Comfort Systems Usa, Inc. · NYSE:FIX

Comfort Systems Usa — Investor Presentation (May 2014)

27 slides from Comfort Systems Usa's investor presentation, May 20, 2014

  1. Slide 1: Comfort Systems USA

    Comfort Systems USA (NYSE: FIX) May 20, 2014

  2. Slide 2: Disclosures

    Disclosures Safe Harbor Certain statements and information in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,”

  3. Slide 3: Comfort Systems USA Overview

    Comfort Systems USA Overview Who We Are • Leading HVAC and mechanical systems installation and service provider • Focused on commercial, industrial, and institutional HVAC markets What We Do Applied Systems Piping Retrofit Service 3

  4. Slide 4: Broad Nationwide Footprint

    Broad Nationwide Footprint 37 companies | 89 locations in 81 cities | 6,700+ employees New location 4

  5. Slide 5: Our Customers

    Our Customers Omni Orlando Resort at ChampionsGate Navy Federal Credit Union Orlando, Florida Pensacola, Florida MedImmune FMC Expansion University Hospital Frederick, Maryland Little Rock, Arkansas 5

  6. Slide 6: Areas of Strength

    Areas of Strength • Long-term local relationships • Collaboration • Safety excellence • Purchasing economics • National service capability • Bonding and insurance • Balance sheet strength 6

  7. Slide 7: Our Safety Record is No Accident

    Our Safety Record is No Accident 14 Lost Time Injury Rate 12 73% below the industry average OSHA Recordable Incident Rate 10 OSHA Incident Rate 8 48% below the industry average 6 4 2 0 1998 2000 2002 2004 2006 2008 2010 2012 2014 Comfort Systems USA (March 2014 data) Industry Average (December 2012

  8. Slide 8: Energy Efficiency

    Energy Efficiency • Energy costs drive the need for efficiency. • HVAC accounts for 30%–50% of electricity usage. • Energy Star (Department of Energy/EPA)/LEED (USGBC). • 2–4 year payouts depending on electric rates, usage, age, and incentives. Use Our Energy to Save Yours!™ 8

  9. Slide 9: Revenue/Stock Price History

    Revenue/Stock Price History $2,000 $25.00 $1,800 $1,600 $20.00 $1,400 Revenue ($ in millions) Stock Price at 12 / 31 $1,200 $15.00 $1,000 ` $800 $10.00 $600 $400 $5.00 $200 $0 $- 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Acquisition Phase Sale of Assets New

  10. Slide 10: Revenue by Activity

    Revenue by Activity 2008 2014 YTD 13% 18% 48% 57% 30% 34% New Construction / Installation Replacement Service & Maintenance 10

  11. Slide 11: Revenue by Sector

    Revenue by Sector March 2014 YTD Revenue 8% 2% 15% Education Healthcare 13% Government 11% Manufacturing / Distribution Office Buildings 12% Retail / Restaurants / Entertainment 12% Multi-Family / Residential Other 27% 11

  12. Slide 12: Diverse Project Mix

    Diverse Project Mix Number of Projects Aggregate Contract Value 3,000 2,804 2,500 2,000 18% 1,500 45% 1,000 37% 500 270 79 0 <$1M $1–$5M >$5M Jobs <$1M (Value: $316M) Jobs $1M – $5M (Value: $650M) Jobs >$5M (Value: $783M) Average Project Size: $555,000 | Average Project Length: 6–9 months (Informati

  13. Slide 13: Book of Business

    Book of Business ($ in millions) Construction Backlog $1,000 $800 $600 $400 $200 $508 $598 $630 $618 $604 $612 $0 2009 2010 2011 2012 2013 1Q 2014 Service Maintenance Base $200 $150 $100 $50 $63 $61 $72 $73 $81 $87 $0 1Q 2009 1Q 2010 1Q 2011 1Q 2012 1Q 2013 1Q 2014 13

  14. Slide 14: Historical Financial Summary

    Historical Financial Summary ($ in millions, except per share information) Revenue Adjusted EPS (1) $1,500 $1.00 $0.80 $1,000 $0.60 $0.40 $500 $0.20 $0 $0.00 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Operating Cash Flow Adjusted EBITDA (2) $60 $70 $50 $60 $40 $50 $40 $30 $30 $20 $20 $10 $10

  15. Slide 15: Historical Financial Summary

    Historical Financial Summary Operating Income % 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% (1) 2007 2008 2009 2010 2011 2012 2013 Adjusted EBITDA % (2) 8.0% 6.0% 4.0% 2.0% 0.0% 2007 2008 2009 2010 2011 2012 2013 (1) Operating income for 2011 excludes goodwill impairment of $57.4M. (2) Adjusted EBITDA i

  16. Slide 16: QTD Financial Performance

    QTD Financial Performance Three Months Ended ($ in millions, except per share information) 3/31/14 3/31/13 Revenue $ 321.4 $ 325.9 Net Income from Continuing Operations Attributable to Comfort Systems USA, Inc. $ 0.4 $ 2.6 Diluted EPS from Continuing Operations Attributable to Comfort Systems USA, I

  17. Slide 17: Key Financial Statistics

    Key Financial Statistics As of ($ in millions) 3/31/14 12/31/13 Cash $ 40.7 $ 52.1 Working Capital $ 133.1 $ 127.6 Goodwill and Intangible Assets $ 151.1 $ 152.0 Total Debt $ 9.0 $ 2.0 Equity $ 313.8 $ 314.0 17

  18. Slide 18: Balance Sheet Strength

    Balance Sheet Strength • $40.7M cash at March 31, 2014 • Positive free cash flow for 15 consecutive years • Debt capacity o $9M debt at 3/31/ 2014 o $175M revolving credit facility o 2018 maturity 18

  19. Slide 19: Earnings Profile for Growth

    Profile for Growth Service Earnings Time Commercial HVAC 19

  20. Slide 20: Comfort Systems USA in the Next Cycle

    Industry Environment: McGraw Hill Construction Comfort Systems USA in the Next Cycle Total Nonresidential Construction Starts Billions of Current Dollars History Forecast • Expanding service 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • Growing markets • Investing in our workforce Nonresidenti

  21. Slide 21: Appendices

    Seu A. Appendices

  22. Slide 22: Appendix I — Income Statement (QTD)

    Appendix I —Income Statement (QTD) ($ in thousands, except per share information) Three Months Ended March 31, 2014 2013 Revenue $ 321,381 100.0% $ 325,890 100.0% Cost of Services 269,232 83.8% 274,423 84.2% Gross Profit 52,149 16.2% 51,467 15.8% Selling, General and Administrative Expenses 50,385 1

  23. Slide 23: Appendix II — GAAP Reconciliation to Adjusted EBITDA

    Appendix II —GAAP Reconciliation to Adjusted EBITDA ($ in thousands) Three Months Ended March 31, 2014 2013 Net Income Including Noncontrolling Interests $ 1,063 $ 2,695 Discontinued Operations 15 54 Income Taxes 692 2,043 Other (Income) Expense, net (68) (64) Changes in the Fair Value of Contingent

  24. Slide 24: Appendix III — GAAP Reconciliation to Adjusted EBITDA (Historical)

    Appendix III —GAAP Reconciliation to Adjusted EBITDA (Historical) ($ in thousands) Year Ended December 31, 2007 2008 2009 2010 2011 2012 2013 Net Income (Loss) Including $ 32,466 $ 49,690 $ 34,182 $ 14,740 ($36,492) $11,849 $28,556 Noncontrolling Interests Discontinued Operations (266) 107 (1,282) 5

  25. Slide 25: Appendix IV — Supplemental Non-GAAP Information (Historical)

    Appendix IV —Supplemental Non-GAAP Information (Historical) ($ in thousands) 2008 2009 2010 2011 2012 2013 Net income (loss) from continuing operations attributable to Comfort Systems USA, Inc. $ 49,797 $ 32,900 $ 20,564 ($32,812) $13,108 $27,345 Goodwill impairment (after tax) - - - 44,805 - - Chan

  26. Slide 26: Appendix V — GAAP Reconciliation to Adjusted EPS (Historical)

    Appendix V —GAAP Reconciliation to Adjusted EPS (Historical) Year Ended December 31, 2008 2009 2010 2011 2012 2013 Diluted income (loss) per share from continuing operations attributable to Comfort Systems USA, Inc. $ 1.24 $ 0.86 $ 0.54 $ (0.88) $ 0.35 $ 0.73 Goodwill impairment - - - 1.20 - - Chang

  27. Slide 27: Contact

    Contact Bill George Executive Vice President and CFO 1-800-723-8431 bill.george@comfortsystemsusa.com www.comfortsystemsusa.com 27

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