Safe Harbor Statement

Transcription

1 As of May 6, 2010

2 Safe Harbor Statement This presentation contains forward-ooking statements within the meaning of the Private Securities Litigation Reform Act of These statements are based on the current pans and expectations of future events of Comfort Systems USA, Inc. and invove risks and uncertainties that coud cause actua future activities and resuts of operations to be materiay different from those set forth in the forward-ooking statements. Important factors that coud cause actua resuts to differ incude, among others, the use of incorrect estimates for bidding a fixed-price contract, undertaking contractua commitments that exceed our abor resources, faiing to perform contractua obigations efficienty enough to maintain profitabiity, nationa or regiona weakness in construction activity and economic conditions, financia difficuties affecting projects, vendors, customers, or subcontractors, our backog faiing to transate into actua revenue or profits, difficuty in obtaining or increased costs associated with bonding and insurance, impairment to goodwi, errors in our percentage-of-competion method of accounting, the resut of competition in our markets, our decentraized management structure, shortages of abor and speciaty buiding materias, retention of key management, seasona fuctuations in the demand for HVAC systems, the imposition of past and future iabiity from environmenta, safety, and heath reguations incuding the inherent risk associated with sefinsurance, adverse itigation resuts and other risks detaied in our reports fied with the Securities and Exchange Commission. A further ist and description of these risks, uncertainties and other factors are discussed under "Item 1A. Company Risk Factors in the Company s Annua Report on Form 10-K for the year ended December 31, 2009." These forward-ooking statements speak ony as of the date of this fiing. Comfort Systems USA, Inc. expressy discaims any obigation or undertaking to reease pubicy any updates or revisions to any forward-ooking statement contained herein to refect any change in our expectations with regard thereto or any change in events, deveopments, conditions or circumstances on which any such statement is based. 2

3 Vision To be the nation s premier HVAC and mechanica systems instaation and services provider. 3

4 Mission To provide the best vaue HVAC and mechanica systems instaation and service, principay i in the mid-market commercia, industria, and institutiona sectors, whie caring for our customers, empoyees and the environment and reaizing superior returns for our stockhoders. 4

5 Vaues Act with honesty and integrity. Show respect for a stakehoders. Exceed customer expectations. Seek win-win win soutions. Demonstrate spirit, drive, and teamwork. Pursue innovation. Achieve premier safety performance. Commit to energy efficiency. i Communicate openy..and often. Impact our communities positivey. 5

6 Comfort Systems USA Nationa Commercia, Industria, Institutiona HVAC/Piping/Pumbing/Energy Efficiency Strong baance sheet Substantia positive cash fow 49% new construction; 51% service, repair, retrofit 2009 Fu Year Revenues $1.1 biion 6

7 Comfort Systems USA s TEAM Wiiam F. Murdy (68) Chairman/CEO Industry: 20 years CSUSA 10 years Cub Quarters (CEO), Land Care (CEO), GID (CEO), Morgan Staney Venture Capita (Pres) PRI (COO), US Army (10 years) BS-West Point, MBA-Harvard Wiiam George (45) Brian Lane (53) EXVP-CFO Industry: 13 years CSUSA 13 years SVP, Genera Counse American Medica Response VP, Genera Counse Corporate Counse, Ropes & Gray BS Econ-BYU JD-Harvard EXVP- President, COO Industry: 25 years CSUSA 6 years Capstone Turbine Corp.- Regiona Director Kvaerner-VP & Genera Manager Haiburton Regiona Director BS-Notre Dame MBA-Boston Coege Thomas N. Tanner (61) SVP- Region 1 Industry: 34 years CSUSA 11 years 2004 SVP-Operations, RVP-East Region Regiona Controer - East Region Armani Pumbing & Mechanica Woodcock & Assoc., ABJ Fire Protection Co. VP, CFO BA - Syracuse Dean Tiison (60) SVP - Region 2 Industry: 37 years CSUSA 13 years Fred Hayes Mechanica Contractors Vice President, SRVP, President/Owner BS-Tennessee Licensed HVAC contractor in NC, TN & VA Chares Ditz (56) SVP - Region 3 Industry: 26 years CSUSA 7 years Goodman-Distribution - President Indoor Comfort-EXVP, COO York Vice President BSBA Ohio State University MBA-University of Dayton Brewster Eare (52) VP Energy Services Industry: 29 years CSUSA 7 years Heathcare Services Johnson Contros NE Utiities Account Executive MBA-Rensseaer BS - University of Connecticut Kim Cotter (41) SVP Service Operations Industry: 20 years CSUSA 5 Years Carrier Commercia - Service Area Manager, Service Manager BA-Bowing Green HVAC Ohio Contractor s License 7

8 Comfort Today Region 3 Region 1 Region 2 ANNUAL REVENUES Over $20M $10M - $20M Comfort Systems USA Energy Services Comfort Systems USA Nationa Accounts 8

9 What We Do Commercia, Industria, Institutiona HVAC A $40B+ Industry D R I V E R S Buiding comfort a necessity Mechanica equipment requires service, repair, repacement Commercia HVAC Appied Systems Increasing technica content and buiding automation Energy efficiency and Indoor Air Quaity (IAQ) emerging Outsourcing Piping Energy Efficiency 9

10 Industry Trend Toward Service & Repacement (Recurring Revenue) 100% NEW CONSTRUCTION 5+ miion commercia buidings (DOE) 70% 70% Recurring service 20 year repacement 50% cyce 10 Share of Industry Revenues 0% 30% SERVICE & REPLACEMENT 1980 Time Source: The Trane Company 30% Inventory of future business OEMs note significant deferred maintenance & repacement over recent years

11 Revenues by Activity 2010 YTD 17% Service and Maintenance 34% 49% New Construction/ Instaation Repacement 11

12 Diverse Project Mix # OF PROJECTS (As of March 31, 2010) 3, Average Project Size $365,000 Average Project Length 6-9 months TOTAL PROJECTS = 4,252 Vaue of Projects >$1M $1,086.8M Vaue of Projects <$1M $463.5M PROJECT SIZE 12

13 Diverse End-Use Base 2010 YTD Heathcare Education Government Manufacturing Office Buiding Muti-Famiy Retai/Restaurants Other Top 20 Customers Served by 16 different Comfort operating units Largest customer = ess than 3% of revenues Lodging & Entertainment Residentia Reigious & Not-for-Profit 13

14 Diverse End-Use Base Omni Orando Resort at ChampionsGate Orando, Forida Arboretum Eementary Schoo Waunakee, Wisconsin 14 Iowa Renewa Energy Washington, Iowa University Hospita Litte Rock, Arkansas

15 Competitive Advantages High quaity operations Abiity to everage and proiferate technica expertise Abiity to coaborate ate on arge jobs and share abor Energy efficiency services Nationa muti-ocation service capabiity Purchasing economics Baance sheet strength Bonding and insurance 15 Strong safety record

16 Safety Industry Average (October 2008 atest avaiabe data) Comfort Systems USA (March 2010 data) OSH HA Recordabe e Rate 20% Difference Lost Time Injury Rate is 54% ess than industry average Achieved 97% training competed OSHA Incident Rate is 44% Difference 44% ess than industry average Source: Bureau of Labor Statistics, Standard Industry Cassification (SIC) Code Speciaty Trades Contractors HVAC and Pumbing & North American Industry Cassification System (NAICS) Code Our safety record is no accident.

17 History Financia 2,000 Revenues Capita Management Structure 346 1,500 1,591 1,546 1,591 1,546 $ Revenue 1, , , ,048 1, , , $ Debt Debt TTM EBI ITDA Acquisition Phase Sae of Assets and Industry Growth Sae of Assets Nonresidentia Construction Spending (FW Dodge) 9/11/01 17

18 Financia Overview 18

19 Financia Profie ($ in miions, except per share amounts) 1Q Revenues.... $ $ Adjusted EBITDA (*) $ 5.7 $ 15.2 % Revenue % 5.4% Operating Income $ 2.1 $ 12.0 % Revenue % 4.3% Net Income - Continuing Operations.... $ 1.2 $ 7.1 % Revenue % 2.5% Diuted EPS - Continuing Operations... $ 0.03 $ 0.18 Free Cash Fow $ (12.6) $ (5.6) Debt... $ 7.4 $ 9.7 Cash $ $ Backog $ $ * See Side 39 for GAAP Reconciiation to Adjusted EBITDA

20 Revenues Revenues (in miions) $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 $1,322 $1,129 $1, $1,048 $ Note: Excudes a divested and discontinued operations

21 Operating Margins (a) 7% 6% Annua a Operating Margin 5% 4% 3% 2% 1% 0% (a) This tabe incudes non-gaap financia information as the information provided excudes goodwi impairment charges of $33.9 miion for No goodwi impairment charge was recorded for 2006, 2007, 2008 or

22 Backog (in miions) 22 Note: Excudes a divested and discontinued operations

23 Strong Cash Fows (in miions) Year Ended December 31, Cash From Operating Activities $ 54.3 $ 82.9 $ 83.6 Purchases Of Property and Equipment (9.5) (14.6) (11.1) 1) Proceeds From Saes Of Property and Equipment Free Cash Fow $ 45.6 $ 68.9 $

24 Financia Strengths Market share up revenue and profit performance better than industry Commitment t to cost containment t $110 miion cash at 3/31/10; substantia credit capacity if needed Positive free cash fow for eeven caendar years 24

25 Profie For Growth Service G S E A R N I N CURRENT OPERATIONS (CONSTRUCTION AND SERVICE) 25 T I M E Commercia HVAC

26 Operations 26 Increase Productivity Education Leadership Project Managers Superintendents Service Saes Service Operations Craft Safety Best Practices Project Management Estimating Cooperation with suppiers Prefabrication New materias and methods

27 Job Loop Project Estimating Project Quaification Post-Project Review Project Pricing Project Management We review projects and appy what we have earned to improve our performance. 27

28 The ony things that evove by themseves in an organization are disorder, friction and maperformance. -Peter Drucker 28

29 Service Increase Service * Grow Maintenance Base Education Empoyees and Customers Higher margin opportunity Recurring revenue Nationa accounts $2.50+ of repair and repacement for every $1.00 of maintenance 29 Target Retrofit Projects Energy Efficiency Indoor Air Quaity (IAQ) * Maintenance, service, repair, retrofit

30 Nationa Account Customers 30 *Trademarks and ogos are the property of their respective owners.

31 Energy Efficiency-Retrofitting HVAC Green Is Part Of Our Business Energy costs drive need for efficiency HVAC 30% - 65 % eectric usage Energy Star (Dept. of Energy/EPA) / LEED (USGBC) 2-4 year pay outs depending on eectric rates, usage, age, incentives 31 Use Our Energy to Save Yours!

32 Growth Interna More of what we do best Service Energy efficiency Step Out Growth New ocations for existing companies Techs on their own Targeted acquisitions Best HVAC oriented mechanica in new area 32

33 The Idea Candidate $20 miion + in revenue Construction and service In a growing market in new area Company that has performed we in the past and has continuing demonstrabe upside Organizationa structure t capabe of sustaining/improving the company Ownership/management that wants to stay on to operate company 33

34 Target Markets (Listed Aphabeticay) Boise, ID Omaha, NE Chareston, SC Portand, OR Coumbia/Forence, SC Richmond, VA Daas/Fort Worth, TX San Antonio, TX E Paso, TX Savannah, GA Ft. Lauderdae, FL Spartanburg/Greenvie, SC Los Angees, CA Tampa, FL Norfok, VA 34

35 Outook 35 Long-Term $40+ biion fragmented industry HVAC is a basic necessity Commercia construction continuing Growing instaed base for recurring maintenance, service, repair and retrofit Scae opportunities service, purchasing, prefab, bonding, best practices Diverse customer base and geography Energy efficiency and Indoor Air Quaity Financiay and operationay sound continuing to grow organicay and by acquisition

36 What We Do 36

37 37

38 Appendix 38

39 Appendix GAAP Reconciiation To Adjusted EBITDA (in thousands) Three Months Ended March 31, 2010 % 2009 % Net Income $ 1,927 $ 6,942 Discontinued Operations (762) 180 Income Taxes 730 4,730 Other (Income) Expense (12) 7 Interest Expense, net Gain on Sae of Assets (5) (2) Depreciation and Amortization 3,636 3,245 Adjusted EBITDA $ , % $ 15,212 54% 5.4% Note 1: The Company defines adjusted earnings before interest, taxes, depreciation and amortization ( Adjusted EBITDA ) as net income, excuding discontinued operations, income taxes, other (income) expense, interest expense, net, gain on sae of assets and depreciation and amortization. Other companies may define Adjusted EBITDA differenty. Adjusted EBITDA is presented because it is a financia measure that is frequenty requested by third parties. However, Adjusted EBITDA is not considered under generay accepted accounting principes as a primary measure of an entity s financia resuts, and accordingy, Adjusted EBITDA shoud not be considered an aternative to operating income, net income, or cash fows as determined under generay accepted accounting principes and as reported by the Company. 39

40 C O N T A C T: Bi George Executive Vice President and CFO bgeorge@comfortsystemsusa.com