Comfort Systems Usa, Inc. · NYSE:FIX
Comfort Systems Usa — Investor Presentation (May 2009)
35 slides from Comfort Systems Usa's investor presentation, May 5, 2009
Slide 1: Comfort Systems USA
COMFORT LOA Quality People. Building Solutions. SYSTEMS Wun
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 communi
Slide 6: Comfort Systems USA
Comfort Systems USA National Commercial, Industrial, Institutional HVAC/Piping/Plumbing/Energy Efficiency Strong balance sheet Substantial continuing growth 54% new construction; 46% service, repair, retrofit 2008 Full Year Revenues $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 Piping Energy Efficiency Building comfort a “necessity” Mechanical equipment – requires service, repair, replacement Increasing technical content and building automation Energy efficiency and Indoor Air Quality emerging Outsourcing D R I V E R S Commercial, Industrial, Ins
Slide 9: Industry Trend Toward Service & Replacement (Recurring Revenue)
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 10: Revenues by Activity
13% 33% 54% Revenues by Activity New Construction/ Installation Replacement Service and Maintenance Q1 2009
Slide 11: Diverse Project Mix
PROJECT SIZE # OF PROJECTS (As of March 31, 2009) Diverse Project Mix Average Project Size $530,000 Average Project Length 6-9 months Value of Projects >$1M $1,388.8M Value of Projects <$1M $585.1M 3,403 235 66 18 8 TOTAL PROJECTS = 3,730 0 2,000 4,000 0-1M 1-5M 5-10M 10-15M 15+M
Slide 12: Diverse End-Use Base
Healthcare Education Government Manufacturing Office Building Multi-Family Retail/Restaurants Other Residential 23% 12% 12% 11% 10% 7% 13% 1% 2% Top Ten Customers Diverse End-Use Base Served by 11 different Comfort operating units Largest customer = less than 3% of revenues Lodging & Entertainment Q
Slide 13: Diverse End-Use Base
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 14: 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 15: History – Financial
854 1,370 1,591 1,546 820 1,057 900 History – Financial Nonresidential Construction Spending (FW Dodge) 9/11/01 1,110 298 819 785 Revenues Sale of Assets Acquisition Phase and Industry Growth $ Revenue Capital Management Structure $ Debt Debt –TTM EBITDA Sale of Assets 80 100 120 140 160 180 200 198
Slide 16: Financial Overview
Financial Overview
Slide 17: 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 18: 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 19: 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 20: Backlog
Backlog (in millions) Note: Excludes all divested and discontinued operations 726.7 690.0 678.9 653.8 700.5 720.0 818.5 786.7 811.3 780.2 804.7 716.9 680.6 752.4 $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 1Q 09
Slide 21: 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 22: Financial Strengths
Financial Strengths Market share up – revenue and profit performance better than industry Commitment to cost containment $108.1 million cash at 3/31/09; substantial credit capacity if needed Positive free cash flow for ten calendar years
Slide 23: Profile For Growth
Profile For Growth T I M E E A R N I N G S Service ACQUISITIONS INCREMENTAL SERVICE GROWTH CURRENT OPERATIONS (CONSTRUCTION AND SERVICE) ENERGY EFFICIENCY Commercial HVAC
Slide 24: 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 25: 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 26: Peter Drucker quote
The only things that evolve by themselves in an organization are disorder, friction and malperformance. -Peter Drucker
Slide 27: 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 28: National Account Customers
National Account Customers *Trademarks and logos are the property of their respective owners.
Slide 29: 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! TM
Slide 30: 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 31: 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 32: 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 33: 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 34: Comfort Systems USA
COMFORT USA SYSTEMS
Slide 35: Contact
C O N T A C T: Bill George Executive Vice President and CFO 1-800-723-8431 bgeorge@comfortsystemsusa.com www.comfortsystemsusa.com
Comfort Systems USA — Investor Presentation (May 2009) on 6ix