01—Abstract
Summary
Summary of the 10-K filed February 25, 2021. Cited figures are marked; the original filing is the authoritative source.
Comfort Systems USA, Inc. (FIX) reported solid performance in its 2020 10-K filing, demonstrating resilience despite the economic backdrop influenced by the COVID-19 pandemic.
The company experienced revenue growth driven by strategic acquisitions, particularly TAS Energy Inc. and TEC Industrial Construction and Maintenance, which complemented its existing operations. While same-store revenue saw a slight decrease, the overall revenue increase of 9.2% to $2.86 billiona reflects successful integration of acquired businesses. Financially, the company maintained strong operational income and generated substantial free cash flow, indicating efficient management of working capital and operations.
Management's focus on core competencies, operating efficiencies, and employee development continues to be a key strategic driver. The company also highlighted its commitment to safety and diversity, underscoring its operational integrity. With a solid balance sheet and available credit facilities, Comfort Systems USA appears well-positioned to navigate potential economic uncertainties and pursue future growth opportunities.
02—Key points
Key Highlights
- Revenue increased by 9.2% to $2.86 billion in 2020, driven by acquisitions including TAS Energy Inc. and TEC Industrial Construction and Maintenance.
- The company generated $286.5 million in cash flow from operating activities and $264.6 million in free cash flow in 2020.
- Operational income was $190.7 million, a 16.5% increase from 2019, reflecting improved project execution and acquisitions.
- Backlog stood at $1.51 billion at the end of 2020, a slight decrease from the prior year, but with a sequential increase noted.
- The company maintained strong liquidity with $330.5 million in available credit as of December 31, 2020.
- Comfort Systems USA continues its stock repurchase program, repurchasing 0.7 million shares for approximately $30.1 million during 2020.
- The company's safety record was highlighted, with an OSHA recordable rate of 1.36, which was 20% better than the industry average.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Comfort Systems USA kept $0.05.
- Revenue$2.86B100.0%
- Cost of revenue−$2.31B80.9%
- Gross profit$547.0M19.1%
- Operating costs−$356.3M12.5%
- Operating income$190.7M6.7%
- Interest, other & tax−$40.5M1.4%
- Net income$150.1M5.3%
Where FY2020 revenue went
$2.86B- Cost of revenue: $2.31B, 81% of revenue
- SG&A: $357.8M, 13% of revenue
- Net income: $150.1M, 5.3% of revenue
- Interest, other & tax: $40.5M, 1.4% of revenue
Kept 5.3% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 25, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $2.86B$2.62B | +9.2% |
| Cost of Revenue | $2.31B$2.11B | +9.3% |
| Gross Profit | $546.98M$501.94M | +9.0% |
| SG&A Expenses | $357.78M$340.00M | +5.2% |
| Operating Income | $190.65M$163.64M | +16.5% |
| Interest Expense | $8.38M$9.32M | −10.0% |
| Net Income | $150.14M$114.32M | +31.3% |
| EPS (Basic) | $4.11$3.10 | +32.6% |
| EPS (Diluted) | $4.09$3.08 | +32.8% |
| Shares Outstanding (Basic) | 36.54M36.85M | −0.8% |
| Shares Outstanding (Diluted) | 36.74M37.13M | −1.1% |
05—Questions
Frequently Asked Questions
What was Comfort Systems USA's revenue performance in 2020?
Comfort Systems USA reported a total revenue of $2.86 billion for the year ended December 31, 2020, an increase of 9.2% compared to $2.62 billion in 2019. This growth was significantly influenced by acquisitions, partially offset by a slight decrease in same-store revenue.
How did the company manage its financial resources in 2020?
The company demonstrated strong financial management, generating $286.5 million in cash flow from operating activities and $264.6 million in free cash flow. They also maintained significant liquidity with $330.5 million in available credit under their senior credit facility.
What is the company's strategy for growth?
Comfort Systems USA's strategy involves strengthening core competencies, achieving operating efficiencies, attracting and retaining skilled employees, focusing on industrial, commercial, and institutional markets, leveraging resources and capabilities, developing and adopting leading technologies, excelling at modular and off-site construction, driving service growth, and seeking growth through opportunistic acquisitions.
How did the COVID-19 pandemic impact the company's operations in 2020?
The COVID-19 pandemic had an impact, particularly on the service business due to building closures and access restrictions. Construction activities were largely considered essential, though some projects experienced delays or temporary closures. The company implemented safety precautions which added costs and inefficiencies. While stabilizing, the pandemic continued to affect the business outlook, with expectations of continued delays in project awards and commencement impacting activity levels, especially in early 2021.
06—Continue