Quarter One 2020 Financial Results
April 30, 2020
First Quarter 2020 Financial Results
Forward-Looking Statements and Non-GAAP Financial Disclosures
Forward Looking Statements:
This material and related presentation contain certain forward-looking statements. Any such comments speak only as of the date on the cover of this slide deck 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. Certain of the risk factors associated with EMCOR's business are also 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.govand www.emcorgroup.com. Such risk factors should be taken into account in evaluating any forward-looking statements.
Non-GAAP Measures:
This material and related presentation 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.
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First Quarter 2020 Financial Results
EMCOR Participants
| Tony Guzzi | Chairman, President & Chief Executive Officer |
| Mark Pompa | EVP, Chief Financial Officer & Treasurer |
| Maxine Mauricio | SVP & General Counsel |
| Kevin Matz | EVP, Shared Services |
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First Quarter 2020 Financial Results
2020 Qtr. 1 Executive Summary
- Strong Qtr. 1 performance
- Record Qtr. 1 for revenues, gross profit, operating income, net income and diluted earnings per share
- Total revenues increased 6.5% to $2.30 billion
- Qtr. 1 diluted EPS of $1.35 in 2020 vs. diluted EPS of $1.28 in Qtr. 1 2019
- Total Remaining Performance Obligations (RPOs) increased by $267 million or 6.4% from 3/31/19
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First Quarter 2020 Financial Results
2020 Qtr. 1 Executive Summary
- U.S. Electrical Construction and Facilities Services segment revenues decreased by $2.8 million vs. Qtr. 1 2019 with an operating margin of 8.4%
- U.S. Mechanical Construction and Facilities Services segment revenues increased by $81.7 million vs. Qtr. 1 2019 with an operating margin of 5.4%
- U.S. Building Services segment revenues increased by $6.0 million vs. Qtr. 1 2019 with an operating margin of 4.0%
- U.S. Industrial Services segment revenues increased by $51.4 million vs. Qtr. 1 2019 with an operating margin of 4.0%
- U.K. Building Services segment revenues increased by $4.8 million vs. Qtr. 1 2019 with an operating margin of 5.1%
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First Quarter 2020 Financial Results
2020 Qtr. 1 Executive Summary
- Diverse RPOs of $4.42 billion, up 6.4% compared to Qtr. 1
2019
- U.S. RPOs UP $284 million or 7.1%
Domestic Construction UP
U.S. Building Services Segment Flat
U.S. Industrial Services Segment UP
Private Sector DOWN (Commercial, Hospitality & Gaming, Industrial / Manufacturing and Short Duration Projects)
Public Sector UP (Transportation, Water / Wastewater,
Institutional, Healthcare)
- Balance sheet remains strong and liquid, including approximately
$347 million of cash
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First Quarter 2020 Financial Results
2020 - Qtr. 1 Financial Results Highlights
- Revenues increased 6.5% quarter-over-quarter to $2.30 billion
Change from | |||||||
Qtr. 1 2019 | |||||||
Qtr. 1 | |||||||
($ Millions) (Unaudited) | 2020 | $ | % | ||||
U.S. Electrical Construction & Facilities Services | $ 525.2 | $ | (2.8) | -0.5% | |||
U.S. Mechanical Construction & Facilities Services | 834.1 | 81.7 | 10.9% | ||||
Total U.S. Construction | 1,359.3 | 78.9 | 6.2% | ||||
U.S. Building Services | 518.1 | 6.0 | 1.2% | ||||
U.S. Industrial Services | 310.0 | 51.4 | 19.9% | ||||
Total U.S. Operations | 2,187.4 | 136.3 | 6.6% | ||||
U.K. Building Services | 112.4 | 4.8 | 4.5% | ||||
Total EMCOR | $ 2,299.8 | $ | 141.1 | 6.5% | |||
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First Quarter 2020 Financial Results
2020 - Qtr. 1 Financial Results Highlights
- SG&A expenses increased to $227.0 million or 9.9% of revenues vs. $206.2 million or 9.6% of revenues for Qtr. 1 2019
- Operating income was $106.0 million or 4.6% of revenues
(Unaudited)
- U.S. Electrical Construction and Facilities Services of $43.9 million: $1.0 million or 2.2% increase
- U.S. Mechanical Construction and Facilities Services of $45.2 million: $4.2 million or 10.2% increase
Total U.S. Construction
- U.S. Building Services of $20.8 million: $6.6 million or 24.2% decrease
- U.S. Industrial Services of $12.3 million: $2.6 million or 27.2% increase
- U.K. Building Services of $5.8 million: $1.6 million or 39.2% increase
Total EMCOR Operating Margin
Operating Margin
For the Quarter Ended
March 31,
2020 2019
8.4%8.1%
5.4%5.4%
6.6% 6.6%
4.0%5.4%
4.0%3.7%
5.1%3.9%
4.6%4.7%
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First Quarter 2020 Financial Results
Key Financial Data - Income Statement
($ Thousands, except per share information) (Unaudited)
For the Quarter Ended | ||||||||||
March 31, | Variance | |||||||||
2020 | 2019 | $ | % | |||||||
Revenues | $ | 2,299,832 | $ | 2,158,728 | $ | 141,104 | 6.5% | |||
Gross Profit | 333,061 | 308,754 | 24,307 | 7.9% | ||||||
Selling, General and Administrative Expenses | 226,997 | 206,169 | 20,828 | 10.1% | ||||||
Restructuring Expenses | 69 | 275 | (206) | N/M | ||||||
Operating Income | $ | 105,995 | $ | 102,310 | $ | 3,685 | 3.6% | |||
4.6% | 4.7% | |||||||||
Diluted Earnings per Common Share | ||||||||||
$ | 1.35 | $ | 1.28 | $ | 0.07 | 5.5% | ||||
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First Quarter 2020 Financial Results
Key Financial Data - Balance Sheet
($ Thousands)
(Unaudited) | |||||
03/31/20 | 12/31/19 | ||||
Cash | $ | 347,092 | $ | 358,818 | |
Working Capital | $ | 899,006 | $ | 721,273 | |
Goodwill | $ | 1,064,853 | $ | 1,063,911 | |
Identifiable Intangible Assets, Net | $ | 597,897 | $ | 611,444 | |
Total Debt (excludes operating leases) | $ | 504,541 | $ | 312,231 | |
Stockholders' Equity | $ | 2,027,594 | $ | 2,057,780 | |
Total Debt / Total Capitalization | 19.9% | 13.2% |
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First Quarter 2020 Financial Results
Remaining Performance Obligations
- Diverse RPOs of $4.42 billion
$5,000
By Segment ($ Millions) (Unaudited)
By Market Sector ($ Millions) (Unaudited)
$$5,05,000
$4,000
$3,000
$$2,0002,
$1,000 $1,000
$4,424
$4,157 $4,036
$$4,04,000
$$3,03,000
$$2,02,000
$$1,0001,000
$4,424
$4,157 $4,036
$0 $0
Qtr. 1- 2019 | 2019 | Qtr. 1- 2020 |
Qtr.1 - 2019 | Qtr. 4 - 2019 | Qtr.1 - 2020 |
$0 | |||
$0 | Qtr. 1 - 2019 | 2019 | Qtr. 1 - 2020 |
Qtr.1 - 2019 | Qtr. 4 - 2019 | Qtr.1 - 2020 |
Mechanical | Electrical | Building Services | Commercial | Hospitality | Industrial / Manufacturing | Healthcare | |||||||||
Industrial Services | EMCOR UK | Institutional | Transportation | Water & Wastewater | Short Duration Projects | ||||||||||
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First Quarter 2020 Financial Results
Current Company-Wide Priorities and Actions
- Protect Employee Health and Safety
- Instituted social distancing and other safety protocols
- Providing PPE
- Control Costs
- ~40% of salaried workforce furloughed or working reduced hours / pay
- Named Executive Officers' annual salary temporarily reduced by 25%
- Director compensation reduced by 22%
- Frequent and Consistent Communication with Field Leadership
- Proactively Work with Suppliers
- Maintain Strong Balance Sheet and Liquidity Position
- Ready to Return to 100% Capacity / Utilization
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First Quarter 2020 Financial Results
EMCOR Credit Facility
- 2020 Credit Agreement - Executed March 2, 2020
- $300 million term loan
- $1.3 billion revolving credit facility
- Ability to increase to $1.9 billion
- Matures on March 2, 2025
Credit Facility
Term Loan Balance | $ | 300,000,000 |
Total Revolving Credit Facility | $ | 1,300,000,000 |
Outstanding Borrowings | 200,000,000 | |
Letters of Credit Issued | 78,963,183 | |
Revolving Credit Available - 3/31/2020 | $ | 1,021,036,817 |
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Disclaimer
EMCOR Group Inc. published this content on 30 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2020 14:07:08 UTC