美国
证券交易委员会
华盛顿特区20549
表格
(标记一个) | |
根据1934年证券交易所法第13或15(d)条款的季度报告 |
截至2024年6月30日季度结束
或
根据1934年证券交易法第13或15(d)条款的规定，提交过渡报告。 | |
为了从 到 的过渡期 | |
委员会文件号码：
（依凭章程所载的完整登记名称）
|
|
| |
注册者的电话号码，包括区域号码: (
根据法案第12(b)条规定注册的证券：
请在方框内选上，表示申报人（1）在过去12个月（或规定申报人须申报报告的较短时间内），已如期申报证券交易法案第13条或15(d)条文件；及（2）已在过去90天内遵守该申报要求。
标示√，以指出在过去12个月内（或登记者必须提交此类档案的较短时期内）是否已按照Regulation S-t第405条的规定提交了每个互动资料档案。
请勾选指示登记者是否为大型快速提交人、快速提交人、非快速提交人、较小的报告公司或新兴成长型公司。请参阅交易所法规120亿2条，了解「大型快速提交人」、「快速提交人」、「较小的报告公司」和「新兴成长型公司」的定义。
加速披露人◻ | 非加速提交者◻ | 小型报告公司 | 新兴成长型公司 | |
如果一家新兴成长型公司，请用勾选标记表示该申报人已选择不使用根据证交所法案13(a)条款提供的任何新的或修订过的财务会计准则的延长过渡期。 ◻
请以勾选方式表示，该登记人是否为贝壳公司（依照交易所法规第120亿2条所定义）。是
发行人截至2024年10月18日的普通股流通量为
第一部分 - 财务资讯
项目1。 基本报表
COMFORt SYSTEMS USA, INC.
合并资产负债表
（以千为单位，除每股份额外）
九月三十日， | 12月31日， | ||||||
| 2024 |
| 2023 |
| |||
(未经查核) | |||||||
资产 | |||||||
流动资产： | |||||||
现金及现金等价物 | $ | | $ | | |||
已开出且应收帐款，扣除信用损失准备金 $ |
| |
| | |||
未开出且应收帐款，扣除信用损失准备金 $ |
| |
| | |||
其他应收款，减去信用损失准备 $ |
| |
| | |||
存货 |
| |
| | |||
预付费用和其他 |
| |
| | |||
成本和根据帐单超额估计收益，适当扣除信用损失准备金 $ |
| |
| | |||
全部流动资产 |
| |
| | |||
资产 售后服务和支援财产 净额 |
| |
| | |||
租赁资产使用权 | | | |||||
商誉 |
| |
| | |||
可识别无形资产净额 |
| |
| | |||
递延税资产 | | | |||||
其他非流动资产 |
| |
| | |||
资产总额 | $ | | $ | | |||
负债及股东权益 | |||||||
流动负债： | |||||||
长期负债的当期到期 | $ | | $ | | |||
应付账款 | | | |||||
应计的薪资和福利费用 |
| |
| | |||
超越成本及预估收益计提之帐单和透支收入 |
| |
| | |||
应计的自保险 |
| |
| | |||
其他流动负债 |
| |
| | |||
流动负债合计 |
| |
| | |||
长期负债 |
| |
| | |||
租赁负债 | |
| | ||||
递延所得税负债 |
| |
| | |||
其他长期负债 |
| |
| | |||
总负债 |
| |
| | |||
承诺事项与可能负担之事项 | |||||||
股东权益： | |||||||
优先股，面额; 授权 $ |
|
| |||||
普通股, $ |
| |
| | |||
按成本核算的库藏股 |
| ( |
| ( | |||
资本公积额额外增资 |
| |
| | |||
保留收益 |
| |
| | |||
股东权益总额 |
| |
| | |||
负债和股东权益总额 | $ | | $ | | |||
附注是这些综合基本报表的重要部分。
2
COMFORt SYSTEMS USA, INC.
综合营运状况表
(以千为单位，除每股资料外)
(未经查核)
| 三个月结束了 | 截至九个月 | |||||||||||
九月三十日， | 九月三十日， | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| |||||
营业收入 | $ | | $ | | $ | | $ | | |||||
服务成本 |
| |
| |
| |
| | |||||
毛利润 |
| |
| |
| |
| | |||||
销售、一般和管理支出 |
| |
| |
| |
| | |||||
出售资产利润 |
| ( |
| ( |
| ( |
| ( | |||||
营收 |
| |
| |
| |
| | |||||
其他收入（费用）： | |||||||||||||
利息收入 |
| |
| |
| |
| | |||||
利息费用 |
| ( |
| ( |
| ( |
| ( | |||||
有关条件性盈余分得义务公允价值变动 |
| ( |
| ( |
| ( |
| ( | |||||
其他 |
| |
| ( |
| |
| | |||||
其他收益（费用） |
| ( |
| ( |
| ( |
| ( | |||||
税前收益(损失) |
| |
| |
| |
| | |||||
所得税费用 |
| |
| |
| |
| | |||||
净利润 | $ | | $ | | $ | | $ | | |||||
每股收益： | |||||||||||||
基础 | $ | | $ | | $ | | $ | | |||||
稀释 | $ | | $ | | $ | | $ | | |||||
计算每股收益所使用的股份： | |||||||||||||
基础 |
| |
| |
| |
| | |||||
稀释 |
| |
| |
| |
| | |||||
附注是这些综合基本报表的重要部分。
3
COMFORt SYSTEMS USA, INC.
股东权益综合表Y
（以千为单位，除每股份额外）
(未经查核)
截至九个月 | ||||||||||||||||||||
2023年9月30日 | ||||||||||||||||||||
额外的 | 总计 |
| ||||||||||||||||||
| 普通股 |
| 库藏股 |
| 资本剩余 | 保留收益 |
| 股东权益 |
| |||||||||||
| 股份 |
| 金额 |
| 股份 |
| 金额 |
| 资本 |
| 累积盈余 |
| 股权 |
| ||||||
2022年12月31日的资产负债表 |
| | $ | |
| ( | $ | ( | $ | | $ | |
| $ | | |||||
净利润 |
| — | — | — | — | — | |
| | |||||||||||
发行股票: | ||||||||||||||||||||
行使期权发行股份 |
| — | — | | | ( | — |
| | |||||||||||
限制性股份与表现股份的发行 |
| — | — | | | | — |
| | |||||||||||
税前领取当现金授权的股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
股份报酬 |
| — | — | — | — | | — |
| | |||||||||||
分红派息 ($ |
| — | — | — | — | — | ( |
| ( | |||||||||||
回购股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
2023年3月31日的结余 | | | ( | ( | | | | |||||||||||||
净利润 |
| — | — | — | — | — | |
| | |||||||||||
股票发行： | ||||||||||||||||||||
发行股份以供选择权行使 |
| — | — | — | — | — | — |
| — | |||||||||||
发行受限股及业绩股 |
| — | — | | | ( | — |
| — | |||||||||||
以股份代替税收扣除员工实际已获分红派息的股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
股份报酬 |
| — | — | — | — | | — |
| | |||||||||||
分红派息 ($ |
| — | — | — | — | — | ( |
| ( | |||||||||||
回购股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
2023年6月30日结算余额 | | | ( | ( | | | | |||||||||||||
净利润 |
| — | — | — | — | — | |
| | |||||||||||
股票发行： | ||||||||||||||||||||
期权行使后股份发行 |
| — | — | — | — | — | — |
| — | |||||||||||
限制股份及绩效股的发行 |
| — | — | | | ( | — |
| — | |||||||||||
以发放股票代替对已发行股票的扣税 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
股份报酬 |
| — | — | — | — | | — |
| | |||||||||||
分红派息 ($ |
| — | — | — | — | — | ( |
| ( | |||||||||||
回购股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
2023年9月30日的资产负债表 | | $ | | ( | $ | ( | $ | | $ | | $ | | ||||||||
4
COMFORt SYSTEMS USA, INC.
股东权益合并报表
（以千为单位，除每股份额外）
(未经查核)
截至九个月 | ||||||||||||||||||||
2024年9月30日 | ||||||||||||||||||||
额外的 | 总计 | |||||||||||||||||||
| 普通股 |
| 库藏股 |
| 资本剩余 | 保留收益 |
| 股东权益 |
| |||||||||||
| 股份 |
| 金额 |
| 股份 |
| 金额 |
| 资本 |
| 累积盈余 |
| 股权 |
| ||||||
2023年12月31日的资产负债表 |
| | $ | | ( | $ | ( | $ | | $ | | $ | | |||||||
净利润 |
| — | — | — | — | — | |
| | |||||||||||
股票发行： | ||||||||||||||||||||
期权行使后的股份发行 |
| — | — | | | ( | — |
| | |||||||||||
发行限制性股票及绩效股 |
| — | — | | | | — |
| | |||||||||||
以股份代替预扣税款，以抵销已授予的股票 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
股份报酬 |
| — | — | — | — | | — |
| | |||||||||||
分红派息 ($ |
| — | — | — | — | — | ( |
| ( | |||||||||||
回购股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
2024年3月31日账户结余 |
| | |
| ( | ( | | | | |||||||||||
净利润 | — | — | — | — | — | | | |||||||||||||
股票发行： | ||||||||||||||||||||
股份发行以行使期权 | — | — | — | — | — | — | — | |||||||||||||
限制性股票和绩效股票发行 | — | — | | | ( | — | — | |||||||||||||
收到分红股代替已发股票预扣税款 | — | — | ( | ( | — | — | ( | |||||||||||||
股份报酬 | — | — | — | — | | — | | |||||||||||||
分红派息 ($ | — | — | — | — | — | ( | ( | |||||||||||||
回购股份 | — | — | ( | ( | — | — | ( | |||||||||||||
2024年6月30日的结余: | | | ( | ( | | | | |||||||||||||
净利润 |
| — | — | — | — | — | |
| | |||||||||||
股票发行： | ||||||||||||||||||||
为期权行使而发行股份 |
| — | — | — | — | — | — |
| — | |||||||||||
发行限制股和表现股 |
| — | — | | | ( | — |
| — | |||||||||||
以采购存货为税收代扣的分红股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
股份报酬 |
| — | — | — | — | | — |
| | |||||||||||
分红派息 ($ |
| — | — | — | — | — | ( |
| ( | |||||||||||
回购股份 |
| — | — | ( | ( | — | — |
| ( | |||||||||||
2024年9月30日结余 | | $ | | ( | $ | ( | $ | | $ | | $ | | ||||||||
附注是这些综合基本报表的重要部分。
5
COMFORt SYSTEMS USA, INC.
综合现金流量表
(以千元计)
(未经查核)
截至九个月 | |||||||
九月三十日， | |||||||
| 2024 |
| 2023 |
| |||
营业活动之现金流量： | |||||||
净利润 | $ | | $ | | |||
调整以将净利润调解为经营活动提供的净现金 | |||||||
可识别无形资产之摊销 |
| |
| | |||
折旧费用 |
| |
| | |||
租赁资产的变动 | | | |||||
呆帐费用 |
| |
| | |||
递延税项提列（收益） |
| ( |
| | |||
偿还债务财务成本 |
| |
| | |||
资产出售所得 |
| ( |
| ( | |||
有关条件性盈余分得义务公允价值变动 |
| |
| | |||
股份报酬 |
| |
| | |||
营运资产和负债变动，扣除并购和出售影响后的净变动— | |||||||
(增加)减少— | |||||||
应收账款，净额 |
| ( |
| ( | |||
存货 |
| |
| ( | |||
预付费用及其他流动资产 |
| |
| | |||
现金及现金等价物以及估计的收益超出帐单和未开帐款应收帐款 |
| ( |
| ( | |||
其他非流动资产 |
| ( |
| ( | |||
增加（减少）在— | |||||||
应付款及应计费用 |
| |
| | |||
超越成本及预估收益计提之帐单和透支收入 |
| |
| | |||
其他长期负债 |
| ( |
| | |||
经营活动产生的净现金流量 |
| |
| | |||
投资活动产生的现金流量: | |||||||
购买不动产和设备 |
| ( |
| ( | |||
固定资产出售收益 |
| |
| | |||
收购支付的现金，扣除取得的现金净额 |
| ( |
| ( | |||
投资支付 | ( | ( | |||||
投资活动中使用的净现金 |
| ( |
| ( | |||
融资活动产生的现金流量: | |||||||
从循环信贷计划获得的收益 |
| |
| | |||
循环信贷付款 |
| ( |
| ( | |||
其他债务净额收入 | | — | |||||
其他债务的付款 |
| ( |
| ( | |||
支付分红派息给股东 |
| ( |
| ( | |||
股份回购 |
| ( |
| ( | |||
以股票代替税款扣缴而收到的股份 |
| ( |
| ( | |||
期权行使所得款项 |
| |
| | |||
已延期收购付款 | ( | — | |||||
支付与条件性担保安排有关的款项 |
| ( |
| ( | |||
筹集资金的净现金流量 |
| ( |
| ( | |||
现金及现金等价物的净增加额 |
| |
| | |||
期初现金及现金等价物 |
| |
| | |||
期末现金及现金等价物 | $ | | $ | | |||
附注是这些综合基本报表的重要部分。
6
COMFORt SYSTEMS USA, INC.
基本报表附注摘要
2024年9月30日
(未经查核)
1. 业务和组织
Comfort Systems USA, Inc.，一家特拉华州公司，提供全面的机械和电气承包服务，主要包括供热、通风和空调（“ HVAC”），管道、电气、管道和控制，以及离场施工、监控和消防。 我们在整个美国建造、安装、维护、修理和更换机械、电气和管道（“ MEP”）系统。 “Comfort Systems”，“我们”，“我们”，或“公司”，指的是Comfort Systems USA，Inc.或Comfort Systems USA，Inc.及其合并子公司，根据情况而定。
2. 重要会计政策和估计摘要
报告基础
这些中期报表应与Comfort Systems的历史合并财务报表及有关附注一并阅读，该公司的年度报告所提交的针对截至2023年12月31日的年度报告，已向美国证券交易委员会（“SEC”）提交（即“Form 10-K”）。
随附的未经审核的合并财务报表是根据中期财务信息的普遍会计原则以及SEC Form 10-Q的指引和SEC规则Regulation S-X编制的。因此，这些财务报表不包括所有合并财务报表所需的附注，应与Form 10-K一并阅读。我们认为已包括所有必要调整以公正呈现这些中期报表，并且调整是正常且经常性质的。中期期间的营运结果并不一定能反映出整个财政年度的结果。
估计的使用
根据普遍公认的会计准则准备基本报表，需要管理层利用估计和假设来确定资产和负债、营业收入和费用以及有关条件性资产和负债的申报金额。实际结果可能与这些估计不同。我们基本报表中使用的最重要估计影响施工合同的营收和成本确认、自保险准备金、所得税会计、收购的公平价值会计，以及关于我们商誉减损测试中的报告单位公平价值的量化。
最近会计宣告
未采用的近期会计宣告
2023年11月，财务会计准则委员会（“FASB”）发布了ASU 2023-07，“分部报告（主题280）：改进报告分部披露”。该标准要求实体在每年和每季度披露，常提供给首席决策者并包含在每个报告的分部利润和损失中的重要分部支出。ASU 2023-07将于2023年12月15日后开始的会计年度和2024年12月15日后开始的会计年度内插入期间生效。允许提前采纳。ASU 2023-07将不会对我们的合并财务状况、营业成果或现金流量产生影响，但将影响我们如上述所讨论的基本报表披露。
2023年12月，FASB发布了ASU 2023-09，“所得税（主题740）：所得税披露的改进。” 此标准要求实体在调解其法定状态时披露更详细的信息。
7
标准要求实体将税率调整为其有效税率。该标准还要求实体就已支付的所得税进行额外披露，以及有关某些与所得损益相关项目的披露。ASU 2023-09适用于2024年12月15日后开始的财政年度. 允许提前采用。此标准将不会对我们的合并财务状况、营业收入或现金流量产生影响，但将影响我们如上所述的财务报表披露。
营收认证
我们对所有业务服务进行逐步认列营业收入，因为随著工作进展，控制不断转移给该客户，而且我们有权在成本发生时向客户开具账单。客户通常通过合同终止条款或我们有权获得支付已执行工作的证据，以及合理利润，以递交对公司没有替代用途的产品或服务。
基于上述原因，我们根据向完满履行责任的进展程度来确认营业收入。选择衡量向完满履行的进展程度的方法需要判断，并基于将提供的产品或服务的性质。通常我们使用成本加成方法来衡量我们向合同完满履行的进步程度，因为这最能展现当我们在合同上费用时发生的资产转移给客户。根据成本加成方法，依据迄今为止已发生的成本与完满履行的预估成本之比率来衡量向完满履行的程度。营业收入，包括预估的费用或利润，随著成本的发生按比例记录。履行的成本包括劳动力、材料、分包商成本、其他直接成本和间接成本之分摊。
对于业务中的一小部分，我们的服务以现有系统的维护服务形式提供，而非建设形式，我们的履行责任在于为特定时期维护客户的机械系统。与施工工作类似，我们逐步确认收入；然而，在提供服务的全部成本可能未知的维护协议中，我们通常使用输入法来确认收入，其基于我们提供服务的时间占我们签订服务约定总时间的比例。我们的营业收入确认政策在《附注3“与客户的合同收入”》中进一步讨论。
应收帐款和信用减损准备
我们需要估计并记录计算摊销成本的合同期间的预期信用损失，包括已开具的及未开具的应收帐款、其他应收款及合同资产。应收帐款包括已开立应收帐款或有无条件开立应收帐款给我们的工作所产生的金额。我们的交易应收款在合约到期时间内到期。
我们使用损失率方法来估计我们所识别的投资组合部门的信用损失。我们的投资组合部门包括施工、服务和其他。虽然我们的施工和服务金融资产通常与相同的客户和行业有关，但由于留置权，我们的施工金融资产通常比服务金融资产具有较低的损失率，我们在施工工作中更有可能拥有留置权。这些留置权平均会导致较低的信用损失支出，相较于没有留置权的应收帐款。分类为“其他”的金融资产包括与我们的核心营收活动无关的应收帐款，例如与前业主的并购活动相关的应收帐款，我们的供应商回扣计划或应收超出我们保险免赔额的预估损失的应收帐款，这些会随之产生相应的应计保险负债。
我们投资组合的损失率基于众多因素，包括我们每个投资组合的信用损失支出历史、各投资组合中我们客户和交易对手的财务实力、应收帐款的老化情况、我们对付款可能性的期望、美国宏观经济趋势以及美国当前和预测的非住宅建筑市场趋势。
除了上述讨论的损失率计算外，我们还为被认为比其他应收帐款组合中的其余应收帐款风险更高的具体应收帐款记录信用损失准备（例如，当我们担心特定客户破产并且无法再支付应付给我们的应收帐款时，我们会对特定应收帐款记录信用损失准备）。
8
未结帐应收帐款
未开票应收账款是我们应得但尚未开票的金额，根据我们已获得的条约而言，我们收款权利是无条件的。只有在货款到期前需要经过一段时间才能收取货款时，对报酬的权利才是无条件的。
所得税
我们在美国各州遍布全境经营业务。我们的有效税率会根据我们在联邦和不同课税率和规则的各州相对的盈利能力（或盈利能力的缺乏）而改变。此外，像税法变化、判决和法律结构等个别项目可能会影响我们的有效税率。这些项目还可能包括商誉和其他无形资产减损的税务处理、并购相关资产和负债的公允价值变化、不确定税务立场，以及会计处理与业务表现不佳相关的亏损。
通胀减少法案于2022年8月16日颁布。 除其他条文外，该法案对超过10亿美元的调整财务报表收入提供了企业替代最低税，该税则对2022年12月31日后开始的纳税年度生效，以及对2022年12月31日后进行的股票回购征收1%的消费税。 消费税的影响记录在我们的综合资产负债表中的“库存股”中。 这些条文对我们当年的整体财务结果、财务状况和现金流量并无实质影响。
2023年9月初，IRS发布了临时指导意见，涵盖包括研究和试验性支出的处理，以及其他话题，针对使用百分比完工法来记录长期合同的纳税所得。 我们依赖这样的指引来完成2022年税务年度，结果减少的应纳税收入抵销了根据《减税和就业法》（2017年）对2022年税务年度的研发支出推迟的减税额。 我们于2023年10月提交了我们的2022年联邦税务申报表，请求退回我们的超额支付，截至2024年9月30日尚未收到。
金融工具
我们的金融工具包括现金及现金等价物、应收账款、其他应收款、应付账款和人寿保险单，我们认为由于这些工具的短期性质，其携带价值接近其公平值，另外还有对前业主的票据和循环信贷设施。
投资
我们有一个$
3. 营业收入来自合同客户
当我们将承诺的商品或服务的控制权转移给客户，在反映我们预期应得的对换这些商品或服务的考虑金额时，营业收入即予以承认。基于销售的税款不包含在营业收入中。
我们提供机械和电气承包服务。我们的机械部门主要包括暖通空调、管道、管网和控制，以及现场施工、监控和消防保护。我们的电气部门包括电系统的安装和维修服务。我们在美国各地建造、安装、维护、修理和更换产品和系统。我们所有的营业收入均在我们向客户交付商品和服务时逐步认列。营业收入可以基于已约定的固定价格或实际成本加成而获得。
9
当：(i)双方均获批准并承诺，(ii)确定了双方的权利，(iii)确定了付款条款，(iv)合同具有商业实质，以及(v)收款的可能性很大时，我们才会纳入一笔合同。我们认为项目的开始控制项是在满足上述标准并获得客户书面授权继续进行，或签署合同时。
通常在项目开始之前，我们并不会产生与获得或履行合同相关的重大增量成本。在极少数情况下，如果产生了重大的合同前成本，则会进行资本化并按照成本至成本的输入方法分摊，以衡量朝向合同完成的进展。我们目前在我们的合并资产负债表中没有任何获得或履行成本的资本化，并且今年尚未发生任何有关此类成本的减值亏损。
由于许多履行契约所需的工作性质，对于项目完成时的总收入和成本的估计(下面更详细地描述的过程)是复杂的，受到许多变量的影响，需要作出重大判断。我们有资格收取的长期合同报酬可能包括固定和变动金额。变动金额可能会增加或降低交易价格。可增加或减少合同价值的变动金额的常见例子是未定的变更订单，代表已获客户授权或确认的用于合同变更的合同修改，但合同价格的最终调整尚待协商。其他正变动营业收入的例子包括根据客户酌情而定的某些绩效指标、项目里程碑或完成日期目标获得的金额。如果我们未能达到所述的绩效要求，例如遵守施工进度，变动金额可能导致合同营业收入的扣减。
我们在合同价格中包括了变量收入的预估金额，只要当变量收入的不确定性解决时，将不会发生巨大的营业收入须彻底反转的机会。我们对变量收入的预估和决定是否在合同价格中包括预估金额主要基于对我们预期表现的评估，以及所有对我们合理可得到的资讯（历史、当前和预测）的评估。直至与变量收入相关的不确定性解决前，我们每会计期间重新评估变量收入金额。变量收入金额的评估变化将作为当前期间已认列营业收入的累积调整来前瞻性地记录。
合同经常因合同规格和要求的更改而进行修改。我们认为当进行修改创建新的或更改现有的可强制执行权利和义务时，合同修改即存在。大多数我们的合同修改是针对与现有履行义务不明显的商品或服务。合同修改对交易价格的影响，以及我们用来衡量与之相关的履行义务的进度的方式，将按照累积追溯的方式，按照对营业收入（增加或减少）的调整进行记录。
我们有一项全公司政策要求定期审查完工估算，管理层审查我们履行义务和预估未完成义务的进展和执行情况。作为此过程的一部分，管理层审查包括但不限于任何已进行的重要合同事项、完成情况以及相关计划时间表、识别的风险和机会以及与估算的营业收入和成本变化相关的管理意见。风险和机会包括管理对实现计划的能力和成本的判断。例如，、里程碑事件的数量和类型）、技术要求（例如，、新开发产品与成熟产品之间的区分）和其他合同要求。管理层必须对劳动生产力和可用性、执行的工作复杂性、材料的供应情况、完成履行义务所需的时间（例如，、以估算工资和物料价格的增加及相关支持成本分摊）、外判商的执行、客户提供的资金可用性和时间安排，以及间接成本率等等变量。
根据这一分析，在我们确定时，任何对营业收入、服务成本的调整以及对营业收入的相关影响都会在我们了解时确认为必要。这些调整可能来自项目的良好表现，如果我们判断我们将成功化解围绕这些履行义务的技术、进度和成本方面的风险或实现相关机会，这可能会导致在单个履行义务期间营业收入的增加。同样，如果我们判断我们不会
10
成功化解这些风险或实现相关机会，这些调整可能导致营业收入减少。有关营业收入、服务成本的估计变动及对营业收入的相关影响每季度进行累计追朔，即根据我们基于当前和之前期间变动的累计效应在当前期间确认变动的影响。 朝著完全满足绩效义务的进展。一项或多项这些估计的显著变动可能影响一项或多项我们的绩效义务的盈利能力。对已决定这项损失的期间亏损的总成本估计超过收益总估计的绩效义务项目中，该损失的全部损失提供在当期确认。
2024年和2023年9月30日结束的三个月内，我们从在先前期间部分满足的绩效义务中认列的净收益对营收产生正面影响
营业收入的分解
我们合并2024年的营业收入来自于我们提供机械和电气领域服务活动的合同。有关我们可报告部门的更多信息，请参阅第11项“部门信息”。我们通过活动、客户类型和提供的服务来将我们与客户的合同产生的营业收入细分，因为我们认为这样描述最能展示经济因素如何影响我们营业收入和现金流量的性质、金额、时间和不确定性。
Three Months Ended September 30, | 九个月截至九月三十日 | |||||||||||||||||||||||
按服务提供的营业收入 |
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||||||||||||
机械部门 | $ | |
| | % | $ | |
| | % | $ | |
| | % | $ | |
| | % | ||||
Electrical Segment | | | % | | | % | | | % | | | % | ||||||||||||
总计 | $ | | | % | $ | | | % | $ | | | % | $ | | | % | ||||||||
Three Months Ended September 30, | 九个月截至九月三十日 | |||||||||||||||||||||||
按客户类型营业收入 | 2024 | 2023 |
| 2024 | 2023 |
| ||||||||||||||||||
科技 | $ | | | % | $ | | | % | $ | | | % | $ | | | % | ||||||||
制造业 | | | % | | | % | | | % | | | % | ||||||||||||
教育 | | | % | | | % | | | % | | | % | ||||||||||||
Healthcare | | | % | | | % | | | % | | | % | ||||||||||||
办公大楼 | | | % | | | % | | | % | | | % | ||||||||||||
零售、餐厅和娱乐 | | | % | | | % | | | % | | | % | ||||||||||||
政府 | | | % | | | % | | | % | | | % | ||||||||||||
多户家庭和住宅 | | | % | | | % | | | % | | | % | ||||||||||||
其他 | | | % | | | % | | | % | | | % | ||||||||||||
总计 | $ | | | % | $ | | | % | $ | | | % | $ | | | % | ||||||||
Three Months Ended September 30, | 九个月截至九月三十日 | |||||||||||||||||||||||
按活动类型收入 | 2024 | 2023 |
| 2024 | 2023 |
| ||||||||||||||||||
新建筑 | $ | | | % | $ | | | % | $ | | | % | $ | | | % | ||||||||
现有建筑施工 | | | % | | | % | | | % | | | % | ||||||||||||
服务专案 | | | % | | | % | | | % | | | % | ||||||||||||
服务呼叫、维护和监控 | | | % | | | % | | | % | | | % | ||||||||||||
总计 | $ | | | % | $ | | | % | $ | | | % | $ | | | % | ||||||||
合约资产和负债
合同资产包括未开票金额，通常是在使用成本至成本法则认识营业收入时产生的，认识的营业收入超过向客户开具发票的金额和权益。
11
支付是有条件的或以完成里程碑为条件，例如专案的某一阶段。合约资产不被认为具有重大的融资成分，因为它们旨在在我们未能履行合约义务的情况下保护客户。
合约负债包括预付款和超额认列收入的帐单。客户预先支付的与尚未开始的工作相关的款项被归类为预付收入。合约负债不被认为具有重大的融资成分，因为它们用于满足合同初期通常较高的营运资金需求，并旨在防止对方未能履行合约下的义务。我们的合约资产和负债在每个报告期末以合约为基础报告为净额。
2024年9月30日和2023年12月31日，合并资产负债表中的合约资产和负债分别为以下金额（以千为单位）：
2024年9月30日 | 2023年12月31日 | ||||
合约资产： | |||||
逾期款项成本及预估收益，扣除信贷损失津贴 | $ | | $ | | |
合约负债： | |||||
超过成本和预估收益以及透支营收 | $ | | $ | | |
在2024年和2023年的前九个月，我们认可了与2024年1月1日和2023年1月1日的合同负债相关的收入$。
我们没有宣布在呈报期间派发任何分红。下表里提供共同股每股基本盈余和稀释盈余的计算方法，涉及2024年和2023年六月三十日结束三个月的财务报表。
待履行绩效义务
剩余的施工履约义务代表尚未执行工作的确认订单所剩下的交易价格，并不包括未行使的合同期权。截至2024年9月30日，分配给剩余履约义务的交易价格总额为$
4. 公允价值衡量
利率风险管理和衍生工具
有时，我们使用衍生工具来管理市场风险，包括利率风险。如果有未清算金额的利率掉期，则会将该金额记录在『其他应收款项』或『其他流动负债』中。利率掉期的盈利和亏损则记录在『利息费用』中。目前我们没有任何依照ASC 815标准核算为避险工具的衍生金融工具。
公允价值衡量
我们将按照以下三种类别之一对以公允价值计量的资产和负债进行分类和披露：
| ● | 第1层——对于相同资产和负债，报价价格在活跃市场中。 |
| ● | 第2级—根据市场数据或市场数据证实的不可观察输入；和 |
| ● | 第3级—重要的不可观察输入，其中几乎没有市场数据存在，因此需要实体开展自己的假设。 |
12
以下表格总结了2024年9月30日和2023年12月31日（以千为单位）基于循环基础度量而计量的资产和负债的公平值，以及包括在公平值层次结构内的水准。
2024年9月30日公平价值测量 | ||||||||||||
| 一级 |
| 二级 |
| 三级 |
| 总计 | |||||
现金及现金等价物 | $ | | $ | — | $ | — | $ | | ||||
可能的股利支付义务 | $ | — | $ | — | $ | | $ | | ||||
2023年12月31日的公允价值衡量 | ||||||||||||
| 一级 |
| 二级 |
| 三级 |
| 总计 | |||||
现金及现金等价物 | $ | | $ | — | $ | — | $ | | ||||
人身保险-现金抵押价值 | $ | — | $ | | $ | — | $ | | ||||
未来收益义务 | $ | — | $ | — | $ | | $ | | ||||
Cash and cash equivalents consist primarily of deposit accounts and highly rated money market funds at a variety of well-known institutions with original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity. We believe the carrying value of our debt associated with our revolving credit facility approximates its fair value due to the variable rate on such debt. We believe the carrying values of our notes to former owners approximate their fair values due to the relatively short remaining terms on these notes.
As of December 31, 2023, we had life insurance policies covering
We value contingent earn-out obligations using a probability weighted discounted cash flow method. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. This analysis reflects the contractual terms of the purchase agreements (例如，, minimum and maximum payments, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows and operating income, probabilities of achieving such future cash flows and operating income and a weighted average cost of capital. Significant changes in any of these assumptions could result in a significantly higher or lower potential liability. The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings. As of September 30, 2024, cash flows were discounted using a weighted average cost of capital ranging from
以下表格显示了我们有关条件收购债务的公允价值调和，使用了重大的不可观察输入（Level 3）（以千为单位）:
| 截至九个月 | 年结束 |
| |||||
| 2024年9月30日 | 2023年12月31日 |
| |||||
期初余额 |
| $ | |
| $ | |
|
|
发行 |
| |
| | ||||
结算 | ( | ( | ||||||
公平价值调整 |
| |
| | ||||
期末余额 | $ | | $ | | ||||
5. 收购
Summit Industrial Construction, LLC 收购
于2024年2月1日，我们收购了Summit Industrial Construction，LLC（“Summit”）。Summit总部位于德州休士顿，是一家专业的工业承包商，提供工程、设计辅助、一站式服务和直接聘用施工服务，主要面向先进科技、动力和工业领域系统。由于此次收购
13
收购，Summit是本公司机械部门的全资子公司。 Summit所得的收入为$
以下总结了转移的收购日期公允价值及收购日期确认之可识别资产和承担的负债数额，包括商誉金额（以千元为单位）：
转让的考量： | ||
支付的现金于结束时 | $ | |
运营资本调整 | | |
发给前所有人的票据 | | |
估计应收取得之未来相关支付的公平价值 | | |
$ | | |
购买并承担之可识别资产及负债金额已认列： | ||
现金及现金等价物 | $ | |
已开立及未开立的应收帐款 | | |
预付费用及其他 | | |
成本及超过帐款的预估收益 | | |
不动产及设备 | | |
租赁使用权资产 | | |
商认 | | |
可辨识无形资产 | | |
其他非流动资产 | | |
应付帐款 | ( | |
已开票超过成本及预估收益和透支收入 | ( | |
目前营运租赁负债 | ( | |
应计费用和其他流动负债 | ( | |
长期营运租约负债 | ( | |
$ | |
将购买价格分配给所购买资产和所承担负债，目前为初步评估，因此可能会在最终对无形资产和应计负债进行确定估值之前发生变化。商誉代表从其他所收购资产中产生的未来经济利益，无法单独识别和单独认列。因为Summit收购而认识的商誉可以在税务用途上抵减。
在估计所购买无形资产的公平价值时，我们运用了被认定为适合各个无形资产的估值方法。为了估计积压和客户关系的公平价值，我们运用了过剩盈利法，其中包括归因于这些资产的预期现金流量，以风险调整折扣率的方式折现到现值，该折扣率代表所需报酬率。贸易名称价值是根据从免除使用权利法中确定，该方法将使用权利税率应用于归因于该资产的收入流，并将结果的使用权利支付税后且折现到现值。确定可辨认无形资产的公平价值所涉及的一些更重要的估计和假设与现金流量和盈利能力的预测有关，它们代表属于第3级输入的一部分。主要假设通常是基于以不同利率折现的预期现金流量的现值。
购入的无形资产包括以下（金额以千美元计）。
估值方法 | 预估使用年限 | 预估公允价值 | |||||
备料量 | 多余收益 | $ | | ||||
商业名称 | Relief-from-royalty | | |||||
客户关系 | 超额收益 | | |||||
总计 | $ | |
14
与实现营收关联的条件性收购款项
J＆S机械承包商股份收购
2024年2月1日，我们收购了J＆S机械承包商股份的全部已发行和待发行股份（“J＆S”）。J＆S总部设在犹他州西约旦，为商业和工业部门提供机械施工服务，专门从事idc概念HVAC系统和医院医疗燃料币系统。由于收购，J＆S已成为公司旗下设在我们机械板块中的全资子公司。归因于J＆S的营业收入为$
以下总结了转移的收购日期公允价值及收购日期确认之可识别资产和承担的负债数额，包括商誉金额（以千元为单位）：
转让的考量： | ||
支付的现金于结束时 | $ | |
运营资本调整 | | |
发给前所有人的票据 | | |
估计应收取得之未来相关支付的公平价值 | | |
$ | | |
购买并承担之可识别资产及负债金额已认列： | ||
现金及现金等价物 | $ | |
已开立及未开立的应收帐款 | | |
存货 | | |
预付费用及其他 | | |
成本及预估收益超过应收帐款 | | |
不动产及设备 | | |
租赁使用权资产 | | |
商认 | | |
可辨识无形资产 | | |
其他非流动资产 | | |
应付帐款 | ( | |
已开票超过成本及预估收益和透支收入 | ( | |
目前营运租赁负债 | ( | |
应计费用和其他流动负债 | ( | |
长期负债 | ( | |
长期营运租约负债 | ( | |
$ | |
对资产收购及负债承担的购买价分配是暂定的，因此，暂时性地受最终无形资产和应计负债最终评估的影响。商誉代表了从其他收购资产中产生的未来经济利益，这些利益无法单独识别并单独确认。根据J&S收购结果确认的商誉可用作税务用途的减免。
在估算已收购无形资产的公平价值时，我们使用确定为个别无形资产最适当的估值方法。为了估算积压订单和客户关系的公平价值，我们采用了超额盈利法，其中包括与这些资产相关的预期现金流量，根据风险调整的折现率折现到现值，该折现率代表所需的收益率。商标价值是基于从免除使用费法确定的，该方法适用于版税
15
与这项资产相关的营收流向税后折现的权利金支付，折现至现值。 为确定可识别无形资产公允价值所必须的一些较为重要的估计和假设与预测现金流和盈利有关，这代表Level 3的输入。 一般使用的主要假设通常基于以贵公司预期现金流的现值折现的率区间。
购入的无形资产包括以下（金额以千美元计）。
|
| 估价 |
| 估价 | |||
| 估值方法 |
| 有用寿命 |
| 公平价值 | ||
备料量 |
| 超额收益 |
| $ | | ||
商业名称 |
| Relief-from-royalty |
|
| | ||
客户关系 |
| 超额收益 |
| | |||
总计 | $ | | |||||
与实现营收关联的条件性收购款项
其他收购
2024年5月1日，我们以总初步购买价格$收购了北卡罗来纳州的一家水暖服务提供商的所有已发行和未发行的会员权益。
2023年10月2日，我们收购了总部位于新罕布什尔州纳舒厄的DECCO, Inc. (“DECCO”)发行并流通的全部股本，总收购价为$百万美元
2023年2月1日，我们收购了总部位于南卡罗来纳州的Eldeco, Inc. (“Eldeco”)发行并流通的全部股本，总收购价为$百万美元
收购的业务运营结果自各自收购日期起，纳入我们的合并基本报表。我们的合并资产负债表包含将购买价格初步分配给所收购资产和承担负债，以等待对无形资产和应计负债的最终评估完成。当前年度和前一年度完成的收购，无论单独或总体上都不重要。若某些收购实现预定盈利目标，将支付额外的条件性购买价格（溢价）。这些溢价（当与卖方的持续雇用无关时）将评估收购日期并列入收购代价之一。如果我们对某笔溢价规定持续雇用为收款条件，则该溢价将按照其获取期间应得的比例记入成本支出。
16
6. 商誉和可识别无形资产,净
商誉
商认金额的变化如下（以千为单位）：
| 机械部门 |
| Electrical Segment |
| 总计 | ||||
2022年12月31日结余 | $ | | $ | | $ | | |||
并购及购买价格调整（见注释5） |
| | | | |||||
2023年12月31日余额 | | | | ||||||
并购和购买价格调整（见附注5） | | | | ||||||
2024年9月30日结余 | $ | | $ | | $ | | |||
可识别无形资产净额
2024年9月30日，可识别无形资产的未来摊销费用如下（以千元计）：
截至12月31日年终— |
|
| ||
2024年（年余部分） | $ | | ||
2025 |
| | ||
2026 |
| | ||
2027 |
| | ||
2028 | | |||
此后 |
| | ||
总计 | $ | |
7. 债务负担
债务负担包括以下项目（以千美元为单位）：
九月三十日， | 12月31日， | ||||||
| 2024 |
| 2023 |
| |||
循环授信额度 | $ | — | $ | — | |||
旧业主备忘录 | |
| | ||||
其他债务 | | | |||||
总负债 | | | |||||
较少—流动部分 | ( |
| ( | ||||
债务的总长期部分 | $ | | $ | | |||
循环信贷设施
我们有一笔 $ 资产
「资产」下的借款有两个利率选择：基准利率贷款（在「资产」中定义）选项和担保隔夜融资利率（“SOFR”）贷款选项。这些利率是浮动利率。
17
由整个金融市场决定，这意味著它们可以且确实会不时上下波动。 然后在这两个利率上再加上额外的保证金:
净杠杆率 | |||||||||||
| 少于 |
| 1.00至1.75之间 |
| 1.75至2.50之间 |
| 2.50至3.00之间 |
| 3.00或更高 | ||
每年额外加入利息补贴区间： | |||||||||||
基础利率贷款选项 | % | | % | | % | | % | | % | ||
SOFR贷款选项 | | % | | % | | % | | % | | % | |
在2023和2024年6月30日结束的三个和六个月中，有资产减损处理记录。更新计算公司进行中的研究和开发资产（“IPR&D”）公平价值所使用的关键假设可能会改变公司未来短期内回收IPR&D资产的带值估计。
我们的某些供应商要求保函，以确保他们代表我们发放的款项（例如，对我们的自资保险计划下的受益人）能够得到补偿。我们偶尔也使用保函来保证履行合同和确保向履行该等合同的分包商和供应商支付。我们的贷方通过该机构发行此类保函。保函会使贷方承诺向保函持有人支付指定金额，如果持有人证明我们未能履行指定行动。如果发生这种情况，我们将需要补偿贷方支付给荣誉保函持有人要求的金额。在没有索赔的情况下，我们不会支付或保留与保函相关的资金。然而，因为保函的索赔要求将要求我们立即向贷方偿还，所以保函被看作是对机构能力的使用。保函费用的范围从
承诺费用须支付未用于借款或信用证明的循环贷款额的部分。这些费用范围在%
此融资设施包含了定义各种财务指标及我们必须遵守的指标水平的财务契约。契约遵循性于每个季度结束时评估。截至2024年9月30日，我们符合所有财务条件。
旧业主备忘录
作为收购过程中的考量之一
结余 | 声明范围 | |||||
| 2024年9月30日 | 利率期货 | ||||
2025 | $ | | % | |||
2026 |
| | % | |||
2027 | | | % | |||
2028 | | | % | |||
总计 | $ | | ||||
F
8. 租约
我们主要根据不可取消的营运租赁合同，租赁特定设施、车辆和设备。其中最重要的非取消性营运租赁部分是我们公司办公室和营运地点所占用的设施。初始期限为12个月或以下的租赁合同未记录在合并资产负债表中。根据租赁会计准则，我们不将租赁元件与其相关的非租赁元件分开。我们有某些根据指数为基础的变动支付的租赁合同，以及设备和设施的短期租赁。变动租金支出和短期租赁支出总计$
18
aggregated to $
租赁条款一般范围从 天从发票日期计算，被视为商业合理。
公司的大部分房地产租赁与没有任何其他业务关系的个人或实体签订。然而，在某些情况下，公司会与现职或前职员工签订房地产租赁。2024年9月30日至2023年结束的三个月，支付给相关方的租金约为$
如果我们决定在租约到期之前取消或终止租约，我们通常会对出租方支付租约期内剩余的租金。我们的租约不包含任何重大的残值担保或重大的限制性契约。在极少数情况下，我们会将某些不再使用的房地产资产出租或次租给第三方。
下表概述了包括在合并资产负债表中的营运租赁资产和负债，如下（以千元计）：
2024年9月30日 | 2023年12月31日 | ||||
营运租赁权使用资产 | $ | | $ | | |
营业租赁负债： | |||||
$ | | $ | | ||
长期营运租赁负债 | | | |||
总经营租赁负债 | $ | | $ | | |
营业租约负债到期期限如下（以千为单位）：
截至12月31日年终— | |||
2024年（不包括2024年9月30日结束的九个月） | $ | | |
2025 | | ||
2026 | | ||
2027 | | ||
2028 | | ||
此后 | | ||
租约支付总额 | | ||
折现之现值折扣 | ( | ||
营运租赁负债现值 | $ | |
19
营运租赁相关的补充资讯如下（以千元计）：
Three Months Ended September 30, | 九个月截至九月三十日 | ||||||||||
2024 | 2023 |
| 2024 | 2023 | |||||||
支付与经营租赁负债计量有关之金额的现金 | $ | | $ | | $ | | $ | | |||
以租赁负债交换获得的营业租赁使用权资产 | $ | | $ | | $ | | $ | | |||
9. 承诺与权益
Claims and Lawsuits
We are subject to certain legal and regulatory claims, including lawsuits arising in the normal course of business. We maintain various insurance coverages to minimize financial risk associated with these claims. We have estimated and provided accruals for probable losses and related legal fees associated with certain litigation in the accompanying consolidated financial statements. While we cannot predict the outcome of these proceedings, in management’s opinion and based on reports of counsel, any liability arising from these matters individually and in the aggregate will not have a material effect on our operating results, cash flows or financial condition, after giving effect to provisions already recorded.
In the first quarter of 2023, we recorded a pre-tax gain of $
截至2024年9月30日，我们根据对相应事项可能结果的分析，在我们的基本报表中记录了未解决事项的应计金额，然而，最终结果及相关成本可能与我们的估计有所偏差，若事态会产生意外的不利结果，我们可能会在未来期间承担额外成本和费用。
保险
许多客户，尤其是与新建筑相关的客户，要求我们提交由保证保险公司发行的绩效和付款债券。如果我们未能按照合同条款履行或支付向合同下提供货物或服务的分包商和供应商，客户可能要求保证公司根据债券支付款项或提供服务。我们必须赔偿保证公司因此而产生的任何费用或支出。
目前保证市场和保证能力的市场条件仍然充足，条款和条件合理。从历史上看，约占约 %的业务需要债券。虽然我们目前与保证公司有著牢固的关系，以支持我们的债券需求，但未来市场条件或对我们营运和财务风险的评估的变化可能会导致保证公司拒绝为我们的工程发行债券。如果发生这种情况，其他替代方案包括进行不需要债券的更多业务，为项目履行提供其他形式的担保，如信用证或现金，并向其他保证公司寻求债券能力。我们可能还将遇到来自客户、供应商和其他市场参与者对我们信用风险的担忧。虽然我们认为我们一般的营运和财务特征将使我们最终能够有效应对债券能力的中断，但这样的中断可能会导致我们的营业收入和利润在短期内下降。
自负风险保险
我们在工伤、雇主责任、汽车责任、一般责任和员工医疗索赔方面均为自保，考虑到我们在这些风险下承担的每一次事故内部扣除额相对较高的保险安排。根据已知事实、历史趋势和行业惯例，我们估计和计提损失。
20
averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. Loss estimates associated with the larger and longer-developing risks, such as workers’ compensation, auto liability and general liability, are reviewed by a third-party actuary quarterly.
10. Stockholders’ Equity
Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS is computed considering the dilutive effect of stock options, restricted stock, restricted stock units and performance stock units. The vesting of unvested, contingently issuable performance stock units is based on the achievement of certain earnings per share targets and total shareholder return. These shares are considered contingently issuable shares for purposes of calculating diluted earnings per share. These shares are not included in the diluted earnings per share denominator until the performance criteria are met, if it is assumed that the end of the reporting period was the end of the contingency period.
Unvested restricted stock, restricted stock units and performance stock units are included in diluted earnings per share, weighted outstanding until the shares and units vest. Upon vesting, the vested restricted stock, restricted stock units and performance stock units are included in basic earnings per share weighted outstanding from the vesting date.
There were
The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands):
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| |
Common shares outstanding, end of period | |
| | |
| | |||
Effect of using weighted average common shares outstanding | |
| | |
| | |||
Shares used in computing earnings per share—basic | |
| | |
| | |||
Effect of shares issuable under stock option plans based on the treasury stock method | |
| | |
| | |||
Effect of restricted and contingently issuable shares | |
| | |
| | |||
Shares used in computing earnings per share—diluted | |
| | |
| | |||
Share Repurchase Program
On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the nine months ended September 30, 2024, we repurchased
21
11. Segment Information
Our activities are within the mechanical services industry and the electrical services industry, which represent our
Three Months Ended September 30, 2024 | ||||||||||||
| Mechanical Segment |
| Electrical Segment |
| Corporate |
| Consolidated | |||||
Revenue | $ | | $ | | $ | — | $ | | ||||
Gross Profit | $ | | $ | | $ | — | $ | | ||||
Three Months Ended September 30, 2023 | ||||||||||||
| Mechanical Segment |
| Electrical Segment |
| Corporate |
| Consolidated | |||||
Revenue | $ | | $ | | $ | — | $ | | ||||
Gross Profit | $ | | $ | | $ | — | $ | | ||||
Nine Months Ended September 30, 2024 | ||||||||||||
| Mechanical Segment |
| Electrical Segment |
| Corporate |
| Consolidated | |||||
Revenue | $ | | $ | | $ | — | $ | | ||||
Gross Profit | $ | | $ | | $ | — | $ | | ||||
Nine Months Ended September 30, 2023 | ||||||||||||
| Mechanical Segment |
| Electrical Segment |
| Corporate |
| Consolidated | |||||
Revenue | $ | | $ | | $ | — | $ | | ||||
Gross Profit | $ | | $ | | $ | — | $ | | ||||
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our historical Consolidated Financial Statements and related notes included elsewhere in this Form 10-Q and the Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2023 (the “Form 10-K”). This discussion contains “forward-looking statements” regarding our business and industry within the meaning of applicable securities laws and regulations. These statements are based on our current plans and expectations and involve risks and uncertainties that could cause our actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include risks set forth in “Item 1A. Risk Factors” included in our Form 10-K. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The terms “Comfort Systems,” “we,” “us,” or the “Company,” refer to Comfort Systems USA, Inc. or Comfort Systems USA, Inc. and its consolidated subsidiaries, as appropriate in the context.
Introduction and Overview
We are a national provider of comprehensive mechanical and electrical installation, renovation, maintenance, repair and replacement services within the mechanical and electrical services industries. We operate primarily in the commercial, industrial and institutional markets and perform most of our work in manufacturing, healthcare, education, office, technology, retail and government facilities. We operate our business in two business segments: mechanical and electrical.
Nature and Economics of Our Business
In our mechanical business segment, customers hire us to ensure HVAC systems deliver specified or generally expected heating, cooling, conditioning and circulation of air in a facility. This entails installing core system equipment such as packaged heating and air conditioning units, or in the case of larger facilities, separate core components such as chillers, boilers, air handlers, and cooling towers. We also typically install connecting and distribution elements such as piping and ducting.
In our electrical business segment, our principal business activity is electrical construction and engineering in the commercial and industrial field. We also perform electrical logistics services and electrical service work.
In both our mechanical and electrical business segments, our responsibilities usually require conforming the systems to pre-established engineering drawings and equipment and performance specifications, which we frequently participate in establishing. Our project management responsibilities include staging equipment and materials to project sites, deploying labor to perform the work, and coordinating with other service providers on the project, including any subcontractors we might use to deliver our portion of the work.
Approximately 91.0% of our revenue is earned on a project basis for installation services in newly constructed facilities or for replacement of systems in existing facilities. When competing for project business, we usually estimate the costs we will incur on a project, and then propose a bid to the customer that includes a contract price and other performance and payment terms. Our bid price and terms are intended to cover our estimated costs on the project and provide a profit margin to us commensurate with the value of the installed system to the customer, the risk that project costs or duration will vary from estimate, the schedule on which we will be paid, the opportunities for other work that we might forego by committing capacity to this project, and other costs that we incur to support our operations but which are not specific to the project. Typically, customers will seek pricing from competitors for a given project. While the criteria on which customers select a provider vary widely and include factors such as quality, technical expertise, on-time performance, post-project support and service, and company history and financial strength, we believe that price for value is the most influential factor for most customers in choosing a mechanical or electrical installation and service provider.
After a customer accepts our bid, we generally enter into a contract with the customer that specifies what we will deliver on the project, what our related responsibilities are and how much and when we will be paid. Our overall
23
price for the project is typically set at a fixed amount in the contract, although changes in project specifications or work conditions that result in unexpected additional work are usually subject to additional payment from the customer via what are commonly known as change orders. Project contracts typically provide for periodic billings to the customer as we meet progress milestones or incur cost on the project. Project contracts in our industry also frequently allow for a small portion of progress billings or contract price to be withheld by the customer until after we have completed the work. Amounts withheld under this practice are known as retention or retainage.
Labor, materials and overhead costs account for the majority of our cost of service. Accordingly, labor management and utilization have the most impact on our project performance. Given the fixed price nature of much of our project work, if our initial estimate of project costs is wrong or we incur cost overruns that cannot be recovered in change orders, we can experience reduced profits or even significant losses on fixed price project work. We also perform some project work on a cost-plus or a time and materials basis, under which we are paid our costs incurred plus an agreed-upon profit margin, and such projects are sometimes subject to a guaranteed maximum cost. These margins are frequently less than fixed-price contract margins because there is less risk of unrecoverable cost overruns in cost-plus or time and materials work.
As of September 30, 2024, we had 8,811 projects in process. Our average project takes six to nine months to complete, with an average contract price of approximately $1.7 million. Our projects generally require working capital funding of equipment and labor costs. Customer payments on periodic billings generally do not recover these costs until late in the job. Our average project duration, together with typical retention terms as discussed above, generally allow us to complete the realization of revenue and earnings in cash within one year. We have what we consider to be a well-diversified distribution of revenue across end-use sectors that we believe reduces our exposure to negative developments in any given sector. Because of the integral nature of our services to most buildings, we have the legal right in almost all cases to attach liens to buildings or related funding sources when we have not been fully paid for installing systems, except with respect to some government buildings. The service work that we do, which is discussed further below, usually does not give rise to lien rights.
We also perform larger projects. Taken together, projects with contract prices of $2 million or more totaled $13.16 billion of aggregate contract value as of September 30, 2024, or approximately 89% of a total contract value for all projects in progress, totaling $14.72 billion. Generally, projects closer in size to $2 million will be completed in one year or less. It is unusual for us to work on a project that exceeds two years in length.
A stratification of projects in progress as of September 30, 2024, by contract price, is as follows:
|
| Aggregate |
| |||
Contract |
| |||||
No. of | Price Value |
| ||||
Contract Price of Project | Projects | (millions) |
| |||
Under $2 million |
| 7,764 | $ | 1,565.9 | ||
$2 million - $10 million |
| 715 |
| 3,312.5 | ||
$10 million - $20 million |
| 150 |
| 2,113.2 | ||
$20 million - $40 million |
| 118 |
| 3,362.2 | ||
Greater than $40 million |
| 64 |
| 4,368.6 | ||
Total |
| 8,811 | $ | 14,722.4 | ||
In addition to project work, approximately 9.0% of our revenue represents maintenance and repair service on already installed HVAC, electrical, and controls systems. This kind of work usually takes from a few hours to a few days to perform. Prices to the customer are based on the equipment and materials used in the service as well as technician labor time. We usually bill the customer for service work when it is complete, typically with payment terms of up to thirty days. We also provide maintenance and repair service under ongoing contracts. Under these contracts, we are paid regular monthly or quarterly amounts and provide specified service based on customer requirements. These agreements typically are for one or more years and frequently contain thirty- to sixty-day cancellation notice periods.
A relatively small portion of our revenue comes from national and regional account customers. These customers typically have multiple sites and contract with us to perform maintenance and repair service. These contracts may also provide for us to perform new or replacement systems installation. We operate a national call center to dispatch
24
technicians to sites requiring service. We perform the majority of this work with our own employees, with the balance being subcontracted to third parties that meet our performance qualifications.
Profile and Management of Our Operations
We manage our 47 operating units based on a variety of factors. Financial measures we emphasize include profitability and use of capital as indicated by cash flow and by other measures of working capital principally involving project cost, billings and receivables. We also monitor selling, general, administrative and indirect project support expense, backlog, workforce size and mix, growth in revenue and profits, variation of actual project cost from original estimate, and overall financial performance in comparison to budget and updated forecasts. Operational factors we emphasize include project selection, estimating, pricing, safety, management and execution practices, labor utilization, training, and the make-up of both existing backlog as well as new business being pursued, in terms of project size, technical application, facility type, end-use customers and industries and location of the work.
Most of our operations compete on a local or regional basis. Attracting and retaining effective operating unit managers is an important factor in our business, particularly in view of the relative uniqueness of each market and operation, the importance of relationships with customers and other market participants, such as architects and consulting engineers, and the high degree of competition and low barriers to entry in most of our markets. Accordingly, we devote considerable attention to operating unit management quality, stability, and contingency planning, including related considerations of compensation and non-competition protection where applicable.
Economic and Industry Factors
As a mechanical and electrical services provider, we operate in the broader nonresidential construction services industry and are affected by trends in this sector. While we do not have operations in all major cities of the United States, we believe our national presence is sufficiently large that we experience trends in demand for and pricing of our services that are consistent with trends in the national nonresidential construction sector. As a result, we monitor the views of major construction sector forecasters along with macroeconomic factors they believe drive the sector, including trends in gross domestic product, interest rates, business investment, employment, demographics and the fiscal condition of federal, state and local governments.
Spending decisions for building construction, renovation and system replacement are generally made on a project basis, usually with some degree of discretion as to when and if projects proceed. With larger amounts of capital, time, and discretion involved, spending decisions are affected to a significant degree by uncertainty, particularly concerns about economic and financial conditions and trends. We have experienced periods of time when economic weakness caused a significant slowdown in decisions to proceed with installation and replacement project work.
Operating Environment and Management Emphasis
In 2020, the advent of a global pandemic led to some delays in service and construction, including delayed project starts and air pockets or pauses during 2020 and 2021. We experienced increasing demand in 2022 and 2023, and we expect that the demand environment, especially for manufacturing and technology customers, will remain at high levels for the rest of 2024 and leading into 2025. While the impacts from the supply chain shortages have improved, we continue to experience increased labor costs and delays in delivery of certain materials and equipment. We expect that constraints and delays in our supply chain will continue to abate in the near term; however, we anticipate that pressure on cost and availability, especially for skilled labor, will continue for the rest of 2024 and leading into 2025.
We have a credit facility in place with terms we believe are favorable that does not expire until July 2027. As of September 30, 2024, we had $770.0 million of credit available to borrow under our credit facility. We have strong surety relationships to support our bonding needs, and we believe our relationships with the surety markets are strong and benefit from our operating history and financial position. We have generated positive free cash flow in each of the last twenty-five calendar years and will continue our emphasis in this area. We believe that the relative size and strength of our Balance Sheet and surety relationships, as compared to most companies in our industry, represent competitive advantages for us.
25
As discussed at greater length in “Results of Operations” below, we expect price competition to continue as local and regional industry participants compete for customers. We will continue to invest in our service business, to pursue the more active sectors in our markets, and to emphasize our regional and national account business.
Cyclicality and Seasonality
The construction industry is subject to business cycle fluctuation. As a result, our volume of business, particularly in new construction projects and renovation, may be adversely affected by declines in new installation and replacement projects in various geographic regions of the United States during periods of economic weakness.
The mechanical and electrical contracting industries are also subject to seasonal variations. The demand for new installation and replacement is generally lower during the winter months (the first quarter of the year) due to reduced construction activity during inclement weather and less use of air conditioning during the colder months. Demand for our services is generally higher in the second and third calendar quarters due to increased construction activity and increased use of air conditioning during the warmer months. Accordingly, we expect our revenue and operating results generally will be lower in the first calendar quarter.
Critical Accounting Estimates
Management believes that there have been no significant changes during the three months ended September 30, 2024, to the items that we disclosed as our "Critical Accounting Estimates" in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. A summary of significant accounting policies and a summary of recent accounting pronouncements applicable to our Consolidated Financial Statements are included in Note 2 “Summary of Significant Accounting Policies and Estimates.”
26
Results of Operations (dollars in thousands):
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||||||||||||
Revenue | $ | 1,812,366 |
| 100.0 | % | $ | 1,378,124 |
| 100.0 | % | $ | 5,159,672 |
| 100.0 | % | $ | 3,849,194 |
| 100.0 | % | ||
Cost of services |
| 1,430,652 |
| 78.9 | % |
| 1,100,625 |
| 79.9 | % |
| 4,116,999 |
| 79.8 | % |
| 3,138,370 |
| 81.5 | % | ||
Gross profit |
| 381,714 |
| 21.1 | % |
| 277,499 |
| 20.1 | % |
| 1,042,673 |
| 20.2 | % |
| 710,824 |
| 18.5 | % | ||
Selling, general and administrative expenses |
| 180,177 |
| 9.9 | % |
| 142,935 |
| 10.4 | % |
| 522,437 |
| 10.1 | % |
| 414,397 |
| 10.8 | % | ||
Gain on sale of assets |
| (1,347) |
| (0.1) | % |
| (579) |
| — |
| (2,778) |
| (0.1) | % |
| (1,683) |
| — | ||||
Operating income |
| 202,884 |
| 11.2 | % |
| 135,143 |
| 9.8 | % |
| 523,014 |
| 10.1 | % |
| 298,110 |
| 7.7 | % | ||
Interest income |
| 3,825 |
| 0.2 | % |
| 952 |
| 0.1 | % |
| 6,692 |
| 0.1 | % |
| 2,441 |
| 0.1 | % | ||
Interest expense |
| (1,730) |
| (0.1) | % |
| (1,886) |
| (0.1) | % |
| (5,072) |
| (0.1) | % |
| (9,880) |
| (0.3) | % | ||
Changes in the fair value of contingent earn-out obligations |
| (17,254) |
| (1.0) | % |
| (8,727) |
| (0.6) | % |
| (44,434) |
| (0.9) | % |
| (14,207) |
| (0.4) | % | ||
Other income (expense) |
| 87 |
| — |
| (44) |
| — |
| 323 |
| — |
| 1 |
| — | ||||||
Income before income taxes |
| 187,812 |
| 10.4 | % |
| 125,438 |
| 9.1 | % |
| 480,523 |
| 9.3 | % |
| 276,465 |
| 7.2 | % | ||
Provision for income taxes |
| 41,577 |
| 20,313 |
| 103,960 |
| 44,648 | ||||||||||||||
Net income | $ | 146,235 | 8.1 | % | $ | 105,125 | 7.6 | % | $ | 376,563 | 7.3 | % | $ | 231,817 | 6.0 | % | ||||||
We had 44 operating locations as of December 31, 2023. In the first quarter of 2024, we split one of our operating locations into two separate operating locations. Additionally, we completed the acquisitions of Summit Industrial Construction, LLC (“Summit”) and J & S Mechanical Contractors, Inc. (“J&S”), which both report as separate operating locations. We had 47 operating locations as of September 30, 2024. Acquisitions are included in our results of operations from the respective acquisition date. The same-store comparison from 2024 to 2023, as described below, excludes Summit, which was acquired on February 1, 2024, J&S, which was acquired on February 1, 2024, DECCO, Inc. (“DECCO”), which was acquired on October 2, 2023, and one month of results for Eldeco, Inc (“Eldeco”), which was acquired on February 1, 2023. An operating location is included in the same-store comparison on the first day it has comparable prior year operating data, except for immaterial acquisitions that are often absorbed and integrated with existing operations.
Revenue—Revenue for the third quarter of 2024 increased $434.2 million, or 31.5%, to $1.81 billion compared to the same period in 2023. The increase included a 17.5% increase in revenue related to same-store activity and a 14.0% increase related to the Summit, J&S, and DECCO acquisitions. The same-store revenue growth was largely driven by strong market conditions, including the increase in our backlog. The increase in demand has been strong in the technology sector, particularly for data centers and chip plants.
The following table presents our operating segment revenue (in thousands, except percentages):
| Three Months Ended September 30, |
| ||||||||||
| 2024 |
| 2023 |
| ||||||||
Revenue: |
| |||||||||||
Mechanical Segment | $ | 1,438,617 |
| 79.4 | % | $ | 1,031,310 |
| 74.8 | % | ||
Electrical Segment |
| 373,749 |
| 20.6 | % |
| 346,814 |
| 25.2 | % | ||
Total | $ | 1,812,366 |
| 100.0 | % | $ | 1,378,124 |
| 100.0 | % | ||
Revenue for our mechanical segment increased $407.3 million, or 39.5%, to $1.44 billion for the third quarter of 2024 compared to the same period in 2023. Of this increase, $193.6 million resulted from the acquisitions of Summit,
27
J&S, and DECCO, and $213.7 million was attributable to same-store activity. The same-store revenue increase primarily resulted from an increase in activity in the technology sector at one of our Virginia operations ($38.6 million), one of our Texas operations ($37.5 million) and at our North Carolina operation ($25.6 million) and in the healthcare and manufacturing sectors at our Mississippi operation ($31.8 million). The same-store revenue increase was partially offset by a decrease in activity in the manufacturing sector at one of our Indiana operations ($23.1 million).
Revenue for our electrical segment increased $26.9 million, or 7.8%, to $373.7 million for the third quarter of 2024 compared to the same period in 2023. The increase primarily resulted from an increase in activity in the technology sector at our Texas electrical operation ($23.6 million).
Revenue for the first nine months of 2024 increased $1.31 billion, or 34.0%, to $5.16 billion compared to the same period in 2023. The increase included a 23.1% increase in revenue related to same-store activity and a 10.9% increase related to the Summit, J&S, DECCO, and Eldeco acquisitions. The same-store revenue growth was largely driven by strong market conditions, including the increase in our backlog. The increase in demand has been strong in the technology and manufacturing sectors, particularly for data centers, chip plants, food and pharmaceuticals.
The following table presents our operating segment revenue (in thousands, except percentages):
| Nine Months Ended September 30, |
| ||||||||||
| 2024 |
| 2023 |
| ||||||||
Revenue: |
| |||||||||||
Mechanical Segment | $ | 4,075,305 |
| 79.0 | % | $ | 2,925,848 |
| 76.0 | % | ||
Electrical Segment |
| 1,084,367 |
| 21.0 | % |
| 923,346 |
| 24.0 | % | ||
Total | $ | 5,159,672 |
| 100.0 | % | $ | 3,849,194 |
| 100.0 | % | ||
Revenue for our mechanical segment increased $1.15 billion, or 39.3%, to $4.08 billion for the first nine months of 2024 compared to the same period in 2023. Of this increase, $412.2 million resulted from the acquisitions of Summit, J&S, and DECCO, and $737.3 million was attributable to same-store activity. The same-store increase primarily resulted from an increase in activity in the technology sector at two of our Texas operations ($244.6 million), at our North Carolina operation ($109.5 million) and at one of our Virginia operations ($93.0 million).
Revenue for our electrical segment increased $161.0 million, or 17.4%, to $1.08 billion for the first nine months of 2024 compared to the same period in 2023. The increase primarily resulted from higher activity in the technology sector at our Texas electrical operation ($99.9 million).
Backlog reflects revenue still to be recognized under contracted or committed installation and replacement project work. Project work generally lasts less than one year. Service agreement revenue, service work and short duration projects, which are generally billed as performed, do not flow through backlog. Accordingly, backlog represents only a portion of our revenue for any given future period, and it represents revenue that is likely to be reflected in our operating results over the next six to twelve months. As a result, we believe the predictive value of backlog information is limited to indications of general revenue direction over the near term, and should not be interpreted as indicative of ongoing revenue performance over several quarters.
The following table presents our operating segment backlog (in thousands, except percentages):
| September 30, 2024 |
| December 31, 2023 |
| September 30, 2023 |
| ||||||||||||
Backlog: |
|
| ||||||||||||||||
Mechanical Segment | $ | 4,441,923 |
| 78.2 | % | $ | 4,027,927 |
| 78.1 | % | $ | 3,117,994 |
| 72.7 | % | |||
Electrical Segment |
| 1,238,858 |
| 21.8 | % |
| 1,129,449 |
| 21.9 | % |
| 1,169,592 |
| 27.3 | % | |||
Total | $ | 5,680,781 |
| 100.0 | % | $ | 5,157,376 |
| 100.0 | % | $ | 4,287,586 |
| 100.0 | % | |||
Backlog as of September 30, 2024 was $5.68 billion, a 1.6% decrease from June 30, 2024 backlog of $5.77 billion, and a 32.5% increase from September 30, 2023 backlog of $4.29 billion. The sequential backlog decrease was primarily a result of the completion of project work at two of our Texas operations ($78.8 million), one of our Virginia operations ($56.5 million) and our Indiana electrical operation ($32.7 million). The sequential backlog decrease
28
was partially offset by increased project bookings at another one of our Texas operations ($90.7 million). The year-over-year backlog increase included the acquisitions of Summit ($324.6 million), J&S ($136.1 million) and DECCO ($49.4 million) as well as a same-store increase of $883.1 million, or 20.6%. Same-store year-over-year backlog growth was primarily attributable to increased project bookings at our Texas electrical operation ($268.4 million), one of our Virginia operations ($146.2 million), our Mississippi operation ($109.2 million), our North Carolina operations ($106.8 million) and another one of our Texas operations ($104.3 million).
Gross Profit—Gross profit increased $104.2 million, or 37.6%, to $381.7 million for the third quarter of 2024 as compared to the same period in 2023. The increase included a $24.7 million, or 8.9%, increase related to the Summit, J&S, and DECCO acquisitions, as well as a 28.7% increase in same-store activity. The same-store increase in gross profit was driven by both higher revenues in the current year as well as improved execution in our operations, including improvements in project execution at two of our Texas operations ($31.3 million) and our Texas electrical operation ($26.1 million). Additionally, we had increased volumes at one of our Virginia operations ($7.9 million). As a percentage of revenue, gross profit for the third quarter increased from 20.1% in 2023 to 21.1% in 2024, primarily due to the factors discussed above and improvements in our electrical segment gross profit margin.
Gross profit increased $331.8 million, or 46.7%, to $1.04 billion for the first nine months of 2024 as compared to the same period in 2023. The increase included a 6.0% increase related to the Summit, J&S, DECCO, and Eldeco acquisitions, as well as a 40.7% increase in same-store activity. The same-store increase in gross profit was primarily driven by both higher revenues in the current year as well as improved execution in our operations, including improvements in project execution at our Texas electrical operation ($74.4 million) and another one of our Texas operations ($47.5 million). Additionally, we had increased volumes at one of our Texas operations ($31.5 million), our North Carolina operations ($27.5 million) and one of our Virginia operations ($22.7 million). These increases were partially offset by a benefit in the first quarter of 2023 of $6.6 million in gross profit related to positive developments on legal matters. As a percentage of revenue, gross profit for the nine-month period increased from 18.5% in 2023 to 20.2% in 2024, primarily due to the factors discussed above and improvements in our electrical segment gross profit margin.
Selling, General and Administrative Expenses (“SG&A”)—SG&A increased $37.2 million, or 26.1%, to $180.2 million for the third quarter of 2024 as compared to 2023. On a same-store basis, excluding amortization expense, SG&A increased $26.5 million, or 19.9%. The same-store increase is primarily due to higher same-store revenue and increased compensation costs ($19.0 million), largely attributable to increased headcount. Amortization expense increased $4.8 million during the period, primarily as a result of the Summit, J&S, and DECCO acquisitions. As a percentage of revenue, SG&A for the third quarter decreased from 10.4% in 2023 to 9.9% in 2024 due to leverage resulting from the increase in revenue.
SG&A increased $108.0 million, or 26.1%, to $522.4 million for the first nine months of 2024 as compared to 2023. On a same-store basis, excluding amortization expense, SG&A increased $77.2 million, or 20.0%. The same-store increase is primarily due to higher same-store revenue and increased compensation costs ($57.7 million), largely attributable to increased headcount and increased cost of labor. Amortization expense increased $12.8 million during the period, primarily as a result of the Summit, J&S and DECCO acquisitions. As a percentage of revenue, SG&A for the nine-month period decreased from 10.8% in 2023 to 10.1% in 2024 due to leverage resulting from the increase in revenue.
We have included same-store SG&A, excluding amortization, because we believe it is an effective measure of comparative results of operations. However, same-store SG&A, excluding amortization, is not considered under generally accepted accounting principles to be a primary measure of an entity’s financial results and, accordingly, should not be considered an alternative to SG&A as shown in our consolidated statements of operations.
Three Months Ended |
| Nine Months Ended | |||||||||||
September 30, |
| September 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| |||||
(in thousands) |
| (in thousands) | |||||||||||
SG&A | $ | 180,177 | $ | 142,935 | $ | 522,437 | $ | 414,397 | |||||
Less: SG&A from companies acquired |
| (5,977) |
| — |
| (18,039) |
| — | |||||
Less: Amortization expense |
| (14,289) |
| (9,516) |
| (41,079) |
| (28,326) | |||||
Same-store SG&A, excluding amortization expense | $ | 159,911 | $ | 133,419 | $ | 463,319 | $ | 386,071 | |||||
29
Interest Income—Interest income increased $2.9 million to $3.8 million for the third quarter of 2024 as compared to the same period in 2023. Interest income increased $4.3 million to $6.7 million for the first nine months of 2024 compared to the same period in 2023. The increase in interest income for the third quarter of 2024 and first nine months of 2024 is due to an increase in our average cash balance and higher interest rates compared to the prior year.
Interest Expense—Interest expense decreased $0.2 million, or 8.3%, to $1.7 million for the third quarter of 2024 as compared to the same period in 2023. Interest expense decreased $4.8 million, or 48.7%, to $5.1 million for the first nine months of 2024 compared to the same period in 2023. The decrease in interest expense for the third quarter of 2024 and first nine months of 2024 is due to a decrease in our average outstanding debt balance compared to the prior year.
Changes in the Fair Value of Contingent Earn-out Obligations—The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings. Expense from changes in the fair value of contingent earn-out obligations for the third quarter of 2024 increased $8.5 million as compared to the same period in 2023. The increase in earn-out expense was primarily driven by higher actual and projected earnings at Summit. Expense from changes in the fair value of contingent earn-out obligations for the first nine months of 2024 increased $30.2 million as compared to the same period in 2023. The increase in earn-out expense was primarily driven by higher actual and projected earnings at Summit and J&S. Expense or income from changes in earn-out valuations may be more volatile in future periods due to large earn-out agreements for acquisitions that closed in 2024.
Provision for Income Taxes—Our provision for income taxes for the nine months ended September 30, 2024 was $104.0 million with an effective tax rate of 21.6% as compared to a provision for income taxes of $44.6 million with an effective tax rate of 16.1% for the same period in 2023. The effective tax rate for 2024 is slightly higher than the 21% federal statutory rate primarily due to net state income taxes (3.6%) and net nondeductible expenses (0.6%), partially offset by the credit for increasing research activities (the “R&D tax credit”) (3.6%). The effective tax rate for 2023 was lower than the 21% federal statutory rate primarily due to the R&D tax credit (5.6%) and an increase in the R&D tax credit for the 2022 tax year (3.9%). These R&D tax credit benefits were partially offset by net state income taxes (3.7%) and net nondeductible expenses (1.4%).
As a result of conforming amendments made to the R&D tax credit in connection with the deferral of tax deductions for research and experimental (“R&E”) expenditures pursuant to the Tax Cuts and Jobs Act (2017), our provision for income taxes for the nine months ended September 30, 2024 benefited from a $3.7 million increase in the R&D tax credit.
Outlook
We experienced strong ongoing demand in the first nine months of 2024, although we continue to experience increased labor costs and impacts from supply chain shortages, including delays in delivery of certain materials and equipment. We are recognizing these challenges in our job planning and pricing, and we are ordering materials on an earlier timeline and seeking to collaborate with customers to share supply risks and to mitigate the effects of these challenges. We have been generally successful in maintaining productivity and in procuring needed materials despite ongoing challenges.
We have a good pipeline of opportunities and potential backlog. Considering our substantial advance bookings, we currently anticipate solid earnings for the remainder of 2024 and in 2025. Although we are preparing for a wide range of challenges and economic circumstances, including a potential recession, we currently expect that supportive conditions for our industry, especially for our manufacturing and technology customers, are likely to continue for the rest of 2024 and leading into 2025.
30
Liquidity and Capital Resources (in thousands):
Nine Months Ended | |||||||
September 30, | |||||||
| 2024 |
| 2023 |
| |||
Cash provided by (used in): | |||||||
Operating activities | $ | 638,594 | $ | 466,560 | |||
Investing activities |
| (304,020) |
| (119,125) | |||
Financing activities |
| (124,141) |
| (267,026) | |||
Net increase (decrease) in cash and cash equivalents | $ | 210,433 | $ | 80,409 | |||
Free cash flow: | |||||||
Cash provided by operating activities | $ | 638,594 | $ | 466,560 | |||
Purchases of property and equipment |
| (70,395) |
| (69,574) | |||
Proceeds from sales of property and equipment |
| 3,611 |
| 5,093 | |||
Free cash flow | $ | 571,810 | $ | 402,079 | |||
Cash Flow
Our business does not require significant amounts of investment in long-term fixed assets. The substantial majority of the capital used in our business is working capital that funds our costs of labor and installed equipment deployed in project work until our customer pays us. Customary terms in our industry allow customers to withhold a small portion of the contract price until after we have completed the work, typically for six months. Amounts withheld under this practice are known as retention or retainage. Our average project duration, together with typical retention terms, generally allow us to complete the realization of revenue and earnings in cash within one year.
Cash Provided by Operating Activities—Cash flow from operations is primarily influenced by demand for our services and operating margins but can also be influenced by working capital needs associated with the various types of services that we provide. In particular, working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily associated with labor, equipment and subcontractors, are required to be paid before the receivables resulting from the work performed are billed and collected. Working capital needs are generally higher during the late winter and spring months as we prepare and plan for the increased project demand when favorable weather conditions exist in the summer and fall months. Conversely, working capital assets are typically converted to cash during the late summer and fall months as project completion is underway. These seasonal trends are sometimes offset by changes in the timing of major projects, which can be impacted by the weather, project delays or accelerations and other economic factors that may affect customer spending.
Cash provided by operating activities was $638.6 million during the first nine months of 2024 compared to $466.6 million during the same period in 2023. The $172.0 million increase in cash provided was primarily driven by higher earnings before non-cash expenses such as amortization of intangible assets, a $138.4 million benefit from increases in accounts payable and accrued liabilities driven by the size and timing of payments and a $113.3 million benefit from changes in accounts receivables, net. This increase was partially offset by a $136.7 million change in billings in excess of costs and deferred revenue due to more advanced payments received in the prior year. We have received large advanced payments in the current and prior years that will reverse when project costs are incurred, except to the extent that additional advanced payments are received.
Cash Used in Investing Activities—During the first nine months of 2024, cash used in investing activities was $304.0 million compared to $119.1 million during the same period in 2023. The $184.9 million increase in cash used primarily related to an increase in cash paid (net of cash acquired) for acquisitions in the current year compared to the same period in 2023.
Cash Used in Financing Activities—Cash used in financing activities was $124.1 million for the first nine months of 2024 compared to $267.0 million during the same period in 2023. The $142.9 million decrease in cash used was primarily due to higher net repayments of debt in the prior year as operating cash flows were used to pay down outstanding debt partially offset by increased share repurchases of $33.5 million in the current year.
31
Free Cash Flow—We define free cash flow as cash provided by operating activities, less customary capital expenditures, plus the proceeds from asset sales. We believe free cash flow, by encompassing both profit margins and the use of working capital over our approximately one year working capital cycle, is an effective measure of operating effectiveness and efficiency. We have included free cash flow information here for this reason, and because we are often asked about it by third parties evaluating us. However, free cash flow is not considered under generally accepted accounting principles to be a primary measure of an entity’s financial results, and accordingly free cash flow should not be considered an alternative to operating income, net income, or amounts shown in our consolidated statements of cash flows as determined under generally accepted accounting principles. Free cash flow may be defined differently by other companies.
Share Repurchase Program
On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On August 7, 2024, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares. Since the inception of the repurchase program, the Board has approved 11.4 million shares to be repurchased. As of September 30, 2024, we have repurchased a cumulative total of 10.4 million shares at an average price of $29.99 per share under the repurchase program.
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the nine months ended September 30, 2024, we repurchased 0.1 million shares for approximately $42.3 million at an average price of $310.02 per share.
Debt
Revolving Credit Facility
We have an $850.0 million senior credit facility (the “Facility”) provided by a syndicate of banks, which is composed of a revolving credit line guaranteed by certain of our subsidiaries. The Facility also provides for an accordion or increase option not to exceed the greater of (a) $250 million and (b) 1.0x Credit Facility Adjusted EBITDA (as defined below), as well as a sublimit of up to $175.0 million issuable in the form of letters of credit. The Facility expires in July 2027 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and the equity of, and assets held by, certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds. As of September 30, 2024, we had no outstanding borrowings on the revolving credit facility, $80.0 million in letters of credit outstanding and $770.0 million of credit available.
There are two interest rate options for borrowings under the Facility, the Base Rate Loan (as defined in the Facility) option and the Secured Overnight Financing Rate (“SOFR”) Loan option. These rates are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. Additional margins are then added to these two rates.
Certain of our vendors require letters of credit to ensure reimbursement for amounts they are disbursing on our behalf, such as to beneficiaries under our self-funded insurance programs. We have also occasionally used letters of credit to guarantee performance under our contracts and to ensure payment to our subcontractors and vendors under those contracts. Our lenders issue such letters of credit through the Facility. A letter of credit commits the lenders to pay specified amounts to the holder of the letter of credit if the holder demonstrates that we have failed to perform specified actions. If this were to occur, we would be required to reimburse the lenders for amounts they fund to honor the letter of credit holder’s claim. Absent a claim, there is no payment or reserving of funds by us in connection with a letter of credit. However, because a claim on a letter of credit would require immediate reimbursement by us to our lenders, letters of credit are treated as a use of Facility capacity. The letter of credit fees range from 1.00% to 2.00% per annum, based on the Net Leverage Ratio.
32
As of September 30, 2024, we have $80.0 million in letter of credit commitments, of which $55.0 million will expire in 2024, $24.8 million will expire in 2025 and $0.2 million will expire in 2026. The substantial majority of these letters of credit are posted with insurers who disburse funds on our behalf in connection with our workers’ compensation, auto liability and general liability insurance program. These letters of credit provide additional security to the insurers that sufficient financial resources will be available to fund claims on our behalf, many of which develop over long periods of time, should we ever encounter financial duress. Posting of letters of credit for this purpose is a common practice for entities that manage their self-insurance programs through third-party insurers as we do. While some of these letter of credit commitments expire in the next twelve months, we expect nearly all of them, particularly those supporting our insurance programs, will be renewed annually.
Commitment fees are payable on the portion of the revolving loan capacity not in use for borrowings or letters of credit at any given time. These fees range from 0.15% to 0.25% per annum, based on the Net Leverage Ratio.
The Facility contains financial covenants defining various financial measures and the levels of these measures with which we must comply. Covenant compliance is assessed as of each quarter end. We were in compliance with all of our financial covenants as of September 30, 2024.
Notes to Former Owners
As part of the consideration used to acquire eight companies, we have outstanding notes to the former owners. Together, these notes had an outstanding balance of $67.6 million as of September 30, 2024. At September 30, 2024, future principal payments of notes to former owners by maturity year are as follows (dollars in thousands):
Balance at | Range of Stated | |||||
| September 30, 2024 | Interest Rates | ||||
2025 | $ | 5,968 | 2.3 - 2.5 | % | ||
2026 |
| 30,625 | 2.5 - 5.5 | % | ||
2027 | 26,000 | 5.5 | % | |||
2028 | 5,000 | 5.5 | % | |||
Total | $ | 67,593 | ||||
Outlook
We have generated positive net free cash flow for the last twenty-five calendar years, much of which occurred during challenging economic and industry conditions. We also continue to have significant borrowing capacity under our credit facility, and we maintain what we feel are reasonable cash balances. We believe these factors will provide us with sufficient liquidity to fund our operations for the foreseeable future.
Other Commitments
Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. If we fail to perform under the terms of a contract or to pay subcontractors and vendors who provided goods or services under a contract, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the sureties for any expenses or outlays they incur.
Under standard terms in the surety market, sureties issue bonds on a project-by-project basis, and can decline to issue bonds at any time. Historically, approximately 10% to 20% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or changes in our sureties’ assessment of our operating and financial risk could cause our sureties to decline to issue bonds for our work. If that were to occur, our alternatives include doing more business that does not require bonds, posting other forms of collateral for project performance, such as letters of credit or cash, and seeking bonding capacity from other sureties. We would likely also encounter concerns from customers, suppliers and other market participants as to our creditworthiness. While we believe our general operating and financial characteristics would enable us to ultimately respond effectively to an
33
interruption in the availability of bonding capacity, such an interruption would likely cause our revenue and profits to decline in the near term.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk primarily related to potential adverse changes in interest rates, as discussed below. We are actively involved in monitoring exposure to market risk and continue to develop and utilize appropriate risk management techniques. We are not exposed to any other significant financial market risks, including commodity price risk, or foreign currency exchange risk from the use of derivative financial instruments. At times, we use derivative financial instruments to manage our interest rate risk.
We have exposure to changes in interest rates under our revolving credit facility. There were no outstanding borrowings on the revolving credit facility as of September 30, 2024 and December 31, 2023. Our debt with fixed interest rates consists of notes to former owners of acquired companies and acquired notes payable.
We measure certain assets at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. We did not recognize any impairments in the current year on those assets required to be measured at fair value on a nonrecurring basis.
The valuation of the Company’s contingent earn-out payments is determined using a probability weighted discounted cash flow method. This analysis reflects the contractual terms of the purchase agreements (e.g., minimum and maximum payment, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our executive management is responsible for ensuring the effectiveness of the design and operation of our disclosure controls and procedures. We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
34
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
We are subject to certain legal and regulatory claims, including lawsuits arising in the normal course of business. We maintain various insurance coverages to minimize financial risk associated with these claims. We have estimated and provided accruals for probable losses and related legal fees associated with certain litigation in our consolidated financial statements. While we cannot predict the outcome of these proceedings, in management’s opinion and based on reports of counsel, any liability arising from these matters individually and in the aggregate will not have a material effect on our operating results, cash flows or financial condition, after giving effect to provisions already recorded.
In the first quarter of 2023, we recorded a pre-tax gain of $6.8 million from legal developments and settlements that primarily relate to disputes with customers regarding the outcome of completed projects as well as an obligation to perform subcontract work under two executed letters of intent for subsequent projects that we believed were not enforceable. The pre-tax gain of $6.8 million was recorded as an increase in gross profit of $6.6 million, a reduction in SG&A of $0.7 million, an increase in interest income of $1.3 million and an increase in the change in fair value of contingent earn-out obligations expense of $1.8 million in our Consolidated Statements of Operations.
As of September 30, 2024, we recorded an accrual for unresolved matters, which is not material to our financial statements, based on our analysis of likely outcomes related to the respective matters; however, it is possible that the ultimate outcome and associated costs will deviate from our estimates and that, in the event of an unexpectedly adverse outcome, we may experience additional costs and expenses in future periods.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition, or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On August 7, 2024, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares. Since the inception of the repurchase program, the Board has approved 11.4 million shares to be repurchased. As of September 30, 2024, we have repurchased a cumulative total of 10.4 million shares at an average price of $29.99 per share under the repurchase program.
The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the nine months ended September 30, 2024, we repurchased 0.1 million shares for approximately $42.3 million at an average price of $310.02 per share.
35
During the quarter ended September 30, 2024, we purchased our common shares in the following amounts at the following average prices:
|
|
| Total Number of Shares |
| Maximum Number of |
| ||||
Purchased as Part of | Shares that May Yet Be |
| ||||||||
Total Number of | Average Price | Publicly Announced Plans | Purchased Under the Plans |
| ||||||
Period | Shares Purchased | Paid Per Share | or Programs (1) | or Programs |
| |||||
July 1 - July 31 |
| 32,219 | $ | 305.13 |
| 10,325,040 |
| 619,085 | ||
August 1 - August 31 |
| 44,192 | $ | 315.12 |
| 10,369,232 |
| 986,319 | ||
September 1 - September 30 |
| 23,550 | $ | 314.55 |
| 10,392,782 |
| 962,769 | ||
| 99,961 | $ | 311.77 |
| 10,392,782 |
| 962,769 | |||
________________________________________
| (1) | Purchased as part of a program announced on March 29, 2007 under which, since the inception of this program, 11.4 million shares have been approved for repurchase. |
Under our stock incentive plans, employees may elect to have us withhold common shares to satisfy statutory federal, state and local tax withholding obligations arising on the vesting of restricted stock awards and exercise of options. When we withhold these shares, we are required to remit to the appropriate taxing authorities the market price of the shares withheld, which could be deemed a purchase of the common shares by us on the date of withholding.
ITEM 5. Other Information
Securities Trading Plans of Directors and Officers
During the three months ended September 30, 2024, no directors or officers of the Company
36
Item 6. Exhibits
Incorporated by Reference | ||||||
Exhibit |
| Description of Exhibits |
| Exhibit |
| Filing or |
3.1 | Second Amended and Restated Certificate of Incorporation of the Registrant | 3.1 | 333-24021 | |||
3.2 | 3.2 | 1998 Form 10-K | ||||
3.3 | 3.3 | 2003 Form 10-K | ||||
3.4 | 3.1 | May 20, 2016 Form 8-K | ||||
3.5 | 3.1 | March 25, 2016 Form 8-K | ||||
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
32.1** | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
32.2** | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
101.INS* | Inline XBRL Instance Document | |||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase | |||||
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document) | |||||
* Filed herewith.
** Furnished herewith.
37
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Comfort Systems USA, Inc. | ||
October 24, 2024 | By: | /s/ Brian E. Lane |
Brian E. Lane | ||
President, Chief Executive Officer and Director | ||
October 24, 2024 | By: | /s/ William George |
William George | ||
Executive Vice President and Chief Financial Officer | ||
October 24, 2024 | By: | /s/ Julie S. Shaeff |
Julie S. Shaeff | ||
Senior Vice President and Chief Accounting Officer | ||
38