Comfort Systems Usa, Inc. · NYSE:FIX
Comfort Systems Usa — Investor Presentation (March 2009)
37 slides from Comfort Systems Usa's investor presentation, Mar 20, 2009
Slide 1: Comfort Systems USA
COMFORT UCA. Quality People. Building Solutions. SYSTEMS urn ——— As of March 19, sols
Slide 2: Safe Harbor Statement
This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current plans and expectations of future events Comfort Systems USA, Inc. and involve risks and uncertainties that could cause actual
Slide 3: Vision
To be the nation’s premier HVAC and mechanical systems installation and services provider. Vision
Slide 4: Mission
Mission To provide the best value HVAC and mechanical systems installation and service, principally in the mid-market commercial, industrial, and institutional sectors, while caring for our customers, employees and the environment and realizing superior returns for our stockholders.
Slide 5: Values
Act with honesty and integrity. Show respect for all stakeholders. Exceed customer expectations. Seek “win-win” solutions. Demonstrate spirit, drive, and teamwork. Pursue innovation. Achieve premier safety performance. Commit to energy efficiency. Communicate openly and often. Impact our communities
Slide 6: Comfort Systems USA at a glance
Comfort Systems USA National Commercial, Industrial, Institutional HVAC/Piping/Plumbing/Energy Efficiency Strong balance sheet Substantial continuing growth 57% new construction; 43% service, repair, retrofit Revenue run rate $1.3 billion
Slide 7: Comfort Today
Comfort Today Over $20M $10M - $20M Under $10M Comfort Systems USA National Accounts ANNUAL REVENUES Region 3 Region 1 Region 2
Slide 8: What We Do
What We Do Commercial HVAC Quality People. Building Solutions. Piping Energy Efficiency Applied Systems
Slide 9: Long Term Industry Growth
Long Term Industry Growth The Dodge Index for Nonresidential Building Construction 2000=100 Building comfort a “necessity” Mechanical equipment – requires service, repair, replacement Increasing technical content and building automation Energy efficiency and Indoor Air Quality emerging Outsourcing C
Slide 10: Industry Trend Toward Service & Replacement
Industry Trend Toward Service & Replacement (Recurring Revenue) 5+ million commercial buildings (DOE) Recurring service 20 year replacement cycle “Inventory” of future business OEMs note significant deferred maintenance & replacement over recent years Source: The Trane Company NEW CONSTRUCTION 70% 3
Slide 11: Revenues by Activity
13% 30% 57% Revenues by Activity New Construction/ Installation Replacement Service and Maintenance 2008
Slide 12: Diverse Project Mix
PROJECT SIZE # OF PROJECTS (As of December 31, 2008) Diverse Project Mix Average Project Size $475,000 Average Project Length 6-9 months Value of Projects >$1M $1,451.5M Value of Projects <$1M $572.5M 3,942 262 64 18 8 TOTAL PROJECTS = 4,294 0 2,000 4,000 0-1M 1-5M 5-10M 10-15M 15+M
Slide 13: Diverse End-Use Base
Healthcare Education Government Manufacturing Office Building Multi-Family Retail/Restaurants Distribution Other Residential 17% 11% 12% 13% 14% 8% 1% 13% 1% 2% Top Ten Customers Diverse End-Use Base Served by 12 different Comfort operating units Largest customer = less than 3% of revenues Lodging &
Slide 14: Diverse End-Use Base projects
Diverse End-Use Base Omni Orlando Resort at ChampionsGate Orlando, Florida University Hospital Little Rock, Arkansas University United Methodist Church Syracuse, New York Iowa Renewal Energy Washington, Iowa
Slide 15: Competitive Advantages
Competitive Advantages High quality operations Ability to leverage and proliferate technical expertise Ability to collaborate on large jobs and share labor Energy efficiency services National multi-location service capability Purchasing economics Balance sheet strength Bonding and insurance Strong s
Slide 16: Safety record
Safe employees Valued by customers Lost time injury rate is 60% less than industry average WC claims cost per payroll dollar down from 3.5% to 0.9% We can build a culture OSHA Recordable Rate Source: Bureau of Labor Statistics, Standard Industry Classification (SIC) Code 20 1710 – Specialty Trades C
Slide 17: Financial Overview
Financial Overview
Slide 18: Financial Profile
4Q YTD 4Q ($ in millions, except per share amounts) 08 07 08 07 Financial Profile Revenues $ 329.0 $293.3 $1,328.5 $1,109.5 Adjusted EBITDA $ 23.3 $ 15.1 $ 91.8 $ 56.8 % Revenue 7.1% 5.1% 6.9% 5.1% Operating Income $ 20.1 $ 13.1 $ 79.4 $ 49.9 % Revenue 6.1% 4.5% 6.0% 4.5% Net Income $ 12.5 $ 8.7 $ 4
Slide 19: Revenues
Revenues Revenues (in millions) $767.4 $892.5 $1,056.5 $1,109.5 $1,328.5 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 2004 2005 2006 2007 2008
Slide 20: Operating Margins
Operating Margins (a) Annual Operating Margin (a) This table includes non-GAAP financial information as the information provided excludes goodwill impairment charges of $0.6 million and $33.9 million for 2004 and 2005, respectively. No goodwill impairment charge was recorded for 2006, 2007 or 2008.
Slide 21: Adjusted EBITDA
Adjusted EBITDA $25.5 (millions) $39.3 $49.6 $56.8 $91.8 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2004 2005 2006 2007 2008
Slide 22: Backlog
Backlog (in millions) Note: Excludes all divested and discontinued operations 726.7 690.0 678.9 653.8 700.5 720.0 818.5 786.7 811.3 780.2 804.7 680.6 752.4 $0 $200 $400 $600 $800 $1,000 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08
Slide 23: Strong Cash Flows
Strong Cash Flows Funds From Operations (a) $82.9 $ 83.6 $ 24.7 CapEx, Net (b) (14.0) (10.8) (7.6) Free Cash Flow $68.9 $ 72.8 $ 17.1 (a) Funds From Operations is defined as net cash provided by operating activities adjusted by taxes paid related to the sale of businesses of $7.0 million in 2006. (b
Slide 24: Financial Strengths
Financial Strengths Market share up – revenue and profit performance better than industry Commitment to cost containment $117.0 million cash at 12/31/08; substantial credit capacity if needed Positive free cash flow for ten calendar years
Slide 25: Profile For Growth
Profile For Growth TIME EARNINGS Service ACQUISITIONS INCREMENTAL SERVICE GROWTH CURRENT OPERATIONS (CONSTRUCTION AND SERVICE) ENERGY EFFICIENCY Commercial HVAC
Slide 26: Operations: Increase Productivity
Operations Increase Productivity Education Leadership Project Managers Superintendents Service Sales Service Operations Craft Safety Best Practices Project Management Estimating Cooperation with suppliers Prefabrication New materials and methods
Slide 27: Job Loop
Job Loop Project Estimating Post-Project Review We review projects and apply what we have learned to improve our performance. Project Pricing Project Qualification Project Management
Slide 28: Peter Drucker quote
The only things that evolve by themselves in an organization are disorder, friction and malperformance. -Peter Drucker
Slide 29: Service: Increase Service
Service Increase Service* Grow Maintenance Base Education Employees and Customers Higher margin opportunity Recurring revenue National accounts $2.50+ of repair and replacement for every $1.00 of maintenance Target Retrofit Projects Energy Efficiency Indoor Air Quality * Maintenance, service, repair
Slide 30: National Account Customers
National Account Customers *Trademarks and logos are the property of their respective owners.
Slide 31: Energy Efficiency-Retrofitting HVAC
Energy Efficiency-Retrofitting HVAC Green Is Part Of Our Business Energy costs drive need for efficiency HVAC 30% - 65 % electric usage Energy Star (Dept. of Energy/EPA) / LEED (USGBC3) 2- 4 year pay outs depending on electric rates, usage, age, incentives Use Our Energy to Save Yours! ™
Slide 32: Growth
Growth Internal More of what we do best Service Energy efficiency Step Out Growth New locations for existing companies Techs “on their own” Targeted acquisitions Best HVAC oriented mechanical in new area
Slide 33: The Ideal Candidate
$20 million + in revenue Construction and service In a growing market where we are not now Company that has performed well in the past and has continuing demonstrable upside Organizational structure capable of sustaining/improving the company Ownership/management that wants to stay on to operate com
Slide 34: Target Markets
Atlanta, GA (Service) Boise, ID Charleston, SC Columbia/Florence, SC Dallas/Fort Worth, TX El Paso, TX Ft. Lauderdale, FL Los Angeles, CA Nashville, TN Target Markets (Listed Alphabetically) Norfolk, VA Omaha, NE Portland, OR Richmond, VA San Antonio, TX Savannah, GA Spartanburg/Greenville, SC Tampa
Slide 35: Outlook
Outlook Long-Term $40+ billion fragmented industry HVAC is a basic necessity Commercial construction continuing Growing installed base for recurring maintenance, service, repair and retrofit Scale opportunities – service, purchasing, prefab, bonding, best practices Diverse customer base and geograph
Slide 36: Comfort Systems USA
COMFORT USA SYSTEMS
Slide 37: Contact
CONTACT: Bill George Executive Vice President and CFO 1-800-723-8431 bgeorge@comfortsystemsusa.com www.comfortsystemsusa.com
Comfort Systems USA — Investor Presentation (March 2009) on 6ix