares used in computing
income (loss) per share:
Basic 38,409 37,702
Diluted 39,505 38,111
Note 1: The diluted earnings per share data presented above reflects
the dilutive effect, if any, of stock options, warrants and
contingently issuable restricted stock which were outstanding during
the periods presented.
Supplemental Information Relating to Earnings (Loss) Per Share
(amounts in thousands, except for per share amounts):
Three Months Ended Three Months Ended
December 31, 2004 December 31, 2003
(Unaudited) (Unaudited)
------------------------- --------------------------
Income
Income (loss)
from from
continuing continuing Income
operations Income operations (loss)
(after per (after per
tax) Shares share tax) Shares share
---------- ------- ------ ---------- ------- -------
Basic earnings
(loss) per share $1,388 38,740 $0.03 $(2,038) 37,831 $(0.05)
Adjustment to
income from
continuing
operations
(after tax):
Remove mark-to-
market increase
(decrease) in
the amount of
warrant and
put
obligation
(after tax) (8) 300
Remove reduction
in valuation
of warrant and
put obligation
(after tax) (1,324)
Adjustments to
shares:
Effect of shares
issuable under
stock option
plans 999 -(a)
Effect of shares
issuable related
to warrant 115 409
Effect of
contingently
issuable
restricted
shares 54 -(a)
---------- ------- ------ ---------- ------- -------
Diluted earnings
(loss) per share $1,380 39,908 $0.03 $(3,062) 38,240 $(0.08)
========== ======= ====== ========== ======= =======
Twelve Months Ended Twelve Months Ended
December 31, 2004 December 31, 2003
-------------------------- --------------------------
Income
Income (loss)
from from
continuing continuing Income
operations Income operations (loss)
(after per (after per
tax) Shares share tax) Shares share
---------- -------- ------ ---------- ------- -------
Basic earnings
(loss) per share $10,193 38,409 $0.27 $(1,136) 37,702 $(0.03)
Adjustment to
income from
continuing
operations
(after tax):
Remove mark-to-
market
increase in
the amount
of warrant
and put
obligation
(after tax) -(b) 488
Remove
reduction in
valuation
of warrant and
put
obligation
(after tax) (1,324)
Adjustments to
shares:
Effect of shares
issuable under
stock option
plans 1,056 -(a)
Effect of shares
issuable related
to warrant -(b) 409
Effect of
contingently
issuable
restricted
shares 40 -(a)
---------- -------- ------ ---------- ------- -------
Diluted earnings
(loss) per share $10,193 39,505 $0.26 $(1,972) 38,111 $(0.05)
========== ======== ====== ========== ======= =======
(a) Due to the loss incurred in this period, these shares are excluded
in the computation of diluted earnings (loss) per share because
they have an anti-dilutive impact.
(b) Exclusion of the mark-to-market adjustment to the amount of the
warrant and put obligation for this period would increase earnings
per share, or be anti-dilutive. In accordance with generally
accepted accounting principles, this anti-dilutive impact is
excluded from determining diluted earnings (loss) per share. The
warrant was exercised, and the related put rights terminated, in
October, 2004.
Supplemental Non-GAAP Information Relating to Ongoing Operations
(Unaudited):
Three Months Ended
December 31,
---------------------------------
2004 % 2003 %
--------- ------ --------- ------
Revenues $211,273 $197,363
Divested units not reflected in
discontinued operations - -
--------- ---------
Revenues from ongoing operations 211,273 100.0% 197,363 100.0%
--------- ---------
Cost of services 176,094 167,246
Divested units not reflected in
discontinued operations - -
--------- ---------
Cost of services from ongoing
operations 176,094 83.3% 167,246 84.7%
--------- ---------
Gross profit from ongoing operations 35,179 16.7% 30,117 15.3%
--------- ---------
Selling, general and administrative
expenses 28,541 27,031
Divested units not reflected in
discontinued operations - -
--------- ---------
Selling, general and administrative
expenses from ongoing operations 28,541 13.5% 27,031 13.7%
--------- ---------
Operating income from ongoing
operations, excluding restructuring
charges and goodwill impairment 6,638 3.1% 3,086 1.6%
--------- ---------
Interest expense, net 281 0.1% 1,155 0.6%
Other expense (income) (2) - 73 -
--------- ---------
Income from ongoing operations
before income taxes, excluding
restructuring charges, goodwill
impairment and the write-off of
debt costs and discount, net 6,359 1,858
Income taxes 1,624 (277)
--------- ---------
Income from ongoing operations
(after tax), excluding
restructuring charges, goodwill
impairment and the write-off of
debt costs and discount, net $ 4,735 2.2% $2,135 1.1%
========= =========
Income (loss) from continuing
operations
(after tax) $1,388 $(2,038)
Divested units not reflected in
discontinued operations (after tax) - -
Restructuring charges (after tax) - -
Goodwill impairment (after tax) 3,347 2,460
Write-off of debt costs and
discount, net
(after tax) - 1,713
--------- ---------
Income from ongoing operations
(after tax), excluding
restructuring charges, goodwill
impairment and the write-off of
debt costs and discount, net $4,735 2.2% $2,135 1.1%
========= =========
Diluted earnings per share - income
from ongoing operations (after
tax), excluding restructuring
charges, goodwill impairment and
the write-off of debt costs and
discount, net $0.12 $0.05
Twelve Months Ended
December 31,
---------------------------------
2004 % 2003 %
--------- ------ --------- ------
Revenues $819,552 $783,171
Divested units not reflected in
discontinued operations - (4,041)
--------- ---------
Revenues from ongoing operations 819,552 100.0% 779,130 100.0%
--------- ---------
Cost of services 687,948 657,325
Divested units not reflected in
discontinued operations - (4,046)
--------- ---------
Cost of services from ongoing
operations 687,948 83.9% 653,279 83.8%
--------- ---------
Gross profit from ongoing operations 131,604 16.1% 125,851 16.2%
--------- ---------
Selling, general and administrative
expenses 108,000 114,030
Divested units not reflected in
discontinued operations - (754)
--------- ---------
Selling, general and administrative
expenses from ongoing operations 108,000 13.2% 113,276 14.5%
--------- ---------
Operating income from ongoing
operations, excluding restructuring
charges and goodwill impairment 23,604 2.9% 12,575 1.6%
--------- ---------
Interest expense, net 1,394 0.2% 3,827 0.5%
Other expense (income) 403 - 178 -
--------- ---------
Income from ongoing operations
before income taxes, excluding
restructuring charges, goodwill
impairment and the write-off of
debt costs and discount, net 21,807 8,570
Income taxes 8,267 2,412
--------- ---------
Income from ongoing operations
(after tax), excluding
restructuring charges, goodwill
impairment and the write-off of
debt costs and discount, net $13,540 1.7% $6,158 0.8%
========= =========
Income (loss) from continuing
operations
(after tax) $10,193 $(1,136)
Divested units not reflected in
discontinued operations (after tax) - 491
Restructuring charges (after tax) - 2,095
Goodwill impairment (after tax) 3,347 2,460
Write-off of debt costs and
discount, net
(after tax) - 2,248
--------- ---------
Income from ongoing operations
(after tax), excluding
restructuring charges, goodwill
impairment and the write-off of
debt costs and discount, net $13,540 1.7% $6,158 0.8%
========= =========
Diluted earnings per share - income
from ongoing operations (after
tax), excluding restructuring
charges, goodwill impairment and
the write-off of debt costs and
discount, net $0.34 $0.16
Note 1: Operating results from ongoing operations, excluding
restructuring charges, goodwill impairment and the write-off of debt
costs and discount, net, is presented because the Company believes it
reflects the results of the core ongoing operations of the Company,
and because we believe it is responsive to frequent questions we
receive about the Company from third parties. However, this measure is
not considered a primary measure of an entity's financial results
under generally accepted accounting principles, and accordingly, this
amount should not be considered an alternative to operating results as
determined under generally accepted accounting principles and as
reported by the Company.
Note 2: The bottom two calculations in the above table show income
from ongoing operations (after tax) and related earnings per share
information excluding divested units not reflected in discontinued
operations, restructuring charges, goodwill impairment and the
write-off of debt costs and discount, net. The tax rate on these items
was computed using the pro forma effective tax rate of the Company
exclusive of these charges.
Note 3: Excluding the effect of nondeductible goodwill charges,
the Company benefited from unusually low tax provisions in each of the
periods presented above. For the fourth quarter and full year of 2004,
this resulted from reduced reserves against deferred state tax
benefits. For the fourth quarter and full year of 2003, this resulted
from reduced tax contingency reserves net of increased state deferred
tax benefits. Applying a tax rate of 42% against pre-tax income in
each period, fourth quarter 2004 net income would have been $3,688,000
or $0.09 per diluted share as compared to $1,078,000 or $0.03 per
diluted share for the fourth quarter of 2003, and full year 2004 net
income would have been $12,648,000 or $0.32 per diluted share as
compared to $4,971,000 or $0.13 per diluted share for the full year of
2003.
Supplemental Non-GAAP Information - Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA") (Unaudited):
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- ---------------------------
2004 % 2003 % 2004 % 2003 %
------- ---- -------- ---- -------- ---- -------- ----
Net income
(loss) $2,006 $(3,511) $10,713 $(5,579)
Discontinued
operations (618) 1,473 (520) 4,443
Income taxes 1,624 (2,179) 8,267 (1,174)
Write-off of
debt costs and
discount, net - 3,349 - 4,172
Other expense
(income) (2) 73 403 178
Interest
expense, net 281 1,155 1,394 3,827
Depreciation 1,067 1,316 4,684 5,295
Divested units
not reflected
in discontinued
operations - - - 759
Goodwill
impairment 3,347 2,726 3,347 2,726
Restructuring
charges - - - 3,223
------- -------- -------- --------
EBITDA $7,705 3.6% $4,402 2.2% $28,288 3.5% $17,870 2.3%
======= ======== ======== ========
Note 1: The Company defines earnings before interest, taxes,
depreciation and amortization (EBITDA) as net income (loss), excluding
discontinued operations, income taxes, write-off of debt costs and
discount, net, other expense (income), interest expense, net,
depreciation, divested units not reflected in discontinued operations,
goodwill impairment 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 third parties.
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.
Comfort Systems USA Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2004 2003
-------------- -------------
Cash and cash equivalents $32,576 $10,129
Accounts receivable, net 174,682 167,567
Costs and estimated earnings in excess of
billings 25,440 16,162
Other current assets 28,031 29,644
-------------- -------------
Total current assets 260,729 223,502
Property and equipment, net 12,988 13,223
Goodwill 100,123 103,470
Other noncurrent assets 9,276 10,915
-------------- -------------
Total assets $383,116 $351,110
============== =============
Current maturities of long-term debt $2,071 $1,594
Accounts payable 64,771 58,516
Billings in excess of costs and estimated
earnings 37,104 29,657
Other current liabilities 55,822 49,532
-------------- -------------
Total current liabilities 159,768 139,299
Long-term debt 6,751 8,809
Other long-term liabilities - 2,342
-------------- -------------
Total liabilities 166,519 150,450
Total equity 216,597 200,660
-------------- -------------
Total liabilities and equity $383,116 $351,110
============== =============
Selected Cash Flow Data (in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
(Unaudited)
2004 2003 2004 2003
---------- --------- ---------- ---------
Cash flow from operating
activities $13,403 $8,361 $26,184 $13,504
Cash flow from investing
activities $(845) $1,233 $(2,476) $(3,863)
Cash flow from financing
activities $(475) $(7,278) $(1,268) $(5,609)
Cash flow from operating
activities $13,403 $8,361 $26,184 $13,504
Taxes paid related to the
sale of businesses - 635 - 11,006
Purchases of property and
equipment (1,829) (745) (4,998) (3,406)
Proceeds from sales of
property and equipment 273 111 545 430
---------- --------- ---------- ---------
Free cash flow $11,847 $8,362 $21,731 $21,534
========== ========= ========== =========
Note 1: Free cash flow is defined as cash flow from operating
activities excluding items related to sales of businesses, less
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 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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