REGISTRATION NO. 333-38009
FILED PURSUANT TO RULE 424(b)(3)
COMFORT SYSTEMS USA, INC.
583,878 Shares of Common Stock
Supplement No. 2 dated April 10, 1998 to
Prospectus dated November 4, 1997
SELLING STOCKHOLDERS
The prospectus will also be used by the Robert A. Dood and Susan V. Dood
Charitable Remainder Unitrust dtd 12/9/97, a donee of a Selling Stockholder, in
connection with sale of less than 10,000 shares given to such charitable
organizations.
ANNUAL FINANCIAL INFORMATION
A copy of the Company's press release containing annual financial results
for 1997 is attached hereto.
<PAGE>
FOR: Comfort Systems USA, Inc.
APPROVED BY: J. Gordon Beittenmiller, Senior Vice President
Three Riverway, Suite 200
Houston, Texas 77056
(713) 830-9600
CONTACT: Betsy Brod/Karen Kruza
Investor Relations
Morgen-Walke Associates
(212) 850-5600
FOR IMMEDIATE RELEASE
COMFORT SYSTEMS USA REPORTS FOURTH QUARTER AND YEAR-END
RESULTS -
FOURTH QUARTER NET INCOME UP 43% -
- STRONG INTERNAL AND ACQUISITION GROWTH -
HOUSTON, TX, FEBRUARY 25, 1998 -- COMFORT SYSTEMS USA, INC., (NYSE: FIX),
a leading provider of commercial/industrial heating, ventilation and air
conditioning services (HVAC) today announced that pro forma net income for the
quarter ended December 31, 1997, increased 43% to $5,306,000 as compared to
$3,713,000 in 1996. Pro forma earnings per share were 25% higher at $0.20, based
on a higher number of shares outstanding, as compared to $0.16 per share in
1996. Revenues for the fourth quarter of 1997 were $99,485,000 versus
$67,864,000 in 1996, a gain of 47%. The Company separately announced the
completion of sixteen acquisitions that bring its annualized revenues to more
than $485 million.
Fred Ferreira, Comfort's Chairman and CEO said, "Our companies continue to
post strong internal growth and our acquisition activity continues to exceed
expectations. We are excited about the excellent progress we have made in
building a major presence in the commercial/industrial HVAC industry."
In December, the Company announced it was acquiring companies with $125
million in annualized revenues. Of this amount, approximately $50 million was
acquired during the quarter in pooling-of-interests transactions. The remaining
$75 million in acquisitions were purchase transactions that closed at or after
the end of the quarter with only nominal contribution to the quarter's results.
In a separate release the Company announced the completion of these
transactions, along with additional acquisitions representing another $60
million in annualized revenues.
- more -
<PAGE>
Comfort Systems USA, Inc.
February 25, 1997
Page 2
"Our companies' internal revenue growth exceeded 30% in the fourth quarter
and was more than 16% for the year," said Mr. Ferreira. "In addition to this
strong performance, our recent acquisitions have added advanced controls
expertise to Comfort's design/build and service capabilities, as well as
stronger regional positions, particularly in the Northeast. With this excellent
internal and acquisition growth, Comfort has more than doubled in size to nearly
one half billion dollars in annualized revenues since our initial public
offering in June. We will continue our focus on building a leading national
company in the commercial/industrial HVAC markets."
Pro forma combined revenues for the full year of 1997 were $324,609,000,
an increase of 23% over $263,863,000 in 1996. Pro forma net income in 1997
increased 18% to $17,532,000 or $0.72 per share based on a higher number of
shares outstanding, as compared to $14,804,000 or $0.65 per share in 1996. The
Company began incurring corporate costs in 1997 in connection with its
establishment as a public company in June, 1997. As a result, these costs are
included in the Company's 1997 fourth quarter and full year results, but not in
comparable 1996 periods.
Comfort Systems USA was formed in 1996 to build a large national company
through consolidation in the highly fragmented HVAC industry. The Company
focuses on the commercial/industrial sector of the industry which is estimated
at over $35 billion with more than 10,000 privately-owned companies in the U.S.
Comfort's 36 companies are located in 29 cities across the U.S., performed
services in over 35 states in 1997, and have been in business for an average of
29 years. FOR MORE INFORMATION, VISIT THE COMPANY'S WEB-SITE AT
WWW.COMFORTSYSTEMSUSA.COM.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS ARE BASED ON
THE CURRENT PLANS AND EXPECTATIONS OF COMFORT SYSTEMS USA, INC. AND INVOLVE
RISKS AND UNCERTAINTIES THAT COULD CAUSE 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, AMONG OTHERS, RISKS ASSOCIATED WITH THE DIFFICULTY OF
INTEGRATING NEWLY ACQUIRED COMPANIES WHILE MAINTAINING THEIR FINANCIAL
PERFORMANCE, SEASONAL OR CYCLICAL VARIATION IN DEMAND FOR THE COMPANY'S
PRODUCTS, THE ABILITY TO OBTAIN ACQUISITION FINANCING, INCREASING COMPETITION
FOR ACQUISITION TARGETS AS NEW COMPANIES ENTER THE MARKET FOR HVAC
CONSOLIDATION, AND THE CONTINUED ISSUANCE OF NEW SHARES AND THE RESULTING
OVERHANG OF SALEABLE STOCK AND OTHER RISKS DETAILED IN THE COMPANY'S CONTINUING
REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
-- financial table follows --
<PAGE>
COMFORT SYSTEMS USA, INC.
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 1997 & 1996
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------------------- -----------------------------------------
1997 % 1996 % 1997 % 1996 %
-------- ----- -------- ----- --------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues ............. $ 99,485 100.0% $ 67,864 100.0% $ 324,609 100.0% $ 263,863 100.0%
Cost of services ..... 73,131 48,524 234,336 191,879
-------- ----- -------- ----- --------- ----- --------- -----
Gross Profit ......... 26,354 26.5% 19,340 28.5% 90,273 27.8% 71,984 27.3%
SG & A ............... 16,131 16.2% 11,522 17.0% 55,966 17.2% 41,745 15.8%
Goodwill amortization 970 1.0% 874 1.3% 3,593 1.1% 3,495 1.3%
-------- ----- -------- ----- --------- ----- --------- -----
Income from operations 9,253 9.3% 6,944 10.2% 30,714 9.5% 26,744 10.1%
Interest expense, net 114 0.1% 250 0.4% 685 0.2% 1,274 0.5%
Other (income) expense (105) (0.1%) (220) (0.3%) (224) (0.1%) (411) (0.2%)
-------- ----- -------- ----- --------- ----- --------- -----
Income before taxes .. 9,244 9.3% 6,914 10.2% 30,253 9.3% 25,881 9.8%
Income taxes ......... 3,938 3,201 12,721 11,077
-------- ----- -------- ----- --------- ----- --------- -----
Net income ........... $ 5,306 5.3% $ 3,713 5.5% $ 17,532 5.4% $ 14,804 5.6%
Earnings per share ... $ 0.20 $ 0.16 $ 0.72 $ 0.65
Shares used in
computing net
earnings per share ... 26,557 22,760 24,502 22,760
EBITDA ............... $ 11,075 11.1% $ 8,081 11.9% $ 36,405 11.2% $ 31,172 11.8%
</TABLE>
Note 1: Prior to the Company's initial public offering and its
pooling-of-interests acquisitions completed in the third and fourth
quarters, the founding and pooled companies were managed as independent
companies. In conjunction with the mergers, certain stockholders have
agreed to reductions in salaries and benefits in accordance with their
employment agreements. The pro forma data present compensation at the
level the stockholders agreed to receive subsequent to the mergers.
Note 2: Diluted earnings per share and basic earnings per share are the same
for the three months and twelve months ended December 31, 1997 and 1996.
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