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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENTREPORT
Pursuantto Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date ofearliest event reported)
August 2, 2024
ComfortSystems USA, Inc.
(Exact name of registrantas specified in its charter)
Delaware 1-13011 76-0526487
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
675 Bering Drive
,
Suite 400
Houston 77057
,
Texas
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code
(
713
)
830-9600
(Former name or former address, if changedsince last report.)
Check the appropriate box below if the Form 8-Kfiling is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
..
Writtencommunications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
..
Solicitingmaterial pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
..
Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
..
Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value FIX New York Stock Exchange
Indicate by check mark whether the registrantis an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of theSecurities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
..
If an emerging growth company, indicate by checkmark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accountingstandards provided pursuant to Section 13(a) of
the Exchange Act.
..
ITEM 7.01
Regulation FD Disclosure
OnAugust 2, 2024, Comfort Systems USA, Inc., a Delaware corporation (the
"Company"),
a leading provider of commercial,industrial and institutional heating,
ventilation, air conditioning and electrical contracting services, posted to
the "Investor"section of its Internet website (www.comfortsystemsusa.com) an
investor presentation slideshow. The Company intends to use this slideshowin
making presentations to analysts, potential investors, and other interested
parties.
The information included inthe investor presentation includes financial
information determined by methods other than in accordance with accounting
principles generallyaccepted in the United States of America ("GAAP"). The
Company's management uses these non-GAAP measures in its analysisof the
Company's performance. The Company believes that the presentation of certain
non-GAAP measures provides useful supplementalinformation that is essential to
a proper understanding of the operating results of the Company's core
businesses. These non-GAAPdisclosures should not be viewed as a substitute for
operating results determined in accordance with GAAP, nor are they necessarily
comparableto non-GAAP performance measures that may be presented by other
companies.
Theinformation in this Form 8-K being furnished under Item 7.01 shall not be
deemed to be "filed" for the purposes of Section18 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities of suchsection, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, orthe
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing. The investor presentation contains
forward-looking statements within the meaning of applicable securities laws
and regulations. These statements are based on the Company'sexpectations and
involve risks and uncertainties that could cause the Company's actual results
to differ materially from those setforth in the statements. These risks are
discussed in the Company's filings with the Securities and Exchange
Commission, includingan extensive discussion of these risks in the Company's
Annual Report on Form 10-K for the year ended December 31, 2023.
A copy of the presentationis furnished herewith as Exhibit 99.1.
ITEM 9.01 Financial Statements and Exhibits
(d)
Exhibits.
Exhibit Description
Number
99.1 Investor presentation dated August 2, 2024
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirementsof the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereuntoduly authorized.
COMFORT SYSTEMS USA, INC.
By: /s/ Laura F. Howell
Laura F. Howell
Senior Vice President and General Counsel
Date://///// August 2, 2024
Exhibit 99.1
Quality People. Building Solutions. NYSE: FIX August 2, 2024
SAFE HARBOR Certain statements and information in this presentation may
constitute forward - looking statements within the meaning of applicab le
securities laws securities laws and regulations. The words "believe,"
"expect," "anticipate," "plan," "intend," "foresee," "should," "would," "c
ould," or other similar expressions are intended to identify forward - looking
statements, which are generally not historic in nature. These forward - looki
ng statements are based on are based on the current expectations and beliefs
of Comfort Systems USA, Inc. and its subsidiaries (collectively, the "Compa
ny" ) concerning future future developments and their effect on the Company.
While the Company's management believes that these forward - looking statemen
ts are reasonable as reasonable as and when made, there can be no assurance
that future developments affecting the Company will be those that it a nti
cipates, and the the Company's actual results of operations, financial
condition and liquidity, and the development of the industry in which t he
Company operates, may differ operates, may differ materially from those made
in or suggested by the forward - looking statements contained in this
presentation . In addition, even if our even if our results of operations,
financial condition and liquidity, and the development of the industry in
which we operate , a re consistent with the forward - the forward - looking
statements contained in this presentation, those results or developments may
not be indicative of our result s or developments in developments in
subsequent periods. All comments concerning the Company's expectations for
future revenue and operating resu lts are based on the on the Company's
forecasts for its existing operations and do not include the potential impact
of any future acquisitions. Th e C ompany's forward - looking forward -
looking statements involve significant risks and uncertainties (some of which
are beyond the Company's control) and assu mptions that could cause could
cause actual future results to differ materially from the Company's historical
experience and its present expectations or projections. Important factors that
could cause actual results to differ materially from those in the forward -
looking statements include, bu t are not limited to: the limited to: the use
of incorrect estimates for bidding a fixed - price contract; undertaking
contractual commitments that exceed t he Company's labor labor resources;
failing to perform contractual obligations efficiently enough to maintain
profitability; national or regiona l w eakness in construction activity
construction activity and economic conditions; rising inflation and
fluctuations in interest rates; shortages of labor and sp eci alty building
materials or materials or material increases to the cost thereof; the
Company's business being negatively affected by health crises or out bre aks
of disease, such as such as epidemics or pandemics (and related impacts, such
as supply chain disruptions); financial difficulties affecting proj ect s,
vendors, customers, or customers, or subcontractors; the Company's backlog
failing to translate into actual revenue or profits; failure of third par ty
subcontractors and suppliers to suppliers to complete work as anticipated;
difficulty in obtaining, or increased costs associated with, bonding and
insuranc e; impairment to goodwill; errors goodwill; errors in the Company's
cost - to - cost input method of accounting; the result of competition in the
Company's markets; t he Company's decentralized management structure; material
failure to comply with varying state and local laws, regulations or
requirements ; d ebarment from bidding on bidding on or performing government
contracts; retention of key management; seasonal fluctuations in the demand
for mechanica l a nd electrical systems; systems; the imposition of past and
future liability from environmental, safety, and health regulations including
the inheren t r isk associated with self - self - insurance; adverse
litigation results; an increase in our effective tax rate; a material
information technology failure or a material cyber security breach; security
breach; risks associated with acquisitions, such as challenges to our ability
to integrate those companies into our int ernal control environment; our
environment; our ability to manage growth and geographically - dispersed
operations; our ability to obtain financing on acceptable terms; extreme
weather weather conditions (such as storms, droughts, extreme heat or cold,
wildfires and floods), including as a result of climate c han ge, and any
resulting resulting regulations or restrictions related thereto; and other
risks detailed in our reports filed with the Securities and Ex change
Commission (the "SEC"). (the "SEC"). For additional information regarding
known material factors that could cause the Company's results to differ from
its project ed results, please see its please see its filings with the SEC,
including its Annual Report on Form 10 - K, Quarterly Reports on Form 10 - Q,
and Current Repor ts on Form 8 - K. Readers are K. Readers are cautioned not
to place undue reliance on forward - looking statements, which speak only as
of the date hereof. The Company undertakes no undertakes no obligation to
publicly update or revise any forward - looking statements after the date they
are made, whether becau se of new information, information, future events, or
otherwise. NON - GAAP MEASURES Certain measures in this presentation are not
measures calculated in accordance with generally accepted accounting
principles (" GAAP"). They should not be should not be considered a
replacement for GAAP results. Non - GAAP financial measures appearing in these
slides are identified in the footnote. See the See the Appendices for a
reconciliation of these non - GAAP measures to the most comparable GAAP
financial measures.
COMFORT SYSTEMS USA 2 . Leading national mechanical, electrical and plumbing
("MEP") installation and service provider . $6.0+ billion yearly revenue .
17,000+ employees . History of profitable growth . Advantageous mechanical,
electrical, and modular construction and service portfolio
NATIONAL FOOTPRINT 3 177 locations | 136 cities | 17,000+ employees
MARKET OUTLOOK 4 Strong Markets . Technology - Data Centers and Chip
Manufacturing . Life Sciences - Pharmaceuticals . Food Processing .
Manufacturing . Healthcare . EV Battery Trends . Industrial . Re - Shoring .
Indoor Air Quality . Service . Modular
Mechanical 79% Electrical 21% SEGMENT BREAKDOWN - YTD 2024 5 REVENUE
Mechanical 75% Electrical 25% GROSS PROFIT YTD 2024 Gross Profit = $661.0M YTD
2024 Revenue = $3,347.3M
Service Projects 7% Service and Maintenance 9% New Construction 42% Existing
Construction 24% Modular 18% REVENUE BREAKDOWN - 2024 6 ACTIVITY 2024 Revenue
= $3.35B Healthcare 8% Education 10% Government 5% Manufacturing 30%
Technology 31% Office Buildings 6% Other 4% Retail 6% MARKET SECTOR
CONSTRUCTION BACKLOG 7 $763 $948 $1,166 $1,602 $1,511 $2,312 $4,064 $5,157
$5,772 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2016 2017 2018 2019
2020 2021 2022 2023 Q2 2024 ($ in millions)
SERVICE MAINTENANCE BASE 8 $111 $116 $123 $127 $130 $147 $161 $165 $171 $0 $20
$40 $60 $80 $100 $120 $140 $160 $180 2016 2017 2018 2019 2020 2021 2022 2023
Q2 2024 ($ in millions)
RECENT FINANCIAL PERFORMANCE 9 THREE MONTHS ENDED SIX MONTHS ENDED ($ in
millions, except per share information) 6/30/24 6/30/23 6/30/24 6/30/23
Revenue $1,810.3 $1,296.4 $3,347.3 $2,471.1 Net Income $134.0 $69.5 $230.3
$126.7 Diluted EPS $3.74 $1.93 $6.43 $3.53 Adjusted EPS (1) $3.74 $1.93 $6.43
$3.45 Adjusted EBITDA (2) $222.7 $111.6 $392.5 $201.9 Operating Cash Flow
$189.9 $125.4 $336.4 $252.3 (1) Adjusted EPS is a non - GAAP financial
measure. Adjusted EPS excludes tax gains. See Appendix II for a GAAP
reconciliation to Ad justed EPS. (2) Adjusted EBITDA is a non - GAAP financial
measure. See Appendix I for a GAAP reconciliation to Adjusted EBITDA.
ACCELERATED CASH 10 $723.7 $427.0 $- $100 $200 $300 $400 $500 $600 $700 $800
TTM 6/30/2024 Operating Cash Flow TTM 6/30/2024 Net Income ($ Millions) - TTM
operating cash flow far exceeds TTM net income - At 6/30/24, we have a very
substantial amount of unearned customer cash - Pre - bookings and equipment
advances will normalize creating cash flow headwind when project costs are
incurred
FINANCIAL STRENGTH . Positive free cash flow for 25 consecutive years .
Increased dividend for 12 consecutive years . Debt/TTM EBITDA = 0.13 . $199.4
M cash at June 30, 2024 . $91.1 M total debt at June 30, 2024 . Debt capacity
- No borrowings at 6/30/24 - $850M senior credit facility - 2027 maturity 11
12 CAPITAL ALLOCATION ($ in thousands) $82,524 75% $15,839 14% $11,774 11%
AVERAGE 2007 - 2023 Acquisitions Share Repurchases Dividends
13 CAPITAL RETURNED ($ in thousands) FISCAL PERIODS SHARE REPURCHASES
DIVIDENDS CAPITAL RETURNED 2015 $8,330 $9,358 $17,688 2016 $13,088 $10,264
$23,352 2017 $9,007 $10,987 $19,994 2018 $28,533 $12,268 $40,801 2019 $19,550
$14,543 $34,093 2020 $30,120 $15,499 $45,619 2021 $27,054 $17,384 $44,438 2022
$38,216 $20,077 $58,293 2023 $21,184 $30,379 $51,563 2024 YTD $11,139 $19,634
$30,773
MODULAR OFF - SITE CONSTRUCTION 14
Foster a safe, collaborative, and inclusive environment for our employees .
Recently launched a Diversity, Equity and Inclusion Council, consisting of a
broad group of internal stakeholders to ensure the Company continually takes
meaningful steps to remain an inclusive place of business . 100% of
operational sites have conducted an employee health and safety risk assessment
and utilize the CAUSE Mapping program and the "5x5" initiative . As part of
our commitment to employee health and well - being, Comfort Systems USA offers
all employees and family members in their household access to 24/7 support for
confidential emotional support, work - life solutions, legal guidance, and
financial resources Our sustainability goals are embedded in how we operate as
a business - they are part of our very foundation and core values of being
safe, honest, respectful, collaborative, and innovative - and we have
diligently sought to develop transparent disclosures to support our
sustainability commitments . As a company, we recognize that while our work
lends itself to sustainable best practices, there is more we can do to create
a positive impact . We are committed to a continual improvement approach to
sustainability . PEOPL E PARTNER S PLANE T Be reliable, honest, and innovative
partners to our customers and suppliers . 100% of all operational sites have
completed an internal audit/risk assessment concerning business ethics issues
. Bronze EcoVadis Sustainability Rating achieved in 2023 . Sustainable
Procurement Policy launched in 2021 . Developed a Supplier Diversity Program
and launched a Supplier Code of Conduct in 2021 . Developed and implemented a
Human Rights Policy in 2022 Operate with the intention to positively impact
the environment through our work and the services we provide to our customers
. Comfort Systems USA has completed a Greenhouse Gas ("GHG") Inventory
covering all relevant Scope 1 and 2 emissions across our operations for the
years 2021, 2022, and 2023, facilitating a deeper analysis and comparative
data in our 2023 Sustainability Report . Previously, we developed and shared
sustainable transportation guidelines with all operating companies to utilize
best practices in fleet management, business travel, route optimization, and
employee commuting . Performed our first climate risk analysis in 2023 Energy
Efficiency GHG Emissions Data Privacy/ Cybersecurity Risk Management Employee
Hiring and Retention Training and Development Worker Health and Safety
Diversity, Equity, and Inclusion Material Topics Material Topics Material
Topics SUSTAINABILITY OVERVIEW 15
Time Innovation INNOVATION WITH AN EMPHASIS ON PRODUCTIVITY 2004 - 2014 .
Early adoption of BIM . Industry - leading prefabrication . Best practice
sharing across subsidiaries 2014 - Present . Investments in advanced BIM
technologies . EAS & TAS modular construction . Mobile technology deployment
in service Future . Pilots of emerging technologies . Partnerships with
industry leading tech firms . Data analytics to drive business insights 16
17 Be safe Be honest Be respectful Be innovative Be collaborative OUR VALUES
OUR STRENGTH 18 . Consistent free cash flow . Strong Balance Sheet .
Acquisition record . Attractive geographies . Leading innovation . Profitable
growth
THANK YOU 19 177 Locations 47 operating companies across America at 177
locations in 136 cities 17,000+ of the most qualified HVAC and electrical
contracting personnel in America 17,000+ Employees $6.0+ Billion Approximately
$6.0+ billion in yearly revenue CONTACT: Julie Shaeff Chief Accounting Officer
1 - 800 - 723 - 8431 ir@comfortsystemsusa.com www.comfortsystemsusa.com
APPENDIX I - GAAP RECONCILIATION TO ADJUSTED EBITDA 20 Three Months Ended June
30, Six Months Ended June 30, ($ in thousands) 2024 2023 2024 2023 Net Income
$134,009 $69,476 $230,328 $126,692 Provision for Income Taxes 35,646 15,726
62,383 24,335 Other Income, net (119) (44) (236) (45) Changes in the Fair
Value of Contingent Earn - out Obligations 14,689 3,098 27,180 5,480 Interest
Expense, net 445 3,826 475 6,505 Gain on Sale of Assets (611) (592) (1,431)
(1,104) Tax - related SG&A costs - - - 421 Amortization 26,890 11,013 50,803
21,344 Depreciation 11,790 9,073 23,044 18,260 Adjusted EBITDA $222,739
$111,576 $392,546 $201,888 Note: The Company defines adjusted earnings before
interest, taxes, depreciation, and amortization ("Adjusted EBITDA") as ne t i
ncome, provision for income taxes, other expense (income), net, changes in the
fair value of contingent earn - out obligations, interest expense (income),
net, gain on sale of assets, goodwill i mpairment, other one - time expenses
or gains and depreciation and amortization. Other companies may define
Adjusted EBITDA differently. Adjusted EBITDA is presented because it is a
financia l m easure 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 financia l r esults, 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 an d a s reported by the Company.
APPENDIX II - GAAP RECONCILIATION TO ADJUSTED EPS 21 Three Months Ended June
30, Six Months Ended June 30, 2024 2023 2024 2023 Diluted Income per Share
$3.74 $1.93 $6.43 $3.53 Tax Gains Related to Prior Years - - - (0.09) Tax -
Related SG&A Costs, Net of Tax - - - 0.01 Diluted Income per Share Excluding
Tax Gains $3.74 $1.93 $6.43 $3.45 Note: Diluted income per share excluding tax
gains is presented because the Company believes it reflects the results of the
cor e ongoing operations of the Company, and we believe it is responsive to
frequent questions we receive from third parties. This measure, however, is
not considered a primary measure of an entity's fin ancial results under
generally accepted accounting principles, and accordingly, should not be
considered an alternative to operating results as determined under generally
accepted accounting p rin ciples and as reported by the Company.
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