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MarketScreener Homepage  >  Equities  >  Nyse  >  EMCOR Group, Inc.    EME

EMCOR GROUP, INC.

(EME)
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EMCOR Group, Inc. : Reports First Quarter 2020 Results

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04/30/2020 | 07:31am EDT

- Record First Quarter Revenues of $2.30 billion, 6.5% Increase Year-over-Year -
- Record First Quarter Diluted EPS of $1.35, 5.5% Increase Year-over-Year -
- Total Remaining Performance Obligations of $4.42 billion, 6.4% Increase Year-over-Year -

EMCOR Group, Inc. (NYSE: EME) today reported results for the first quarter ended March 31, 2020.

For the first quarter of 2020, net income was $75.7 million, or $1.35 per diluted share, compared to $72.4 million, or $1.28 per diluted share, for the first quarter of 2019. Revenues for the first quarter of 2020 totaled $2.30 billion, an increase of 6.5%, compared to $2.16 billion for the first quarter of 2019.

Operating income for the first quarter of 2020 was $106.0 million, or 4.6% of revenues. This compares to $102.3 million, or 4.7% of revenues, for the first quarter of 2019.

Selling, general and administrative expenses for the first quarter of 2020 totaled $227.0 million, or 9.9% of revenues, compared to $206.2 million, or 9.6% of revenues, for the first quarter of 2019.

The Company's income tax rate for the first quarter of 2020 was 27.4%, compared to an income tax rate of 27.5% for the first quarter of 2019.

Remaining performance obligations at March 31, 2020 were $4.42 billion, compared to $4.16 billion at March 31, 2019. Total U.S. remaining performance obligations grew approximately $284 million year-over-year.

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, “The Company achieved record first quarter revenues, operating income, net income, and diluted earnings per share. We delivered revenue growth of 6.5% during the quarter, 2.7% of which was organic, led by double-digit growth in our U.S. Mechanical Construction and U.S. Industrial Services segments. Our steadfast commitment to excellent project execution delivered operating income growth of 3.6% year-over-year. Despite the uncertainty surrounding the COVID-19 pandemic, we have record remaining performance obligations, up 6.4% year-over-year, underscoring the resiliency of our business and the underlying demand in the marketplace.”

Mr. Guzzi added, “Our U.S. Construction segments delivered solid results, posting combined revenue and operating income growth of 6.2% and 6.1% year-over-year, respectively, led by strength in the healthcare and manufacturing market sectors. U.S. Building Services, which saw revenue growth of 1.2% year-over-year, faced the most disruption from the COVID-19 pandemic as the quarter progressed, primarily due to the closure or partial closure of customer facilities. U.S. Industrial Services, on the other hand, performed very well in a difficult environment, delivering revenue and operating income growth of 19.9% and 27.2% year-over-year, respectively, driven by strength in our field services operations, as a result of strong execution on several large turnarounds. Finally, we are pleased by the sustained strength in our U.K. Building Services segment, which generated revenue growth of 4.5% year-over-year and operating income growth of 39.2% year-over-year, resulting in 120 basis points of operating margin expansion.”

Mr. Guzzi concluded, “In response to the abrupt drop in activity due to the COVID-19 pandemic, we are focusing on the elements of our business within our control and reacting to the macroeconomic disruptions in a disciplined and process-oriented manner. Our robust contingency plans are serving us well as the situation evolves daily. We have implemented strict safety protocols for our employees and are reducing costs where appropriate. We continue to perform work for our customers where we are able to operate and are prepared to execute on our existing remaining performance obligations and support our customers as they restart their operations. Overall, we are in a strong financial position, with a solid and liquid balance sheet and access to additional capital through our recently amended and extended credit facility. We also have solid remaining performance obligations and a healthy project pipeline. We did, however, begin to experience certain disruptions caused by the pandemic and the associated containment and mitigation measures late in the first quarter and expect continued headwinds going into the second quarter and possibly into the third quarter. Looking forward, we are well-positioned to continue to serve our customers during this crisis and when the environment normalizes.”

EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure and building services. This press release and other press releases may be viewed at the Company’s website at www.emcorgroup.com. EMCOR routinely posts information that may be important to investors in the “Investor Relations” section of our website at www.emcorgroup.com. Investors and potential investors are encouraged to consult the EMCOR website regularly for important information about EMCOR.

EMCOR Group's first quarter conference call will be available live via internet broadcast today, Thursday, April 30, at 10:30 AM Eastern Daylight Time. The live call may be accessed through the Company's website at www.emcorgroup.com.

Forward Looking Statements:

This release contains certain forward-looking statements. Any such comments speak only as of April 30, 2020 and EMCOR assumes no obligation to update any such forward-looking statements, unless required by law. These forward-looking statements may include statements regarding anticipated future operating and financial performance, the nature and impact of our remaining performance obligations, our ability to pursue acquisitions, our ability to return capital to shareholders, market opportunities, market growth and customer trends. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated (whether expressly or implied) by the forward-looking statements. Accordingly, these statements are no guarantee of future performance. Such risks and uncertainties include, but are not limited to, adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for EMCOR’s services, adverse business conditions, availability of adequate levels of surety bonding, increased competition, unfavorable labor productivity, mix of business, the impact of the 2020 ransomware attack, and the impact of the COVID-19 pandemic on our revenue and operations, including employees, construction activity, and facilities utilization, and the risk factors associated with EMCOR’s business discussed in Part I, Item 1A “Risk Factors,” of the Company’s 2019 Form 10-K and in other reports filed from time to time with the Securities and Exchange Commission and available at www.sec.gov and www.emcorgroup.com.

Non-GAAP Measures:

This release may include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Company uses these non-GAAP measures as key performance indicators for the purpose of evaluating performance internally. We also believe that these non-GAAP measures provide investors with useful information with respect to our on-going operations. Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP and may not be comparable to the calculation of similar measures of other companies.

EMCOR GROUP, INC.

FINANCIAL HIGHLIGHTS

(In thousands, except share and per share information)

(Unaudited)

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

For the three months ended
March 31,

 

 

2020

 

2019

Revenues

 

$

2,299,832

 

 

$

2,158,728

 

Cost of sales

 

1,966,771

 

 

1,849,974

 

Gross profit

 

333,061

 

 

308,754

 

Selling, general and administrative expenses

 

226,997

 

 

206,169

 

Restructuring expenses

 

69

 

 

275

 

Operating income

 

105,995

 

 

102,310

 

Net periodic pension (cost) income

 

742

 

 

406

 

Interest expense, net

 

(2,488

)

 

(2,823

)

Income before income taxes

 

104,249

 

 

99,893

 

Income tax provision

 

28,584

 

 

27,483

 

Net income

 

$

75,665

 

 

$

72,410

 

 

 

 

 

 

Basic earnings per common share

 

$

1.35

 

 

$

1.29

 

 

 

 

 

 

Diluted earnings per common share

 

$

1.35

 

 

$

1.28

 

 

 

 

 

 

Weighted average shares of common stock outstanding:

 

 

 

 

Basic

 

56,007,122

 

 

56,168,356

 

Diluted

 

56,210,728

 

 

56,424,222

 

 

 

 

 

 

Dividends declared per common share

 

$

0.08

 

 

$

0.08

 

 

 

 

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

March 31, 2020
(Unaudited)

 

December 31,
2019

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

347,092

 

 

$

358,818

 

Accounts receivable, net

 

2,055,483

 

 

2,030,813

 

Contract assets

 

195,265

 

 

177,830

 

Inventories

 

35,387

 

 

40,446

 

Prepaid expenses and other

 

52,161

 

 

51,976

 

Total current assets

 

2,685,388

 

 

2,659,883

 

Property, plant & equipment, net

 

157,848

 

 

156,187

 

Operating lease right-of-use assets

 

237,796

 

 

245,471

 

Goodwill

 

1,064,853

 

 

1,063,911

 

Identifiable intangible assets, net

 

597,897

 

 

611,444

 

Other assets

 

91,765

 

 

93,462

 

Total assets

 

$

4,835,547

 

 

$

4,830,358

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Current maturities of long-term debt and finance lease liabilities

 

$

10,360

 

 

$

18,092

 

Accounts payable

 

592,576

 

 

665,402

 

Contract liabilities

 

590,873

 

 

623,642

 

Accrued payroll and benefits

 

301,878

 

 

382,573

 

Other accrued expenses and liabilities

 

237,973

 

 

195,757

 

Operating lease liabilities, current

 

52,722

 

 

53,144

 

Total current liabilities

 

1,786,382

 

 

1,938,610

 

Borrowings under revolving credit facility

 

200,000

 

 

50,000

 

Long-term debt and finance lease liabilities

 

294,181

 

 

244,139

 

Operating lease liabilities, long-term

 

198,492

 

 

204,950

 

Other long-term obligations

 

328,898

 

 

334,879

 

Total liabilities

 

2,807,953

 

 

2,772,578

 

Equity:

 

 

 

 

Total EMCOR Group, Inc. stockholders’ equity

 

2,026,948

 

 

2,057,134

 

Noncontrolling interests

 

646

 

 

646

 

Total equity

 

2,027,594

 

 

2,057,780

 

Total liabilities and equity

 

$

4,835,547

 

 

$

4,830,358

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2020 and 2019

(In thousands) (Unaudited)

 

 

 

 

 

 

 

2020

 

2019

Cash flows - operating activities:

 

 

 

 

Net income

 

$

75,665

 

 

$

72,410

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

11,767

 

 

10,585

 

Amortization of identifiable intangible assets

 

14,747

 

 

11,610

 

Provision for (recovery of) credit losses

 

2,614

 

 

(673

)

Deferred income taxes

 

4,375

 

 

2,496

 

Excess tax benefits from share-based compensation

 

(157

)

 

(499

)

Non-cash share-based compensation expense

 

3,291

 

 

3,557

 

Other reconciling items

 

199

 

 

467

 

Changes in operating assets and liabilities, excluding the effect of businesses acquired

 

(191,314

)

 

(157,388

)

Net cash used in operating activities

 

(78,813

)

 

(57,435

)

Cash flows - investing activities:

 

 

 

 

Payments for acquisitions of businesses, net of cash acquired

 

(2,582

)

 

(31,124

)

Proceeds from sale or disposal of property, plant and equipment

 

196

 

 

1,023

 

Purchase of property, plant and equipment

 

(12,035

)

 

(13,113

)

Investments in and advances to unconsolidated entities

 

 

 

(794

)

Net cash used in investing activities

 

(14,421

)

 

(44,008

)

Cash flows - financing activities:

 

 

 

 

Proceeds from revolving credit facility

 

200,000

 

 

 

Repayments of revolving credit facility

 

(50,000

)

 

 

Proceeds from long-term debt

 

300,000

 

 

 

Repayments of long-term debt and debt issuance costs

 

(257,549

)

 

(3,800

)

Repayments of finance lease liabilities

 

(1,277

)

 

(1,053

)

Dividends paid to stockholders

 

(4,500

)

 

(4,480

)

Repurchase of common stock

 

(99,048

)

 

 

Taxes paid related to net share settlements of equity awards

 

(2,492

)

 

(3,735

)

Issuance of common stock under employee stock purchase plan

 

1,638

 

 

1,323

 

Payments for contingent consideration arrangements

 

(653

)

 

(23

)

Distributions to noncontrolling interests

 

 

 

(40

)

Net cash provided by (used in) financing activities

 

86,119

 

 

(11,808

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(4,678

)

 

1,298

 

Decrease in cash, cash equivalents, and restricted cash

 

(11,793

)

 

(111,953

)

Cash, cash equivalents, and restricted cash at beginning of year (1)

 

359,920

 

 

366,214

 

Cash, cash equivalents, and restricted cash at end of period (2)

 

$

348,127

 

 

$

254,261

 

(1)

Includes $1.1 million and $2.3 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively.

(2)

Includes $1.0 million and $2.2 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of March 31, 2020 and 2019, respectively.

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands) (Unaudited)

 

 

 

 

 

For the three months ended
March 31,

 

 

2020

 

2019

Revenues from unrelated entities:

 

 

 

 

United States electrical construction and facilities services

 

$

525,229

 

 

$

528,070

 

United States mechanical construction and facilities services

 

834,112

 

 

752,409

 

United States building services

 

518,083

 

 

512,079

 

United States industrial services

 

310,031

 

 

258,645

 

Total United States operations

 

2,187,455

 

 

2,051,203

 

United Kingdom building services

 

112,377

 

 

107,525

 

Total worldwide operations

 

$

2,299,832

 

 

$

2,158,728

 

 

 

 

 

 

 

For the three months ended
March 31,

 

 

2020

 

2019

Operating income (loss):

 

 

 

 

United States electrical construction and facilities services

 

$

43,903

 

 

$

42,951

 

United States mechanical construction and facilities services

 

45,171

 

 

40,985

 

United States building services

 

20,838

 

 

27,483

 

United States industrial services

 

12,257

 

 

9,636

 

Total United States operations

 

122,169

 

 

121,055

 

United Kingdom building services

 

5,764

 

 

4,141

 

Corporate administration

 

(21,869

)

 

(22,611

)

Restructuring expenses

 

(69

)

 

(275

)

Total worldwide operations

 

105,995

 

 

102,310

 

Other corporate items:

 

 

 

 

Net periodic pension (cost) income

 

742

 

 

406

 

Interest expense, net

 

(2,488

)

 

(2,823

)

Income before income taxes

 

$

104,249

 

 

$

99,893

 

 

 

 

 

 

 


© Business Wire 2020
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Financials (USD)
Sales 2020 8 764 M - -
Net income 2020 253 M - -
Net cash 2020 282 M - -
P/E ratio 2020 14,4x
Yield 2020 0,49%
Capitalization 3 556 M 3 556 M -
EV / Sales 2019
EV / Sales 2020 0,37x
Nbr of Employees 36 000
Free-Float 88,9%
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Technical analysis trends EMCOR GROUP, INC.
Short TermMid-TermLong Term
TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 6
Average target price 67,00 $
Last Close Price 64,84 $
Spread / Highest target 23,4%
Spread / Average Target 3,33%
Spread / Lowest Target -7,46%
EPS Revisions
Managers
NameTitle
Anthony J. Guzzi Chairman, President & Chief Executive Officer
Mark A. Pompa Chief Financial Officer, Treasurer & EVP
Richard F. Hamm Independent Director
David Howard Laidley Independent Director
John W. Altmeyer Independent Director
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