EX-99.1 5 tm2018570d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

Quality People. Building Solutions. NYSE: FIX May 5, 2020

SAFE HARBOR Certain statements and information in this presentation may constitute forward - looking statements regarding our future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as ame nde d. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are int ended to identify forward - looking statements, which are generally not historic in nature. These forward - looking statements are based on the curren t expectations and beliefs of Comfort Systems USA, Inc. and its subsidiaries (collectively, the “Company”) concerning future de vel opments and their effect on the Company. While the Company’s management believes that these forward - looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Company will be those that it anticipates. All comment s c oncerning the Company’s expectations for future revenue and operating results are based on the Company’s forecasts for its existing ope rat ions and do not include the potential impact of any future acquisitions. The Company’s forward - looking statements involve significant risks and uncertainties (some of which are beyond the Company’s control) and assumptions that could cause actual future results to diff er materially from the Company’s historical experience and its present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward - looking statements include, bu t are not limited to: the use of incorrect estimates for bidding a fixed - price contract; undertaking contractual commitments that exce ed the Company’s labor resources; failing to perform contractual obligations efficiently enough to maintain profitability; national or regional weakness in construction activity and economic conditions; the Company’s business being negatively affected by health crises or outbreaks of disease, such as epidemics or pandemics; financial difficulties affecting projects, vendors, customers, or subcontractors; th e C ompany’s backlog failing to translate into actual revenue or profits; failure of third party subcontractors and suppliers to complete wor k as anticipated; difficulty in obtaining or increased costs associated with bonding and insurance; impairment to goodwill; errors in the Compa ny’ s percentage - of - completion method of accounting; the result of competition in the Company’s markets; the Company’s decentralized management structure; material failure to comply with varying state and local laws, regulations or requirements; debarment from bidding on or performing government contracts; shortages of labor and specialty building materials; retention of key management; seasonal fluctuations in the demand for mechanical or electrical systems; the imposition of past and future liability from environmental, safety, and health regu lat ions including the inherent risk associated with self - insurance; adverse litigation results; an increase in our effective tax rate; an informat ion technology failure or cyber security breach; and other risks detailed in our reports filed with the Securities and Exchange Commission ( the “SEC”). For additional information regarding known material factors that could cause the Company’s results to differ from its project ed results, please see its filings with the SEC, including its Annual Report on Form 10 - K, Quarterly Reports on Form 10 - Q, and Curr ent Reports on Form 8 - K. Readers are cautioned not to place undue reliance on forward - looking statements, which speak only as of the date hereo f. The Company undertakes no obligation to publicly update or revise any forward - looking statements after the date they are made, wheth er as a result of new information, future events, or otherwise. NON - GAAP MEASURES Certain measures in this presentation are not measures calculated in accordance with generally accepted accounting principles (“ GAAP”). They should not be considered a replacement for GAAP results. Non - GAAP financial measures appearing in these slides are identifi ed in the footnote. See the Appendices for a reconciliation of these non - GAAP measures to the most comparable GAAP financial measures.

COMFORT SYSTEMS USA 2 • Leading national mechanical, electrical and plumbing (“MEP”) installation and service provider • $2.6B yearly revenue • 12,000+ employees • History of Profitable Growth • Balanced construction and service portfolio

NATIONAL FOOTPRINT 3 142 locations | 116 cities | 12,000 employees

New Construction Existing Building Construction Service Projects Service Calls, Maintenance & Monitoring REVENUE BREAKDOWN – YTD 2020 4 Activity YTD 2020 Revenue = $700.1M 7% 13% 50% 30% Healthcare 14% Education 16% Government 6% Industrial 39% Office Buildings 11% Other 5% Retail / Restaurant / Entertainment 9% Market Sector

CONSTRUCTION BACKLOG 5 $763 $948 $1,166 $1,602 $1,618 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2016 2017 2018 2019 Q1 2020 ($ in millions)

SERVICE MAINTENANCE BASE 6 $111 $116 $123 $127 $130 $100 $105 $110 $115 $120 $125 $130 $135 2016 2017 2018 2019 Q1 2020 ($ in millions)

RECENT FINANCIAL PERFORMANCE 7 Three Months Ended Twelve Months Ended ($ in millions, except per share information) 3/31/20 3/31/19 12/31/19 Revenue $700.1 $538.5 $2,615.3 Net Income $17.7 $19.9 $114.3 Diluted EPS $0.48 $0.53 $3.08 Adjusted EBITDA (1) $36.9 $38.5 $213.5 Operating Cash Flow $21.9 $1.0 $142.0 ( 1) Adjusted EBITDA is a non - GAAP financial measure. See Appendix for a GAAP reconciliation to Adjusted EBITDA.

FOCUS ON CASH FLOW • Positive free cash flow for 21 consecutive years • Increased dividend for 7 consecutive years • Debt/TTM EBITDA = 1.58 • $133.3M cash at March 31, 2020 • $334.0M total debt at March 31, 2020 • Debt capacity – $290.6M borrowings at 3/31/20 – $600M senior credit facility – 2025 maturity 8

9 CONSISTENT CAPITAL ALLOCATION ($ in thousands) $45,034 70% $10,906 17% $8,749 13% Average 2006 - 2019 Acquisitions Share Repurchases Dividends $64,689 $56,273 $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Free Cash Flow Disc Spending

MODULAR OFF - SITE CONSTRUCTION 10

OUR STRENGTH 11 • Consistent free cash flow • Strong Balance Sheet • Acquisition record • Leading innovation • Profitable growth

THANK YOU 12 142 Locations 35 operating companies across America at 142 locations in 116 cities 12,000+ of the most qualified HVAC and electrical contracting personnel in America 12,000+ Employees $2.6 Billion $2.6 billion in yearly revenue CONTACT: Bill George Executive Vice President & CFO 1 - 800 - 723 - 8431 Bill.George@comfortsystemsusa.com www.comfortsystemsusa.com

APPENDIX – GAAP RECONCILIATION TO ADJUSTED EBITDA 13 Three Months Ended March 31, Twelve Months Ended December 31, ($ in thousands) 2020 2019 2019 Net Income $17,716 $19,866 $114,324 Provision for Income Taxes 6,751 6,933 37,418 Other (Income) Expense, net (25) (15) (187) Changes in the Fair Value of Contingent Earn - out Obligations (2,272) 158 2,991 Interest Expense, net 2,553 1,037 9,093 Gain on Sale of Assets (554) (219) (1,701) Depreciation and Amortization 12,691 10,724 51,572 Adjusted EBITDA $36,860 $38,484 $213,510 Note: The Company defines adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as net in come, provision for income taxes, other expense (income), net, changes in the fair value of contingent earn - out obligations, interest expense, net, gain on sale of assets, goodwill impairment and depreciation and amortization. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is presented because it is a financial measure that is frequently requested by t hir d parties. However, Adjusted EBITDA is not considered under generally accepted accounting principles as a primary measure of an entity’s financial results, and accordingly, Adjusted EBI TDA should not be considered an alternative to operating income, net income, or cash flows as determined under generally accepted accounting principles and as reported by the Company.