Comfort Systems USA Inc. (NYSE:FIX) Q3 2018 Earnings Conference Call Transcript

Oct 26, 2018 • 11:00 am ET

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Comfort Systems USA Inc. (NYSE:FIX) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome, everyone to the Quarter Three 2018 Comfort Systems USA Earnings Conference Call hosted by Julie Shaeff, CAO. My name is Sheila and I'm your operator for today. During the presentation, your lines will remain on listen-only. (Operator Instructions) I would like to advise all parties that this conference is being recorded for replay purposes.

And I would now like to hand over to Julie. Please go ahead.

Executive
Julie Shaeff

Thanks, Sheila. Good morning. Welcome to Comfort Systems USA's Third Quarter Earnings Call.

(Forward Looking Cautionary statements)

A slide presentation will accompany our remarks. The slides are posted on the IR section of the company's website found at comfortsystemsusa.com.

Joining me on the call today are Brian Lane, President and CEO; and Bill George, CFO. Brian will open our remarks.

Executive
Brian Lane

Okay. Thanks, Julie. Good morning, and welcome to our third quarter earnings call. I want to start by thanking all our Comfort Systems USA employees for their hard work and dedication. I'll cover the highlights for the quarter, and Bill will discuss the financial results in more detail. Thanks to superb execution by our field teams, we are happy to report our best-ever quarterly results. We earned $1.02 per share this quarter, which is the first time in our history we have exceeded $1 per share in a quarter.

Revenue for the quarter was $595 million, another quarterly record and a 24% increase compared to the third quarter of 2017. Profits improved substantially and our operating income for the first nine months of 2018 has already exceeded last year's record full year operating income. Free cash flow for the quarter was also strong and our cash performance this quarter and year-to-date bodes well for the health of the underlying work. We are on track for a very good cash flow performance in the fourth quarter and next year. We have had positive free cash flow for 20 years in a row.

In light of our strong results and cash flow, our Board of Directors raised our dividend again this quarter, increasing it to $0.09 per share. We remain committed to using our cash flow to invest in our existing business, add great companies and return capital to our shareholders. Robust construction activity continues in the majority of our markets, and our backlog has increased by a remarkable $300 million since this time last year. Overall, I am very optimistic about our prospects going into next year.

I'll discuss our backlog and outlook in more detail in a few minutes. But first, let me turn this call over to Bill to review the details of our financial performance. Bill?

Executive
William George

Thanks, Brian. Please refer to slides two through six as I provide some explanations and details of our results.

Revenue growth accelerated this quarter as we reported $595 million in revenue for the third quarter of 2018, which is an increase of $114 million or 23.6% compared to the third quarter of 2017. Our same-store revenue increased by $87 million. So same-store