8-K/AExhibits & Filings

COMFORT SYSTEMS USA INC 8-K/A Report, Exhibit Filing (Oct 6, 2010)

Filed October 6, 2010For Securities:FIX

Summary

Comfort Systems USA, Inc. (FIX) filed an Amendment to Form 8-K on October 6, 2010, to provide the required financial statements and pro forma information related to its acquisition of ColonialWebb Contractors Company. The acquisition, which closed on July 28, 2010, makes ColonialWebb a wholly-owned subsidiary of Comfort Systems USA. This filing is crucial for investors as it details the financial impact of this significant strategic move. The provided pro forma statements combine the historical financials of both companies, offering insights into the combined entity's financial position and performance as if the acquisition had occurred at earlier dates. Key elements include the preliminary purchase price allocation, which resulted in significant goodwill and identifiable intangible assets, and the pro forma impact on revenues, expenses, and earnings per share. Investors should carefully review these pro forma figures to understand the potential financial trajectory of the newly combined company.

Key Highlights

  • 1Comfort Systems USA, Inc. (FIX) is providing audited financial statements for ColonialWebb Contractors Company as of December 31, 2008, and December 31, 2009, along with unaudited financials as of June 30, 2010.
  • 2Pro forma condensed combined financial statements are presented, reflecting the acquisition of ColonialWebb as if it occurred on January 1, 2009 (for operations) and June 30, 2010 (for balance sheet).
  • 3The pro forma balance sheet as of June 30, 2010, shows total assets of $633.7 million and total liabilities of $329.2 million for the combined entity.
  • 4The pro forma statement of operations for the six months ended June 30, 2010, indicates combined revenues of $578.4 million and a net income of $5.9 million.
  • 5For the year ended December 31, 2009, the pro forma statement of operations shows combined revenues of $1.35 billion and a net income of $46.2 million.
  • 6The preliminary purchase price allocation includes $49.7 million in goodwill and $28.1 million in identifiable intangible assets, such as customer relationships, backlog, non-compete agreements, and trade names.
  • 7The acquisition involved cash payments, notes issued to former owners, and estimated contingent earn-out payments totaling approximately $109.7 million.

Frequently Asked Questions

This filing is an amendment to a previous Form 8-K, providing the necessary audited financial statements for ColonialWebb Contractors Company and pro forma condensed combined financial information. This is required by Item 9.01 of Form 8-K when a significant acquisition occurs.

The pro forma statements suggest a significant increase in scale. For the year ended December 31, 2009, combined revenues were approximately $1.35 billion, and pro forma net income was $46.2 million. For the six months ended June 30, 2010, combined revenues were $578.4 million, with pro forma net income of $5.9 million. However, investors should note that these are pro forma figures and include significant goodwill and intangible assets from the acquisition.

The preliminary purchase price allocation shows a total consideration of approximately $109.7 million. A significant portion of this is allocated to goodwill ($49.7 million) and identifiable intangible assets ($28.1 million), which include backlog, customer relationships, non-compete agreements, and trade names. The remainder is allocated to net assets acquired and adjustments for deferred taxes.

Yes, the acquisition includes estimated fair value of contingent earn-out payments amounting to $6.66 million. These payments are based on the achievement of specified milestones. Future changes in the estimated fair value of these contingent payments will be recognized immediately in earnings.