Comfort Systems Usa, Inc. · NYSE:FIX
Comfort Systems Usa — Investor Presentation (October 2019)
22 slides from Comfort Systems Usa's investor presentation, Oct 31, 2019
Slide 1: Quality People. Building Solutions.
Quality People. Building Solutions. NYSE: FIX October 31, 2019
Slide 2: Safe Harbor / Non-GAAP Measures
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, as amended. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,”
Slide 3: Comfort Systems USA
Comfort Systems USA • Leading mid-market HVAC and electrical contracting installation and service provider • $2.6B yearly revenue • 11,900 employees • 35 operating companies • Balanced construction & service portfolio 2
Slide 4: National Footprint
National Footprint 35 companies | 129 locations in 111 cities | 11,900 employees 3
Slide 5: Walker Engineering
Walker Engineering Overview • Walker is a leading full-service electrical contracting and network infrastructure engineering business serving commercial and industrial clients in Texas • Headquarters: Dallas, Texas with locations in all 4 major Texas markets (Dallas, Houston, Austin and San Antonio)
Slide 6: Our Markets
Our Markets Every Building You See … Light Heavy Light Heavy Residential Commercial Industrial Commercial Commercial Industrial Industrial … Needs What We Do 5
Slide 7: Lifecycle Product Portfolio
Lifecycle Product Portfolio • 6+ million commercial buildings • Diverse revenue streams throughout lifecycle • 10 - 20 year replacement cycle • “Inventory” of future business • Recurring service • Continued benefit through maintenance & replacement 6
Slide 8: Revenue by Activity
Revenue by Activity YTD 2019 FY 2018 Revenue = $1.90B Revenue = $2.18B 9.1% 9.5% 31.9% 15.3% 36.5% 16.0% 43.7% 38.0% New Construction Existing Building Construction Service Projects Service Calls, Maintenance & Monitoring 7
Slide 9: Market Sectors
Market Sectors Multi-Family / Residential 4.4% Health Care Retail / Restaurant / 16.2% Entertainment Other 9.7% 3.5% Office Building Education 13.5% 15.4% Government 6.2% Industrial 31.1% YTD September 2019 Revenue Revenue = $1.90B 8
Slide 10: Diverse Project Mix
Diverse Project Mix Number of Projects 6,000 5,278 5,000 4,000 3,000 2,000 1,000 598 185 0 <$1M $1–$5M >$5M Average Project Size: $0.8 M | Average Project Length: 6 – 9 months (Information as of September 30, 2019) 9
Slide 11: Book of Business
Book of Business ($ in millions) Construction Backlog $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $618 $604 $758 $712 $763 $948 $1,166 $1,609 $0 2012 2013 2014 2015 2016 2017 2018 Q3 2019 Service Maintenance Base $200 $175 $150 $125 $100 $75 $50 $25 $75 $83 $89 $104 $111 $116 $123 $125 $0
Slide 12: Recent Financial Performance
Recent Financial Performance Three Months Ended Nine Months Ended ($ in millions, except per share information) 9/30/19 9/30/18 9/30/19 9/30/18 Revenue $706.9 $594.5 $1,895.7 $1,594.5 Net Income $36.2 $38.5 $80.3 $87.7 Diluted EPS $0.98 $1.02 $2.16 $2.33 Adjusted EBITDA (1) $66.1 $63.6 $154.4 $142.3
Slide 13: Adjusted EPS/Stock Price History
Adjusted EPS/Stock Price History $3.50 $50.00 $45.00 $3.00 $40.00 $2.50 $35.00 Stock Price at 12 / 31 Adjusted EPS at 12/31* $30.00 $2.00 $25.00 ` $1.50 $20.00 $1.00 $15.00 $10.00 $0.50 $5.00 $- $- 2013 2014 2015 2016 2017 2018 Adjusted EPS at 12/31* Stock Price at 12/31 *Adjusted EPS is a non-GAAP
Slide 14: Historical Financial Summary
Historical Financial Summary ($ in millions, except per share information) Revenue Adjusted EPS (1) CAGR = 9.97% CAGR = 33.15% $2,400 $3.20 $2,100 $2.80 $1,800 $2.40 $1,500 $2.00 $1,200 $1.60 $900 $1.20 $600 $0.80 $300 $0.40 $0 $0.00 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Operat
Slide 15: Focus on Cash Flow
Focus on Cash Flow • Positive free cash flow for 20 consecutive years • Increased dividend for 6 consecutive years • Debt/TTM EBITDA = 1.19 • $40.4M cash at September 30, 2019 • $201.7M net debt at September 30, 2019 • Debt capacity – $242.0M debt at 9/30/19 – $400M revolving credit facility – 2023
Slide 16: Profile for Growth
Profile for Growth Service Earnings Time Commercial HVAC 15
Slide 17: Average Discretionary Spending
Average Discretionary Spending ($ in thousands) Average 2006 - 2018 $8,304 16% $10,242 20% $33,385 64% Acquisitions Share Repurchases Dividends $60,000 $51,952 $51,930 $50,000 $40,000 $30,000 $20,000 $10,000 $- Free Cash Flow Disc Spending 16
Slide 18: Our Strengths
Our Strengths • Industry leading skilled labor • Ability to share knowledge • Diverse portfolio • Strong balance sheet • Acquisition record • Positioned for growth 17
Slide 19: Thank You
Thank You 11,900 Employees 11,900 of the most qualified HVAC and electrical contracting personnel in America 129 Locations $2.6 Billion 35 operating companies across America at $2.6 billion in yearly revenue 129 locations in 111 cities Contact: Bill George Executive Vice President & CFO 1-800-723-84
Slide 20: Appendix I – GAAP Reconciliation to Adjusted EBITDA
Appendix I – GAAP Reconciliation to Adjusted EBITDA Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2019 2018 2019 2018 Net Income $36,233 $38,541 $80,272 $87,747 Provision for Income Taxes 12,473 13,595 26,339 26,466 Other (Income) Expense, net (3) (39) (167) (4,06
Slide 21: Appendix II – GAAP Reconciliation to Adjusted EBITDA
Appendix II – GAAP Reconciliation to Adjusted EBITDA (Historical) Year Ended December 31, ($ in thousands) 2013 2014 2015 2016 2017 2018 Net Income Including Non-controlling $28,556 $28,599 $57,440 $64,896 $55,272 $112,903 Interests Discontinued Operations 76 15 - - - - Provision for Income Taxes 18
Slide 22: Appendix III – GAAP Reconciliation to Adjusted EPS
Appendix III – GAAP Reconciliation to Adjusted EPS (Historical) Year Ended December 31, 2013 2014 2015 2016 2017 2018 Diluted income per share from continuing operations attributable to $0.73 $0.61 $1.30 $1.72 $1.47 $3.00 Comfort Systems USA, Inc. Goodwill impairment - 0.01 - - 0.02 - Tax valuation
Comfort Systems USA — Investor Presentation (October 2019) on 6ix