Comfort Systems USA Reports Third Quarter Results; Significantly Improved Earnings, Operating Income, and EBITDA; Sixth Consecutive Quarter of Positive Free Cash Flow.Business Editors HOUSTON--(BUSINESS WIRE)--Nov. 13, 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 net income of $5,642,000 or $0.15 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 September September: see month. 30, 2001, as compared to a net loss of $3,689,000 or $0.10 per diluted share, in the third quarter of 2000. The results for the third quarter of 2000 included pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $10 million. Excluding the impact of these charges, net income for the third quarter of 2000 would have been $975,000 or $0.03 per diluted share. The Company reported revenues of $408,935,000 in the current quarter as compared to $423,922,000 in 2000. Excluding revenues of operations that have been closed or divested since the Company started its 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). in the third quarter of last year, comparable revenues for the third quarter of 2001 were $407,313,000 as compared to $411,559,000 in 2000. Bill Murdy, Comfort Systems USA's chairman and chief executive officer said, "Our third quarter results show our best progress to date from the restructuring efforts and strong focus on operational improvement that we began in the third quarter of last year. We reported higher profits and better margins at every line of the income statement, reduced selling, general and administrative expenses, and posted our sixth consecutive quarter of positive free cash flow." Net income for the nine months ended September 30, 2001 was $10,033,000 or $0.27 per diluted share in 2001 versus a net loss of $586,000 or $0.02 per diluted share in 2000. Excluding the charges discussed above, net income for the nine months ended September 30, 2000 would have been $6,290,000 or $0.17 per diluted share. Revenues were $1,169,204,000 in 2001 as compared to $1,191,458,000 in 2000. Excluding revenues of operations that have been closed or divested since the Company started its restructuring in the third quarter of last year, comparable revenues for the first nine months of 2001 were $1,162,867,000 as compared to $1,149,921,000 in 2000. Murdy continued, "While we have made very good progress in 2001, we have some more work to do in fully turning around our operational performance at certain of our operating entities. This is particularly important at a time when there are concerns about the economy as we move into 2002. Throughout our organization, we are continuing our efforts to control indirect and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. , including consolidation of back office support functions in a number of areas of the country over the next few months. "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. as of September 30, 2001 was $724,195,000 and this level is consistent with the seasonal nature of our business as well as our continued emphasis on more disciplined project selection. Backlog on a same-store basis at this time last year was $744,804,000. Preliminary information indicates our backlog increased in October October: see month. , and in early November November: see month. we booked $29 million in new healthcare work in the 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. . Increased activity relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our energy efficiency, multi-location service, and automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. controls efforts was encouraging during the quarter as we continue to emphasize service and 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 work, which is generally more stable in a slowing economy." In October, Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Powers retired from the Comfort Systems USA's Board of Directors. Mr. Powers was formerly President of Quality Air Heating & Cooling in Grand Rapids Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, and built it into one of the premier companies in the industry. Bill Murdy said, "Bob joined Comfort Systems USA's Board of Directors in 1997 when Quality became one of Comfort's founding companies. He retired from operations in 2000, but has continued to lend his tremendous experience and guidance to our Company as a director since then. His contributions to Comfort as an operator and a director have been immeasurable, and he will be missed. We wish him all the best in his future endeavors." Comfort Systems USA will host its quarterly conference call to discuss third quarter results on Wednesday Wednesday: see week. , November 14 at 9 a.m. Central Standard Time. To participate in the call, dial 312/470-0009 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 5 p.m. Central Standard Time Wednesday, November 21 by calling 402/220-0249. Comfort Systems USA is a premier provider of business solutions addressing workplace comfort, environments, processes and energy services, with more than 120 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, 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, the lack of a combined operating history and the difficulty of integrating acquired businesses, retention of key management, 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 estimates for bidding a fixed price contract and other risks detailed in the Company's reports filed with the Securities and Exchange Commission. - Financial table follows -
Comfort Systems USA Inc.
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2001 & 2000
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
--------------------
2001 % 2000 %
------ ------ ------ ------
Revenues $408,935 100.0% $423,922 100.0%
Cost of services 335,797 82.1% 352,838 83.2%
--------- ---------
Gross profit 73,138 17.9% 71,084 16.8%
SG&A 52,735 12.9% 58,021 13.7%
Goodwill amortization 3,021 0.7% 3,151 0.7%
Restructuring charges -- -- 9,959 2.3%
--------- ---------
Income from operations 17,382 4.3% (47) --
Interest expense, net 5,133 1.3% 7,017 1.7%
Other (income) expense (157) -- (588) (0.1%)
Reductions in non-operating
assets and liabilities, net -- -- -- --
--------- ---------
Income (loss) before taxes 12,406 3.0% (6,476) (1.5%)
Income taxes 6,764 (2,787)
--------- ---------
Net income (loss) $5,642 1.4% $(3,689) (0.9%)
========= =========
Net income (loss) per share:
Basic $0.15 $(0.10)
Diluted $0.15 $(0.10)
Shares used in computing
net income (loss) per share:
Basic 37,468 37,265
Diluted 37,773 37,265
EBITDA $23,512 5.7% $16,134 3.8%
Net income, excluding
restructuring and
nonrecurring charges $5,642 1.4% $975 0.2%
Diluted earnings per share,
excluding restructuring
and nonrecurring charges $0.15 $0.03
Nine Months Ended
September 30,
-------------------
2001 % 2000 %
------ ----- ------ ------
Revenues $1,169,204 100.0% $1,191,458 100.0%
Cost of services 963,098 82.4% 978,869 82.2%
--------- ---------
Gross profit 206,106 17.6% 212,589 17.8%
SG&A 158,230 13.5% 169,182 14.2%
Goodwill amortization 9,063 0.8% 9,483 0.8%
Restructuring charges 238 -- 10,313 0.9%
--------- ---------
Income from operations 38,575 3.3% 23,611 2.0%
Interest expense, net 17,770 1.5% 19,417 1.6%
Other (income) expense (531) -- (678) (0.1%)
Reductions in non-operating
assets and liabilities, net -- -- 5,190 0.4%
--------- ---------
Income (loss) before taxes 21,336 1.8% (318) --
Income taxes 11,303 268
--------- ---------
Net income (loss) $10,033 0.9% $(586) --
========= =========
Net income (loss) per share:
Basic $0.27 $(0.02)
Diluted $0.27 $(0.02)
Shares used in computing
net income (loss) per share:
Basic 37,411 37,429
Diluted 37,449 37,429
EBITDA $56,885 4.9% $52,337 4.4%
Net income, excluding
restructuring and
nonrecurring charges $10,157 0.9% $6,290 0.5%
Diluted earnings per share,
excluding restructuring
and nonrecurring charges $0.27 $0.17
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.
Note 3: Net income, excluding restructuring and nonrecurring
charges is defined as net income, excluding restructuring charges and
reductions in non-operating assets and liabilities. The tax rate on
these items was computed using the proforma effective tax rate of the
Company exclusive of these charges.
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