Summary
Comfort Systems USA, Inc. (FIX) reported increased revenue and gross profit for the second quarter and first six months of 2016 compared to the prior year, driven by a combination of acquisition growth and improved same-store operational execution. The company experienced a 2.6% revenue increase year-over-year for the quarter, reaching $427.5 million, and a 3.5% increase for the six-month period to $813.5 million. This growth was partially offset by a decrease in same-store activity, notably at the EAS operation due to reduced large project work in the manufacturing sector. Despite a slight decrease in same-store backlog year-over-year, gross profit margins improved, reflecting better project execution and increased volumes in certain regions. Selling, General, and Administrative (SG&A) expenses also rose, primarily due to increased compensation costs related to improved operating results and service expansion. The company maintains a strong financial position with ample liquidity and a credit facility that expires in 2021, demonstrating a consistent focus on cash flow generation, having achieved positive free cash flow for seventeen consecutive years.
Financial Highlights
52 data points| Revenue | $427.54M |
| Cost of Revenue | $338.11M |
| Gross Profit | $89.43M |
| SG&A Expenses | $61.02M |
| Operating Income | $28.61M |
| Interest Expense | $606K |
| Net Income | $17.72M |
| EPS (Basic) | $0.47 |
| EPS (Diluted) | $0.47 |
| Shares Outstanding (Basic) | 37.44M |
| Shares Outstanding (Diluted) | 37.91M |
Key Highlights
- 1Revenue increased by 2.6% to $427.5 million for Q2 2016 and by 3.5% to $813.5 million for the first six months of 2016, compared to the prior year periods.
- 2Gross profit saw a significant increase of 9.0% to $89.4 million for Q2 2016 and 11.0% to $162.9 million for the first six months of 2016, with gross profit margin improving to 20.9% and 20.0% respectively.
- 3The acquisition of Shoffner contributed positively to revenue and gross profit, while same-store revenue saw a slight decrease, primarily due to reduced large project work at the EAS operation.
- 4Backlog as of June 30, 2016, was $724.3 million, a slight increase of 1.7% year-over-year, although sequential backlog decreased.
- 5SG&A expenses increased by 6.4% for Q2 2016 and 7.3% for the first six months of 2016, largely attributed to increased compensation costs and expanded service activities.
- 6The company reported strong liquidity with $247.5 million in available credit under its amended revolving credit facility, which expires in February 2021.
- 7Positive free cash flow was generated for the seventeenth consecutive year, totaling $26.0 million for the first six months of 2016, demonstrating ongoing operational efficiency.