Skip to content
AnalystLens

Comfort Systems USA 8-K Report, Financial Results (Jul 25, 2024)

Reports
Earnings & Results·Other Events·Exhibits & Filings
Filing Date
Filed July 25, 2024
Period End
July 25, 2024
Security
FIX
In the record · 2016–202610-K1110-Q338-K137

FIX filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 137 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Apr ’18Apr ’18
  2. Material agreement8-K · Mar ’20Mar ’20
  3. Material agreement8-K · May ’22May ’22
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed July 25, 2024. Cited figures are marked; the original filing is the authoritative source.

Comfort Systems USA (NYSE: FIX) reported strong second-quarter 2024 results for the period ended June 30, 2024.

Revenue rose about 40% year over year to $1.81 billiona (from $1.30 billion), and net income more than doubled to $134.0 million, or $3.74 per diluted share, versus $69.5 million, or $1.93, a year earlier. Gross margin expanded to 20.1% from 17.6%, and operating income climbed to $184.7 million from $92.1 million. Operating cash flow was $189.9 million, and free cash flow reached $167.3 million, up from $102.3 million.

Management attributed results to strong execution and early contributions from recently acquired companies, which the company said exceeded expectations. Backlog ended the quarter at $5.77 billionb, down slightly from $5.91 billion at March 31, 2024 but up substantially from $4.19 billion a year earlier. On a same-store basis, backlog grew to $5.22 billion, up about 25% year over year, while same-store revenue rose roughly 30%.

Management said demand remains at unprecedented levels and expressed optimism for continued strong results in the second half of 2024 and into 2025. Note that the growth figures include acquisitions, and the balance sheet grew substantially: goodwill and intangibles increased sharply, and total liabilities rose to $2.73 billionc. The company also declared a quarterly dividend of $0.30 per share, payable August 23, 2024 to holders of record on August 12, 2024, up from $0.20 a year earlier.

Adjusted EBITDA was $222.7 milliond (12.3% margin) for the quarter, compared with $111.6 million (8.6%) in the prior-year period. Investors should weigh the strong growth and margin expansion against the increased leverage from acquisitions, rising earn-out obligation charges ($14.7 million in the quarter), and the reliance on a large, labor-intensive project backlog.

02—Key points

Key Highlights

  1. Revenue of $1.81 billion, up about 40% year over year from $1.30 billion
  2. Diluted EPS of $3.74 versus $1.93 in Q2 2023; net income of $134.0 million, up about 93%
  3. Gross margin expanded to 20.1% from 17.6%; operating margin rose to 10.2% from 7.1%
  4. Adjusted EBITDA of $222.7 million (12.3% margin), up from $111.6 million (8.6%)
  5. Total backlog of $5.77 billion; same-store backlog up 25% year over year to $5.22 billion
  6. Free cash flow of $167.3 million versus $102.3 million; quarterly dividend raised to $0.30 per share from $0.20

03—Questions

Frequently Asked Questions

  1. What drove the large increase in revenue and earnings?

    Growth came from strong execution on customer projects, robust demand, and contributions from companies acquired in the past year. Same-store revenue rose roughly 30%, indicating that organic growth was substantial alongside acquisitions.

  2. Is the backlog still growing?

    Total backlog was $5.77 billion at June 30, 2024, slightly below $5.91 billion at March 31, 2024 but well above $4.19 billion a year earlier. Same-store backlog rose 25% year over year, and management said job pipelines remain robust.

  3. How much is the dividend and when is it paid?

    The board declared a quarterly dividend of $0.30 per share, payable August 23, 2024 to stockholders of record at the close of business on August 12, 2024. This is up from $0.20 per share in the prior-year quarter.

  4. What are the main risks highlighted in the release?

    The release cites risks including incorrect estimates on fixed-price contracts, labor and material shortages or cost increases, economic and construction cycles, integration of acquisitions, goodwill impairment, and changes in the fair value of contingent earn-out obligations, which were a $14.7 million charge in the quarter.

  5. Did the balance sheet change materially?

    Yes. Goodwill rose to $874.9 million from $666.8 million at year-end 2023, and identifiable intangibles increased to $480.9 million from $280.4 million. Long-term debt rose to $73.4 million from $39.3 million, and total liabilities increased to $2.73 billion, largely reflecting acquisitions.

04—Continue

← View all 8-K filings