Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 21, 2014 | Jun. 30, 2013 | Dec. 31, 2012 |
Document and Entity Information | ' | ' | ' | ' |
Entity Registrant Name | 'COMFORT SYSTEMS USA INC | ' | ' | ' |
Entity Central Index Key | '0001035983 | ' | ' | ' |
Document Type | '10-K | ' | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' | ' |
Entity Public Float | ' | ' | $556.80 | ' |
Entity Common Stock, Shares Outstanding | ' | 37,634,927 | ' | ' |
Treasury Stock, Shares | 3,488,438 | 3,488,438 | ' | 3,879,299 |
Document Fiscal Year Focus | '2013 | ' | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $52,054 | $40,757 |
Accounts receivable, less allowance for doubtful accounts of $4,460 and $6,333, respectively | 267,470 | 256,959 |
Other receivables | 16,373 | 12,376 |
Inventories | 8,430 | 9,638 |
Prepaid expenses and other | 24,209 | 25,037 |
Costs and estimated earnings in excess of billings | 28,122 | 26,204 |
Assets related to discontinued operations | 339 | 1,582 |
Total current assets | 396,997 | 372,553 |
PROPERTY AND EQUIPMENT, NET | 46,861 | 41,416 |
GOODWILL | 114,588 | 114,588 |
IDENTIFIABLE INTANGIBLE ASSETS, NET | 37,383 | 44,515 |
OTHER NONCURRENT ASSETS | 5,993 | 7,682 |
Total assets | 601,822 | 580,754 |
CURRENT LIABILITIES: | ' | ' |
Current maturities of long-term debt | ' | 300 |
Current maturities of notes to former owners | 2,000 | ' |
Accounts payable | 100,825 | 100,641 |
Accrued compensation and benefits | 44,093 | 36,892 |
Billings in excess of costs and estimated earnings | 64,588 | 73,814 |
Accrued self-insurance expense | 29,398 | 29,096 |
Other current liabilities | 28,168 | 27,077 |
Liabilities related to discontinued operations | 366 | 767 |
Total current liabilities | 269,438 | 268,587 |
LONG-TERM DEBT, NET OF CURRENT MATURITIES | ' | 2,100 |
NOTES TO FORMER OWNERS, NET OF CURRENT MATURITIES | ' | 5,000 |
DEFERRED INCOME TAX LIABILITIES | 9,941 | 7,954 |
OTHER LONG-TERM LIABILITIES | 8,421 | 9,807 |
Total liabilities | 287,800 | 293,448 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Preferred stock, $.01 par, 5,000,000 shares authorized, none issued and outstanding | ' | ' |
Common stock, $.01 par, 102,969,912 shares authorized, 41,123,365 and 41,123,365 shares issued, respectively | 411 | 411 |
Treasury stock, at cost, 3,488,438 and 3,879,299 shares, respectively | -37,468 | -41,012 |
Additional paid-in capital | 318,123 | 317,534 |
Retained earnings (deficit) | 14,768 | -6,528 |
Comfort Systems USA, Inc. stockholders' equity | 295,834 | 270,405 |
Noncontrolling interests | 18,188 | 16,901 |
Total stockholders' equity | 314,022 | 287,306 |
Total liabilities and stockholders' equity | $601,822 | $580,754 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $4,460 | $6,333 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 102,969,912 | 102,969,912 |
Common stock, shares issued | 41,123,365 | 41,123,365 |
Treasury stock, shares | 3,488,438 | 3,879,299 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
REVENUE | $1,357,272 | $1,331,185 | $1,216,654 |
COST OF SERVICES | 1,117,389 | 1,123,564 | 1,035,124 |
Gross profit | 239,883 | 207,621 | 181,530 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 194,214 | 185,809 | 167,053 |
GOODWILL IMPAIRMENT | 0 | 0 | 57,354 |
GAIN ON SALE OF ASSETS | -589 | -491 | -236 |
Operating income (loss) | 46,258 | 22,303 | -42,641 |
OTHER INCOME (EXPENSE): | ' | ' | ' |
Interest income | 23 | 24 | 128 |
Interest expense | -1,351 | -1,595 | -1,886 |
Changes in the fair value of contingent earn-out obligations | 1,646 | 662 | 5,528 |
Other | 204 | 145 | 934 |
Other income (expense) | 522 | -764 | 4,704 |
INCOME (LOSS) BEFORE INCOME TAXES | 46,780 | 21,539 | -37,937 |
INCOME TAX EXPENSE (BENEFIT) | 18,148 | 10,045 | -5,463 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 28,632 | 11,494 | -32,474 |
Income (loss) from discontinued operations, net of income tax expense (benefit) of $(119), $212 and $(2,709) | -76 | 355 | -4,018 |
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 28,556 | 11,849 | -36,492 |
Less: Net income (loss) attributable to noncontrolling interests | 1,287 | -1,614 | 338 |
NET INCOME (LOSS) ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC | $27,269 | $13,463 | ($36,830) |
Basic- | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | $0.73 | $0.35 | ($0.88) |
Income (loss) from discontinued operations (in dollars per share) | ' | $0.01 | ($0.11) |
Net income (loss) (in dollars per share) | $0.73 | $0.36 | ($0.99) |
Diluted- | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | $0.73 | $0.35 | ($0.88) |
Income (loss) from discontinued operations (in dollars per share) | ' | $0.01 | ($0.11) |
Net income (loss) (in dollars per share) | $0.73 | $0.36 | ($0.99) |
SHARES USED IN COMPUTING INCOME (LOSS) PER SHARE: | ' | ' | ' |
Basic (in shares) | 37,245 | 37,112 | 37,389 |
Diluted (in shares) | 37,536 | 37,259 | 37,389 |
DIVIDENDS PER SHARE (in dollars per share) | $0.21 | $0.20 | $0.20 |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
Operating income (loss), income tax expense (benefit) | ($119) | $212 | ($2,709) |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Non-Controlling Interests |
In Thousands, except Share data, unless otherwise specified | ||||||
BALANCE at Dec. 31, 2010 | $312,784 | $411 | ($34,714) | $326,467 | $20,620 | ' |
BALANCE (in shares) at Dec. 31, 2010 | ' | 41,123,365 | -3,221,775 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income (loss) | -36,492 | ' | ' | ' | -36,830 | 338 |
Issuance of Stock: | ' | ' | ' | ' | ' | ' |
Issuance of shares for options exercised including tax benefit | 449 | ' | 707 | -258 | ' | ' |
Issuance of shares for options exercised including tax benefit (in shares) | ' | ' | 65,950 | ' | ' | ' |
Issuance of restricted stock | ' | ' | 2,488 | -2,488 | ' | ' |
Issuance of restricted stock (in shares) | ' | ' | 230,702 | ' | ' | ' |
Shares received in lieu of tax withholding payment on vested restricted stock | -662 | ' | -662 | ' | ' | ' |
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | ' | ' | -50,793 | ' | ' | ' |
Tax benefit from vesting of restricted stock | 54 | ' | ' | 54 | ' | ' |
Stock-based compensation expense | 3,604 | ' | ' | 3,604 | ' | ' |
Dividends | -7,552 | ' | ' | -3,771 | -3,781 | ' |
Share repurchase | -7,256 | ' | -7,256 | ' | ' | ' |
Share repurchase (in shares) | ' | ' | -738,590 | ' | ' | ' |
Acquisition of EAS | 17,377 | ' | ' | ' | ' | 17,377 |
Contribution from noncontrolling interest | 800 | ' | ' | ' | ' | 800 |
BALANCE at Dec. 31, 2011 | 283,106 | 411 | -39,437 | 323,608 | -19,991 | 18,515 |
BALANCE (in shares) at Dec. 31, 2011 | ' | 41,123,365 | -3,714,506 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income (loss) | 11,849 | ' | ' | ' | 13,463 | -1,614 |
Issuance of Stock: | ' | ' | ' | ' | ' | ' |
Issuance of shares for options exercised including tax benefit | 373 | ' | 1,087 | -714 | ' | ' |
Issuance of shares for options exercised including tax benefit (in shares) | ' | ' | 102,750 | ' | ' | ' |
Issuance of restricted stock | ' | ' | 742 | -742 | ' | ' |
Issuance of restricted stock (in shares) | ' | ' | 70,000 | ' | ' | ' |
Shares received in lieu of tax withholding payment on vested restricted stock | -544 | ' | -544 | ' | ' | ' |
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | ' | ' | -51,507 | ' | ' | ' |
Tax benefit from vesting of restricted stock | 56 | ' | ' | 56 | ' | ' |
Stock-based compensation expense | 2,797 | ' | ' | 2,797 | ' | ' |
Dividends | -7,471 | ' | ' | -7,471 | ' | ' |
Share repurchase | -2,860 | ' | -2,860 | ' | ' | ' |
Share repurchase (in shares) | ' | ' | -286,036 | ' | ' | ' |
BALANCE at Dec. 31, 2012 | 287,306 | 411 | -41,012 | 317,534 | -6,528 | 16,901 |
BALANCE (in shares) at Dec. 31, 2012 | ' | 41,123,365 | -3,879,299 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income (loss) | 28,556 | ' | ' | ' | 27,269 | 1,287 |
Issuance of Stock: | ' | ' | ' | ' | ' | ' |
Issuance of shares for options exercised including tax benefit | 5,233 | ' | 4,711 | 522 | ' | ' |
Issuance of shares for options exercised including tax benefit (in shares) | ' | ' | 439,762 | ' | ' | ' |
Issuance of restricted stock | ' | ' | 1,301 | -1,301 | ' | ' |
Issuance of restricted stock (in shares) | ' | ' | 122,375 | ' | ' | ' |
Shares received in lieu of tax withholding payment on vested restricted stock | -631 | ' | -631 | ' | ' | ' |
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | ' | ' | -45,266 | ' | ' | ' |
Tax benefit from vesting of restricted stock | 184 | ' | ' | 184 | ' | ' |
Forfeiture of unvested restricted stock | ' | ' | -5 | 5 | ' | ' |
Forfeiture of unvested restricted stock (in shares) | ' | ' | -469 | ' | ' | ' |
Stock-based compensation expense | 3,041 | ' | ' | 3,041 | ' | ' |
Dividends | -7,835 | ' | ' | -1,862 | -5,973 | ' |
Share repurchase | -1,832 | ' | -1,832 | ' | ' | ' |
Share repurchase (in shares) | -100,000 | ' | -125,541 | ' | ' | ' |
BALANCE at Dec. 31, 2013 | $314,022 | $411 | ($37,468) | $318,123 | $14,768 | $18,188 |
BALANCE (in shares) at Dec. 31, 2013 | ' | 41,123,365 | -3,488,438 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net income (loss) including noncontrolling interests | $28,556 | $11,849 | ($36,492) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities- | ' | ' | ' |
Amortization of identifiable intangible assets | 7,132 | 8,837 | 7,462 |
Depreciation expense | 11,440 | 11,793 | 12,591 |
Goodwill and other intangible asset impairments | ' | ' | 58,922 |
Bad debt expense | 19 | 2,453 | 936 |
Deferred tax expense (benefit) | 4,514 | 3,541 | -9,525 |
Amortization of debt financing costs | 245 | 229 | 226 |
Gain on sale of assets | -589 | -607 | -239 |
Changes in the fair value of contingent earn-out obligations | -1,646 | -662 | -5,528 |
Stock-based compensation expense | 3,974 | 2,797 | 3,604 |
(Increase) decrease in- | ' | ' | ' |
Receivables, net | -12,427 | 2,913 | 10,390 |
Inventories | 1,208 | 1,195 | -270 |
Prepaid expenses and other current assets | -109 | 370 | 977 |
Costs and estimated earnings in excess of billings | -1,918 | 1,636 | 4,162 |
Other noncurrent assets | -491 | -3,334 | 917 |
Increase (decrease) in- | ' | ' | ' |
Accounts payable and accrued liabilities | 6,776 | -15,507 | -21,477 |
Billings in excess of costs and estimated earnings | -9,226 | 1,776 | 5,426 |
Other long-term liabilities | 965 | 1,231 | -2,402 |
Net cash provided by operating activities | 38,423 | 30,510 | 29,680 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Purchases of property and equipment | -17,403 | -11,782 | -8,666 |
Proceeds from sales of property and equipment | 1,107 | 1,106 | 717 |
Proceeds from businesses sold | 43 | 164 | 156 |
Sales of marketable securities | ' | ' | 2,000 |
Cash paid for acquisitions, earn-outs and intangible assets, net of cash acquired | ' | -12,656 | -29,957 |
Net cash used in investing activities | -16,253 | -23,168 | -35,750 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Payments on other long-term debt | -5,400 | -7,349 | -14,387 |
Debt financing costs | -552 | ' | -517 |
Payments of dividends to shareholders | -7,875 | -7,498 | -7,520 |
Share repurchase program | -1,832 | -2,860 | -7,256 |
Shares received in lieu of tax withholding | -631 | -544 | -662 |
Excess tax benefit of stock-based compensation | 534 | 100 | 210 |
Proceeds from exercise of options | 4,883 | 329 | 293 |
Capital contribution from noncontrolling interests | ' | ' | 800 |
Net cash used in financing activities | -10,873 | -17,822 | -29,039 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 11,297 | -10,480 | -35,109 |
CASH AND CASH EQUIVALENTS, beginning of year-continuing operations and discontinued operations | 40,757 | 51,237 | 86,346 |
CASH AND CASH EQUIVALENTS, end of year-continuing operations and discontinued operations | $52,054 | $40,757 | $51,237 |
Business_and_Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2013 | |
Business and Organization | ' |
Business and Organization | ' |
1. Business and Organization | |
Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive heating, ventilation and air conditioning ("HVAC") installation, maintenance, repair and replacement services within the mechanical services industry. We operate primarily in the commercial, industrial and institutional HVAC markets and perform most of our services within office buildings, retail centers, apartment complexes, manufacturing plants and healthcare, education and government facilities. In addition to standard HVAC services, we provide specialized applications such as building automation control systems, fire protection, process cooling, electronic monitoring and process piping. Certain locations also perform related activities such as electrical service and plumbing. Approximately 42% of our consolidated 2013 revenue is attributable to installation of systems in newly constructed facilities, with the remaining 58% attributable to maintenance, repair and replacement services. The following activities account for our consolidated 2013 revenue: HVAC 75%, plumbing 15%, building automation control systems 6% and other 4%. These activities are within the mechanical services industry which is the single industry segment we serve. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||
2. Summary of Significant Accounting Policies | |||||||||||
Principles of Consolidation | |||||||||||
These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. All significant intercompany accounts and transactions have been eliminated. | |||||||||||
Reclassifications | |||||||||||
Certain reclassifications have been made in prior period financial statements to conform to current period presentation. These reclassifications are either of a normal and recurring nature or are due to discontinued operations accounting related to the shutdown of our Delaware operation in 2012. Neither have resulted in any changes to previously reported net income for any periods. | |||||||||||
Accounting Adjustment | |||||||||||
The accompanying financial statements for the year ended December 31, 2013 includes the correction of prior period accounting errors which resulted in additional net after-tax income in the period of approximately $1.3 million. We determined that the errors primarily impacted years prior to 2010. These corrections are reflected on a pretax basis in revenue, cost of sales and selling, general, and administrative expenses, which include $3.3 million, $0.8 million and $0.3 million, respectively. | |||||||||||
We have considered the guidance found in ASC 250-10 and ASC 270-10 (SEC Staff Accounting Bulletin No. 99, Materiality, Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), in evaluating whether a restatement of prior financial statements is required as a result of the misstatement to such financial statements. ASC 250 requires that corrections of errors be recorded by restatement of prior periods if the error is material. We quantitatively and qualitatively assessed the materiality of the errors and concluded that the errors were not material to our earnings for the year ended December 31, 2013, and any of our previously issued financial statements. | |||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenue and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, self-insurance accruals, deferred tax assets, warranty accruals, fair value accounting for acquisitions and the quantification of fair value for reporting units in connection with our goodwill impairment testing. | |||||||||||
Cash Flow Information | |||||||||||
We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||||
Cash paid (in thousands) for: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Interest | $ | 799 | $ | 1,326 | $ | 1,720 | |||||
Income taxes for continuing operations | 15,821 | 13,948 | 1,613 | ||||||||
Income taxes for discontinued operations | — | 5 | 8 | ||||||||
| | | | | | | | | | | |
Total | $ | 16,620 | $ | 15,279 | $ | 3,341 | |||||
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Revenue Recognition | |||||||||||
Approximately 83% of our revenue was earned on a project basis and recognized through the percentage of completion method of accounting. Under this method, contract revenue recognizable at any time during the life of a contract is determined by multiplying expected total contract revenue by the percentage of contract costs incurred at any time to total estimated contract costs. More specifically, as part of the negotiation and bidding process in connection with obtaining installation contracts, we estimate our contract costs, which include all direct materials (exclusive of rebates), labor and subcontract costs and indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. These contract costs are included in our results of operations under the caption "Cost of Services." Then, as we perform under those contracts, we measure costs incurred, compare them to total estimated costs to complete the contract and recognize a corresponding proportion of contract revenue. Labor costs are considered to be incurred as the work is performed. Subcontractor labor is recognized as the work is performed, but is generally subjected to approval as to milestones or other evidence of completion. Non-labor project costs consist of purchased equipment, prefabricated materials and other materials. Purchased equipment on our projects is substantially produced to job specifications and is a value added element to our work. The costs are considered to be incurred when title is transferred to us, which typically is upon delivery to the work site. Prefabricated materials, such as ductwork and piping, are generally performed at our shops and recognized as contract costs when fabricated for the unique specifications of the job. Other materials costs are not significant and are generally recorded when delivered to the work site. This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments. | |||||||||||
We generally do not incur significant costs prior to receiving a contract, and therefore, these costs are expensed as incurred. In limited circumstances, when significant pre-contract costs are incurred, they are deferred if the costs can be directly associated with a specific contract and if their recoverability from the contract is probable. Upon receiving the contract, these costs are included in contract costs. Deferred costs associated with unsuccessful contract bids are written off in the period that we are informed that we will not be awarded the contract. | |||||||||||
Project contracts typically provide for a schedule of billings or invoices to the customer based on reaching agreed upon milestones or as we incur costs. The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings to the customer under the contract are reflected as a current asset in our balance sheet under the caption "Costs and estimated earnings in excess of billings." Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in our balance sheet under the caption "Billings in excess of costs and estimated earnings." | |||||||||||
Contracts in progress are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Costs incurred on contracts in progress | $ | 989,072 | $ | 1,182,085 | |||||||
Estimated earnings, net of losses | 126,431 | 134,534 | |||||||||
Less—Billings to date | (1,151,969 | ) | (1,364,229 | ) | |||||||
| | | | | | | | ||||
$ | (36,466 | ) | $ | (47,610 | ) | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
Costs and estimated earnings in excess of billings | $ | 28,122 | $ | 26,204 | |||||||
Billings in excess of costs and estimated earnings | (64,588 | ) | (73,814 | ) | |||||||
| | | | | | | | ||||
$ | (36,466 | ) | $ | (47,610 | ) | ||||||
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Accounts receivable include amounts billed to customers under retention or retainage provisions in construction contracts. Such provisions are standard in our industry and usually allow for a small portion of progress billings or the contract price to be withheld by the customer until after we have completed work on the project, typically for a period of six months. Based on our experience with similar contracts in recent years, the majority of our billings for such retention balances at each balance sheet date are finalized and collected within the subsequent year. Retention balances at December 31, 2013 and 2012 are $51.4 million and $48.0 million, respectively, and are included in accounts receivable. | |||||||||||
Accounts payable at December 31, 2013 and 2012 included $10.3 million and $11.3 million of retainage under terms of contracts with subcontractors, respectively. The majority of the retention balances at each balance sheet date are finalized and paid within the subsequent year. | |||||||||||
The percentage of completion method of accounting is also affected by changes in job performance, job conditions and final contract settlements. These factors may result in revisions to estimated costs and, therefore, revenue. Such revisions are frequently based on further estimates and subjective assessments. The effects of these revisions are recognized in the period in which the revisions are determined. When such revisions lead to a conclusion that a loss will be recognized on a contract, the full amount of the estimated ultimate loss is recognized in the period such a conclusion is reached, regardless of the percentage of completion of the contract. | |||||||||||
Revisions to project costs and conditions can give rise to change orders under which the customer agrees to pay additional contract price. Revisions can also result in claims we might make against the customer to recover project variances that have not been satisfactorily addressed through change orders with the customer. Except in certain circumstances, we do not recognize revenue or margin based on change orders or claims until they have been agreed upon with the customer. The amount of revenue associated with unapproved change orders and claims is currently immaterial. | |||||||||||
Variations from estimated project costs could have a significant impact on our operating results, depending on project size, and the recoverability of the variation via additional customer payments. | |||||||||||
Revenue associated with maintenance, repair and monitoring services and related contracts are recognized as services are performed. Amounts associated with unbilled service work orders are reflected as a current asset in our balance sheet under the caption "Costs and estimated earnings in excess of billings" and amounts billed in advance of work orders being performed are reflected as a current liability in our balance sheet under the caption "Billings in excess of costs and estimated earnings." | |||||||||||
Accounts Receivable | |||||||||||
The carrying value of our receivables, net of the allowance for doubtful accounts, represents the estimated net realizable value. We estimate our allowance for doubtful accounts based upon the creditworthiness of our customers, prior collection history, ongoing relationships with our customers, the aging of past due balances, our lien rights, if any, in the property where we performed the work and the availability, if any, of payment bonds applicable to the contract. The receivables are written off when they are deemed to be uncollectible. | |||||||||||
Inventories | |||||||||||
Inventories consist of parts and supplies that we purchase and hold for use in the ordinary course of business and are stated at the lower of cost or market using the first-in, first-out method. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost, and depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the expected life of the lease or the estimated useful life of the asset. | |||||||||||
Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated over the remaining useful life of the equipment. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in "Gain on sale of assets" in the statement of operations. | |||||||||||
Recoverability of Goodwill and Identifiable Intangible Assets | |||||||||||
Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred. | |||||||||||
When the carrying value of a given reporting unit exceeds its fair value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value. If other reporting units have had increases in fair value, such increases may not be recorded. Accordingly, such increases may not be netted against impairments at other reporting units. The requirements for assessing whether goodwill has been impaired involve market-based information. This information, and its use in assessing goodwill, entails some degree of subjective assessment. | |||||||||||
We currently perform our annual impairment testing as of October 1 and any impairment charges resulting from this process are reported in the fourth quarter. We segregate our operations into reporting units based on the degree of operating and financial independence of each unit and our related management of them. We perform our annual goodwill impairment testing at the reporting unit level. | |||||||||||
In the evaluation of goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value. If, after completing such assessment, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then there is no need to perform any further testing. If we conclude otherwise, then we perform the first step of a two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying value of the reporting unit. | |||||||||||
We estimate the fair value of the reporting unit based on two market approaches and an income approach, which utilizes discounted future cash flows. Assumptions critical to the fair value estimates under the discounted cash flow model include discount rates, cash flow projections, projected long-term growth rates and the determination of terminal values. The market approaches utilized market multiples of invested capital from comparable publicly traded companies ("public company approach") and comparable transactions ("transaction approach"). The market multiples from invested capital include revenue, book equity plus debt and earnings before interest, taxes, depreciation and amortization ("EBITDA"). | |||||||||||
We amortize identifiable intangible assets with finite lives over their useful lives. Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances. | |||||||||||
Long-Lived Assets | |||||||||||
Long-lived assets are comprised principally of goodwill, identifiable intangible assets, property and equipment, and deferred income tax assets. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of these assets may not be recoverable. We use estimates of future income from operations and cash flows, as well as other economic and business factors, to assess the recoverability of these assets. | |||||||||||
Acquisitions | |||||||||||
We recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition. | |||||||||||
Contingent Consideration—In certain acquisitions, we agree to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain predetermined profitability targets. We have recognized liabilities for these contingent obligations based on their estimated fair value at the date of acquisition with any differences between the acquisition date fair value and the ultimate settlement of the obligations being recognized in income from operations. | |||||||||||
Contingent Assets and Liabilities—Assets and liabilities arising from contingencies are recognized at their acquisition date fair value when their respective fair values can be determined. If the fair values of such contingencies cannot be determined, they are recognized at the acquisition date if the contingencies are probable and an amount can be reasonably estimated. Acquisition date fair value estimates are revised as necessary if, and when, additional information regarding these contingencies becomes available to further define and quantify assets acquired and liabilities assumed. | |||||||||||
Self-Insurance Liabilities | |||||||||||
We are substantially self-insured for workers' compensation, employer's liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. Loss estimates associated with the larger and longer-developing risks—workers' compensation, auto liability and general liability—are reviewed by a third-party actuary quarterly. Our self-insurance arrangements are further discussed in Note 12 "Commitments and Contingencies." | |||||||||||
Warranty Costs | |||||||||||
We typically warrant labor for the first year after installation on new HVAC systems. We generally warrant labor for thirty days after servicing of existing HVAC systems. A reserve for warranty costs is estimated and recorded based upon the historical level of warranty claims and management's estimate of future costs. | |||||||||||
Income Taxes | |||||||||||
We are subject to income tax in the United States and Puerto Rico and file a consolidated return for federal income tax purposes. Income taxes are provided for under the liability method, which takes into account differences between financial statement treatment and tax treatment of certain transactions. | |||||||||||
Deferred income taxes are based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred income tax provision represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||
We regularly evaluate valuation allowances established for deferred tax assets for which future realization is uncertain. We perform this evaluation quarterly. In assessing the realizability of deferred tax assets, we must consider whether it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. We consider all available evidence, both positive and negative, in determining whether a valuation allowance is required. Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence. | |||||||||||
Significant judgment is required in assessing the timing and amounts of deductible and taxable items. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions may be disallowed. When facts and circumstances change, we adjust these reserves through our provision for income taxes. | |||||||||||
To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and are classified as a component of income tax expense in our Consolidated Statements of Operations. | |||||||||||
Segment Disclosure | |||||||||||
Our activities are within the mechanical services industry, which is the single industry segment we serve. Each operating subsidiary represents an operating segment and these segments have been aggregated, as the operating units meet all of the aggregation criteria. | |||||||||||
Concentrations of Credit Risk | |||||||||||
We provide services in a broad range of geographic regions. Our credit risk primarily consists of receivables from a variety of customers including general contractors, property owners and developers and commercial and industrial companies. We are subject to potential credit risk related to changes in business and economic factors throughout the United States within the nonresidential construction industry. However, we are entitled to payment for work performed and have certain lien rights in that work. Further, we believe that our contract acceptance, billing and collection policies are adequate to manage potential credit risk. We regularly review our accounts receivable and estimate an allowance for uncollectible amounts. We have a diverse customer base, with no single customer accounting for more than 3% of consolidated 2013 revenue. | |||||||||||
Financial Instruments | |||||||||||
Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, notes to former owners and a revolving credit facility. We believe that the carrying values of these instruments on the accompanying balance sheets approximate their fair values. | |||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
3. Fair Value Measurements | ||||||||||||||
We classify and disclose assets and liabilities carried at fair value in one of the following three categories: | ||||||||||||||
• | ||||||||||||||
Level 1—quoted prices in active markets for identical assets and liabilities; | ||||||||||||||
• | ||||||||||||||
Level 2—observable market based inputs or unobservable inputs that are corroborated by market data; and | ||||||||||||||
• | ||||||||||||||
Level 3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||
The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall, for assets and liabilities measured on a recurring basis as of December 31, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements | ||||||||||||||
at Reporting Date Using | ||||||||||||||
Balance | Quoted Prices in | Significant | Significant | |||||||||||
December 31, 2013 | Active Markets | Other | Unobservable | |||||||||||
for Identical | Observable | Inputs | ||||||||||||
Assets | Inputs | (Level 3) | ||||||||||||
(Level 1) | (Level 2) | |||||||||||||
Cash and cash equivalents | $ | 52,054 | $ | 52,054 | $ | — | $ | — | ||||||
Life insurance—cash surrender value | $ | 2,943 | $ | — | $ | 2,943 | $ | — | ||||||
Contingent earn-out obligations | $ | 320 | $ | — | $ | — | $ | 320 | ||||||
Cash and cash equivalents consist primarily of 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. | ||||||||||||||
One of our operations has life insurance policies covering 41 employees with a combined face value of $41.2 million. The policy is invested in mutual funds and the fair value measurement of the cash surrender balance associated with these policies is determined using Level 2 inputs within the fair value hierarchy and will vary with investment performance. The cash surrender value of these policies is $2.9 million as of December 31, 2013 and $2.5 million as of December 31, 2012. These assets are included in "Other Noncurrent Assets" in our consolidated balance sheets. | ||||||||||||||
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 (e.g., 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, probabilities of achieving such future cash flows and a discount rate. The contingent earn-out obligations are measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. | ||||||||||||||
The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3) (in thousands). | ||||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Balance at beginning of year | $ | 1,966 | $ | 2,488 | ||||||||||
Issuances | — | 140 | ||||||||||||
Adjustments to fair value | (1,646 | ) | (662 | ) | ||||||||||
| | | | | | | | |||||||
Balance at end of year | $ | 320 | $ | 1,966 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
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. During the years ended December 31, 2013 and 2012, there were no goodwill or other intangible asset impairments recorded. See Note 6 "Goodwill and Identifiable Intangible Assets, Net" for further discussion. We did not recognize any other impairments on those assets required to be measured at fair value on a nonrecurring basis. | ||||||||||||||
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2013 | |
Acquisitions | ' |
Acquisitions | ' |
4. Acquisitions | |
Acquisition of EAS | |
On November 2, 2011, we acquired a 60% majority interest in Environmental Air Systems, LLC ("EAS"). EAS is a regional mechanical contractor with principal offices in Greensboro and Raleigh, North Carolina. EAS engages in a broad range of mechanical contracting projects, HVAC service and controls, and sophisticated prefabrication of mechanical systems, in North Carolina, South Carolina and throughout the Atlantic region. The acquisition date fair value of consideration transferred was $30.4 million, of which $15.7 million was allocated to goodwill. | |
Other Acquisitions | |
No acquisitions were completed in 2013. We completed various acquisitions from 2011 to 2012, which were not material, individually or in the aggregate, and were "tucked-in" with existing operations. The results of operations of acquisitions are included in our consolidated financial statements from their respective acquisition dates. Additional contingent purchase price ("earn-out") has been or will be paid if certain acquisitions achieve predetermined profitability targets. The total purchase price for these acquisitions, including earn-outs, was $14.2 million in 2012 and $2.9 million in 2011. | |
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Discontinued Operations | ' | ||||||||||
Discontinued Operations | ' | ||||||||||
5. Discontinued Operations | |||||||||||
During the fourth quarter of 2012, we substantially completed the shutdown of our operation located in Delaware which we decided to curtail operating in the fourth quarter of 2011. During 2011, we impaired the intangible assets of $1.6 million associated with this operation as a result of this decision. The after tax loss was $0.1 million and $4.0 million for the years ended December 31, 2013 and 2011, respectively. For the year ended December 31, 2012, after tax income was recorded for this operation of $0.1 million. These results have been recorded in discontinued operations under "Operating income (loss), net of tax expense (benefit)." | |||||||||||
In addition, we recorded after tax income of $0.3 million for the year ended December 31, 2012 which was associated with the reduction of estimated liabilities associated with the sale and shutdown of previous discontinued operations. This amount is reflected in discontinued operations under "Operating income (loss), net of tax expense (benefit)" in addition to those mentioned above. | |||||||||||
Our consolidated statements of operations and the related earnings per share amounts have been restated to reflect the effects of the discontinued operations. No interest expense is allocated to discontinued operations. | |||||||||||
Revenue and pre-tax income (loss) related to discontinued operations are as follows (in thousands): | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue | $ | 49 | $ | 4,668 | $ | 23,366 | |||||
Pre-tax income (loss) | $ | (195 | ) | $ | 567 | $ | (6,727 | ) |
Goodwill_and_Identifiable_Inta
Goodwill and Identifiable Intangible Assets, Net | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Goodwill and Identifiable Intangible Assets, Net | ' | ||||||||||||||||
Goodwill and Identifiable Intangible Assets, Net | ' | ||||||||||||||||
6. Goodwill and Identifiable Intangible Assets, Net | |||||||||||||||||
Goodwill | |||||||||||||||||
The changes in the carrying amount of goodwill are as follows (in thousands): | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Balance at beginning of year | $ | 114,588 | $ | 107,093 | |||||||||||||
Additions (See Note 4) | — | 7,495 | |||||||||||||||
| | | | | | | | ||||||||||
Balance at end of year | $ | 114,588 | $ | 114,588 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
We perform our annual impairment testing on October 1, or more frequently, if events and circumstances indicate impairment may have occurred. As discussed in Note 2, "Summary of Significant Accounting Policies," we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying value. | |||||||||||||||||
During our annual impairment testing on October 1, we performed a qualitative assessment for each reporting unit which considered various factors, including changes in the carrying value of the reporting unit, forecasted operating results, long-term growth rates and discount rates. Additionally, we considered qualitative key events and circumstances (i.e. macroeconomic environment, industry and market specific conditions, cost factors and events specific to the reporting unit, etc.). Based on this assessment, we concluded that it was more likely than not that the fair value of each of the reporting units was greater than its carrying value. Accordingly, no further testing was required. | |||||||||||||||||
There was no impairment of goodwill as a result of our annual goodwill impairment test in 2013. We also did not encounter any events or changes in circumstances that indicated an impairment was more likely than not during interim periods in 2013. | |||||||||||||||||
During 2012 and 2011, the fair value of each reporting unit was estimated using a discounted cash flow model combined with market valuation approaches. We assigned a weighting of 50% to the discounted cash flow analysis, 40% to the public company approach and 10% to the transaction approach for the year ended December 31, 2012. In certain instances, there was no weighting assigned to the transaction approach due to a lack of comparable market data and a weighting of 50% was assigned to the public company approach for those impacted reporting units. There was no impairment of goodwill as a result of our annual goodwill impairment test in 2012. We assigned a weighting of 50% to the discounted cash flow analysis and 50% to the public company approach for the year ended December 31, 2011. There was no weighting assigned to the transaction approach due to the lack of comparable market data in 2011. We recorded a goodwill impairment of $57.3 million during 2011 related to four reporting units serving the Virginia, Maryland and North Carolina markets. | |||||||||||||||||
There are significant inherent uncertainties and management judgment involved in estimating the fair value of each reporting unit. While we believe we have made reasonable estimates and assumptions to estimate the fair value of our reporting units, it is possible that a material change could occur. If actual results are not consistent with our current estimates and assumptions, or the current economic downturn worsens or the projected recovery is significantly delayed beyond our projections, goodwill impairment charges may be recorded in future periods. | |||||||||||||||||
Identifiable Intangible Assets, Net | |||||||||||||||||
Identifiable intangible assets consist of the following (dollars in thousands): | |||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||
Estimated | Gross Book | Accumulated | Gross Book | Accumulated | |||||||||||||
Useful Lives | Value | Amortization | Value | Amortization | |||||||||||||
in Years | |||||||||||||||||
Customer relationships | 15-Feb | $ | 40,404 | $ | (20,978 | ) | $ | 40,404 | $ | (15,579 | ) | ||||||
Backlog | 2-Jan | 6,515 | (6,515 | ) | 6,515 | (6,375 | ) | ||||||||||
Noncompete agreements | 7-Feb | 2,890 | (2,649 | ) | 2,890 | (2,380 | ) | ||||||||||
Tradenames | 25-Feb | 23,695 | (5,979 | ) | 23,695 | (4,655 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Total | $ | 73,504 | $ | (36,121 | ) | $ | 73,504 | $ | (28,989 | ) | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
The amounts attributable to customer relationships, noncompete agreements and tradenames are amortized to "Selling, General and Administrative Expenses" on a pattern of economic benefit or a straight-line method over periods from two to twenty-five years. The amounts attributable to backlog are being amortized to "Cost of Services" on a proportionate method over the remaining backlog period. Amortization expense for the years ended December 31, 2013, 2012 and 2011 was $7.1 million, $8.8 million and $7.1 million, respectively. | |||||||||||||||||
At December 31, 2013, future amortization expense of identifiable intangible assets is as follows (in thousands): | |||||||||||||||||
Year ended December 31— | |||||||||||||||||
2014 | $ | 6,106 | |||||||||||||||
2015 | 4,873 | ||||||||||||||||
2016 | 3,748 | ||||||||||||||||
2017 | 2,997 | ||||||||||||||||
2018 | 2,320 | ||||||||||||||||
Thereafter | 17,339 | ||||||||||||||||
| | | | | |||||||||||||
Total | $ | 37,383 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property and Equipment | ' | |||||||||
Property and Equipment | ' | |||||||||
7. Property and Equipment | ||||||||||
Property and equipment consist of the following (dollars in thousands): | ||||||||||
December 31, | ||||||||||
Estimated | ||||||||||
Useful Lives | ||||||||||
in Years | 2013 | 2012 | ||||||||
Land | — | $ | 2,404 | $ | 2,404 | |||||
Transportation equipment | 1 - 7 | 46,233 | 38,352 | |||||||
Machinery and equipment | 1 - 15 | 22,920 | 21,670 | |||||||
Computer and telephone equipment | 1 - 10 | 19,012 | 18,481 | |||||||
Buildings and leasehold improvements | 2 - 40 | 25,371 | 24,438 | |||||||
Furniture and fixtures | 2 - 17 | 5,036 | 4,741 | |||||||
| | | | | | | | | | |
120,976 | 110,086 | |||||||||
Less—Accumulated depreciation | (74,115 | ) | (68,670 | ) | ||||||
| | | | | | | | | | |
Property and equipment, net | $ | 46,861 | $ | 41,416 | ||||||
| | | | | | | | | | |
| | | | | | | | | | |
Depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $11.4 million, $11.7 million and $11.9 million, respectively. | ||||||||||
Detail_of_Certain_Balance_Shee
Detail of Certain Balance Sheet Accounts | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Detail of Certain Balance Sheet Accounts | ' | ||||||||||
Detail of Certain Balance Sheet Accounts | ' | ||||||||||
8. Detail of Certain Balance Sheet Accounts | |||||||||||
Activity in our allowance for doubtful accounts consists of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 6,333 | $ | 4,615 | $ | 5,029 | |||||
Additions for bad debt expense | 19 | 2,753 | 214 | ||||||||
Deductions for uncollectible receivables written off, net of recoveries | (1,892 | ) | (1,090 | ) | (770 | ) | |||||
Allowance for doubtful accounts of acquired companies at date of acquisition | — | 55 | 142 | ||||||||
| | | | | | | | | | | |
Balance at end of year | $ | 4,460 | $ | 6,333 | $ | 4,615 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other current liabilities consist of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Accrued warranty costs | $ | 6,795 | $ | 6,781 | |||||||
Accrued job losses | 758 | 2,137 | |||||||||
Accrued rent and lease obligations | 673 | 673 | |||||||||
Accrued sales and use tax | 1,821 | 1,710 | |||||||||
Deferred revenue | 1,320 | 1,143 | |||||||||
Liabilities due to former owners | 4,054 | 2,349 | |||||||||
Other current liabilities | 12,747 | 12,284 | |||||||||
| | | | | | | | ||||
$ | 28,168 | $ | 27,077 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
LongTerm_Debt_Obligations
Long-Term Debt Obligations | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Long-Term Debt Obligations | ' | |||||||||||||
Long-Term Debt Obligations | ' | |||||||||||||
9. Long-Term Debt Obligations | ||||||||||||||
Long-term debt obligations consist of the following (in thousands): | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Revolving credit facility | $ | — | $ | — | ||||||||||
Other debt | — | 2,400 | ||||||||||||
Notes to former owners | 2,000 | 5,000 | ||||||||||||
| | | | | | | | |||||||
Total debt | 2,000 | 7,400 | ||||||||||||
Less—current portion | (2,000 | ) | (300 | ) | ||||||||||
| | | | | | | | |||||||
Total long-term portion of debt | $ | — | $ | 7,100 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
At December 31, 2013, future principal payments of long-term debt are as follows (in thousands): | ||||||||||||||
Year ended December 31— | ||||||||||||||
2014 | $ | 2,000 | ||||||||||||
2015 | — | |||||||||||||
2016 | — | |||||||||||||
2017 | — | |||||||||||||
2018 | — | |||||||||||||
Thereafter | — | |||||||||||||
| | | | | ||||||||||
$ | 2,000 | |||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Interest expense included the following primary elements (in thousands): | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Interest expense on notes to former owners | $ | 97 | $ | 255 | $ | 795 | ||||||||
Interest expense on borrowings and unused commitment fees | 279 | 444 | 243 | |||||||||||
Letter of credit fees | 731 | 667 | 622 | |||||||||||
Amortization of debt financing costs | 244 | 229 | 226 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 1,351 | $ | 1,595 | $ | 1,886 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Revolving Credit Facility | ||||||||||||||
On June 25, 2013, we amended our senior credit facility (the "Facility") provided by a syndicate of banks increasing our borrowing capacity from $125.0 million to $175.0 million. The Facility, which is available for borrowings and letters of credit, expires in July 2018 and is secured by a first lien on substantially all of the Company's personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and a second lien on the Company's assets related to projects subject to surety bonds. We incurred approximately $0.6 million in financing and professional costs in connection with the amendment to the Facility, which combined with the previous unamortized costs of $0.7 million, will be amortized on a straight-line basis as a non-cash charge to interest expense over the remaining term of the Facility. As of December 31, 2013, we had no outstanding borrowings, $48.1 million in letters of credit outstanding, and $126.9 million of credit available. | ||||||||||||||
Collateral | ||||||||||||||
A common practice in our industry is the posting of payment and performance bonds with customers. These bonds are offered by financial institutions known as sureties, and provide assurance to the customer that in the event we encounter significant financial or operational difficulties, the surety will arrange for the completion of our contractual obligations and for the payment of our vendors on the projects subject to the bonds. In cooperation with our lenders, we granted our sureties a first lien on assets such as receivables, costs and estimated earnings in excess of billings, and equipment specifically identifiable to projects for which bonds are outstanding, as collateral for potential obligations under bonds. As of December 31, 2013, the book value of these assets was approximately $69.5 million. | ||||||||||||||
Covenants and Restrictions | ||||||||||||||
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. Credit Facility Adjusted EBITDA is defined under the Facility for financial covenant purposes as net earnings for the four quarters ending as of any given quarterly covenant compliance measurement date, plus the corresponding amounts for (a) interest expense; (b) income taxes; (c) depreciation and amortization; (d) other non-cash charges and (e) pre-acquisition results of acquired companies. The following is a reconciliation of Credit Facility Adjusted EBITDA to net income (in thousands): | ||||||||||||||
Net income including noncontrolling interests | $ | 28,556 | ||||||||||||
Income taxes—continuing operations | 18,148 | |||||||||||||
Interest expense, net | 1,328 | |||||||||||||
Depreciation and amortization expense | 18,572 | |||||||||||||
Stock compensation expense | 3,974 | |||||||||||||
Income taxes—discontinued operations | (119 | ) | ||||||||||||
EBITDA attributable to noncontrolling interests | (2,342 | ) | ||||||||||||
Pre-acquisition results of acquired companies, as defined under the Facility | — | |||||||||||||
| | | | | ||||||||||
Credit Facility Adjusted EBITDA | $ | 68,117 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
The Facility's principal financial covenants include: | ||||||||||||||
Leverage Ratio— The Facility requires that the ratio of our Consolidated Total Indebtedness to our Credit Facility Adjusted EBITDA not exceed 3.00 through December 31, 2014, 2.75 through December 31, 2015 and 2.50 through maturity. The leverage ratio as of December 31, 2013 was 0.03. | ||||||||||||||
Fixed Charge Coverage Ratio— The Facility requires that the ratio of Credit Facility Adjusted EBITDA, less non-financed capital expenditures, tax provision, dividends and amounts used to repurchase stock to the sum of interest expense and scheduled principal payments of indebtedness be at least 2.00; provided that the calculation of the fixed charge coverage ratio excludes stock repurchases and the payment of dividends at any time that the Company's Net Leverage Ratio does not exceed 1.50. The Facility also allows the fixed charge coverage ratio not to be reduced for stock repurchases through June 30, 2015 in an aggregate amount not to exceed $25 million if at the time of and after giving effect to such repurchase the Company's Net Leverage Ratio was less than or equal to 1.50. Capital expenditures, tax provision, dividends and stock repurchase payments are defined under the Facility for purposes of this covenant to be amounts for the four quarters ending as of any given quarterly covenant compliance measurement date. The fixed charge coverage ratio as of December 31, 2013 was 10.88. | ||||||||||||||
Other Restrictions— The Facility permits acquisitions of up to $20.0 million per transaction, provided that the aggregate purchase price of such an acquisition and of acquisitions in the same fiscal year does not exceed $50.0 million. However, these limitations only apply when the Company's Net Leverage Ratio is equal to or greater than 2.00. | ||||||||||||||
While the Facility's financial covenants do not specifically govern capacity under the Facility, if our debt level under the Facility at a quarter-end covenant compliance measurement date were to cause us to violate the Facility's leverage ratio covenant, our borrowing capacity under the Facility and the favorable terms that we currently have could be negatively impacted by the lenders. | ||||||||||||||
We are in compliance with all of our financial covenants as of December 31, 2013. | ||||||||||||||
Interest Rates and Fees | ||||||||||||||
There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. Under the Base Rate Loan Option, the interest rate is determined based on the highest of the Federal Funds Rate plus 0.5%, the prime lending rate offered by Wells Fargo Bank, N.A. or the one-month Eurodollar Rate plus 1.00%. Under the Eurodollar Rate Loan Option, the interest rate is determined based on the one- to six-month Eurodollar Rate. The Eurodollar Rate corresponds very closely to rates described in various general business media sources as the London Interbank Offered Rate or "LIBOR." Additional margins are then added to these rates. The additional margins are determined based on the ratio of our Consolidated Total Indebtedness as of a given quarter end to our "Credit Facility Adjusted EBITDA" for the twelve months ending as of that quarter end, as defined in the credit agreement and shown below. | ||||||||||||||
The interest rates under the Facility are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. For illustrative purposes, the following are the respective market rates as of December 31, 2013 relating to interest options under the Facility: | ||||||||||||||
Base Rate Loan Option: | ||||||||||||||
Federal Funds Rate plus 0.50% | 0.59 | % | ||||||||||||
Wells Fargo Bank, N.A. Prime Rate | 3.25 | % | ||||||||||||
One-month LIBOR plus 1.00% | 1.2 | % | ||||||||||||
Eurodollar Rate Loan Option: | ||||||||||||||
One-month LIBOR | 0.2 | % | ||||||||||||
Six-month LIBOR | 0.35 | % | ||||||||||||
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 just the same as actual borrowings. We have never had a claim made against a letter of credit that resulted in payments by a lender or by us and believe such claim is unlikely in the foreseeable future. | ||||||||||||||
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. Letter of credit fees and commitment fees are based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA, as defined in the credit agreement. | ||||||||||||||
Consolidated Total Indebtedness to Credit Facility Adjusted | ||||||||||||||
EBITDA | ||||||||||||||
Less than 0.75 | 0.75 to 1.50 | 1.50 to 2.25 | 2.25 or greater | |||||||||||
Additional Per Annum Interest Margin Added Under: | ||||||||||||||
Base Rate Loan Option | 0.25 | % | 0.5 | % | 0.75 | % | 1 | % | ||||||
Eurodollar Rate Loan Option | 1.25 | % | 1.5 | % | 1.75 | % | 2 | % | ||||||
Letter of credit fees | 1.25 | % | 1.5 | % | 1.75 | % | 2 | % | ||||||
Commitment fees on any portion of the Revolving Loan capacity not in use for borrowings or letters of credit at any given time | 0.2 | % | 0.25 | % | 0.3 | % | 0.35 | % | ||||||
We estimate that the weighted average interest rate applicable to the borrowings under the Facility would be approximately 1.6% as of December 31, 2013. | ||||||||||||||
Notes to Former Owners | ||||||||||||||
We issued subordinated notes to the former owners of acquired companies as part of the consideration used to acquire these companies. These notes had an outstanding balance of $2.0 million as of December 31, 2013 and bear interest, payable annually, at a weighted average interest rate of 3.3%. The maturity date of the outstanding balance is July 2014. | ||||||||||||||
Other Debt | ||||||||||||||
In conjunction with our acquisition of ColonialWebb in 2010, we acquired long-term debt related to an industrial revenue bond associated with its office building and warehouse. In July 2013, we paid the outstanding balance of $2.4 million. The weighted average interest rate on this variable rate debt as of the last day outstanding was approximately 0.21%. | ||||||||||||||
In addition, our majority owned subsidiary, EAS, has a revolving $2.5 million credit line that is available for temporary working capital needs and expires June 30, 2014. As of December 31, 2013, we had no outstanding borrowings and, therefore, $2.5 million of credit available. We estimate that the weighted average interest rate applicable to borrowings under this variable rate credit line would be approximately 2.7% as of December 31, 2013. | ||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
10. Income Taxes | |||||||||||
Provision for Income Taxes | |||||||||||
The provision for income taxes relating to continuing operations consists of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current— | |||||||||||
Federal | $ | 11,707 | $ | 5,679 | $ | 2,207 | |||||
State and Puerto Rico | 1,954 | 1,151 | 1,673 | ||||||||
| | | | | | | | | | | |
13,661 | 6,830 | 3,880 | |||||||||
| | | | | | | | | | | |
Deferred— | |||||||||||
Federal | 3,254 | 2,897 | (10,121 | ) | |||||||
State and Puerto Rico | 1,233 | 318 | 778 | ||||||||
| | | | | | | | | | | |
4,487 | 3,215 | (9,343 | ) | ||||||||
| | | | | | | | | | | |
$ | 18,148 | $ | 10,045 | $ | (5,463 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The difference in income taxes provided for and the amounts determined by applying the federal statutory tax rate to income before income taxes results from the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income tax expense (benefit) at the statutory rate of 35% | $ | 16,373 | $ | 7,539 | $ | (13,278 | ) | ||||
Changes resulting from— | |||||||||||
State income taxes, net of federal tax effect | 1,910 | 1,011 | (1,972 | ) | |||||||
Increase (decrease) in valuation allowance | 1,465 | 455 | 3,431 | ||||||||
Increase (decrease) in tax contingency reserves | (145 | ) | 198 | 28 | |||||||
Increase (decrease) from noncontrolling interests | (450 | ) | 565 | (118 | ) | ||||||
Non-deductible expenses | 594 | 481 | 386 | ||||||||
Domestic production activity deduction | (520 | ) | (378 | ) | — | ||||||
Goodwill impairment | — | — | 9,223 | ||||||||
Purchase accounting adjustments | (472 | ) | (210 | ) | (2,992 | ) | |||||
Other | (607 | ) | 384 | (171 | ) | ||||||
| | | | | | | | | | | |
$ | 18,148 | $ | 10,045 | $ | (5,463 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred Tax Assets (Liabilities) | |||||||||||
Significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the balance sheet are as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred income tax assets— | |||||||||||
Accounts receivable and allowance for doubtful accounts | $ | 1,660 | $ | 2,293 | |||||||
Stock compensation | 2,165 | 2,444 | |||||||||
Accrued liabilities and expenses | 19,290 | 19,661 | |||||||||
Net operating loss carryforwards | 7,794 | 6,562 | |||||||||
Other | 613 | 1,017 | |||||||||
| | | | | | | | ||||
Total deferred income tax assets | 31,522 | 31,977 | |||||||||
| | | | | | | | ||||
Deferred income tax liabilities— | |||||||||||
Property and equipment | (6,660 | ) | (5,357 | ) | |||||||
Long-term contracts | (671 | ) | (306 | ) | |||||||
Goodwill | (3,364 | ) | (1,124 | ) | |||||||
Intangible assets | (2,803 | ) | (3,932 | ) | |||||||
Other | (947 | ) | (1,131 | ) | |||||||
| | | | | | | | ||||
Total deferred income tax liabilities | (14,445 | ) | (11,850 | ) | |||||||
| | | | | | | | ||||
Less—Valuation allowance | (7,605 | ) | (6,140 | ) | |||||||
| | | | | | | | ||||
Net deferred income tax assets | $ | 9,472 | $ | 13,987 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
The deferred income tax assets and liabilities reflected above are included in the consolidated balance sheets as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred income tax assets— | |||||||||||
Prepaid expenses and other | $ | 18,279 | $ | 19,952 | |||||||
Other noncurrent assets | 1,472 | 2,324 | |||||||||
| | | | | | | | ||||
Total deferred income tax assets | $ | 19,751 | $ | 22,276 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Deferred income tax liabilities— | |||||||||||
Other current liabilities | $ | 338 | $ | 335 | |||||||
Deferred income tax liabilities | 9,941 | 7,954 | |||||||||
| | | | | | | | ||||
Total deferred income tax liabilities | $ | 10,279 | $ | 8,289 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
As of December 31, 2013, we had $7.8 million of future tax benefits related to $106.4 million of available state and Puerto Rican net operating loss carryforwards ("NOLs") which expire between 2014 and 2033. A valuation allowance of $7.6 million has been recorded against net deferred tax assets of state and Puerto Rico. We recorded an increase in valuation allowances of $1.5 million for the year ended December 31, 2013. Our deferred tax assets for Puerto Rico are fully valued. A deferred tax asset for state NOLs, net of related valuation allowance, of $1.6 million reflects our conclusion that it is likely that this asset will be realized based upon expected future earnings in certain subsidiaries. We update this assessment of the realizability of deferred tax assets relating to state net NOLs annually. A return to profitability in our entities with valuation allowances on their NOL's and deferred tax assets would result in a reversal of a portion of the valuation allowance relating to realized deferred tax assets. A sustained period of profitability could cause a change in our judgment of the remaining deferred tax assets. If that were to occur then it is likely that we would reverse some or all of the remaining deferred tax asset valuation allowance. | |||||||||||
As of December 31, 2013 and 2012, approximately $0.3 million and $0.3 million, respectively, of unrecognized tax benefits, if recognized in future periods, would impact our effective tax rate. This liability is included in "Other Long-Term Liabilities" in the consolidated balance sheets. We do not expect that the total amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months. | |||||||||||
We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense. Total interest and penalties decreased $0.4 million during the year ended December 31, 2013. We recognized $0.4 million in interest during the year ended December 31, 2012. We had accrued approximately $0.3 million and $0.7 million for the payment of interest and penalties at December 31, 2013 and 2012, respectively. Our tax records are subject to review by the Internal Revenue Service for the 2010 tax year forward and by various state authorities for the 2005 tax year forward. | |||||||||||
Liabilities for Uncertain Tax Positions | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 499 | $ | 696 | $ | 696 | |||||
Additions based on tax positions related to the current year | — | — | — | ||||||||
Additions for tax positions of prior years | — | — | — | ||||||||
Reductions for tax positions of prior years | (86 | ) | (197 | ) | — | ||||||
Settlements | — | — | — | ||||||||
| | | | | | | | | | | |
Balance at end of year | $ | 413 | $ | 499 | $ | 696 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2013 | |
Employee Benefit Plans | ' |
Employee Benefit Plans | ' |
11. Employee Benefit Plans | |
We and certain of our subsidiaries sponsor various retirement plans for most full-time and some part-time employees. These plans primarily consist of defined contribution plans. The defined contribution plans generally provide for contributions up to 2.5% of covered employees' salaries or wages. These contributions totaled $5.5 million in 2013, $5.2 million in 2012 and $5.1 million in 2011. Of these amounts, approximately $0.1 million was payable to the plans at December 31, 2013 and 2012. | |
Certain of our subsidiaries also participate or have participated in various multi-employer pension plans for the benefit of employees who are union members. As of December 31, 2013 and 2012, we had 6 and 5 employees, respectively, who were union members. There were no contributions made to multi-employer pension plans in 2013, 2012 or 2011. The data available from administrators of other multi-employer pension plans is not sufficient to determine the accumulated benefit obligations, nor the net assets attributable to the multi-employer plans in which our employees participate or previously participated. | |
Certain individuals at one of our operations are entitled to receive fixed annual payments that reach a maximum amount, as specified in the related agreements, for a 15 year period following retirement or, in some cases, the attainment of 65 years of age. We recognize the unfunded status of the plan as a non-current liability in our Consolidated Balance Sheet. Benefits vest 50% after ten years of service, 75% after fifteen years of service and are fully vested after 20 years of service. We had an unfunded benefit liability of $3.2 million and $3.0 million recorded as of December 31, 2013 and 2012, respectively. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
12. Commitments and Contingencies | |||||
Leases | |||||
We lease certain facilities and equipment under noncancelable operating leases. Rent expense for the years ended December 31, 2013, 2012 and 2011 was $16.2 million, $15.2 million, and $12.0 million, respectively. We recognize escalating rental payments that are quantifiable at the inception of the lease on a straight-line basis over the lease term. Concurrent with the acquisitions of certain companies, we entered into various agreements with previous owners to lease buildings used in our operations. The terms of these leases generally range from three to ten years and certain leases provide for escalations in the rental expenses each year, the majority of which are based on inflation. Included in the 2013, 2012 and 2011 rent expense above are approximately $3.8 million, $3.4 million and $2.2 million of rent paid to these related parties, respectively. | |||||
The following represents future minimum rental payments under noncancelable operating leases (in thousands): | |||||
Year ended December 31— | |||||
2014 | $ | 10,453 | |||
2015 | 9,341 | ||||
2016 | 7,844 | ||||
2017 | 7,139 | ||||
2018 | 6,040 | ||||
Thereafter | 8,422 | ||||
| | | | | |
$ | 49,239 | ||||
| | | | | |
| | | | | |
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. | |||||
Surety | |||||
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 surety for any expenses or outlays it incurs. To date, we are not aware of any losses to our sureties in connection with bonds the sureties have posted on our behalf, and do not expect such losses to be incurred in the foreseeable future. | |||||
Surety market conditions are currently challenging as a result of significant losses incurred by many sureties in recent periods, both in the construction industry as well as in certain larger corporate bankruptcies. As a result, less bonding capacity is available in the market and terms have become more restrictive. Further, 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 25% to 35% of our business has required bonds. While we have strong surety relationships to support our bonding needs, current market conditions as well as changes in the sureties' assessment of our operating and financial risk could cause the sureties to decline to issue bonds for our work. If that were to occur, the 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, including a significant amount of cash on our balance sheet, would enable us to ultimately respond effectively to an interruption in the availability of bonding capacity, such an interruption would likely cause our revenue and profits to decline in the near term. | |||||
Self-Insurance | |||||
We are substantially self-insured for workers' compensation, employer's liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. 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. | |||||
Our self-insurance arrangements currently are as follows: | |||||
Workers' Compensation— The per-incident deductible for workers' compensation is $500,000. Losses above $500,000 are determined by statutory rules on a state-by-state basis, and are fully covered by excess workers' compensation insurance. | |||||
Employer's Liability— For employer's liability, the per incident deductible is $500,000. We are fully insured for the next $500,000 of each loss, and then have several layers of excess loss insurance policies that cover losses up to $100 million in aggregate across this risk area (as well as general liability and auto liability noted below). | |||||
General Liability— For general liability, the per incident deductible is $500,000. We are fully insured for the next $1.5 million of each loss, and then have several layers of excess loss insurance policies that cover losses up to $100 million in aggregate across this risk area (as well as employer's liability noted above and auto liability noted below). | |||||
Auto Liability— For auto liability, the per incident deductible is $500,000. We are fully insured for the next $1.5 million of each loss, and then have several layers of excess loss insurance policies that cover losses up to $100 million in aggregate across this risk area (as well as employer's liability and general liability noted above). | |||||
Employee Medical— We have two medical plans. The deductible for employee group health claims is $325,000 per person, per policy (calendar) year for each plan. Insurance then covers any responsibility for medical claims in excess of the deductible amount. | |||||
Our $100 million of aggregate excess loss coverage above applicable per-incident deductibles represents one policy limit that applies to all lines of risk; we do not have a separate $100 million of excess loss coverage for each of general liability, employer's liability and auto liability. | |||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Stockholders' Equity | ' | ||||||||||
Stockholders' Equity | ' | ||||||||||
13. Stockholders' Equity | |||||||||||
2012 Equity Incentive Plan | |||||||||||
In May 2012, our stockholders approved our 2012 Equity Incentive Plan (the "2012 Plan"), which provides for the granting of incentive or non-qualified stock options, stock appreciation rights, restricted or deferred stock, dividend equivalents or other incentive awards to directors, employees, or consultants. The number of shares authorized and reserved for issuance under the 2012 Plan is 5.1 million shares. As of December 31, 2013, there were 4.4 million shares available for issuance under this plan. The 2012 Plan will expire in May 2022. Additionally, we have outstanding stock options, stock awards and stock units that were issued under other plans, and no further grants may be made under those plans. | |||||||||||
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 approved extensions of the program to acquire additional shares. Since the inception of the repurchase program, the Board has approved 6.6 million shares to be repurchased. | |||||||||||
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. We repurchased 0.1 million shares for the year ended December 31, 2013 at an average price of $14.59 per share. Since the inception of the program in 2007 and as of December 31, 2013, we have repurchased a cumulative total of 6.0 million shares at an average price of $11.00 per share. | |||||||||||
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, contingently issuable restricted stock and restricted stock units. The vesting of unvested contingently issuable restricted stock is based on the achievement of certain earnings per share targets. 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 and restricted stock units are included in diluted earnings per share, weighted outstanding until the shares and units vest. Upon vesting, the vested restricted stock and restricted stock units are included in basic earnings per share weighted outstanding from the vesting date. | |||||||||||
There were no anti-dilutive stock options for the year ended December 31, 2013 and approximately 1.0 million anti-dilutive stock options excluded from the calculation of diluted EPS for the year ended December 31, 2012. Assuming dilution, approximately 0.7 million anti-dilutive stock options would have been excluded from the calculation of diluted EPS for the year ended December 31, 2011. The effect of 0.2 million of common stock equivalents have been excluded from the calculation of diluted EPS for the year ended December 31, 2011, due to our net loss position in this period. | |||||||||||
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): | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Common shares outstanding, end of period(a) | 37,578 | 37,069 | 37,050 | ||||||||
Effect of using weighted average common shares outstanding | (333 | ) | 43 | 339 | |||||||
| | | | | | | | | | | |
Shares used in computing earnings per share—basic | 37,245 | 37,112 | 37,389 | ||||||||
Effect of shares issuable under stock option plans based on the treasury stock method | 183 | 87 | — | ||||||||
Effect of contingently issuable restricted shares | 108 | 60 | — | ||||||||
| | | | | | | | | | | |
Shares used in computing earnings per share—diluted | 37,536 | 37,259 | 37,389 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
(a) | |||||||||||
Excludes 0.1 million, 0.2 million and 0.4 million shares of unvested contingently issuable restricted stock outstanding for the years ended December 31, 2013, 2012 and 2011, respectively (see Note 14 "Stock-Based Compensation"). | |||||||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||||
14. Stock-Based Compensation | ||||||||||||||||||||
Under the 2012 Equity Incentive Plan (the "2012 Plan") grants of stock options, restricted stock and restricted stock units, and performance share units have been, and will be, determined and administered by the compensation committee of the Board of Directors. Total stock-based compensation expense was $4.0 million, $2.8 million and $3.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. Total income tax benefit recognized for stock-based compensation arrangements was $1.5 million, $1.0 million and $1.3 million for each of the years ended December 31, 2013, 2012 and 2011. We present the benefits of tax deductions in excess of recognized compensation costs ("excess tax benefits") as financing cash flows in the consolidated statements of cash flows. | ||||||||||||||||||||
Upon the vesting of restricted shares, we have allowed the holder to elect to surrender an amount of shares to meet their minimum statutory tax withholding requirements. These shares are accounted for as treasury stock based upon the value of the stock on the date of vesting. | ||||||||||||||||||||
Stock Options | ||||||||||||||||||||
The following table summarizes activity under our stock option plans (shares in thousands): | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Stock Options | Shares | Weighted- | Shares | Weighted- | Shares | Weighted- | ||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise Price | Exercise Price | Exercise Price | ||||||||||||||||||
Outstanding at beginning of year | 1,143 | $ | 11.59 | 1,056 | $ | 10.84 | 1,061 | $ | 9.58 | |||||||||||
Granted | 156 | $ | 13.86 | 190 | $ | 11.19 | 142 | $ | 13.87 | |||||||||||
Exercised | (440 | ) | $ | 11.1 | (103 | ) | $ | 3.2 | (66 | ) | $ | 4.46 | ||||||||
Forfeited | (1 | ) | $ | 13.87 | — | $ | — | — | $ | — | ||||||||||
Expired | — | $ | — | — | $ | — | (81 | ) | $ | 4.82 | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Outstanding at end of year | 858 | $ | 12.24 | 1,143 | $ | 11.59 | 1,056 | $ | 10.84 | |||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options exercisable at end of year | 528 | 810 | 762 | |||||||||||||||||
The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and 2011 was $3.0 million, $0.8 million and $0.5 million, respectively. Stock options exercisable as of December 31, 2013 have a weighted-average remaining contractual term of 5.2 years and an aggregate intrinsic value of $4.0 million. As of December 31, 2013, we have 0.9 million options that are vested or expected to vest; these options have a weighted average exercise price of $12.24 per share, have a weighted-average remaining contractual term of 6.5 years and an aggregate intrinsic value of $6.1 million. | ||||||||||||||||||||
The following table summarizes information about stock options outstanding at December 31, 2013 (shares in thousands): | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Range of Exercise Prices | Number | Weighted- | Weighted- | Number | Weighted- | |||||||||||||||
Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
at 12/31/13 | Remaining | Exercise Price | at 12/31/13 | Exercise Price | ||||||||||||||||
Contractual | ||||||||||||||||||||
Life | ||||||||||||||||||||
$6.38 - $7.94 | 48 | 1.38 | $ | 6.4 | 48 | $ | 6.4 | |||||||||||||
$10.73 - $12.90 | 447 | 6.31 | $ | 11.66 | 320 | $ | 11.84 | |||||||||||||
$13.15 - $15.03 | 363 | 7.4 | $ | 13.73 | 160 | $ | 13.57 | |||||||||||||
| | | | | | | | | | | | | | | | | ||||
$6.38 - $15.03 | 858 | 6.5 | $ | 12.24 | 528 | $ | 11.88 | |||||||||||||
| | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | | | | ||||
The fair value of each option award is estimated, based on several assumptions, on the date of grant using the Black-Scholes option valuation model. The fair values and the assumptions used for the 2013, 2012 and 2011 grants are shown in the table below: | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Weighted-average fair value per share of options granted | $5.06 | $4.03 | $5.04 | |||||||||||||||||
Fair value assumptions: | ||||||||||||||||||||
Expected dividend yield | 1.82% | 1.86% | 1.70% | |||||||||||||||||
Expected stock price volatility | 46.60% | 46.50% | 44.20% | |||||||||||||||||
Risk-free interest rate | 0.96% | 1.17% | 2.24% | |||||||||||||||||
Expected term | 5.6 years | 5.3 years | 5.3 years | |||||||||||||||||
Stock options are accounted for as equity instruments, and compensation cost is recognized using the straight-line method over the vesting period. Stock options generally vest over a three-year vesting period. Certain stock option and restricted stock awards provide for accelerated vesting if the employee retires at any time when the sum of their age and years of service is at least 75. As of December 31, 2013, the unrecognized compensation cost related to stock options was $0.7 million, which is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of options vested during the year ended December 31, 2013 was $0.7 million. | ||||||||||||||||||||
The following table summarizes information about nonvested stock option awards as of December 31, 2013 and changes for the year ended December 31, 2013 (shares in thousands): | ||||||||||||||||||||
Stock Options | Shares | Weighted-Average | ||||||||||||||||||
Grant Date | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Nonvested at December 31, 2012 | 333 | $ | 4.4 | |||||||||||||||||
Granted | 156 | $ | 5.06 | |||||||||||||||||
Vested | (158 | ) | $ | 4.51 | ||||||||||||||||
Forfeited | (1 | ) | $ | 5.04 | ||||||||||||||||
| | | | | | | | |||||||||||||
Nonvested at December 31, 2013 | 330 | $ | 4.66 | |||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
We generally issue treasury shares for stock options and restricted stock, unless treasury shares are not available. | ||||||||||||||||||||
Restricted Stock and Restricted Stock Units | ||||||||||||||||||||
The following table summarizes activity under our restricted stock plans (shares in thousands): | ||||||||||||||||||||
Shares | ||||||||||||||||||||
Restricted Stock and Restricted Stock Units | 2013 | 2012 | 2011 | |||||||||||||||||
Unvested at beginning of year | 272 | 302 | 312 | |||||||||||||||||
Granted | 169 | 224 | 231 | |||||||||||||||||
Vested | (240 | ) | (254 | ) | (241 | ) | ||||||||||||||
Forfeited | (2 | ) | — | — | ||||||||||||||||
| | | | | | | | | | | ||||||||||
Unvested at end of year | 199 | 272 | 302 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Approximately $1.1 million of compensation expense related to restricted stock and restricted stock units will be recognized over a weighted-average period of 0.8 years. The total fair value of shares vested during the year ended December 31, 2013 was $3.1 million. The weighted-average fair value per share of restricted stock shares and units awarded during 2013, 2012 and 2011 was $13.57, $10.78 and $11.29, respectively. The aggregate intrinsic value of restricted stock vested during the years ended December 31, 2013, 2012 and 2011 was $4.7 million, $3.1 million and $2.6 million, respectively. | ||||||||||||||||||||
Performance Stock Units | ||||||||||||||||||||
Under the 2012 Plan, we granted dollar-denominated performance vesting restricted stock units ("PSUs") which cliff vest at the end of a three-year performance period. The PSUs are subject to two performance measures; 50% of the PSUs are based on the annual performance of our stock price relative to a group of our peers (total shareholder return) and 50% of the PSUs are measured based on meeting or exceeding a pre-determined annual earnings per share target as set by our board of directors (EPS). Depending on the Company's performance in relation to the established performance measures, the awards may vest at zero to a maximum of 2.0 times the dollar-denominated award granted at target. Upon achievement of the necessary performance metrics, the award will be determined in dollars and may be settled in cash or stock based on the market price of the Company's common stock at the end of the performance period, at our discretion. | ||||||||||||||||||||
Compensation expense for dollar-denominated performance units will ultimately be equal to the final dollar value awarded to the grantee upon vesting, settled either in cash or stock. However, throughout the performance period we must record an accrued expense based on an estimate of that future payout. For units determined by EPS performance, the awards are evaluated quarterly against established targets in order to estimate the liability throughout the vesting period. For units determined by total shareholder return performance, a Monte Carlo simulation model was used to estimate accruals throughout the vesting period. The model simulates our total shareholder return and compares it against our peer group over the three-year performance period to produce a predicted distribution of relative share performance. This is applied to the reward criteria to give an expected value of the total shareholder return element. During 2013, the vesting criteria was set for both 2013 and 2012 grants. There were no performance stock unit grants in 2011. The calculated fair market value as of December 31, 2013 is $2.4 million. The accrued expense related to performance stock units as of December 31, 2013 is $0.9 million. Approximately $1.5 million of compensation expense related to performance stock units will be recognized over a weighted-average period of 1.1 years. No awards vested during the year ended December 31, 2013. | ||||||||||||||||||||
We generally issue treasury shares for stock compensation purposes, unless treasury shares are not available. | ||||||||||||||||||||
Quarterly_Results_of_Operation
Quarterly Results of Operations (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Results of Operations (Unaudited) | ' | |||||||||||||
Quarterly Results of Operations (Unaudited) | ' | |||||||||||||
15. Quarterly Results of Operations (Unaudited) | ||||||||||||||
Quarterly financial information for the years ended December 31, 2013 and 2012 is summarized as follows (in thousands, except per share data): | ||||||||||||||
2013 | ||||||||||||||
Q1 | Q2 | Q3(a) | Q4 | |||||||||||
Revenue | $ | 325,890 | $ | 351,053 | $ | 349,989 | $ | 330,340 | ||||||
Gross profit | 51,467 | 59,967 | 67,021 | 61,428 | ||||||||||
Operating income | 5,086 | 14,379 | 17,734 | 9,059 | ||||||||||
Income from continuing operations | 2,749 | 8,314 | 11,637 | 5,932 | ||||||||||
Income (loss) from discontinued operations, net of tax | (54 | ) | — | (25 | ) | 3 | ||||||||
Net income including noncontrolling interests | 2,695 | 8,314 | 11,612 | 5,935 | ||||||||||
Less: Net income attributable to noncontrolling interests | 163 | 552 | 233 | 339 | ||||||||||
Net income attributable to Comfort Systems USA, Inc. | 2,532 | 7,762 | 11,379 | 5,596 | ||||||||||
INCOME PER SHARE ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC.: | ||||||||||||||
Basic— | ||||||||||||||
Income from continuing operations | $ | 0.07 | $ | 0.21 | $ | 0.31 | $ | 0.15 | ||||||
Income from discontinued operations | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Net income | $ | 0.07 | $ | 0.21 | $ | 0.31 | $ | 0.15 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted— | ||||||||||||||
Income from continuing operations | $ | 0.07 | $ | 0.21 | $ | 0.3 | $ | 0.15 | ||||||
Income from discontinued operations | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Net income | $ | 0.07 | $ | 0.21 | $ | 0.3 | $ | 0.15 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | (10,351 | ) | $ | 6,700 | $ | 27,433 | $ | 14,641 | |||||
(a) | ||||||||||||||
Included in unaudited quarterly results of operations for the third quarter of 2013 is the correction of prior period accounting errors which resulted in net after-tax income of approximately $1.3 million, or $0.03 per diluted share. Refer to Footnote 2 for additional disclosure. | ||||||||||||||
2012 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||
Revenue | $ | 326,902 | $ | 353,172 | $ | 335,241 | $ | 315,870 | ||||||
Gross profit | 42,931 | 54,096 | 55,521 | 55,073 | ||||||||||
Operating income (loss) | (3,003 | ) | 7,441 | 9,767 | 8,098 | |||||||||
Income (loss) from continuing operations | (2,431 | ) | 3,949 | 5,423 | 4,553 | |||||||||
Income (loss) from discontinued operations, net of tax | (237 | ) | 98 | (98 | ) | 592 | ||||||||
Net income (loss) including noncontrolling interests | (2,668 | ) | 4,047 | 5,325 | 5,145 | |||||||||
Less: Net income (loss) attributable to noncontrolling interests | (1,639 | ) | (421 | ) | (348 | ) | 794 | |||||||
Net income (loss) attributable to Comfort Systems USA, Inc. | (1,029 | ) | 4,468 | 5,673 | 4,351 | |||||||||
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC.: | ||||||||||||||
Basic— | ||||||||||||||
Income (loss) from continuing operations | $ | (0.02 | ) | $ | 0.12 | $ | 0.15 | $ | 0.1 | |||||
Income (loss) from discontinued operations | (0.01 | ) | — | — | 0.02 | |||||||||
| | | | | | | | | | | | | | |
Net income (loss) | $ | (0.03 | ) | $ | 0.12 | $ | 0.15 | $ | 0.12 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted— | ||||||||||||||
Income (loss) from continuing operations | $ | (0.02 | ) | $ | 0.12 | $ | 0.15 | $ | 0.1 | |||||
Income (loss) from discontinued operations | (0.01 | ) | — | — | 0.02 | |||||||||
| | | | | | | | | | | | | | |
Net income (loss) | $ | (0.03 | ) | $ | 0.12 | $ | 0.15 | $ | 0.12 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | (19,816 | ) | $ | 6,793 | $ | 16,455 | $ | 27,078 | |||||
The sums of the individual quarterly earnings per share amounts do not necessarily agree with year-to-date earnings per share as each quarter's computation is based on the weighted average number of shares outstanding during the quarter, the weighted average stock price during the quarter and the dilutive effects of options and contingently issuable restricted stock in each quarter. | ||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||
Principles of Consolidation | ' | ||||||||||
Principles of Consolidation | |||||||||||
These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. All significant intercompany accounts and transactions have been eliminated. | |||||||||||
Reclassifications | ' | ||||||||||
Reclassifications | |||||||||||
Certain reclassifications have been made in prior period financial statements to conform to current period presentation. These reclassifications are either of a normal and recurring nature or are due to discontinued operations accounting related to the shutdown of our Delaware operation in 2012. Neither have resulted in any changes to previously reported net income for any periods. | |||||||||||
Accounting Adjustment | ' | ||||||||||
Accounting Adjustment | |||||||||||
The accompanying financial statements for the year ended December 31, 2013 includes the correction of prior period accounting errors which resulted in additional net after-tax income in the period of approximately $1.3 million. We determined that the errors primarily impacted years prior to 2010. These corrections are reflected on a pretax basis in revenue, cost of sales and selling, general, and administrative expenses, which include $3.3 million, $0.8 million and $0.3 million, respectively. | |||||||||||
We have considered the guidance found in ASC 250-10 and ASC 270-10 (SEC Staff Accounting Bulletin No. 99, Materiality, Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), in evaluating whether a restatement of prior financial statements is required as a result of the misstatement to such financial statements. ASC 250 requires that corrections of errors be recorded by restatement of prior periods if the error is material. We quantitatively and qualitatively assessed the materiality of the errors and concluded that the errors were not material to our earnings for the year ended December 31, 2013, and any of our previously issued financial statements. | |||||||||||
Use of Estimates | ' | ||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, revenue and expenses and disclosures regarding contingent assets and liabilities. Actual results could differ from those estimates. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, self-insurance accruals, deferred tax assets, warranty accruals, fair value accounting for acquisitions and the quantification of fair value for reporting units in connection with our goodwill impairment testing. | |||||||||||
Cash Flow Information | ' | ||||||||||
Cash Flow Information | |||||||||||
We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||||
Cash paid (in thousands) for: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Interest | $ | 799 | $ | 1,326 | $ | 1,720 | |||||
Income taxes for continuing operations | 15,821 | 13,948 | 1,613 | ||||||||
Income taxes for discontinued operations | — | 5 | 8 | ||||||||
| | | | | | | | | | | |
Total | $ | 16,620 | $ | 15,279 | $ | 3,341 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Revenue Recognition | ' | ||||||||||
Revenue Recognition | |||||||||||
Approximately 83% of our revenue was earned on a project basis and recognized through the percentage of completion method of accounting. Under this method, contract revenue recognizable at any time during the life of a contract is determined by multiplying expected total contract revenue by the percentage of contract costs incurred at any time to total estimated contract costs. More specifically, as part of the negotiation and bidding process in connection with obtaining installation contracts, we estimate our contract costs, which include all direct materials (exclusive of rebates), labor and subcontract costs and indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. These contract costs are included in our results of operations under the caption "Cost of Services." Then, as we perform under those contracts, we measure costs incurred, compare them to total estimated costs to complete the contract and recognize a corresponding proportion of contract revenue. Labor costs are considered to be incurred as the work is performed. Subcontractor labor is recognized as the work is performed, but is generally subjected to approval as to milestones or other evidence of completion. Non-labor project costs consist of purchased equipment, prefabricated materials and other materials. Purchased equipment on our projects is substantially produced to job specifications and is a value added element to our work. The costs are considered to be incurred when title is transferred to us, which typically is upon delivery to the work site. Prefabricated materials, such as ductwork and piping, are generally performed at our shops and recognized as contract costs when fabricated for the unique specifications of the job. Other materials costs are not significant and are generally recorded when delivered to the work site. This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments. | |||||||||||
We generally do not incur significant costs prior to receiving a contract, and therefore, these costs are expensed as incurred. In limited circumstances, when significant pre-contract costs are incurred, they are deferred if the costs can be directly associated with a specific contract and if their recoverability from the contract is probable. Upon receiving the contract, these costs are included in contract costs. Deferred costs associated with unsuccessful contract bids are written off in the period that we are informed that we will not be awarded the contract. | |||||||||||
Project contracts typically provide for a schedule of billings or invoices to the customer based on reaching agreed upon milestones or as we incur costs. The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings to the customer under the contract are reflected as a current asset in our balance sheet under the caption "Costs and estimated earnings in excess of billings." Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in our balance sheet under the caption "Billings in excess of costs and estimated earnings." | |||||||||||
Contracts in progress are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Costs incurred on contracts in progress | $ | 989,072 | $ | 1,182,085 | |||||||
Estimated earnings, net of losses | 126,431 | 134,534 | |||||||||
Less—Billings to date | (1,151,969 | ) | (1,364,229 | ) | |||||||
| | | | | | | | ||||
$ | (36,466 | ) | $ | (47,610 | ) | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
Costs and estimated earnings in excess of billings | $ | 28,122 | $ | 26,204 | |||||||
Billings in excess of costs and estimated earnings | (64,588 | ) | (73,814 | ) | |||||||
| | | | | | | | ||||
$ | (36,466 | ) | $ | (47,610 | ) | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
Accounts receivable include amounts billed to customers under retention or retainage provisions in construction contracts. Such provisions are standard in our industry and usually allow for a small portion of progress billings or the contract price to be withheld by the customer until after we have completed work on the project, typically for a period of six months. Based on our experience with similar contracts in recent years, the majority of our billings for such retention balances at each balance sheet date are finalized and collected within the subsequent year. Retention balances at December 31, 2013 and 2012 are $51.4 million and $48.0 million, respectively, and are included in accounts receivable. | |||||||||||
Accounts payable at December 31, 2013 and 2012 included $10.3 million and $11.3 million of retainage under terms of contracts with subcontractors, respectively. The majority of the retention balances at each balance sheet date are finalized and paid within the subsequent year. | |||||||||||
The percentage of completion method of accounting is also affected by changes in job performance, job conditions and final contract settlements. These factors may result in revisions to estimated costs and, therefore, revenue. Such revisions are frequently based on further estimates and subjective assessments. The effects of these revisions are recognized in the period in which the revisions are determined. When such revisions lead to a conclusion that a loss will be recognized on a contract, the full amount of the estimated ultimate loss is recognized in the period such a conclusion is reached, regardless of the percentage of completion of the contract. | |||||||||||
Revisions to project costs and conditions can give rise to change orders under which the customer agrees to pay additional contract price. Revisions can also result in claims we might make against the customer to recover project variances that have not been satisfactorily addressed through change orders with the customer. Except in certain circumstances, we do not recognize revenue or margin based on change orders or claims until they have been agreed upon with the customer. The amount of revenue associated with unapproved change orders and claims is currently immaterial. | |||||||||||
Variations from estimated project costs could have a significant impact on our operating results, depending on project size, and the recoverability of the variation via additional customer payments. | |||||||||||
Revenue associated with maintenance, repair and monitoring services and related contracts are recognized as services are performed. Amounts associated with unbilled service work orders are reflected as a current asset in our balance sheet under the caption "Costs and estimated earnings in excess of billings" and amounts billed in advance of work orders being performed are reflected as a current liability in our balance sheet under the caption "Billings in excess of costs and estimated earnings." | |||||||||||
Accounts Receivable | ' | ||||||||||
Accounts Receivable | |||||||||||
The carrying value of our receivables, net of the allowance for doubtful accounts, represents the estimated net realizable value. We estimate our allowance for doubtful accounts based upon the creditworthiness of our customers, prior collection history, ongoing relationships with our customers, the aging of past due balances, our lien rights, if any, in the property where we performed the work and the availability, if any, of payment bonds applicable to the contract. The receivables are written off when they are deemed to be uncollectible. | |||||||||||
Inventories | ' | ||||||||||
Inventories | |||||||||||
Inventories consist of parts and supplies that we purchase and hold for use in the ordinary course of business and are stated at the lower of cost or market using the first-in, first-out method. | |||||||||||
Property and Equipment | ' | ||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost, and depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the expected life of the lease or the estimated useful life of the asset. | |||||||||||
Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated over the remaining useful life of the equipment. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in "Gain on sale of assets" in the statement of operations. | |||||||||||
Recoverability of Goodwill and Identifiable Intangible Assets | ' | ||||||||||
Recoverability of Goodwill and Identifiable Intangible Assets | |||||||||||
Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred. | |||||||||||
When the carrying value of a given reporting unit exceeds its fair value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value. If other reporting units have had increases in fair value, such increases may not be recorded. Accordingly, such increases may not be netted against impairments at other reporting units. The requirements for assessing whether goodwill has been impaired involve market-based information. This information, and its use in assessing goodwill, entails some degree of subjective assessment. | |||||||||||
We currently perform our annual impairment testing as of October 1 and any impairment charges resulting from this process are reported in the fourth quarter. We segregate our operations into reporting units based on the degree of operating and financial independence of each unit and our related management of them. We perform our annual goodwill impairment testing at the reporting unit level. | |||||||||||
In the evaluation of goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value. If, after completing such assessment, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then there is no need to perform any further testing. If we conclude otherwise, then we perform the first step of a two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying value of the reporting unit. | |||||||||||
We estimate the fair value of the reporting unit based on two market approaches and an income approach, which utilizes discounted future cash flows. Assumptions critical to the fair value estimates under the discounted cash flow model include discount rates, cash flow projections, projected long-term growth rates and the determination of terminal values. The market approaches utilized market multiples of invested capital from comparable publicly traded companies ("public company approach") and comparable transactions ("transaction approach"). The market multiples from invested capital include revenue, book equity plus debt and earnings before interest, taxes, depreciation and amortization ("EBITDA"). | |||||||||||
We amortize identifiable intangible assets with finite lives over their useful lives. Changes in strategy and/or market condition may result in adjustments to recorded intangible asset balances. | |||||||||||
Long-Lived Assets | ' | ||||||||||
Long-Lived Assets | |||||||||||
Long-lived assets are comprised principally of goodwill, identifiable intangible assets, property and equipment, and deferred income tax assets. We periodically evaluate whether events and circumstances have occurred that indicate that the remaining balances of these assets may not be recoverable. We use estimates of future income from operations and cash flows, as well as other economic and business factors, to assess the recoverability of these assets. | |||||||||||
Acquisitions | ' | ||||||||||
Acquisitions | |||||||||||
We recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition. | |||||||||||
Contingent Consideration—In certain acquisitions, we agree to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain predetermined profitability targets. We have recognized liabilities for these contingent obligations based on their estimated fair value at the date of acquisition with any differences between the acquisition date fair value and the ultimate settlement of the obligations being recognized in income from operations. | |||||||||||
Contingent Assets and Liabilities—Assets and liabilities arising from contingencies are recognized at their acquisition date fair value when their respective fair values can be determined. If the fair values of such contingencies cannot be determined, they are recognized at the acquisition date if the contingencies are probable and an amount can be reasonably estimated. Acquisition date fair value estimates are revised as necessary if, and when, additional information regarding these contingencies becomes available to further define and quantify assets acquired and liabilities assumed. | |||||||||||
Self-Insurance Liabilities | ' | ||||||||||
Self-Insurance Liabilities | |||||||||||
We are substantially self-insured for workers' compensation, employer's liability, auto liability, general liability and employee group health claims, in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. Loss estimates associated with the larger and longer-developing risks—workers' compensation, auto liability and general liability—are reviewed by a third-party actuary quarterly. Our self-insurance arrangements are further discussed in Note 12 "Commitments and Contingencies." | |||||||||||
Warranty Costs | ' | ||||||||||
Warranty Costs | |||||||||||
We typically warrant labor for the first year after installation on new HVAC systems. We generally warrant labor for thirty days after servicing of existing HVAC systems. A reserve for warranty costs is estimated and recorded based upon the historical level of warranty claims and management's estimate of future costs. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | |||||||||||
We are subject to income tax in the United States and Puerto Rico and file a consolidated return for federal income tax purposes. Income taxes are provided for under the liability method, which takes into account differences between financial statement treatment and tax treatment of certain transactions. | |||||||||||
Deferred income taxes are based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred income tax provision represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||
We regularly evaluate valuation allowances established for deferred tax assets for which future realization is uncertain. We perform this evaluation quarterly. In assessing the realizability of deferred tax assets, we must consider whether it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. We consider all available evidence, both positive and negative, in determining whether a valuation allowance is required. Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence. | |||||||||||
Significant judgment is required in assessing the timing and amounts of deductible and taxable items. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions may be disallowed. When facts and circumstances change, we adjust these reserves through our provision for income taxes. | |||||||||||
To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and are classified as a component of income tax expense in our Consolidated Statements of Operations. | |||||||||||
Segment Disclosure | ' | ||||||||||
Segment Disclosure | |||||||||||
Our activities are within the mechanical services industry, which is the single industry segment we serve. Each operating subsidiary represents an operating segment and these segments have been aggregated, as the operating units meet all of the aggregation criteria. | |||||||||||
Concentrations of Credit Risk | ' | ||||||||||
Concentrations of Credit Risk | |||||||||||
We provide services in a broad range of geographic regions. Our credit risk primarily consists of receivables from a variety of customers including general contractors, property owners and developers and commercial and industrial companies. We are subject to potential credit risk related to changes in business and economic factors throughout the United States within the nonresidential construction industry. However, we are entitled to payment for work performed and have certain lien rights in that work. Further, we believe that our contract acceptance, billing and collection policies are adequate to manage potential credit risk. We regularly review our accounts receivable and estimate an allowance for uncollectible amounts. We have a diverse customer base, with no single customer accounting for more than 3% of consolidated 2013 revenue. | |||||||||||
Financial Instruments | ' | ||||||||||
Financial Instruments | |||||||||||
Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, notes to former owners and a revolving credit facility. We believe that the carrying values of these instruments on the accompanying balance sheets approximate their fair values. | |||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||
Schedule of cash paid | ' | ||||||||||
Cash paid (in thousands) for: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Interest | $ | 799 | $ | 1,326 | $ | 1,720 | |||||
Income taxes for continuing operations | 15,821 | 13,948 | 1,613 | ||||||||
Income taxes for discontinued operations | — | 5 | 8 | ||||||||
| | | | | | | | | | | |
Total | $ | 16,620 | $ | 15,279 | $ | 3,341 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of contracts in progress | ' | ||||||||||
Contracts in progress are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Costs incurred on contracts in progress | $ | 989,072 | $ | 1,182,085 | |||||||
Estimated earnings, net of losses | 126,431 | 134,534 | |||||||||
Less—Billings to date | (1,151,969 | ) | (1,364,229 | ) | |||||||
| | | | | | | | ||||
$ | (36,466 | ) | $ | (47,610 | ) | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
Costs and estimated earnings in excess of billings | $ | 28,122 | $ | 26,204 | |||||||
Billings in excess of costs and estimated earnings | (64,588 | ) | (73,814 | ) | |||||||
| | | | | | | | ||||
$ | (36,466 | ) | $ | (47,610 | ) | ||||||
| | | | | | | | ||||
| | | | | | | | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Summary of fair values and levels within the fair value hierarchy in which the fair value measurements fall for assets and liabilities measured on a recurring basis | ' | |||||||||||||
The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall, for assets and liabilities measured on a recurring basis as of December 31, 2013 (in thousands): | ||||||||||||||
Fair Value Measurements | ||||||||||||||
at Reporting Date Using | ||||||||||||||
Balance | Quoted Prices in | Significant | Significant | |||||||||||
December 31, 2013 | Active Markets | Other | Unobservable | |||||||||||
for Identical | Observable | Inputs | ||||||||||||
Assets | Inputs | (Level 3) | ||||||||||||
(Level 1) | (Level 2) | |||||||||||||
Cash and cash equivalents | $ | 52,054 | $ | 52,054 | $ | — | $ | — | ||||||
Life insurance—cash surrender value | $ | 2,943 | $ | — | $ | 2,943 | $ | — | ||||||
Contingent earn-out obligations | $ | 320 | $ | — | $ | — | $ | 320 | ||||||
Schedule of reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3) | ' | |||||||||||||
The table below presents a reconciliation of the fair value of our contingent earn-out obligations that use significant unobservable inputs (Level 3) (in thousands). | ||||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Balance at beginning of year | $ | 1,966 | $ | 2,488 | ||||||||||
Issuances | — | 140 | ||||||||||||
Adjustments to fair value | (1,646 | ) | (662 | ) | ||||||||||
| | | | | | | | |||||||
Balance at end of year | $ | 320 | $ | 1,966 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Discontinued Operations | ' | ||||||||||
Schedule of revenue and pre-tax income (loss) related to discontinued operations | ' | ||||||||||
Revenue and pre-tax income (loss) related to discontinued operations are as follows (in thousands): | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue | $ | 49 | $ | 4,668 | $ | 23,366 | |||||
Pre-tax income (loss) | $ | (195 | ) | $ | 567 | $ | (6,727 | ) |
Goodwill_and_Identifiable_Inta1
Goodwill and Identifiable Intangible Assets, Net (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Goodwill and Identifiable Intangible Assets, Net | ' | ||||||||||||||||
Schedule of changes in the carrying amount of goodwill | ' | ||||||||||||||||
The changes in the carrying amount of goodwill are as follows (in thousands): | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Balance at beginning of year | $ | 114,588 | $ | 107,093 | |||||||||||||
Additions (See Note 4) | — | 7,495 | |||||||||||||||
| | | | | | | | ||||||||||
Balance at end of year | $ | 114,588 | $ | 114,588 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Schedule of components of identifiable intangible assets | ' | ||||||||||||||||
Identifiable intangible assets consist of the following (dollars in thousands): | |||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||
Estimated | Gross Book | Accumulated | Gross Book | Accumulated | |||||||||||||
Useful Lives | Value | Amortization | Value | Amortization | |||||||||||||
in Years | |||||||||||||||||
Customer relationships | 15-Feb | $ | 40,404 | $ | (20,978 | ) | $ | 40,404 | $ | (15,579 | ) | ||||||
Backlog | 2-Jan | 6,515 | (6,515 | ) | 6,515 | (6,375 | ) | ||||||||||
Noncompete agreements | 7-Feb | 2,890 | (2,649 | ) | 2,890 | (2,380 | ) | ||||||||||
Tradenames | 25-Feb | 23,695 | (5,979 | ) | 23,695 | (4,655 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Total | $ | 73,504 | $ | (36,121 | ) | $ | 73,504 | $ | (28,989 | ) | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Schedule of future amortization expense of identifiable intangible assets | ' | ||||||||||||||||
At December 31, 2013, future amortization expense of identifiable intangible assets is as follows (in thousands): | |||||||||||||||||
Year ended December 31— | |||||||||||||||||
2014 | $ | 6,106 | |||||||||||||||
2015 | 4,873 | ||||||||||||||||
2016 | 3,748 | ||||||||||||||||
2017 | 2,997 | ||||||||||||||||
2018 | 2,320 | ||||||||||||||||
Thereafter | 17,339 | ||||||||||||||||
| | | | | |||||||||||||
Total | $ | 37,383 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property and Equipment | ' | |||||||||
Schedule of components of property and equipment | ' | |||||||||
Property and equipment consist of the following (dollars in thousands): | ||||||||||
December 31, | ||||||||||
Estimated | ||||||||||
Useful Lives | ||||||||||
in Years | 2013 | 2012 | ||||||||
Land | — | $ | 2,404 | $ | 2,404 | |||||
Transportation equipment | 1 - 7 | 46,233 | 38,352 | |||||||
Machinery and equipment | 1 - 15 | 22,920 | 21,670 | |||||||
Computer and telephone equipment | 1 - 10 | 19,012 | 18,481 | |||||||
Buildings and leasehold improvements | 2 - 40 | 25,371 | 24,438 | |||||||
Furniture and fixtures | 2 - 17 | 5,036 | 4,741 | |||||||
| | | | | | | | | | |
120,976 | 110,086 | |||||||||
Less—Accumulated depreciation | (74,115 | ) | (68,670 | ) | ||||||
| | | | | | | | | | |
Property and equipment, net | $ | 46,861 | $ | 41,416 | ||||||
| | | | | | | | | | |
| | | | | | | | | | |
Detail_of_Certain_Balance_Shee1
Detail of Certain Balance Sheet Accounts (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Detail of Certain Balance Sheet Accounts | ' | ||||||||||
Schedule of activity in allowance for doubtful accounts | ' | ||||||||||
Activity in our allowance for doubtful accounts consists of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 6,333 | $ | 4,615 | $ | 5,029 | |||||
Additions for bad debt expense | 19 | 2,753 | 214 | ||||||||
Deductions for uncollectible receivables written off, net of recoveries | (1,892 | ) | (1,090 | ) | (770 | ) | |||||
Allowance for doubtful accounts of acquired companies at date of acquisition | — | 55 | 142 | ||||||||
| | | | | | | | | | | |
Balance at end of year | $ | 4,460 | $ | 6,333 | $ | 4,615 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of other current liabilities | ' | ||||||||||
Other current liabilities consist of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Accrued warranty costs | $ | 6,795 | $ | 6,781 | |||||||
Accrued job losses | 758 | 2,137 | |||||||||
Accrued rent and lease obligations | 673 | 673 | |||||||||
Accrued sales and use tax | 1,821 | 1,710 | |||||||||
Deferred revenue | 1,320 | 1,143 | |||||||||
Liabilities due to former owners | 4,054 | 2,349 | |||||||||
Other current liabilities | 12,747 | 12,284 | |||||||||
| | | | | | | | ||||
$ | 28,168 | $ | 27,077 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
LongTerm_Debt_Obligations_Tabl
Long-Term Debt Obligations (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Long-Term Debt Obligations | ' | |||||||||||||
Schedule of components of long-term debt obligations | ' | |||||||||||||
Long-term debt obligations consist of the following (in thousands): | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Revolving credit facility | $ | — | $ | — | ||||||||||
Other debt | — | 2,400 | ||||||||||||
Notes to former owners | 2,000 | 5,000 | ||||||||||||
| | | | | | | | |||||||
Total debt | 2,000 | 7,400 | ||||||||||||
Less—current portion | (2,000 | ) | (300 | ) | ||||||||||
| | | | | | | | |||||||
Total long-term portion of debt | $ | — | $ | 7,100 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Schedule of future principal payments of long-term debt | ' | |||||||||||||
At December 31, 2013, future principal payments of long-term debt are as follows (in thousands): | ||||||||||||||
Year ended December 31— | ||||||||||||||
2014 | $ | 2,000 | ||||||||||||
2015 | — | |||||||||||||
2016 | — | |||||||||||||
2017 | — | |||||||||||||
2018 | — | |||||||||||||
Thereafter | — | |||||||||||||
| | | | | ||||||||||
$ | 2,000 | |||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of interest expense | ' | |||||||||||||
Interest expense included the following primary elements (in thousands): | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Interest expense on notes to former owners | $ | 97 | $ | 255 | $ | 795 | ||||||||
Interest expense on borrowings and unused commitment fees | 279 | 444 | 243 | |||||||||||
Letter of credit fees | 731 | 667 | 622 | |||||||||||
Amortization of debt financing costs | 244 | 229 | 226 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 1,351 | $ | 1,595 | $ | 1,886 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Schedule of reconciliation of Credit Facility Adjusted EBITDA to net income | ' | |||||||||||||
The following is a reconciliation of Credit Facility Adjusted EBITDA to net income (in thousands): | ||||||||||||||
Net income including noncontrolling interests | $ | 28,556 | ||||||||||||
Income taxes—continuing operations | 18,148 | |||||||||||||
Interest expense, net | 1,328 | |||||||||||||
Depreciation and amortization expense | 18,572 | |||||||||||||
Stock compensation expense | 3,974 | |||||||||||||
Income taxes—discontinued operations | (119 | ) | ||||||||||||
EBITDA attributable to noncontrolling interests | (2,342 | ) | ||||||||||||
Pre-acquisition results of acquired companies, as defined under the Facility | — | |||||||||||||
| | | | | ||||||||||
Credit Facility Adjusted EBITDA | $ | 68,117 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of market rates relating to interest options under the Facility | ' | |||||||||||||
Base Rate Loan Option: | ||||||||||||||
Federal Funds Rate plus 0.50% | 0.59 | % | ||||||||||||
Wells Fargo Bank, N.A. Prime Rate | 3.25 | % | ||||||||||||
One-month LIBOR plus 1.00% | 1.2 | % | ||||||||||||
Eurodollar Rate Loan Option: | ||||||||||||||
One-month LIBOR | 0.2 | % | ||||||||||||
Six-month LIBOR | 0.35 | % | ||||||||||||
Summary of additional margins | ' | |||||||||||||
Consolidated Total Indebtedness to Credit Facility Adjusted | ||||||||||||||
EBITDA | ||||||||||||||
Less than 0.75 | 0.75 to 1.50 | 1.50 to 2.25 | 2.25 or greater | |||||||||||
Additional Per Annum Interest Margin Added Under: | ||||||||||||||
Base Rate Loan Option | 0.25 | % | 0.5 | % | 0.75 | % | 1 | % | ||||||
Eurodollar Rate Loan Option | 1.25 | % | 1.5 | % | 1.75 | % | 2 | % | ||||||
Letter of credit fees | 1.25 | % | 1.5 | % | 1.75 | % | 2 | % | ||||||
Commitment fees on any portion of the Revolving Loan capacity not in use for borrowings or letters of credit at any given time | 0.2 | % | 0.25 | % | 0.3 | % | 0.35 | % |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Schedule of provision for income taxes relating to continuing operations | ' | ||||||||||
The provision for income taxes relating to continuing operations consists of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current— | |||||||||||
Federal | $ | 11,707 | $ | 5,679 | $ | 2,207 | |||||
State and Puerto Rico | 1,954 | 1,151 | 1,673 | ||||||||
| | | | | | | | | | | |
13,661 | 6,830 | 3,880 | |||||||||
| | | | | | | | | | | |
Deferred— | |||||||||||
Federal | 3,254 | 2,897 | (10,121 | ) | |||||||
State and Puerto Rico | 1,233 | 318 | 778 | ||||||||
| | | | | | | | | | | |
4,487 | 3,215 | (9,343 | ) | ||||||||
| | | | | | | | | | | |
$ | 18,148 | $ | 10,045 | $ | (5,463 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of difference in income taxes provided for and the amounts determined by applying the federal statutory tax rate to income before income taxes results | ' | ||||||||||
The difference in income taxes provided for and the amounts determined by applying the federal statutory tax rate to income before income taxes results from the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income tax expense (benefit) at the statutory rate of 35% | $ | 16,373 | $ | 7,539 | $ | (13,278 | ) | ||||
Changes resulting from— | |||||||||||
State income taxes, net of federal tax effect | 1,910 | 1,011 | (1,972 | ) | |||||||
Increase (decrease) in valuation allowance | 1,465 | 455 | 3,431 | ||||||||
Increase (decrease) in tax contingency reserves | (145 | ) | 198 | 28 | |||||||
Increase (decrease) from noncontrolling interests | (450 | ) | 565 | (118 | ) | ||||||
Non-deductible expenses | 594 | 481 | 386 | ||||||||
Domestic production activity deduction | (520 | ) | (378 | ) | — | ||||||
Goodwill impairment | — | — | 9,223 | ||||||||
Purchase accounting adjustments | (472 | ) | (210 | ) | (2,992 | ) | |||||
Other | (607 | ) | 384 | (171 | ) | ||||||
| | | | | | | | | | | |
$ | 18,148 | $ | 10,045 | $ | (5,463 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the balance sheet | ' | ||||||||||
Significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the balance sheet are as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred income tax assets— | |||||||||||
Accounts receivable and allowance for doubtful accounts | $ | 1,660 | $ | 2,293 | |||||||
Stock compensation | 2,165 | 2,444 | |||||||||
Accrued liabilities and expenses | 19,290 | 19,661 | |||||||||
Net operating loss carryforwards | 7,794 | 6,562 | |||||||||
Other | 613 | 1,017 | |||||||||
| | | | | | | | ||||
Total deferred income tax assets | 31,522 | 31,977 | |||||||||
| | | | | | | | ||||
Deferred income tax liabilities— | |||||||||||
Property and equipment | (6,660 | ) | (5,357 | ) | |||||||
Long-term contracts | (671 | ) | (306 | ) | |||||||
Goodwill | (3,364 | ) | (1,124 | ) | |||||||
Intangible assets | (2,803 | ) | (3,932 | ) | |||||||
Other | (947 | ) | (1,131 | ) | |||||||
| | | | | | | | ||||
Total deferred income tax liabilities | (14,445 | ) | (11,850 | ) | |||||||
| | | | | | | | ||||
Less—Valuation allowance | (7,605 | ) | (6,140 | ) | |||||||
| | | | | | | | ||||
Net deferred income tax assets | $ | 9,472 | $ | 13,987 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of deferred income tax assets and liabilities included in the consolidated balance sheets | ' | ||||||||||
The deferred income tax assets and liabilities reflected above are included in the consolidated balance sheets as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred income tax assets— | |||||||||||
Prepaid expenses and other | $ | 18,279 | $ | 19,952 | |||||||
Other noncurrent assets | 1,472 | 2,324 | |||||||||
| | | | | | | | ||||
Total deferred income tax assets | $ | 19,751 | $ | 22,276 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Deferred income tax liabilities— | |||||||||||
Other current liabilities | $ | 338 | $ | 335 | |||||||
Deferred income tax liabilities | 9,941 | 7,954 | |||||||||
| | | | | | | | ||||
Total deferred income tax liabilities | $ | 10,279 | $ | 8,289 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties | ' | ||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 499 | $ | 696 | $ | 696 | |||||
Additions based on tax positions related to the current year | — | — | — | ||||||||
Additions for tax positions of prior years | — | — | — | ||||||||
Reductions for tax positions of prior years | (86 | ) | (197 | ) | — | ||||||
Settlements | — | — | — | ||||||||
| | | | | | | | | | | |
Balance at end of year | $ | 413 | $ | 499 | $ | 696 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum rental payments under noncancelable operating leases | ' | ||||
The following represents future minimum rental payments under noncancelable operating leases (in thousands): | |||||
Year ended December 31— | |||||
2014 | $ | 10,453 | |||
2015 | 9,341 | ||||
2016 | 7,844 | ||||
2017 | 7,139 | ||||
2018 | 6,040 | ||||
Thereafter | 8,422 | ||||
| | | | | |
$ | 49,239 | ||||
| | | | | |
| | | | | |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Stockholders' Equity | ' | ||||||||||
Reconciliation of number of shares outstanding with the number of shares used in computing basic and diluted earnings per share | ' | ||||||||||
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): | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Common shares outstanding, end of period(a) | 37,578 | 37,069 | 37,050 | ||||||||
Effect of using weighted average common shares outstanding | (333 | ) | 43 | 339 | |||||||
| | | | | | | | | | | |
Shares used in computing earnings per share—basic | 37,245 | 37,112 | 37,389 | ||||||||
Effect of shares issuable under stock option plans based on the treasury stock method | 183 | 87 | — | ||||||||
Effect of contingently issuable restricted shares | 108 | 60 | — | ||||||||
| | | | | | | | | | | |
Shares used in computing earnings per share—diluted | 37,536 | 37,259 | 37,389 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
(a) | |||||||||||
Excludes 0.1 million, 0.2 million and 0.4 million shares of unvested contingently issuable restricted stock outstanding for the years ended December 31, 2013, 2012 and 2011, respectively (see Note 14 "Stock-Based Compensation"). | |||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||||
Summary of activity under the entity's stock option plans | ' | |||||||||||||||||||
The following table summarizes activity under our stock option plans (shares in thousands): | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Stock Options | Shares | Weighted- | Shares | Weighted- | Shares | Weighted- | ||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise Price | Exercise Price | Exercise Price | ||||||||||||||||||
Outstanding at beginning of year | 1,143 | $ | 11.59 | 1,056 | $ | 10.84 | 1,061 | $ | 9.58 | |||||||||||
Granted | 156 | $ | 13.86 | 190 | $ | 11.19 | 142 | $ | 13.87 | |||||||||||
Exercised | (440 | ) | $ | 11.1 | (103 | ) | $ | 3.2 | (66 | ) | $ | 4.46 | ||||||||
Forfeited | (1 | ) | $ | 13.87 | — | $ | — | — | $ | — | ||||||||||
Expired | — | $ | — | — | $ | — | (81 | ) | $ | 4.82 | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Outstanding at end of year | 858 | $ | 12.24 | 1,143 | $ | 11.59 | 1,056 | $ | 10.84 | |||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options exercisable at end of year | 528 | 810 | 762 | |||||||||||||||||
Summary information about stock options outstanding | ' | |||||||||||||||||||
The following table summarizes information about stock options outstanding at December 31, 2013 (shares in thousands): | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Range of Exercise Prices | Number | Weighted- | Weighted- | Number | Weighted- | |||||||||||||||
Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
at 12/31/13 | Remaining | Exercise Price | at 12/31/13 | Exercise Price | ||||||||||||||||
Contractual | ||||||||||||||||||||
Life | ||||||||||||||||||||
$6.38 - $7.94 | 48 | 1.38 | $ | 6.4 | 48 | $ | 6.4 | |||||||||||||
$10.73 - $12.90 | 447 | 6.31 | $ | 11.66 | 320 | $ | 11.84 | |||||||||||||
$13.15 - $15.03 | 363 | 7.4 | $ | 13.73 | 160 | $ | 13.57 | |||||||||||||
| | | | | | | | | | | | | | | | | ||||
$6.38 - $15.03 | 858 | 6.5 | $ | 12.24 | 528 | $ | 11.88 | |||||||||||||
| | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | | | | ||||
Schedule of fair values and the assumptions used for the grants | ' | |||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Weighted-average fair value per share of options granted | $5.06 | $4.03 | $5.04 | |||||||||||||||||
Fair value assumptions: | ||||||||||||||||||||
Expected dividend yield | 1.82% | 1.86% | 1.70% | |||||||||||||||||
Expected stock price volatility | 46.60% | 46.50% | 44.20% | |||||||||||||||||
Risk-free interest rate | 0.96% | 1.17% | 2.24% | |||||||||||||||||
Expected term | 5.6 years | 5.3 years | 5.3 years | |||||||||||||||||
Summary of information about nonvested stock option awards and changes | ' | |||||||||||||||||||
The following table summarizes information about nonvested stock option awards as of December 31, 2013 and changes for the year ended December 31, 2013 (shares in thousands): | ||||||||||||||||||||
Stock Options | Shares | Weighted-Average | ||||||||||||||||||
Grant Date | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Nonvested at December 31, 2012 | 333 | $ | 4.4 | |||||||||||||||||
Granted | 156 | $ | 5.06 | |||||||||||||||||
Vested | (158 | ) | $ | 4.51 | ||||||||||||||||
Forfeited | (1 | ) | $ | 5.04 | ||||||||||||||||
| | | | | | | | |||||||||||||
Nonvested at December 31, 2013 | 330 | $ | 4.66 | |||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Summary of activity under the entity's restricted stock plans | ' | |||||||||||||||||||
The following table summarizes activity under our restricted stock plans (shares in thousands): | ||||||||||||||||||||
Shares | ||||||||||||||||||||
Restricted Stock and Restricted Stock Units | 2013 | 2012 | 2011 | |||||||||||||||||
Unvested at beginning of year | 272 | 302 | 312 | |||||||||||||||||
Granted | 169 | 224 | 231 | |||||||||||||||||
Vested | (240 | ) | (254 | ) | (241 | ) | ||||||||||||||
Forfeited | (2 | ) | — | — | ||||||||||||||||
| | | | | | | | | | | ||||||||||
Unvested at end of year | 199 | 272 | 302 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Quarterly_Results_of_Operation1
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Results of Operations (Unaudited) | ' | |||||||||||||
Schedule of Quarterly Financial Information | ' | |||||||||||||
Quarterly financial information for the years ended December 31, 2013 and 2012 is summarized as follows (in thousands, except per share data): | ||||||||||||||
2013 | ||||||||||||||
Q1 | Q2 | Q3(a) | Q4 | |||||||||||
Revenue | $ | 325,890 | $ | 351,053 | $ | 349,989 | $ | 330,340 | ||||||
Gross profit | 51,467 | 59,967 | 67,021 | 61,428 | ||||||||||
Operating income | 5,086 | 14,379 | 17,734 | 9,059 | ||||||||||
Income from continuing operations | 2,749 | 8,314 | 11,637 | 5,932 | ||||||||||
Income (loss) from discontinued operations, net of tax | (54 | ) | — | (25 | ) | 3 | ||||||||
Net income including noncontrolling interests | 2,695 | 8,314 | 11,612 | 5,935 | ||||||||||
Less: Net income attributable to noncontrolling interests | 163 | 552 | 233 | 339 | ||||||||||
Net income attributable to Comfort Systems USA, Inc. | 2,532 | 7,762 | 11,379 | 5,596 | ||||||||||
INCOME PER SHARE ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC.: | ||||||||||||||
Basic— | ||||||||||||||
Income from continuing operations | $ | 0.07 | $ | 0.21 | $ | 0.31 | $ | 0.15 | ||||||
Income from discontinued operations | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Net income | $ | 0.07 | $ | 0.21 | $ | 0.31 | $ | 0.15 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted— | ||||||||||||||
Income from continuing operations | $ | 0.07 | $ | 0.21 | $ | 0.3 | $ | 0.15 | ||||||
Income from discontinued operations | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Net income | $ | 0.07 | $ | 0.21 | $ | 0.3 | $ | 0.15 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | (10,351 | ) | $ | 6,700 | $ | 27,433 | $ | 14,641 | |||||
(a) | ||||||||||||||
Included in unaudited quarterly results of operations for the third quarter of 2013 is the correction of prior period accounting errors which resulted in net after-tax income of approximately $1.3 million, or $0.03 per diluted share. Refer to Footnote 2 for additional disclosure. | ||||||||||||||
2012 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | |||||||||||
Revenue | $ | 326,902 | $ | 353,172 | $ | 335,241 | $ | 315,870 | ||||||
Gross profit | 42,931 | 54,096 | 55,521 | 55,073 | ||||||||||
Operating income (loss) | (3,003 | ) | 7,441 | 9,767 | 8,098 | |||||||||
Income (loss) from continuing operations | (2,431 | ) | 3,949 | 5,423 | 4,553 | |||||||||
Income (loss) from discontinued operations, net of tax | (237 | ) | 98 | (98 | ) | 592 | ||||||||
Net income (loss) including noncontrolling interests | (2,668 | ) | 4,047 | 5,325 | 5,145 | |||||||||
Less: Net income (loss) attributable to noncontrolling interests | (1,639 | ) | (421 | ) | (348 | ) | 794 | |||||||
Net income (loss) attributable to Comfort Systems USA, Inc. | (1,029 | ) | 4,468 | 5,673 | 4,351 | |||||||||
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC.: | ||||||||||||||
Basic— | ||||||||||||||
Income (loss) from continuing operations | $ | (0.02 | ) | $ | 0.12 | $ | 0.15 | $ | 0.1 | |||||
Income (loss) from discontinued operations | (0.01 | ) | — | — | 0.02 | |||||||||
| | | | | | | | | | | | | | |
Net income (loss) | $ | (0.03 | ) | $ | 0.12 | $ | 0.15 | $ | 0.12 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted— | ||||||||||||||
Income (loss) from continuing operations | $ | (0.02 | ) | $ | 0.12 | $ | 0.15 | $ | 0.1 | |||||
Income (loss) from discontinued operations | (0.01 | ) | — | — | 0.02 | |||||||||
| | | | | | | | | | | | | | |
Net income (loss) | $ | (0.03 | ) | $ | 0.12 | $ | 0.15 | $ | 0.12 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | $ | (19,816 | ) | $ | 6,793 | $ | 16,455 | $ | 27,078 |
Business_and_Organization_Deta
Business and Organization (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Installation of systems in newly constructed facilities | ' |
Business and Organization | ' |
Percentage of revenue attributable to services | 42.00% |
Maintenance, repair and replacement services | ' |
Business and Organization | ' |
Percentage of revenue attributable to services | 58.00% |
HVAC | ' |
Business and Organization | ' |
Percentage of revenue attributable to services | 75.00% |
Plumbing | ' |
Business and Organization | ' |
Percentage of revenue attributable to services | 15.00% |
Building automation control systems | ' |
Business and Organization | ' |
Percentage of revenue attributable to services | 6.00% |
Other | ' |
Business and Organization | ' |
Percentage of revenue attributable to services | 4.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Net income after-tax | $5,596,000 | $11,379,000 | $7,762,000 | $2,532,000 | $4,351,000 | $5,673,000 | $4,468,000 | ($1,029,000) | $27,269,000 | $13,463,000 | ($36,830,000) |
Revenue | 330,340,000 | 349,989,000 | 351,053,000 | 325,890,000 | 315,870,000 | 335,241,000 | 353,172,000 | 326,902,000 | 1,357,272,000 | 1,331,185,000 | 1,216,654,000 |
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,117,389,000 | 1,123,564,000 | 1,035,124,000 |
Selling, general, and administrative expenses | ' | ' | ' | ' | ' | ' | ' | ' | 194,214,000 | 185,809,000 | 167,053,000 |
Cash paid for: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | 799,000 | 1,326,000 | 1,720,000 |
Income taxes for continuing operations | ' | ' | ' | ' | ' | ' | ' | ' | 15,821,000 | 13,948,000 | 1,613,000 |
Income taxes for discontinued operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | 8,000 |
Total | ' | ' | ' | ' | ' | ' | ' | ' | 16,620,000 | 15,279,000 | 3,341,000 |
Revenue Recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenue earned on a project basis | ' | ' | ' | ' | ' | ' | ' | ' | 83.00% | ' | ' |
Contracts in progress | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Costs incurred on contracts in progress | 989,072,000 | ' | ' | ' | 1,182,085,000 | ' | ' | ' | 989,072,000 | 1,182,085,000 | ' |
Estimated earnings, net of losses | 126,431,000 | ' | ' | ' | 134,534,000 | ' | ' | ' | 126,431,000 | 134,534,000 | ' |
Less-Billings to date | -1,151,969,000 | ' | ' | ' | -1,364,229,000 | ' | ' | ' | -1,151,969,000 | -1,364,229,000 | ' |
Contracts in progress | -36,466,000 | ' | ' | ' | -47,610,000 | ' | ' | ' | -36,466,000 | -47,610,000 | ' |
Costs and estimated earnings in excess of billings | 28,122,000 | ' | ' | ' | 26,204,000 | ' | ' | ' | 28,122,000 | 26,204,000 | ' |
Billings in excess of costs and estimated earnings | -64,588,000 | ' | ' | ' | -73,814,000 | ' | ' | ' | -64,588,000 | -73,814,000 | ' |
Period during which progress billings or contract price can be withheld until completion of work | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' |
Retention receivable | 51,400,000 | ' | ' | ' | 48,000,000 | ' | ' | ' | 51,400,000 | 48,000,000 | ' |
Retention payable | 10,300,000 | ' | ' | ' | 11,300,000 | ' | ' | ' | 10,300,000 | 11,300,000 | ' |
Warranty Costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Labor warranty period after servicing of existing HVAC system | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' |
Adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income after-tax | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 3,300,000 | ' | ' |
Cost of sales | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' |
Selling, general, and administrative expenses | ' | ' | ' | ' | ' | ' | ' | ' | $300,000 | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (Revenue, Customer concentration) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
Concentrations of Credit Risk | ' |
Number of single customers accounting for more than threshold concentration risk percentage | 0 |
Maximum | ' |
Concentrations of Credit Risk | ' |
Single customer, percentage of revenue | 3.00% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value Measurements | ' | ' |
Number of employees covered under life insurance policies | 41 | ' |
Combined face value of life insurance policies | $41,200,000 | ' |
Cash surrender value | 2,900,000 | 2,500,000 |
Contingent earn-out obligations | ' | ' |
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3) | ' | ' |
Balance at beginning of year | 1,966,000 | 2,488,000 |
Issuances | ' | 140,000 |
Adjustments to fair value | -1,646,000 | -662,000 |
Balance at end of period | 320,000 | 1,966,000 |
Recurring basis | Total | ' | ' |
Fair Value Measurements | ' | ' |
Cash and cash equivalents | 52,054,000 | ' |
Life insurance - cash surrender value | 2,943,000 | ' |
Contingent earn-out obligations | 320,000 | ' |
Recurring basis | Quoted Market Prices In Active Markets for Identical Assets (Level 1) | ' | ' |
Fair Value Measurements | ' | ' |
Cash and cash equivalents | 52,054,000 | ' |
Recurring basis | Significant Other Observable Inputs (Level 2) | ' | ' |
Fair Value Measurements | ' | ' |
Life insurance - cash surrender value | 2,943,000 | ' |
Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' |
Fair Value Measurements | ' | ' |
Contingent earn-out obligations | $320,000 | ' |
Acquisitions_Details
Acquisitions (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 02, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | EAS | Other Acquisitions | Other Acquisitions | |||
Acquisitions | ' | ' | ' | ' | ' | ' |
Interest acquired (as a percent) | ' | ' | ' | 60.00% | ' | ' |
Number of acquisitions | 0 | ' | ' | ' | ' | ' |
Fair value of consideration transferred | ' | ' | ' | $30,400,000 | $14,200,000 | $2,900,000 |
Goodwill on acquisition | $114,588,000 | $114,588,000 | $107,093,000 | $15,700,000 | ' | ' |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Discontinued Operations | ' | ' | ' |
After-tax income (loss) from discontinued operations | ($76,000) | $355,000 | ($4,018,000) |
Interest expense allocated to discontinued operations | 0 | ' | ' |
Revenue and pre-tax income (loss) related to discontinued operations | ' | ' | ' |
Revenue | 49,000 | 4,668,000 | 23,366,000 |
Pre-tax income (loss) | -195,000 | 567,000 | -6,727,000 |
Operation located in Delaware | ' | ' | ' |
Discontinued Operations | ' | ' | ' |
Impairment of intangible assets | ' | ' | 1,600,000 |
After-tax income (loss) from discontinued operations | -100,000 | 100,000 | -4,000,000 |
Income associated with the reduction of estimated liabilities associated with the sale and shutdown of previous discontinued operations | ' | $300,000 | ' |
Goodwill_and_Identifiable_Inta2
Goodwill and Identifiable Intangible Assets, Net (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Changes in the carrying amount of goodwill | ' | ' | ' |
Balance at the beginning of period | $114,588 | $107,093 | ' |
Additions | ' | 7,495 | ' |
Impairment of goodwill | 0 | 0 | 57,354 |
Balance at the end of period | 114,588 | 114,588 | 107,093 |
Virginia, Maryland and North Carolina markets | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' |
Impairment of goodwill | ' | ' | $57,300 |
Number of reporting units, which could no longer support the related goodwill balance | ' | ' | 4 |
Income valuation approach using discounted cash flow model | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' |
Weighting percentage | ' | 50.00% | 50.00% |
Public company market approach | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' |
Weighting percentage | ' | 40.00% | 50.00% |
Weight assigned to the public company approach for impacted reporting units, percentage | ' | 50.00% | ' |
Transaction approach | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' |
Weighting percentage | ' | 10.00% | ' |
Weight assigned to the transaction approach due to the lack of comparable market data, percentage | ' | 0.00% | 0.00% |
Goodwill_and_Identifiable_Inta3
Goodwill and Identifiable Intangible Assets, Net (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Identifiable Intangible Assets, Net | ' | ' | ' |
Gross Book Value | $73,504 | $73,504 | ' |
Accumulated Amortization | -36,121 | -28,989 | ' |
Amortization expense | 7,132 | 8,837 | 7,462 |
Future amortization expense of identifiable intangible assets | ' | ' | ' |
2014 | 6,106 | ' | ' |
2015 | 4,873 | ' | ' |
2016 | 3,748 | ' | ' |
2017 | 2,997 | ' | ' |
2018 | 2,320 | ' | ' |
Thereafter | 17,339 | ' | ' |
Total | 37,383 | ' | ' |
Customer relationships | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Gross Book Value | 40,404 | 40,404 | ' |
Accumulated Amortization | -20,978 | -15,579 | ' |
Customer relationships | Minimum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '2 years | ' | ' |
Customer relationships | Maximum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '15 years | ' | ' |
Backlog | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Gross Book Value | 6,515 | 6,515 | ' |
Accumulated Amortization | -6,515 | -6,375 | ' |
Backlog | Minimum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '1 year | ' | ' |
Backlog | Maximum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '2 years | ' | ' |
Noncompete agreements | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Gross Book Value | 2,890 | 2,890 | ' |
Accumulated Amortization | -2,649 | -2,380 | ' |
Noncompete agreements | Minimum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '2 years | ' | ' |
Noncompete agreements | Maximum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '7 years | ' | ' |
Tradenames | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Gross Book Value | 23,695 | 23,695 | ' |
Accumulated Amortization | ($5,979) | ($4,655) | ' |
Tradenames | Minimum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '2 years | ' | ' |
Tradenames | Maximum | ' | ' | ' |
Identifiable Intangible Assets, Net | ' | ' | ' |
Estimated Useful Lives in Years | '25 years | ' | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property and equipment | ' | ' | ' |
Property and equipment, gross | $120,976 | $110,086 | ' |
Less-Accumulated depreciation | -74,115 | -68,670 | ' |
Property and equipment, net | 46,861 | 41,416 | ' |
Depreciation expense | 11,400 | 11,700 | 11,900 |
Land | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 2,404 | 2,404 | ' |
Transportation equipment | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 46,233 | 38,352 | ' |
Transportation equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '1 year | ' | ' |
Transportation equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '7 years | ' | ' |
Machinery and equipment | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 22,920 | 21,670 | ' |
Machinery and equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '1 year | ' | ' |
Machinery and equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '15 years | ' | ' |
Computer and telephone equipment | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 19,012 | 18,481 | ' |
Computer and telephone equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '1 year | ' | ' |
Computer and telephone equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '10 years | ' | ' |
Buildings and leasehold improvements | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | 25,371 | 24,438 | ' |
Buildings and leasehold improvements | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '2 years | ' | ' |
Buildings and leasehold improvements | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '40 years | ' | ' |
Furniture and fixtures | ' | ' | ' |
Property and equipment | ' | ' | ' |
Property and equipment, gross | $5,036 | $4,741 | ' |
Furniture and fixtures | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '2 years | ' | ' |
Furniture and fixtures | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Estimated useful life | '17 years | ' | ' |
Detail_of_Certain_Balance_Shee2
Detail of Certain Balance Sheet Accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Activity in allowance for doubtful accounts | ' | ' | ' |
Balance at beginning of year | $6,333 | $4,615 | $5,029 |
Additions for bad debt expense | 19 | 2,753 | 214 |
Deductions for uncollectible receivables written off, net of recoveries | -1,892 | -1,090 | -770 |
Allowance for doubtful accounts of acquired companies at date of acquisition | ' | 55 | 142 |
Balance at end of year | 4,460 | 6,333 | 4,615 |
Other current liabilities | ' | ' | ' |
Accrued warranty costs | 6,795 | 6,781 | ' |
Accrued job losses | 758 | 2,137 | ' |
Accrued rent and lease obligations | 673 | 673 | ' |
Accrued sales and use tax | 1,821 | 1,710 | ' |
Deferred revenue | 1,320 | 1,143 | ' |
Liabilities due to former owners | 4,054 | 2,349 | ' |
Other current liabilities | 12,747 | 12,284 | ' |
Total other current liabilities | $28,168 | $27,077 | ' |
LongTerm_Debt_Obligations_Deta
Long-Term Debt Obligations (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Long-Term Debt Obligations | ' | ' |
Total debt | $2,000 | $7,400 |
Less - current portion | -2,000 | -300 |
Total long-term portion of debt | ' | 7,100 |
Other debt | ' | ' |
Long-Term Debt Obligations | ' | ' |
Total debt | ' | 2,400 |
Notes to former owners | ' | ' |
Long-Term Debt Obligations | ' | ' |
Total debt | $2,000 | $5,000 |
LongTerm_Debt_Obligations_Deta1
Long-Term Debt Obligations (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Future principal payments of long-term debt | ' | ' | ' |
2014 | $2,000 | ' | ' |
Total | 2,000 | 7,400 | ' |
Interest expense | ' | ' | ' |
Interest expense on notes to former owners | 97 | 255 | 795 |
Interest expense on borrowings and unused commitment fees | 279 | 444 | 243 |
Letter of credit fees | 731 | 667 | 622 |
Amortization of debt financing costs | 244 | 229 | 226 |
Total | $1,351 | $1,595 | $1,886 |
LongTerm_Debt_Obligations_Deta2
Long-Term Debt Obligations (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jun. 25, 2013 | Jun. 24, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Other debt | Other debt | Notes to former owners | ||||||||||||
item | EAS | Actual | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater | Minimum | Minimum | Maximum | Maximum | Maximum | Maximum | Maximum | Maximum | Base rate | Base rate | Base rate | Base rate | Base rate | Base rate | Base rate | Base rate | Eurodollar rate | Eurodollar rate | Eurodollar rate | Eurodollar rate | Eurodollar rate | Eurodollar rate | |||||||||||||||||
Covenant Requirement | Actual | Through December 31, 2014 | Through December 31, 2015 | Through maturity | Covenant Requirement | Actual | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater | Federal Funds Rate | Wells Fargo Bank, N.A. Prime Rate | One-month LIBOR | Six-month LIBOR | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25 | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater | One-month LIBOR | Six-month LIBOR | |||||||||||||||||||||||||
Long-Term Debt Obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $175,000,000 | $125,000,000 | $2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financing and professional cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of credit amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit available | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 126,900,000 | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Book value of assets pledged as collateral | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 69,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of quarters of net earnings used for the calculation of the credit facility adjusted EBITDA | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reconciliation of Credit Facility Adjusted EBITDA to net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) including noncontrolling interests | 5,935,000 | 11,612,000 | 8,314,000 | 2,695,000 | 5,145,000 | 5,325,000 | 4,047,000 | -2,668,000 | 28,556,000 | 11,849,000 | -36,492,000 | 28,556,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income taxes-continuing operations | ' | ' | ' | ' | ' | ' | ' | ' | 18,148,000 | 10,045,000 | -5,463,000 | 18,148,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,328,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,572,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | 2,800,000 | 3,600,000 | 3,974,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income taxes - discontinued operation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -119,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EBITDA attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,342,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit Facility Adjusted EBITDA | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 68,117,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal financial covenants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.03 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | 2.75 | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net leverage ratio used to determine exclusion of stock repurchases and the payment of dividends for calculation of the fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of stock repurchases to maintain maximum net leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net leverage ratio after giving effect to stock repurchases for calculation of the fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of quarters of capital expenditures, tax provision, dividends and stock repurchase payments used for calculation of fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.88 | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Permitted amount of acquisitions per transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate purchase price of current acquisition and acquisitions in the preceding 12 month period for determining permitted amount of acquisition per transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net leverage ratio used as basis for other restrictions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of interest rate options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of Credit Facility Adjusted EBITDA for determining additional margins | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market rates relating to interest options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Base rate | 'Base rate | 'Base rate | 'Base rate | ' | ' | 'One-month LIBOR | 'Six-month LIBOR | 'Eurodollar rate | 'Eurodollar rate | 'Eurodollar rate | 'Eurodollar rate | ' | ' | ' | ' | ' |
Interest rate margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.50% | 0.75% | 1.00% | 0.50% | ' | 1.00% | ' | 1.25% | 1.50% | 1.75% | 2.00% | ' | ' | ' | ' | ' |
Market rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.59% | 3.25% | 1.20% | ' | ' | ' | ' | ' | 0.20% | 0.35% | ' | ' | ' |
Additional per annum interest margin added under: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Base rate | 'Base rate | 'Base rate | 'Base rate | ' | ' | 'One-month LIBOR | 'Six-month LIBOR | 'Eurodollar rate | 'Eurodollar rate | 'Eurodollar rate | 'Eurodollar rate | ' | ' | ' | ' | ' |
Additional per annum interest margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.50% | 0.75% | 1.00% | 0.50% | ' | 1.00% | ' | 1.25% | 1.50% | 1.75% | 2.00% | ' | ' | ' | ' | ' |
Letter of credit fees (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | 1.50% | 1.75% | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fees payable on unused portion of the facility (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.20% | 0.25% | 0.30% | 0.35% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments of debt | ' | ' | ' | ' | ' | ' | ' | ' | $5,400,000 | $7,349,000 | $14,387,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,400,000 | ' | ' |
Other disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.21% | 3.30% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current- | ' | ' | ' |
Federal | $11,707 | $5,679 | $2,207 |
State and Puerto Rico | 1,954 | 1,151 | 1,673 |
Total | 13,661 | 6,830 | 3,880 |
Deferred- | ' | ' | ' |
Federal | 3,254 | 2,897 | -10,121 |
State and Puerto Rico | 1,233 | 318 | 778 |
Total | 4,487 | 3,215 | -9,343 |
Provision for income taxes | $18,148 | $10,045 | ($5,463) |
Income_Taxes_Details2
Income Taxes (Details2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes | ' | ' | ' |
Income tax expense (benefit) at the statutory rate of 35% | $16,373 | $7,539 | ($13,278) |
Changes resulting from- | ' | ' | ' |
State income taxes, net of federal tax effect | 1,910 | 1,011 | -1,972 |
Increase (decrease) in valuation allowance | 1,465 | 455 | 3,431 |
Increase (decrease) in tax contingency reserves | -145 | 198 | 28 |
Increase (decrease) from noncontrolling interests | -450 | 565 | -118 |
Non-deductible expenses | 594 | 481 | 386 |
Domestic production activity deduction | -520 | -378 | ' |
Goodwill impairment | ' | ' | 9,223 |
Purchase accounting adjustments | -472 | -210 | -2,992 |
Other | -607 | 384 | -171 |
Provision for income taxes | $18,148 | $10,045 | ($5,463) |
Income_Taxes_Details3
Income Taxes (Details3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred income tax assets- | ' | ' |
Accounts receivable and allowance for doubtful accounts | $1,660 | $2,293 |
Stock compensation | 2,165 | 2,444 |
Accrued liabilities and expenses | 19,290 | 19,661 |
Net operating loss carryforwards | 7,794 | 6,562 |
Other | 613 | 1,017 |
Total deferred income tax assets | 31,522 | 31,977 |
Deferred income tax liabilities- | ' | ' |
Property and equipment | -6,660 | -5,357 |
Long-term contracts | -671 | -306 |
Goodwill | -3,364 | -1,124 |
Intangible assets | -2,803 | -3,932 |
Other | -947 | -1,131 |
Total deferred income tax liabilities | -14,445 | -11,850 |
Less-Valuation allowance | -7,605 | -6,140 |
Net deferred income tax assets | 9,472 | 13,987 |
Deferred income tax assets- | ' | ' |
Prepaid expenses and other | 18,279 | 19,952 |
Other noncurrent assets | 1,472 | 2,324 |
Total deferred income tax assets | 19,751 | 22,276 |
Deferred income tax liabilities- | ' | ' |
Other current liabilities | 338 | 335 |
Deferred income tax liabilities | 9,941 | 7,954 |
Total deferred income tax liabilities | $10,279 | $8,289 |
Income_Taxes_Details4
Income Taxes (Details4) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | |
Operating loss carryforwards | ' | ' | ' |
Valuation allowance | $7,605,000 | $6,140,000 | ' |
Unrecognized tax benefits that would impact effective tax rate | 300,000 | 300,000 | ' |
Total interest and penalties decreased | -400,000 | ' | ' |
Interest expense recognized on unrecognized tax benefit | ' | 400,000 | ' |
Interest and penalties accrued | 300,000 | 700,000 | ' |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ' | ' | ' |
Balance at the beginning of the period | 499,000 | 696,000 | 696,000 |
Reductions for tax positions of prior years | -86,000 | -197,000 | ' |
Balance at the end of the period | 413,000 | 499,000 | 696,000 |
State and Puerto Rico | ' | ' | ' |
Operating loss carryforwards | ' | ' | ' |
Future tax benefits | 7,800,000 | ' | ' |
Net operating loss carryforwards | 106,400,000 | ' | ' |
Valuation allowance | 7,600,000 | ' | ' |
Increase in valuation allowance | 1,500,000 | ' | ' |
Deferred tax assets net of valuation allowance | $1,600,000 | ' | ' |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | item | ||
Employee Benefit Plans | ' | ' | ' |
Percentage of contribution of covered employee's salaries or wages | 2.50% | ' | ' |
Contribution | $5,500,000 | $5,200,000 | $5,100,000 |
Amount payable to plan | 100,000 | 100,000 | ' |
Number of employees who are union members | 6 | 5 | ' |
Contributions made to multi employer pension plans | 0 | 0 | 0 |
Period in which certain individuals are entitled to fixed annual payments | '15 years | ' | ' |
Maximum age under which certain individuals are entitled to fixed annual payments | '65 years | ' | ' |
Portion of benefits vesting after ten years of completed service (as a percent) | 50.00% | ' | ' |
Period of completed service over which 50% of benefits are vested | '10 years | ' | ' |
Portion of benefits vesting after fifteen years of completed service (as a percent) | 75.00% | ' | ' |
Period of completed service over which 75% of benefits are vested | '15 years | ' | ' |
Period of service over which benefits are fully vested | '20 years | ' | ' |
Unfunded benefit liability | $3,200,000 | $3,000,000 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Leases | ' | ' | ' |
Rent expense | $16,200,000 | $15,200,000 | $12,000,000 |
Future minimum rental payments under noncancelable operating leases | ' | ' | ' |
2014 | 10,453,000 | ' | ' |
2015 | 9,341,000 | ' | ' |
2016 | 7,844,000 | ' | ' |
2017 | 7,139,000 | ' | ' |
2018 | 6,040,000 | ' | ' |
Thereafter | 8,422,000 | ' | ' |
Total future minimum rental payments | 49,239,000 | ' | ' |
Lease buildings | Minimum | ' | ' | ' |
Leases | ' | ' | ' |
Lease term | '3 years | ' | ' |
Lease buildings | Maximum | ' | ' | ' |
Leases | ' | ' | ' |
Lease term | '10 years | ' | ' |
Lease buildings | Previous owners | ' | ' | ' |
Leases | ' | ' | ' |
Rent expense | $3,800,000 | $3,400,000 | $2,200,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Surety) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum | ' |
Surety | ' |
Percentage of business which has required bonds | 25.00% |
Maximum | ' |
Surety | ' |
Percentage of business which has required bonds | 35.00% |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | Dec. 31, 2013 |
Workers Compensation | ' |
Self-Insurance | ' |
Per incident deductible amount | $500,000 |
Amount of loss fully insured above per incident deductible amount. | 500,000 |
Employer's Liability, General Liability and Auto Liability | Maximum | ' |
Self-Insurance | ' |
Amount of excess loss insurance covered | 100,000,000 |
Employer's Liability | ' |
Self-Insurance | ' |
Per incident deductible amount | 500,000 |
Amount of loss fully insured above per incident deductible amount. | 500,000 |
General Liability | ' |
Self-Insurance | ' |
Per incident deductible amount | 500,000 |
Amount of loss fully insured above per incident deductible amount. | 1,500,000 |
Auto Liability | ' |
Self-Insurance | ' |
Per incident deductible amount | 500,000 |
Amount of loss fully insured above per incident deductible amount. | 1,500,000 |
Employee Medical | ' |
Self-Insurance | ' |
Number of medical plans | 2 |
Employee Medical- Plan One | ' |
Self-Insurance | ' |
Per person, per policy deductible amount | 325,000 |
Employee Medical- Plan Two | ' |
Self-Insurance | ' |
Per person, per policy deductible amount | $325,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | 82 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Mar. 29, 2007 | Dec. 31, 2013 | 31-May-12 | |
2012 Equity Incentive Plan | 2012 Equity Incentive Plan | ||||
Stockholder's Equity | ' | ' | ' | ' | ' |
Number of shares authorized and reserved for issuance | ' | ' | ' | ' | 5,100,000 |
Number of shares available for issuance | ' | ' | ' | 4,400,000 | ' |
Share Repurchase Program | ' | ' | ' | ' | ' |
Number of shares of outstanding common stock authorized to be acquired under a stock repurchase program | 6,600,000 | 6,600,000 | 1,000,000 | ' | ' |
Number of shares of common stock repurchased | 100,000 | 6,000,000 | ' | ' | ' |
Average price (in dollars per share) | $14.59 | $11 | ' | ' | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock Options | ' | ' | ' |
Earnings Per Share | ' | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 0 | 1 | 0.7 |
Common stock equivalents | ' | ' | ' |
Earnings Per Share | ' | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | ' | ' | 0.2 |
Stockholders_Equity_Details_3
Stockholders' Equity (Details 3) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Reconciliation of the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share | ' | ' | ' |
Common shares outstanding, end of period | 37,578,000 | 37,069,000 | 37,050,000 |
Effect of using weighted average common shares outstanding | -333,000 | 43,000 | 339,000 |
Shares used in computing earnings per share - basic | 37,245,000 | 37,112,000 | 37,389,000 |
Effect of shares issuable under stock option plans based on the treasury stock method | 183,000 | 87,000 | ' |
Effect of contingently issuable restricted shares | 108,000 | 60,000 | ' |
Shares used in computing earnings per share - diluted | 37,536,000 | 37,259,000 | 37,389,000 |
Number of shares of unvested contingently issuable restricted stock outstanding | 100,000 | 200,000 | 400,000 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock-Based Compensation | ' | ' | ' |
Stock-based compensation expense | $4,000,000 | $2,800,000 | $3,600,000 |
Income tax benefit | 1,500,000 | 1,000,000 | 1,300,000 |
Stock Options | ' | ' | ' |
Shares | ' | ' | ' |
Balance at beginning of year (in shares) | 1,143,000 | 1,056,000 | 1,061,000 |
Granted (in shares) | 156,000 | 190,000 | 142,000 |
Exercised (in shares) | -440,000 | -103,000 | -66,000 |
Forfeited (in shares) | -1,000 | ' | ' |
Expired (in shares) | ' | ' | -81,000 |
Balance at end of year (in shares) | 858,000 | 1,143,000 | 1,056,000 |
Options exercisable at end of year (in shares) | 528,000 | 810,000 | 762,000 |
Weighted-Average Exercise Price | ' | ' | ' |
Balance at beginning of year (in dollars per share) | $11.59 | $10.84 | $9.58 |
Granted (in dollars per share) | $13.86 | $11.19 | $13.87 |
Exercised (in dollars per share) | $11.10 | $3.20 | $4.46 |
Forfeited (in dollars per share) | $13.87 | ' | ' |
Expired (in dollars per share) | ' | ' | $4.82 |
Balance at end of year (in dollars per share) | $12.24 | $11.59 | $10.84 |
Other information | ' | ' | ' |
Intrinsic value of options exercised | 3,000,000 | 800,000 | 500,000 |
Weighted-average remaining contractual term of options exercisable | '5 years 2 months 12 days | ' | ' |
Aggregate intrinsic value of options exercisable | 4,000,000 | ' | ' |
Number of options that are vested and expected to vest (in shares) | 900,000 | ' | ' |
Weighted average exercise price of options that are vested and expected to vest (in dollars per share) | $12.24 | ' | ' |
Weighted-average remaining contractual term of options that are vested and expected to vest | '6 years 6 months | ' | ' |
Aggregate intrinsic value of options that are vested and expected to vest | $6,100,000 | ' | ' |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (Stock Options, USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
$6.38 - $7.94 | ' |
Stock-Based Compensation | ' |
Exercise price, low end of range (in dollars per share) | $6.38 |
Exercise price, high end of range (in dollars per share) | $7.94 |
Options Outstanding | ' |
Number of Shares | 48 |
Weighted Average Remaining Contractual Life | '1 year 4 months 17 days |
Weighted Average Exercise Price (in dollars per share) | $6.40 |
Options Exercisable | ' |
Number of Shares | 48 |
Weighted Average Exercise Price (in dollars per share) | $6.40 |
$10.73 - $12.90 | ' |
Stock-Based Compensation | ' |
Exercise price, low end of range (in dollars per share) | $10.73 |
Exercise price, high end of range (in dollars per share) | $12.90 |
Options Outstanding | ' |
Number of Shares | 447 |
Weighted Average Remaining Contractual Life | '6 years 3 months 22 days |
Weighted Average Exercise Price (in dollars per share) | $11.66 |
Options Exercisable | ' |
Number of Shares | 320 |
Weighted Average Exercise Price (in dollars per share) | $11.84 |
$13.15 - $15.03 | ' |
Stock-Based Compensation | ' |
Exercise price, low end of range (in dollars per share) | $13.15 |
Exercise price, high end of range (in dollars per share) | $15.03 |
Options Outstanding | ' |
Number of Shares | 363 |
Weighted Average Remaining Contractual Life | '7 years 4 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $13.73 |
Options Exercisable | ' |
Number of Shares | 160 |
Weighted Average Exercise Price (in dollars per share) | $13.57 |
$6.38 - $15.03 | ' |
Stock-Based Compensation | ' |
Exercise price, low end of range (in dollars per share) | $6.38 |
Exercise price, high end of range (in dollars per share) | $15.03 |
Options Outstanding | ' |
Number of Shares | 858 |
Weighted Average Remaining Contractual Life | '6 years 6 months |
Weighted Average Exercise Price (in dollars per share) | $12.24 |
Options Exercisable | ' |
Number of Shares | 528 |
Weighted Average Exercise Price (in dollars per share) | $11.88 |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (USD $) | 12 Months Ended | ||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Additional information | ' | ' | ' |
Calculated fair market value | $2,400,000 | ' | ' |
Accrued compensation | 44,093,000 | 36,892,000 | ' |
Stock Options | ' | ' | ' |
Stock-Based Compensation | ' | ' | ' |
Weighted-average fair value per share of options granted (in dollars per share) | $5.06 | $4.03 | $5.04 |
Fair value assumptions: | ' | ' | ' |
Expected dividend yield (as a percent) | 1.82% | 1.86% | 1.70% |
Expected stock price volatility (as a percent) | 46.60% | 46.50% | 44.20% |
Risk-free interest rate (as a percent) | 0.96% | 1.17% | 2.24% |
Expected term | '5 years 7 months 6 days | '5 years 3 months 18 days | '5 years 3 months 18 days |
Other information | ' | ' | ' |
Vesting period | '3 years | ' | ' |
Total fair value of options vested | 700,000 | ' | ' |
Nonvested Options, Shares | ' | ' | ' |
Beginning of the period (in shares) | 330 | 333 | ' |
Granted (in shares) | 156 | ' | ' |
Vested (in shares) | -158 | ' | ' |
Forfeited (in shares) | -1 | ' | ' |
End of the period (in shares) | 330 | 333 | ' |
Nonvested Options, Weighted-Average Grant Date Fair Value | ' | ' | ' |
Beginning of the period (in dollars per share) | $4.40 | ' | ' |
Granted (in dollars per share) | $5.06 | $4.03 | $5.04 |
Vested (in dollars per share) | $4.51 | ' | ' |
Forfeited (in dollars per share) | $5.04 | ' | ' |
End of the period (in dollars per share) | $4.66 | $4.40 | ' |
Additional information | ' | ' | ' |
Compensation expense yet to be recognized | 700,000 | ' | ' |
Weighted-average period over which compensation cost will be recognized | '1 year 9 months 18 days | ' | ' |
Stock units granted (in shares) | 156 | 190 | 142 |
Stock Options | Minimum | ' | ' | ' |
Other information | ' | ' | ' |
Sum of age and years of service for accelerated vesting on retirement of certain stock options and restricted stock awards | '75 years | ' | ' |
Restricted Stock and Restricted Stock Units | ' | ' | ' |
Shares | ' | ' | ' |
Beginning of the period (in shares) | 272 | 302 | 312 |
Granted (in shares) | 169 | 224 | 231 |
Vested (in shares) | -240 | -254 | -241 |
Forfeited (in shares) | -2 | ' | ' |
End of the period (in shares) | 199 | 272 | 302 |
Additional information | ' | ' | ' |
Compensation expense yet to be recognized | 1,100,000 | ' | ' |
Weighted-average period over which compensation cost will be recognized | '9 months 18 days | ' | ' |
Fair value of shares vested | 3,100,000 | ' | ' |
Weighted-average fair value (in dollars per share) | $13.57 | $10.78 | $11.29 |
Aggregate intrinsic value of stock vested | 4,700,000 | 3,100,000 | 2,600,000 |
Performance Stock Units | ' | ' | ' |
Other information | ' | ' | ' |
Vesting period | '3 years | ' | ' |
Additional information | ' | ' | ' |
Compensation expense yet to be recognized | 1,500,000 | ' | ' |
Weighted-average period over which compensation cost will be recognized | '1 year 1 month 6 days | ' | ' |
Period for which shareholder return is compared with peer group for units determined by EPS performance | '3 years | ' | ' |
Types of performance units | 2 | ' | ' |
Percentage of units measured on stock price relative to peer group | 50.00% | ' | ' |
Percentage of units measured on stock price based on pre determined EPS | 50.00% | ' | ' |
Stock units granted (in shares) | ' | ' | 0 |
Accrued compensation | $900,000 | ' | ' |
Stock units vested during period (in shares) | 0 | ' | ' |
Performance Stock Units | Minimum | ' | ' | ' |
Additional information | ' | ' | ' |
Performance measures for dollar denominated award granted | 0 | ' | ' |
Performance Stock Units | Maximum | ' | ' | ' |
Additional information | ' | ' | ' |
Performance measures for dollar denominated award granted | 2 | ' | ' |
Restricted Stock | Minimum | ' | ' | ' |
Other information | ' | ' | ' |
Sum of age and years of service for accelerated vesting on retirement of certain stock options and restricted stock awards | '75 years | ' | ' |
Quarterly_Results_of_Operation2
Quarterly Results of Operations (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Results of Operations (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | $330,340 | $349,989 | $351,053 | $325,890 | $315,870 | $335,241 | $353,172 | $326,902 | $1,357,272 | $1,331,185 | $1,216,654 |
Gross profit | 61,428 | 67,021 | 59,967 | 51,467 | 55,073 | 55,521 | 54,096 | 42,931 | 239,883 | 207,621 | 181,530 |
Operating income | 9,059 | 17,734 | 14,379 | 5,086 | 8,098 | 9,767 | 7,441 | -3,003 | 46,258 | 22,303 | -42,641 |
Income from continuing operations | 5,932 | 11,637 | 8,314 | 2,749 | 4,553 | 5,423 | 3,949 | -2,431 | 28,632 | 11,494 | -32,474 |
Income (loss) from discontinued operations, net of tax | 3 | -25 | ' | -54 | 592 | -98 | 98 | -237 | ' | ' | ' |
Net income including noncontrolling interests | 5,935 | 11,612 | 8,314 | 2,695 | 5,145 | 5,325 | 4,047 | -2,668 | 28,556 | 11,849 | -36,492 |
Less: Net income attributable to noncontrolling interests | 339 | 233 | 552 | 163 | 794 | -348 | -421 | -1,639 | 1,287 | -1,614 | 338 |
Net income attributable to Comfort Systems USA, Inc. | 5,596 | 11,379 | 7,762 | 2,532 | 4,351 | 5,673 | 4,468 | -1,029 | 27,269 | 13,463 | -36,830 |
Basic- | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.15 | $0.31 | $0.21 | $0.07 | $0.10 | $0.15 | $0.12 | ($0.02) | $0.73 | $0.35 | ($0.88) |
Income from discontinued operations (in dollars per share) | ' | ' | ' | ' | $0.02 | ' | ' | ($0.01) | ' | $0.01 | ($0.11) |
Net income (loss) (in dollars per share) | $0.15 | $0.31 | $0.21 | $0.07 | $0.12 | $0.15 | $0.12 | ($0.03) | $0.73 | $0.36 | ($0.99) |
Diluted- | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.15 | $0.30 | $0.21 | $0.07 | $0.10 | $0.15 | $0.12 | ($0.02) | $0.73 | $0.35 | ($0.88) |
Income from discontinued operations (in dollars per share) | ' | ' | ' | ' | $0.02 | ' | ' | ($0.01) | ' | $0.01 | ($0.11) |
Net income (loss) (in dollars per share) | $0.15 | $0.30 | $0.21 | $0.07 | $0.12 | $0.15 | $0.12 | ($0.03) | $0.73 | $0.36 | ($0.99) |
Net cash provided by (used in) operating activities | 14,641 | 27,433 | 6,700 | -10,351 | 27,078 | 16,455 | 6,793 | -19,816 | 38,423 | 30,510 | 29,680 |
Quarterly Results of Operations (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income after-tax | 5,596 | 11,379 | 7,762 | 2,532 | 4,351 | 5,673 | 4,468 | -1,029 | 27,269 | 13,463 | -36,830 |
Net diluted income after-tax (in dollars per share) | $0.15 | $0.30 | $0.21 | $0.07 | $0.12 | $0.15 | $0.12 | ($0.03) | $0.73 | $0.36 | ($0.99) |
Adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly Results of Operations (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 3,300 | ' | ' |
Net income attributable to Comfort Systems USA, Inc. | ' | ' | ' | ' | ' | ' | ' | ' | 1,300 | ' | ' |
Diluted- | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.03 | ' | ' |
Quarterly Results of Operations (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income after-tax | ' | ' | ' | ' | ' | ' | ' | ' | $1,300 | ' | ' |
Net diluted income after-tax (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.03 | ' | ' |