Comfort Systems USA Reports Third Quarter Results; Strong Increases in Profits 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 $6,131,000 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, 2005, as compared to net income of $3,490,000 or $0.09 per diluted share, in the third quarter of 2004. Net 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 for the quarter was $6,464,000 or $0.16 per diluted share in the third quarter of 2005, as compared to $3,341,000 or $0.09, in the third quarter of 2004. The Company reported revenues from continuing operations of $243,453,000 in the current quarter as compared to $206,171,000 in 2004. The Company also reported free cash flow of $6,630,000 in the current quarter as compared to free cash flow of $4,158,000 in 2004. 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, 2005 was $650,751,000 as compared to $639,654,000 as of June June: see month. 30, 2005 on a same-store basis. 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 experienced sharp improvements in earnings and revenues, and we continued our track record of effective capital management even as rising activity levels led to an increase in our investment in working capital. Our Company's growing strength has also allowed our Board of Directors to declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. , for the first time, a quarterly dividend of $0.025 per share, and we are very pleased to begin to provide a direct and tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. return to our many loyal shareholders." The details of the dividend are contained in a separate release also issued today. The Company reported net income for the nine months ended September 30, 2005 of $11,338,000 or $0.28 per diluted share as compared to net income of $8,707,000 or $0.22 per diluted share in 2004. Excluding the debt cost write off, net income from continuing operations was $12,718,000 or $0.32 per diluted share for the nine months ended September 30, 2005. The Company reported revenues of $681,937,000 from continuing operations for the first nine months of 2005, as compared to $594,198,000 in 2004. Murdy continued, "We believe that the improvement we are experiencing is largely due to our emphasis on productivity and execution, and is a tribute to our many employees. Our commitment to our people is leading us to continue to increase our efforts and investment in training our team members throughout the Company. This emphasis, when combined with improved market conditions and our strong balance sheet and backlog, should give us a solid foundation to pursue further improvement." 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. , November November: see month. 3, 2005 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 1-517-308-9002. A replay of the entire call will be available until 5:00 p.m. Central Time, Thursday, November 10, 2005 by calling 1-402-220-9713. Comfort Systems USA(R) is a premier provider of business solutions addressing workplace comfort, with 57 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 and regional weakness in non-residential construction activity, difficulty in obtaining 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 Nine Months Ended September 30, 2005 and 2004
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
September 30,
---------------------------------------
2005 % 2004 %
--------- --------- --------- ---------
Revenues $243,453 100.0% $206,171 100.0%
Cost of services 202,418 83.1% 173,706 84.3%
--------- ---------
Gross profit 41,035 16.9% 32,465 15.7%
SG&A 29,613 12.2% 26,102 12.7%
Loss (gain) on sale of assets (53) - 34 -
--------- ---------
Income from operations 11,475 4.7% 6,329 3.1%
Interest expense, net 1 - 334 0.2%
Other expense (income) 39 - 101 -
Write off of debt costs - - - -
--------- ---------
Income before taxes 11,435 4.7% 5,894 2.9%
Income taxes 4,971 2,553
--------- ---------
Income from continuing
operations 6,464 2.7% 3,341 1.6%
Discontinued operations:
Operating income (loss), net
of income tax expense
(benefit) of $(461), $80,
$(693) and $73 (295) 149
Estimated gain (loss) on
disposition, including
income tax expense
(benefit) of $(17), $0, $65
and $235 (38) -
--------- ---------
Net income $6,131 $3,490
========= =========
Income per share:
Basic-
Income from continuing
operations $ 0.16 $0.09
Discontinued operations -
Income (loss) from
operations (0.01) -
Estimated gain (loss) on
disposition - -
--------- ---------
Net income $0.15 $0.09
========= =========
Diluted -
Income from continuing
operations $0.16 $0.09
Discontinued operations -
Income (loss) from
operations (0.01) -
Estimated gain (loss) on
disposition - -
--------- ---------
Net income $0.15 $0.09
========= =========
Shares used in computing
income (loss) per share:
Basic 39,372 38,418
Diluted 40,382 39,455
Nine Months Ended
September 30,
---------------------------------------
2005 % 2004 %
--------- --------- --------- ---------
Revenues $681,937 100.0% $594,198 100.0%
Cost of services 571,690 83.8% 499,670 84.1%
--------- ---------
Gross profit 110,247 16.2% 94,528 15.9%
SG&A 87,339 12.8% 77,686 13.1%
Loss (gain) on sale of assets (112) - (33) -
--------- ---------
Income from operations 23,020 3.4% 16,875 2.8%
Interest expense, net 495 0.1% 1,113 0.2%
Other expense (income) (36) - 438 0.1%
Write off of debt costs 870 0.1% - -
--------- ---------
Income before taxes 21,691 3.2% 15,324 2.6%
Income taxes 9,452 6,596
--------- ---------
Income from continuing
operations 12,239 1.8% 8,728 1.5%
Discontinued operations:
Operating income (loss), net
of income tax expense
(benefit) of $(461), $80,
$(693) and $73 (1,000) 116
Estimated gain (loss) on
disposition, including
income tax expense
(benefit) of $(17), $0, $65
and $235 99 (137)
--------- ---------
Net income $11,338 $8,707
========= =========
Income per share:
Basic-
Income from continuing
operations $0.31 $0.23
Discontinued operations -
Income (loss) from
operations (0.02) -
Estimated gain (loss) on
disposition - -
--------- ---------
Net income $0.29 $0.23
========= =========
Diluted -
Income from continuing
operations $0.30 $0.22
Discontinued operations -
Income (loss) from
operations (0.02) -
Estimated gain (loss) on
disposition - -
--------- ---------
Net income $0.28 $0.22
========= =========
Shares used in computing
income (loss) per share:
Basic 39,180 38,298
Diluted 40,179 39,457
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 Non-GAAP Information (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
2005 % 2004 % 2005 % 2004 %
-------- ---- -------- ---- -------- ---- -------- -----
Income from
continuing
operations
(after tax) $6,464 $3,341 $12,239 $8,728
Write off of
debt costs
(after tax) - - 479 -
-------- -------- -------- --------
Income from
continuing
operations
(after tax),
excluding
the write
off of debt
costs $6,464 2.7% $3,341 1.6% $12,718 1.9% $8,728 1.5%
======== ======== ======== ========
Diluted
earnings per
share -
income from
continuing
operations
(after tax),
excluding
the write
off of debt
costs $0.16 $0.09 $0.32 $0.22
Note 1: Operating results from continuing operations, excluding the
write off of debt costs, 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 tax rate on this item was computed using the pro forma
effective tax rate of the Company exclusive of this charge.
Supplemental Non-GAAP Information - Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("Adjusted EBITDA")
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
2005 % 2004 % 2005 % 2004 %
-------- ---- -------- ---- -------- ---- -------- -----
Net income $6,131 $3,490 $11,338 $8,707
Discontinued
operations 333 (149) 901 21
Income taxes 4,971 2,553 9,452 6,596
Write off of
debt costs - - 870 -
Other expense
(income) 39 101 (36) 438
Interest
expense, net 1 334 495 1,113
Loss (gain)
on sale of
assets (53) 34 (112) (33)
Depreciation 1,276 1,276 3,382 3,498
-------- -------- -------- --------
Adjusted
EBITDA $12,698 5.2% $7,639 3.7% $26,290 3.9% $20,340 3.4%
======== ======== ======== ========
Note 1: The Company defines adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) as net income,
excluding discontinued operations, income taxes, write off of debt
costs, other expense (income), interest expense, net, gain on sale of
assets and depreciation. Adjusted EBITDA may be defined differently by
other companies. 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)
September 30, December 31,
2005 2004
------------- ------------
(unaudited)
Cash and cash equivalents $33,709 $32,698
Accounts receivable, net 206,147 171,246
Costs and estimated earnings in excess of
billings 26,467 24,683
Assets related to discontinued operations 872 5,860
Other current assets 27,727 26,912
------------- ------------
Total current assets 294,922 261,399
Property and equipment, net 13,889 12,456
Goodwill 100,123 100,123
Other noncurrent assets 7,258 9,138
------------- ------------
Total assets $416,192 $383,116
============= ============
Current maturities of long-term debt $- $2,071
Accounts payable 69,153 63,620
Billings in excess of costs and estimated
earnings 55,981 36,927
Liabilities related to discontinued
operations 38 1,935
Other current liabilities 60,564 55,215
------------- ------------
Total current liabilities 185,736 159,768
Long-term debt - 6,751
Other long-term liabilities - -
------------- ------------
Total liabilities 185,736 166,519
Total equity 230,456 216,597
------------- ------------
Total liabilities and equity $416,192 $383,116
============= ============
Selected Cash Flow Data (in thousands) (unaudited):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- --------
Cash flow from operating
activities $8,103 $5,121 $14,491 $12,781
Cash flow from investing
activities $(930) $(807) $(5,766) $(1,631)
Cash flow from financing
activities $81 $(526) $(7,592) $(793)
Cash flow from operating
activities $8,103 $5,121 $14,491 $12,781
Purchases of property and
equipment (1,826) (963) (5,053) (3,180)
Proceeds from sales of
property and equipment 353 - 564 283
-------- -------- -------- --------
Free cash flow $6,630 $4,158 $10,002 $9,884
======== ======== ======== ========
Note 1: Free cash flow is defined as cash flow from operating
activities 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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