Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 20, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | COMFORT SYSTEMS USA INC | |
Entity Central Index Key | 1,035,983 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,265,543 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 31,444 | $ 32,074 |
Accounts receivable, less allowance for doubtful accounts of $4,392 and $4,288, respectively | 297,079 | 318,837 |
Other receivables | 16,001 | 20,363 |
Inventories | 9,958 | 9,208 |
Prepaid expenses and other | 5,997 | 6,106 |
Costs and estimated earnings in excess of billings | 35,974 | 29,369 |
Total current assets | 396,453 | 415,957 |
PROPERTY AND EQUIPMENT, NET | 68,593 | 68,195 |
GOODWILL | 148,103 | 149,208 |
IDENTIFIABLE INTANGIBLE ASSETS, NET | 40,873 | 42,435 |
DEFERRED INCOME TAX ASSETS | 28,247 | 27,170 |
OTHER NONCURRENT ASSETS | 5,343 | 5,938 |
Total assets | 687,612 | 708,903 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 1,112 | 600 |
Current maturities of long-term capital lease obligations | 131 | 163 |
Accounts payable | 98,132 | 103,440 |
Accrued compensation and benefits | 51,221 | 61,712 |
Billings in excess of costs and estimated earnings | 76,834 | 83,985 |
Accrued self-insurance | 33,846 | 33,520 |
Other current liabilities | 31,767 | 34,261 |
Total current liabilities | 293,043 | 317,681 |
LONG-TERM DEBT | 693 | 1,955 |
LONG-TERM CAPITAL LEASE OBLIGATIONS | 68 | 93 |
DEFERRED INCOME TAX LIABILITIES | 2,289 | 2,289 |
OTHER LONG-TERM LIABILITIES | 9,563 | 10,252 |
Total liabilities | 305,656 | 332,270 |
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, 3,897,384 and 3,914,251 shares, respectively | (58,789) | (57,387) |
Additional paid-in capital | 311,481 | 309,625 |
Retained earnings | 128,853 | 123,984 |
Total stockholders’ equity | 381,956 | 376,633 |
Total liabilities and stockholders' equity | $ 687,612 | $ 708,903 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 4,392 | $ 4,288 |
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 | 3,897,384 | 3,914,251 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
REVENUE | $ 380,588 | $ 385,942 |
COST OF SERVICES | 304,634 | 312,440 |
Gross profit | 75,954 | 73,502 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 63,247 | 58,190 |
GOODWILL IMPAIRMENT | 1,105 | |
GAIN ON SALE OF ASSETS | (154) | (145) |
Operating income | 11,756 | 15,457 |
OTHER INCOME (EXPENSE): | ||
Interest income | 11 | 1 |
Interest expense | (390) | (701) |
Changes in the fair value of contingent earn-out obligations | (26) | |
Other | 18 | 486 |
Other income (expense) | (387) | (214) |
INCOME BEFORE INCOME TAXES | 11,369 | 15,243 |
INCOME TAX EXPENSE | 3,892 | 5,402 |
NET INCOME ATTRIBUTABLE TO COMFORT SYSTEMS USA, INC. | $ 7,477 | $ 9,841 |
Basic- | ||
Net income (in dollars per share) | $ 0.20 | $ 0.26 |
Diluted- | ||
Net income (in dollars per share) | $ 0.20 | $ 0.26 |
SHARES USED IN COMPUTING INCOME PER SHARE: | ||
Basic (in shares) | 37,225 | 37,344 |
Diluted (in shares) | 37,724 | 37,830 |
DIVIDENDS PER SHARE (in dollars per share) | $ 0.070 | $ 0.065 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Non-Controlling Interests | Total |
BALANCE at Dec. 31, 2015 | $ 411 | $ (46,845) | $ 323,765 | $ 69,390 | $ 18,284 | $ 365,005 |
BALANCE (in shares) at Dec. 31, 2015 | 41,123,365 | |||||
BALANCE (in shares) at Dec. 31, 2015 | (3,696,781) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | $ 9,841 | |||||
BALANCE (in shares) at Mar. 31, 2016 | 37,392,000 | |||||
BALANCE at Dec. 31, 2015 | $ 411 | $ (46,845) | 323,765 | 69,390 | 18,284 | $ 365,005 |
BALANCE (in shares) at Dec. 31, 2015 | 41,123,365 | |||||
BALANCE (in shares) at Dec. 31, 2015 | (3,696,781) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 64,896 | 64,896 | ||||
Issuance of Stock: | ||||||
Issuance of shares for options exercised | $ 1,568 | 10 | 1,578 | |||
Issuance of shares for options exercised (in shares) | 111,761 | |||||
Issuance of restricted stock & performance stock | $ 2,282 | (306) | 1,976 | |||
Issuance of restricted stock & performance stock (in shares) | 172,727 | |||||
Shares received in lieu of tax withholding payment on vested restricted stock | $ (1,304) | (1,304) | ||||
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | (41,788) | |||||
Stock-based compensation | 3,502 | 3,502 | ||||
Dividends | (10,264) | (10,264) | ||||
Share repurchase | $ (13,088) | (13,088) | ||||
Share repurchase (in shares) | (460,170) | |||||
Acquisition of noncontrolling interests | (17,346) | $ (18,284) | (35,630) | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2016 | $ 411 | $ (57,387) | 309,625 | 123,984 | $ 376,633 | |
BALANCE (in shares) at Dec. 31, 2016 | 41,123,365 | |||||
BALANCE (in shares) at Dec. 31, 2016 | (3,914,251) | 3,914,251 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect of change in accounting principle (unaudited) | (38) | $ (38) | ||||
Net income | 7,477 | 7,477 | ||||
Issuance of Stock: | ||||||
Issuance of shares for options exercised | $ 759 | (23) | 736 | |||
Issuance of shares for options exercised (in shares) | 51,156 | |||||
Issuance of restricted stock & performance stock | $ 668 | 948 | 1,616 | |||
Issuance of restricted stock & performance stock (in shares) | 44,566 | |||||
Shares received in lieu of tax withholding payment on vested restricted stock | $ (632) | (632) | ||||
Shares received in lieu of tax withholding payment on vested restricted stock (in shares) | (17,443) | |||||
Stock-based compensation | 931 | 931 | ||||
Dividends | (2,608) | (2,608) | ||||
Share repurchase | $ (2,197) | (2,197) | ||||
Share repurchase (in shares) | (61,412) | |||||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2017 | $ 411 | $ (58,789) | $ 311,481 | $ 128,853 | $ 381,956 | |
BALANCE (in shares) at Mar. 31, 2017 | 41,123,365 | 37,226,000 | ||||
BALANCE (in shares) at Mar. 31, 2017 | (3,897,384) | 3,897,384 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 7,477 | $ 9,841 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Amortization of identifiable intangible assets | 1,562 | 2,039 |
Depreciation expense | 4,577 | 4,219 |
Goodwill impairment | 1,105 | |
Bad debt expense (benefit) | 219 | (262) |
Deferred tax expense (benefit) | (1,077) | (1,022) |
Amortization of debt financing costs | 94 | 85 |
Gain on sale of assets | (154) | (145) |
Changes in the fair value of contingent earn-out obligations | 26 | |
Stock-based compensation | 1,333 | 1,485 |
(Increase) decrease in- | ||
Receivables, net | 24,525 | 17,142 |
Inventories | (750) | (370) |
Prepaid expenses and other current assets | 659 | (179) |
Costs and estimated earnings in excess of billings | (6,605) | (1,837) |
Other noncurrent assets | 465 | 49 |
Increase (decrease) in- | ||
Accounts payable and accrued liabilities | (16,299) | (9,316) |
Billings in excess of costs and estimated earnings | (7,151) | (8,526) |
Other long-term liabilities | 47 | (86) |
Net cash provided by operating activities | 10,053 | 13,117 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (5,077) | (3,765) |
Proceeds from sales of property and equipment | 292 | 220 |
Cash paid for acquisitions, net of cash acquired | (313) | (57,071) |
Net cash used in investing activities | (5,098) | (60,616) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from revolving line of credit | 132,000 | |
Payments on revolving line of credit | (91,000) | |
Payments on other debt | (25) | (17) |
Payments on capital lease obligations | (57) | (66) |
Debt financing costs | (789) | |
Payments of dividends to stockholders | (2,608) | (2,426) |
Share repurchase | (2,197) | (2,840) |
Shares received in lieu of tax withholding | (632) | (562) |
Proceeds from exercise of options | 736 | 275 |
Deferred acquisition payments | (802) | |
Net cash provided by (used in) financing activities | (5,585) | 34,575 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (630) | (12,924) |
CASH AND CASH EQUIVALENTS, beginning of period | 32,074 | 56,464 |
CASH AND CASH EQUIVALENTS, end of period | $ 31,444 | $ 43,540 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2017 | |
Business and Organization | |
Business and Organization | 1. Business and Organization Comfort Systems USA, Inc., a Delaware corporation, provides comprehensive mechanical contracting services, which principally includes heating, ventilation and air conditioning (“HVAC”), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. We install, maintain, repair and replace products and systems throughout the United States. Approximately 39% of our consolidated 2017 revenue is attributable to installation of systems in newly constructed facilities, with the remaining 61% attributable to maintenance, repair and replacement services. Our consolidated 2017 revenue was derived from the following service activities, all of which are in the mechanical services industry, the single industry segment we serve: Revenue Service Activity $ in thousands % HVAC $ 270,217 71 % Plumbing 68,506 18 % Building Automation Control Systems 22,835 6 % Other 19,030 5 % Total $ 380,588 100 % |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation These interim statements should be read in conjunction with the historical Consolidated Financial Statements and related notes of Comfort Systems included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2016 (the “Form 10-K”). The accompanying unaudited consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the SEC. Accordingly, these financial statements do not include all the footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the Form 10-K. We believe all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. Certain amounts in prior periods may have been reclassified to conform to the current year presentation. The effects of the reclassifications were not material to the unaudited consolidated financial statements. The results of operations for interim periods are not necessarily indicative of the results for the full fiscal year. 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. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 provides a framework that replaces the existing revenue recognition guidance. The guidance can be applied on a full retrospective or modified retrospective basis whereby the entity records a cumulative effect of initially applying this update on the adoption date. We currently plan to use the modified retrospective basis on the adoption date. ASU 2014-09 is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. While we are still evaluating the potential impact of this authoritative guidance on our consolidated financial statements, we currently believe the areas that may impact us the most include accounting for variable consideration, capitalization of incremental costs of obtaining a contract and the guidance on the number of performance obligations contained in a contract. The impact on our consolidated financial statements upon adoption of ASU 2014-09 will be determined in large part by the contracts in progress on our adoption date; however, we currently do not believe the adoption will have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The standard requires lessees to recognize assets and liabilities for most leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. ASU 2016-02’s transition provisions are applied using a modified retrospective approach at the beginning of the earliest comparative period presented in the financial statements. Full retrospective application is prohibited. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This standard provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is intended to reduce diversity in practice with respect to these items. The standard is applied using a retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and other (Topic 350): Simplifying the Accounting for Goodwill Impairment”. This standard removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Additionally, entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The standard is applied prospectively and is effective for fiscal years beginning after December 15, 2019, including annual or interim goodwill impairment tests within those fiscal years. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. We early adopted ASU 2017-04 in the first quarter of 2017. See Footnote 5 for further discussion of the impact of adopting this standard. Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, life insurance policies, notes to former owners, capital leases and a revolving credit facility. We believe that the carrying values of these instruments on the accompanying balance sheets approximate their fair values. Segment Disclosure Our activities are within the mechanical services industry, which is the single industry segment we serve. Each operating unit represents an operating segment and these segments have been aggregated, as the operating units meet all of the aggregation criteria. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 (in thousands): Balance Fair Value Measurements at Reporting Date March 31, 2017 Level 1 Level 2 Level 3 Cash and cash equivalents $ 31,444 $ 31,444 $ — $ — Life insurance—cash surrender value $ 3,504 $ — $ 3,504 $ — Contingent earn-out obligations $ 2,557 $ — $ — $ 2,557 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 46 employees with a combined face value of $42.5 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 was $3.5 million as of March 31, 2017 and $3.7 million as of December 31, 2016. 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). Balance at beginning of year $ 2,531 Issuances — Settlements — Adjustments to fair value 26 Balance at March 31, 2017 $ 2,557 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 first quarter of 2017, we recorded a goodwill impairment charge of $1.1 million based on Level 3 measurements. See Note 5 “Goodwill” for further discussion. We did not recognize any other impairments, in the first quarter, on those assets required to be measured at fair value on a nonrecurring basis. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Acquisitions | |
Acquisitions | 4. Acquisitions We completed two acquisitions in the first quarter of 2016. We acquired the remaining 40% noncontrolling interest in Environmental Air Systems, LLC (“EAS”) on January 1, 2016 for $46.6 million, including $42.0 million funded on the closing date plus a holdback, an earn-out that will be earned if certain financial targets are met after the acquisition date and a working capital adjustment. Due to our majority ownership and control over EAS on the acquisition date, the difference between the purchase price and the noncontrolling interest liability was recorded in Additional Paid-In Capital in our Balance Sheet. Additionally in the first quarter of 2016, we acquired 100% of the ShoffnerKalthoff family of companies (collectively, “Shoffner”), which reports as a separate operating location in the Knoxville, Tennessee area. Shoffner was included in our consolidated results of operations beginning on its acquisition date. The acquisition date fair value of consideration transferred for this acquisition was $19.8 million, of which $14.8 million was allocated to goodwill and identifiable intangible assets. The purchase price included $15.5 million funded on the closing date plus a note payable to former owners, an earn-out that we will pay if certain financial targets are met after the acquisition date and a working capital adjustment. Other Acquisitions We funded cash of $0.8 million in the first quarter of 2016 for an acquisition completed in the fourth quarter of 2015. This acquisition was not material and was “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. Such earn-outs are not subject to the continued employment of the sellers . |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill | |
Goodwill | 5. Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): March 31, December 31, 2017 2016 Balance at beginning of year $ 149,208 $ 143,874 Additions (See Note 4) — 5,334 Impairment adjustment (1,105) — Balance at end of period $ 148,103 $ 149,208 We recorded a goodwill impairment charge of $1.1 million during the first quarter of 2017. Based on changes to our market strategy that occurred in March 2017 related to our reporting unit based in California, we reevaluated our projected future earnings for this operating location. When the carrying value of a given reporting unit exceeds its fair value, a goodwill impairment loss is recorded for this difference, not to exceed the carrying amount of goodwill. Based upon our projected future earnings for this location, we could no longer support the related goodwill balance and therefore the goodwill associated with this location was fully impaired. The fair value was estimated using a discounted cash flow model. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Debt Obligations | |
Debt Obligations | 6. Debt Obligations Debt obligations consist of the following (in thousands): March 31, December 31, 2017 2016 Revolving credit facility $ — $ — Notes to former owners 1,525 2,250 Other debt 280 305 Capital lease obligations 199 256 Total debt 2,004 2,811 Less—current portion (1,243) (763) Total long-term portion of debt $ 761 $ Revolving Credit Facility We have a $325.0 million senior credit facility (the “Facility”) provided by a syndicate of banks, with a $100 million accordion option. The Facility, which is available for borrowings and letters of credit, expires in February 2021 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and assets held by certain unrestricted subsidiaries and a second lien on our assets related to projects subject to surety bonds. As of March 31, 2017, we had no outstanding borrowings, $38.9 million in letters of credit outstanding and $286.1 million of credit available. There are two interest rate options for borrowings under the Facility, the Base Rate Loan Option and the Eurodollar Rate Loan Option. These rates are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. Additional margins are then added to these two rates. The following is a summary of the 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 % 0.50 % 0.75 % 1.00 % Eurodollar Rate Loan Option 1.25 % 1.50 % 1.75 % 2.00 % We estimate that the weighted average interest rate applicable to the borrowings under the Facility would be approximately 2.0% as of March 31, 2017. 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 for a fee. 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 a claim is unlikely in the foreseeable future. The letter of credit fees range from 1.25% to 2.00% per annum, based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA, as defined in the credit agreement. Commitment fees are payable on the portion of the revolving loan capacity not in use for borrowings or letters of credit at any given time. These fees range from 0.20% to 0.35% per annum, based on the ratio of Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA, as defined in the credit agreement. 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. 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 (i) 3.00 to 1.00 as of the end of each fiscal quarter through September 30, 2017, and (ii) 2.75 to 1.00 as of the end of each fiscal quarter thereafter through maturity. The leverage ratio as of March 31, 2017 was 0.02. Fixed Charge Coverage Ratio —The Facility requires that the ratio of (a) Credit Facility Adjusted EBITDA, less non-financed capital expenditures, tax provision, dividends and amounts used to repurchase stock to (b) the sum of interest expense and scheduled principal payments of indebtedness be at least 2.00 to 1.00; 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 to 1.00. The Facility also allows the fixed charge coverage ratio not to be reduced for stock repurchases through September 30, 2015 in an aggregate amount not to exceed $25 million and for stock repurchases made after February 22, 2016 but on or prior to December 31, 2017 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 to 1.00. 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 March 31, 2017 was 25.24. Other Restrictions —The Facility permits acquisitions of up to $30.0 million per transaction, provided that the aggregate purchase price of all such acquisitions in the same fiscal year does not exceed $65.0 million. However, these limitations only apply when the Company’s Total Leverage Ratio is greater than 2.00 to 1.00. 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 were in compliance with all of our financial covenants as of March 31, 2017. Notes to Former Owners As part of the consideration used to acquire two companies, we have outstanding subordinated notes to the former owners. These notes had an outstanding balance of $1.5 million as of March 31, 2017. In conjunction with the Shoffner acquisition in the first quarter of 2016, we issued a subordinated note to former owners with an outstanding balance of $1.0 million as of March 31, 2017 that bears interest, payable quarterly, at a weighted average interest rate of 3.0%. The principal is due in equal installments in February 2018 and 2019. In conjunction with an acquisition in the fourth quarter of 2014, we issued a subordinated note to the former owners with an outstanding balance of $0.5 million as of March 31, 2017 that bears interest, payable quarterly, at a weighted average interest rate of 2.5%. The principal is due in October 2017. Other Debt As part of the Shoffner acquisition, we acquired debt with an outstanding balance at the acquisition date of $0.4 million with principle and interest due the last day of every month; ending on the December 30, 2019 maturity date. The interest rate is the one month LIBOR rate plus 2.25%. As of March 31, 2017, $0.3 million of the note was outstanding, of which $0.1 million was considered current. In addition, with one of our acquisitions we acquired capital lease obligations. As of March 31, 2017, $0.2 million of capital lease obligations were outstanding, of which $0.1 million was considered current. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies 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 have seen some strengthening as the commercial construction markets have started to rebound. Bonding capacity remains adequate in the current market conditions along with acceptable terms and conditions. Historically, approximately 20% to 30% of our business has required bonds. While we currently have strong surety relationships to support our bonding needs, future market conditions or 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 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 are estimated and accrued based upon known facts, historical trends and industry averages. Estimated losses in excess of our deductible, which have not already been paid, are included in our accrual with a corresponding receivable from our insurance carrier. Loss estimates associated with the larger and longer‑developing risks, such as workers’ compensation, auto liability and general liability, are reviewed by a third‑party actuary quarterly. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS is computed considering the dilutive effect of stock options, restricted stock, restricted stock units and performance stock units. The vesting of unvested contingently issuable performance stock units is based on the achievement of certain earnings per share targets and total shareholder return. These shares are considered contingently issuable shares for purposes of calculating diluted earnings per share. These shares are not included in the diluted earnings per share denominator until the performance criteria are met, if it is assumed that the end of the reporting period was the end of the contingency period. Unvested restricted stock, restricted stock units and performance stock units are included in diluted earnings per share, weighted outstanding until the shares and units vest. Upon vesting, the vested restricted stock, restricted stock units and performance stock units are included in basic earnings per share weighted outstanding from the vesting date. There were approximately 0.1 million anti-dilutive stock options excluded from the calculation of diluted EPS for the three months ended March 31, 2017 and for the three months ended March 31, 2016. The following table reconciles the number of shares outstanding with the number of shares used in computing basic and diluted earnings per share for each of the periods presented (in thousands): Three Months Ended March 31, 2017 2016 Common shares outstanding, end of period 37,226 37,392 Effect of using weighted average common shares outstanding (1) (48) Shares used in computing earnings per share—basic 37,225 37,344 Effect of shares issuable under stock option plans based on the treasury stock method 335 321 Effect of restricted and contingently issuable shares 164 165 Shares used in computing earnings per share—diluted 37,724 37,830 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 8.1 million shares to be repurchased. As of March 31, 2017, we have repurchased a cumulative total of 7.4 million shares at an average price of $13.21 per share under the repurchase program. The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the three months ended March 31, 2017, we repurchased 0.1 million shares for approximately $2.2 million at an average price of $35.78 per share. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events. | |
Subsequent Events | 9. Subsequent Events On April 1, 2017, we acquired all of the issued and outstanding stock of BCH Holdings, Inc. and each of its wholly-owned subsidiaries (collectively “BCH”) for $100 million, comprised of $85.7 million in cash at closing subject to working capital and certain other post-closing adjustments as set forth in the purchase agreement, and $14.3 million in a promissory note that is payable in two equal installments of $7.15 million on the third and fourth anniversaries of the closing date, plus an earn‑out that we will pay if certain financial targets are met after the acquisition date. BCH is an integrated, single-source provider of mechanical service, maintenance and construction with headquarters in Tampa, Florida and operations throughout the southeastern region of the United States. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation These interim statements should be read in conjunction with the historical Consolidated Financial Statements and related notes of Comfort Systems included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2016 (the “Form 10-K”). The accompanying unaudited consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the SEC. Accordingly, these financial statements do not include all the footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the Form 10-K. We believe all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. Certain amounts in prior periods may have been reclassified to conform to the current year presentation. The effects of the reclassifications were not material to the unaudited consolidated financial statements. The results of operations for interim periods are not necessarily indicative of the results for the full fiscal year. |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 provides a framework that replaces the existing revenue recognition guidance. The guidance can be applied on a full retrospective or modified retrospective basis whereby the entity records a cumulative effect of initially applying this update on the adoption date. We currently plan to use the modified retrospective basis on the adoption date. ASU 2014-09 is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. While we are still evaluating the potential impact of this authoritative guidance on our consolidated financial statements, we currently believe the areas that may impact us the most include accounting for variable consideration, capitalization of incremental costs of obtaining a contract and the guidance on the number of performance obligations contained in a contract. The impact on our consolidated financial statements upon adoption of ASU 2014-09 will be determined in large part by the contracts in progress on our adoption date; however, we currently do not believe the adoption will have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The standard requires lessees to recognize assets and liabilities for most leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. ASU 2016-02’s transition provisions are applied using a modified retrospective approach at the beginning of the earliest comparative period presented in the financial statements. Full retrospective application is prohibited. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This standard provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is intended to reduce diversity in practice with respect to these items. The standard is applied using a retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and other (Topic 350): Simplifying the Accounting for Goodwill Impairment”. This standard removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Additionally, entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The standard is applied prospectively and is effective for fiscal years beginning after December 15, 2019, including annual or interim goodwill impairment tests within those fiscal years. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. We early adopted ASU 2017-04 in the first quarter of 2017. See Footnote 5 for further discussion of the impact of adopting this standard. |
Financial Instruments | Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable, life insurance policies, notes to former owners, capital leases and a revolving credit facility. We believe that the carrying values of these instruments on the accompanying balance sheets approximate their fair values. |
Segment Disclosure | Segment Disclosure Our activities are within the mechanical services industry, which is the single industry segment we serve. Each operating unit represents an operating segment and these segments have been aggregated, as the operating units meet all of the aggregation criteria. |
Business and Organization (Tabl
Business and Organization (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business and Organization | |
Schedule of service activities | Revenue Service Activity $ in thousands % HVAC $ 270,217 71 % Plumbing 68,506 18 % Building Automation Control Systems 22,835 6 % Other 19,030 5 % Total $ 380,588 100 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 (in thousands): Balance Fair Value Measurements at Reporting Date March 31, 2017 Level 1 Level 2 Level 3 Cash and cash equivalents $ 31,444 $ 31,444 $ — $ — Life insurance—cash surrender value $ 3,504 $ — $ 3,504 $ — Contingent earn-out obligations $ 2,557 $ — $ — $ 2,557 |
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). Balance at beginning of year $ 2,531 Issuances — Settlements — Adjustments to fair value 26 Balance at March 31, 2017 $ 2,557 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill are as follows (in thousands): March 31, December 31, 2017 2016 Balance at beginning of year $ 149,208 $ 143,874 Additions (See Note 4) — 5,334 Impairment adjustment (1,105) — Balance at end of period $ 148,103 $ 149,208 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Obligations | |
Schedule of components of debt obligations | Debt obligations consist of the following (in thousands): March 31, December 31, 2017 2016 Revolving credit facility $ — $ — Notes to former owners 1,525 2,250 Other debt 280 305 Capital lease obligations 199 256 Total debt 2,004 2,811 Less—current portion (1,243) (763) Total long-term portion of debt $ 761 $ |
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 % 0.50 % 0.75 % 1.00 % Eurodollar Rate Loan Option 1.25 % 1.50 % 1.75 % 2.00 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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): Three Months Ended March 31, 2017 2016 Common shares outstanding, end of period 37,226 37,392 Effect of using weighted average common shares outstanding (1) (48) Shares used in computing earnings per share—basic 37,225 37,344 Effect of shares issuable under stock option plans based on the treasury stock method 335 321 Effect of restricted and contingently issuable shares 164 165 Shares used in computing earnings per share—diluted 37,724 37,830 |
Business and Organization (Deta
Business and Organization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Business and Organization | ||
Revenue | $ 380,588 | $ 385,942 |
Percentage of revenue attributable to services | 100.00% | |
Installation of systems in newly constructed facilities | ||
Business and Organization | ||
Percentage of revenue attributable to services | 39.00% | |
Maintenance, repair and replacement services | ||
Business and Organization | ||
Percentage of revenue attributable to services | 61.00% | |
HVAC | ||
Business and Organization | ||
Revenue | $ 270,217 | |
Percentage of revenue attributable to services | 71.00% | |
Plumbing | ||
Business and Organization | ||
Revenue | $ 68,506 | |
Percentage of revenue attributable to services | 18.00% | |
Building Automation Control Systems | ||
Business and Organization | ||
Revenue | $ 22,835 | |
Percentage of revenue attributable to services | 6.00% | |
Other | ||
Business and Organization | ||
Revenue | $ 19,030 | |
Percentage of revenue attributable to services | 5.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Fair Value Measurements | ||
Number of employees covered under life insurance policies | item | 46 | |
Combined face value of life insurance policies | $ 42,500 | |
Cash surrender value | 3,500 | $ 3,700 |
Reconciliation of the fair value of contingent earn-out obligations that use significant unobservable inputs (Level 3) | ||
Goodwill, Impairment Loss | 1,105 | |
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 | 2,531 | |
Adjustments to fair value | 26 | |
Balance at end of period | 2,557 | |
Recurring basis | Total | ||
Fair Value Measurements | ||
Cash and cash equivalents | 31,444 | |
Life insurance - cash surrender value | 3,504 | |
Contingent earn-out obligations | 2,557 | |
Recurring basis | Quoted Market Prices In Active Markets for Identical Assets (Level 1) | ||
Fair Value Measurements | ||
Cash and cash equivalents | 31,444 | |
Recurring basis | Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Life insurance - cash surrender value | 3,504 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurements | ||
Contingent earn-out obligations | $ 2,557 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | Jan. 01, 2016USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($)item |
Acquisitions | |||
Number of acquisitions | item | 2 | ||
Environmental Air Systems | |||
Acquisitions | |||
Interest acquired (as a percent) | 40.00% | ||
Total purchase price | $ 46.6 | ||
Purchase price paid in cash | $ 42 | ||
Shoffner | |||
Acquisitions | |||
Interest acquired (as a percent) | 100.00% | ||
Total purchase price | $ 19.8 | ||
Amount allocated to goodwill and identifiable intangible assets for acquisitions | 14.8 | ||
Purchase price paid in cash | $ 15.5 | ||
Other Acquisitions | |||
Acquisitions | |||
Purchase price paid in cash | $ 0.8 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Changes in the carrying amount of goodwill | ||
Balance at the beginning of year | $ 149,208 | $ 143,874 |
Additions (See Note 4) | 5,334 | |
Impairment adjustment | (1,105) | |
Balance at end of period | $ 148,103 | $ 149,208 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Long-Term Debt Obligations | ||
Total debt | $ 2,004 | $ 2,811 |
Less - current portion | (1,243) | (763) |
Total long-term portion of debt | 761 | 2,048 |
Notes to former owners | ||
Long-Term Debt Obligations | ||
Total debt | 1,525 | 2,250 |
Other debt | ||
Long-Term Debt Obligations | ||
Total debt | 280 | 305 |
Capital lease obligation | 200 | |
Capital lease obligations | ||
Long-Term Debt Obligations | ||
Capital lease obligation | $ 199 | $ 256 |
Debt Obligations-Other (Details
Debt Obligations-Other (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2017USD ($)item | Mar. 31, 2016item | Dec. 31, 2016USD ($) | Feb. 22, 2016USD ($) | Feb. 21, 2016USD ($) | |
Long-Term Debt Obligations | |||||
Line of credit borrowing capacity accordion option | $ 100,000 | ||||
Other disclosures | |||||
Current portion of capital lease obligations | $ 131 | $ 163 | |||
Number of acquisitions | item | 2 | ||||
Shoffner | |||||
Other disclosures | |||||
Outstanding balance | 300 | ||||
Debt acquired related to coil line duct processing system | 400 | ||||
Current debt | $ 100 | ||||
London Interbank Offered Rate (LIBOR) | Shoffner | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 2.25% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 2.25% | ||||
Revolving credit facility | |||||
Long-Term Debt Obligations | |||||
Borrowing capacity | $ 0 | $ 325,000 | |||
Letters of credit amount outstanding | 38,900 | ||||
Credit available | $ 286,100 | ||||
Principal financial covenants | |||||
Leverage ratio | 0.02 | ||||
Fixed charge coverage ratio | 25.24 | ||||
Number of quarters of capital expenditures, tax provision, dividends and stock repurchase payments used for calculation of fixed charge coverage ratio | item | 4 | ||||
Number of interest rate options | item | 2 | ||||
Other disclosures | |||||
Weighted average interest rate (as a percent) | 2.00% | ||||
Revolving credit facility | Through September 30, 2017 | |||||
Principal financial covenants | |||||
Leverage ratio | 3 | ||||
Revolving credit facility | Through maturity | |||||
Principal financial covenants | |||||
Leverage ratio | 2.75 | ||||
Revolving credit facility | Minimum | |||||
Principal financial covenants | |||||
Fixed charge coverage ratio | 2 | ||||
Additional per annum interest margin added under: | |||||
Letter of credit fees (as a percent) | 1.25% | ||||
Commitment fees payable on unused portion of the facility (as a percent) | 0.20% | ||||
Revolving credit facility | Minimum | Covenant Requirement | |||||
Principal financial covenants | |||||
Net leverage ratio used as basis for other restrictions | 2 | ||||
Revolving credit facility | Maximum | |||||
Principal financial covenants | |||||
Net leverage ratio after giving effect to stock repurchases for calculation of the fixed charge coverage ratio | 1.50 | ||||
Permitted amount of acquisitions per transaction | $ 30,000 | ||||
Aggregate purchase price of current acquisition and acquisitions in the preceding 12 month period for determining permitted amount of acquisition per transaction | $ 65,000 | ||||
Additional per annum interest margin added under: | |||||
Letter of credit fees (as a percent) | 2.00% | ||||
Commitment fees payable on unused portion of the facility (as a percent) | 0.35% | ||||
Revolving credit facility | Maximum | Covenant Requirement | |||||
Principal financial covenants | |||||
Net leverage ratio used to determine exclusion of stock repurchases and the payment of dividends for calculation of the fixed charge coverage ratio | 1.50 | ||||
Revolving credit facility | Maximum | Stock Repurchases Through September 30, 2015 | |||||
Principal financial covenants | |||||
Amount of stock repurchases to maintain maximum net leverage ratio | $ 25,000 | ||||
Revolving credit facility | Maximum | Stock Repurchases After February 22, 2016 And On Or Before December 31, 2017 | |||||
Principal financial covenants | |||||
Amount of stock repurchases to maintain maximum net leverage ratio | $ 25,000 | ||||
Revolving credit facility | Base rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75 | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 0.25% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 0.25% | ||||
Revolving credit facility | Base rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50 | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 0.50% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 0.50% | ||||
Revolving credit facility | Base rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25 | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 0.75% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 0.75% | ||||
Revolving credit facility | Base rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 1.00% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 1.00% | ||||
Revolving credit facility | Eurodollar rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: Less than 0.75 | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 1.25% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 1.25% | ||||
Revolving credit facility | Eurodollar rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 0.75 to 1.50 | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 1.50% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 1.50% | ||||
Revolving credit facility | Eurodollar rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 1.50 to 2.25 | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 1.75% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 1.75% | ||||
Revolving credit facility | Eurodollar rate | Consolidated Total Indebtedness to Credit Facility Adjusted EBITDA: 2.25 or greater | |||||
Market rates relating to interest options | |||||
Interest rate margin (as a percent) | 2.00% | ||||
Additional per annum interest margin added under: | |||||
Additional per annum interest margin (as a percent) | 2.00% | ||||
Notes to former owners | |||||
Other disclosures | |||||
Outstanding balance | $ 1,525 | 2,250 | |||
Notes to former owners | Shoffner | |||||
Other disclosures | |||||
Outstanding balance | $ 1,000 | ||||
Weighted average interest rate (as a percent) | 3.00% | ||||
Notes to former owners | Other Acquisitions | |||||
Other disclosures | |||||
Outstanding balance | $ 500 | ||||
Weighted average interest rate (as a percent) | 2.50% | ||||
Other debt | |||||
Other disclosures | |||||
Outstanding balance | $ 280 | $ 305 | |||
Capital lease obligation pertaining to acquisition | 200 | ||||
Current portion of capital lease obligations | $ 100 |
Commitments and Contingencies -
Commitments and Contingencies - Bonds (Details) - Surety | 3 Months Ended |
Mar. 31, 2017 | |
Minimum | |
Surety | |
Percentage of business which has required bonds | 20.00% |
Maximum | |
Surety | |
Percentage of business which has required bonds | 30.00% |
Stockholders' Equity- Anti-dilu
Stockholders' Equity- Anti-dilutive stock options (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Options | ||
Earnings Per Share | ||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 100 | 100 |
Stockholders' Equity-Number of
Stockholders' Equity-Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
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 | 37,226 | 37,392 |
Effect of using weighted average common shares outstanding | (1) | (48) |
Shares used in computing earnings per share - basic | 37,225 | 37,344 |
Effect of shares issuable under stock option plans based on the treasury stock method | 335 | 321 |
Effect of restricted and contingently issuable shares | 164 | 165 |
Shares used in computing earnings per share - diluted | 37,724 | 37,830 |
Stockholders' Equity- Incentive
Stockholders' Equity- Incentive and Other (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 120 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | Mar. 29, 2007 | |
Share Repurchase Program | |||
Number of shares of outstanding common stock authorized to be acquired under a stock repurchase program | 8.1 | 8.1 | 1 |
Share repurchase (in shares) | 7.4 | ||
Average price (in dollars per share) | $ 35.78 | $ 13.21 | |
Repurchased carrying basis | $ 2.2 | $ 2.2 | |
Maximum | |||
Share Repurchase Program | |||
Share repurchase (in shares) | 0.1 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent events - BCH $ in Thousands | Apr. 01, 2017USD ($)installment |
Subsequent Events | |
Fair value of consideration transferred | $ 100,000 |
Purchase price paid in cash | 85,700 |
Promissory note payable | $ 14,300 |
Number of installments payable for promissory note | installment | 2 |
Promissory note payable in each installment | $ 7,150 |