10-QPeriod: Q3 FY2015

COMFORT SYSTEMS USA INC Quarterly Report for Q3 Ended Sep 30, 2015

Filed October 29, 2015For Securities:FIX

Summary

Comfort Systems USA Inc. (FIX) filed its quarterly report for the period ending September 29, 2015. The filing primarily addresses routine disclosures and does not present significant new financial or operational developments. Key items include updates on legal proceedings, confirming that while lawsuits exist, management does not anticipate a material adverse impact on the company's financial condition. The report also details the company's ongoing stock repurchase program. Comfort Systems USA Inc. has been actively repurchasing its shares, with a notable acceleration in the pace during the nine months ended September 30, 2015, and specifically during the third quarter. The company also disclosed an amendment to a change in control agreement for a senior vice president to include immediate equity acceleration upon a change in control, a term that was inadvertently omitted and previously disclosed as intended.

Financial Highlights

52 data points
Beta

Revenue

$410.56M

21.3% Gross Margin

Net Income

$17.67M

4.3% Net Margin

EPS (Diluted)

$0.46

Total Assets

$694.53M

Cash & Equivalents

$45.07M

Free Cash Flow

$18.02M

Financial Statements
Beta
Revenue$410.56M
Cost of Revenue$323.10M
Gross Profit$87.47M
SG&A Expenses$57.90M
Operating Income$29.86M
Interest Expense$399K
Net Income$17.67M
EPS (Basic)$0.47
EPS (Diluted)$0.46
Shares Outstanding (Basic)37.55M
Shares Outstanding (Diluted)38.01M

Key Highlights

  • 1The company is subject to legal proceedings arising in the normal course of business, but management believes these will not materially impact financial results.
  • 2Comfort Systems USA Inc. continues its stock repurchase program, having bought back 6.8 million shares cumulatively since 2007.
  • 3During the nine months ended September 30, 2015, the company repurchased 0.2 million shares for approximately $4.9 million.
  • 4In the third quarter of 2015, the company repurchased 122,800 shares for an average price of $27.72 per share.
  • 5The Board of Directors has approved extensions and increases to the stock repurchase program, with a current authorization for up to 7.6 million shares.
  • 6An Amended Change in Control Agreement was entered into with Senior Vice President James Mylett, rectifying an omission regarding immediate equity acceleration upon a Change in Control.

Frequently Asked Questions

The company acknowledges it is subject to claims and lawsuits in the normal course of business. However, management believes that the resolution of these matters, individually or in aggregate, will not have a material adverse impact on the company's operating results, cash flows, or financial condition.

The company has an active stock repurchase program. Since its inception in 2007, a total of 6.8 million shares have been repurchased. During the nine months ended September 30, 2015, 0.2 million shares were repurchased for approximately $4.9 million, with a notable number of repurchases occurring in the third quarter of 2015.

Yes, the company amended a Change in Control Agreement with Senior Vice President James Mylett. This amendment corrects an inadvertent omission by ensuring immediate acceleration of Mr. Mylett's outstanding equity upon a Change in Control event, which aligns with the company's previously disclosed intent.

This report directs investors to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2014. It states that no new material risks beyond those already identified are being disclosed in this quarterly report, though it acknowledges that unknown or currently immaterial risks could emerge.