Slides
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Certain statements and information in this presentation may constitute forward -looking statements within the meaning of applica ble securities laws and regulations. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other s imilar expressions are intended to identify forward-looking statements, which are generally not historic in nature. These forward -looking statements are based on the current expectations and beliefs of Comfort Systems USA, Inc. and its subsidiaries (collectively, the “Company”) concerning future developments and their effect on the Company. While the Company’s management believes that these forward -looking statements are reasonable as and when made, there can be no assurance t hat future developments affecting the Company will be those that it anticipates, and the Company’s actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates, may differ materially from those made in or suggested by the forward -looking statements contained in this presentation. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicati ve of our results or developments in subsequent periods. All comments concerning the Company’s expectations for future revenue and operating results are based on the Company’s forecasts for its existing operations and do not include the potential impact of any future acquisitions. The Company’s forward -looking statements involve significant risks and uncertainties (some of which are beyond the Company’s control) and assumptions that 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, but are not limited to: the use of incorrect estimates for bidding a fixed-price contract; undertaking contractual commitments that exceed the Company’s labor r esources; failing to perform contractual obligations efficiently enough to maintain profitability; national or regional weakness in construction activity and economic conditions; rising inflation and fluctuations in interest rates; shortages of labor and specialty building materials or material increases to the cost the reof; the Company’s business being negatively affected by health crises or outbreaks of disease, such as epidemics or pandemics (and related impacts, such as su pply chain disruptions); financial difficulties affecting projects, vendors, customers, or subcontractors; the Company’s backlog failing to translate into actua l revenue or profits; failure of third party subcontractors and suppliers to complete work as anticipated; difficulty in obtaining, or increased costs associated with, b onding and insurance; impairment to 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; debarment from bidding on or performing government contracts; retention of key management; seasonal fluctuations in the demand for mechanical and electrical systems; the imposition of past and future liability from environmental, safety, and health regulations including the inherent risk associated with self -insurance; adverse litigation results; an increase in our effective tax rate; a material information technology failure or a material cyber security breach; risks associated with acqu isitions, such as challenges to our ability to integrate those companies into our internal control environment; our ability to manage growth and geographically -dispersed operations; our ability to obtain financing on acceptable terms; extreme weather conditions (such as storms, droughts, extreme heat or cold, wildfires and floo ds), including as a result of climate change, and any resulting regulations or restrictions related thereto; and other risks detailed in our reports filed with th e Securities and Exchange Commission (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 filings with the SEC, including its Annual Report on Form 10 -K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-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 obligation to publicly update or revise any forward-looking statements after the date they are made, whether because of new information, future events, or otherwise. Certain measures in this presentation are not measures calculated in accordance with generally accepted accounting principles (“GAAP”). They should not be considered a replacement for GAAP results. Non-GAAP financial measures appearing in these slides are identified in the footnote. See the Appendices for a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures.
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Q1 2025 Revenue was $1.83 billion compared to $1.54 billion in Q1 2024 Gross Profit percentage increased to 22.0% vs. 19.3% in Q1 2024 SG&A increased to $194.9 million from $162.7 million in Q1 2024 EPS was $4.75 per diluted share compared to $2.69 in Q1 2024 Q1 2025 Cash Used in Operations was $88.0 million compared to Cash Provided from Operations of $146.6 million in Q1 2024 Q1 2025 Backlog was $6.89 billion compared to $5.99 billion in Q4 2024 and $5.91 billion in Q1 2024
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($ Thousands, Except Per Share Data) (Unaudited) 2025 $ % Revenue 1,831,286$ 100.0% 1,537,016$ 100.0% 294,270$ 19.1% Cost of Services 1,427,870 78.0% 1,239,653 80.7% 188,217 15.2% Gross Profit 403,416 22.0% 297,363 19.3% 106,053 35.7% Selling, General and Administrative Expenses 194,874 10.6% 162,723 10.6% 32,151 19.8% Gain on Sale of Assets (556) — (820) — 264 -32.2% Operating Income 209,098$ 11.4% 135,460$ 8.8% 73,638$ 54.4% Net Income 169,289$ 9.2% 96,319$ 6.3% 72,970$ 75.8% Diluted EPS 4.75$ 2.69$ 2.06$ 76.6% Adjusted EBITDA (1) 242,667$ 13.3% 169,807$ 11.0% 72,860$ 42.9% (1) See Slide 9 for GAAP Reconciliation to Adjusted EBITDA 2024 Variance For the Three Months Ended March 31,
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($ Millions) 3/31/2025 12/31/2024 (Unaudited) Cash 204.8$ 549.9$ Working Capital 186.3$ 207.5$ Goodwill 905.8$ 875.3$ Intangible Assets, Net 441.5$ 434.4$ Total Debt 67.8$ 68.3$ Equity 1,777.0$ 1,704.7$
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($ Millions) (Unaudited)
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(YTD)
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Note: The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net income, 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 impairment, 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 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. March 31, 2025 2024 Net Income 169,289$ 96,319$ Provision for Income Taxes 38,723 26,737 Other Income, net (24) (117) Changes in the Fair Value of Contingent Earn-out Obligations 3,758 12,491 Interest Expense (Income), net (2,648) 30 Gain on Sale of Assets (556) (820) Amortization 20,115 23,913 Depreciation 14,010 11,254 Adjusted EBITDA 242,667$ 169,807$ Three Months Ended ($ Thousands) (Unaudited)
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March 31, 2025 2024 Cash from Operating Activities (87,950)$ 146,557$ Purchases of Property and Equipment (22,208) (24,952) Proceeds from Sales of Property and Equipment 1,095 1,014 Free Cash Flow (109,063)$ 122,619$ Three Months Ended Note: Free cash flow is defined as cash flow from operating activities less customary capital expenditures, plus the proceeds from asset sales. Other companies may define free cash flow differently. 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. ($ Thousands) (Unaudited)