EMCOR Group, Inc. Reports Fourth Quarter and Full Year 2012 Results

  EMCOR Group, Inc. Reports Fourth Quarter and Full Year 2012 Results

     - Revenues Increase 6.2% to $1.61 Billion; Organic Growth of 4.3% -

  - Fourth Quarter Diluted Earnings Per Share from Continuing Operations of
                                   $0.68 -

             - Backlog as of December 31, 2012 of $3.37 Billion -

         - Company Announces 2013 Revenue and Diluted EPS Guidance -

Business Wire

NORWALK, Conn. -- February 26, 2013

EMCOR Group, Inc. (NYSE: EME) today reported results for the fourth quarter
ended December 31, 2012.

For the fourth quarter of 2012, net income from continuing operations
attributable to EMCOR increased 27.8% to $46.4 million, or $0.68 per diluted
share. For the fourth quarter of 2011, net income from continuing operations
attributable to EMCOR was $36.3 million, or $0.53 per diluted share. For the
fourth quarter of 2011, non-GAAP net income from continuing operations was
$38.6 million, or $0.57 per diluted share, excluding a previously announced
non-cash impairment charge of $3.8 million, or $0.03 per diluted share
after-tax.

Revenues increased 6.2% to $1.61 billion in the fourth quarter of 2012,
compared to revenues of $1.52 billion in the year ago period. Organic revenue
growth in the 2012 fourth quarter was 4.3%.

For the fourth quarter of 2012, operating income was $78.9 million, or 4.9% of
revenues. Operating income for the fourth quarter of 2011, including the above
mentioned non-cash impairment charge was $62.4 million, or 4.1% of revenues.
Excluding the non-cash impairment charge, the Company's non-GAAP operating
income for the fourth quarter of 2011 was $66.2 million, or 4.4% of revenues.
The Company recorded restructuring expenses of $0.1 million in the 2011 fourth
quarter.

Please see the attached tables for a reconciliation of non-GAAP operating
income, non-GAAP net income and non-GAAP diluted earnings per share to the
comparable GAAP figures.

Selling, general and administrative expenses were $149.6 million, or 9.3% of
revenues, in the fourth quarter of 2012, compared to $148.0 million, or 9.7%
of revenues, in the year ago period.

The Company's income tax rate as reported in the 2012 fourth quarter was
39.8%, compared to an income tax rate of 38.5% in the year ago period.

Backlog as of December 31, 2012 was $3.37 billion, an increase of 1.4% from
$3.33 billion at the end of 2011. Domestically, continued strong growth in the
industrial sector combined with growth in the institutional sector more than
offset declines in the commercial, healthcare, hospitality/gaming,
transportation and water/wastewater sectors. Total commercial backlog
decreased $20 million, or 2.0%, from year ago levels to $961 million while
industrial backlog increased $248 million, or 62.9%, from the year ago period
to $643 million. Backlog growth in the Company's domestic operations more than
offset a backlog decline related to the Company's efforts to reduce its UK
construction operations and focus on its facilities services business in that
market. Total aggregate backlog was level compared to September 30, 2012.

Tony Guzzi, President and Chief Executive Officer of EMCOR Group, commented,
“The 2012 fourth quarter finished a strong year for us. We generated solid
organic growth over a strong year-ago performance and expanded margins through
excellent execution and a focus on cost control. Cash generation was strong
during the year, and we have both invested in our growth and returned $58
million to our shareholders through our dividend and share repurchase program
through the year. Overall, we are very pleased with our performance in what
continues to be a challenging and uncertain environment.”

Mr. Guzzi continued, “We continue to have particularly strong performance in
our domestic construction operations, driven by organic growth and solid
project execution. In facilities services, our turnaround and maintenance
services for industrial clients continued to perform well, and we saw modest
improvement in mechanical services operations. Our strength domestically
offset the performance of our UK operations, where we continued to refocus our
operations on facilities services in light of the difficult conditions in the
UK construction market.”

Mr. Guzzi concluded, “We delivered excellent results in 2012, and, as we enter
2013, we believe we are well positioned for continued success. Our domestic
construction businesses will continue to focus on strong project execution.
Our facilities services business has the capacity to meet ongoing demand for
turnaround and maintenance work from our industrial customers, and we are well
positioned for improvements in our commercial site-based operations. While we
have seen some increase in demand, overall economic conditions remain
challenging. Bookings have been healthy, but current backlog levels continue
to limit our visibility, and the bidding environment remains uneven. As we
await a broader economic recovery, our focus will remain on resource
management, cost controls and leveraging near-term opportunities.”

For the 2012 full-year period, net income from continuing operations
attributable to EMCOR was $146.6 million, or $2.16 per diluted share, compared
to $121.7 million, or $1.78 per diluted share. Income from continuing
operations for the 2011 full-year period included the above-mentioned
impairment charge as well as transaction expenses related to the acquisition
of USM of $4.7 million, or $0.06 per diluted share after-tax. Excluding the
USM transaction expenses and impairment charge, the Company's non-GAAP net
income from continuing operations for the 2011 full-year period was $127.8
million, or $1.87 per diluted share.

Revenues for the 2012 full-year period increased 13.1% to $6.35 billion,
compared to $5.61 billion for the 2011 full-year period. Organic revenue
growth for the 2012 full-year period was 7.6%.

Operating income in the 2012 full-year period was $250.0 million, or 3.9% of
revenues, compared to $210.8 million, or 3.8% of revenues, a year ago.
Operating income for the 2011 full-year period included the non-cash
impairment charge and USM transaction expenses of $4.7 million. Excluding
these items, the Company's non-GAAP operating income for the 2011 full-year
period was $219.3 million, or 3.9% of revenues. The Company recorded
restructuring expenses of $0.1 million in the 2012 full-year period and $1.2
million in the 2011 full-year period.

For the 2012 full-year period, SG&A totaled $556.2 million, or 8.8% of
revenues. SG&A for the 2011 full-year period was $518.1 million, or 9.2% of
revenues, and included the USM transaction expenses discussed above.

The Company noted that, based on the current size and mix of its backlog and
assuming the continuation of current market conditions, it expects to generate
revenues in 2013 of approximately $6.5 billion, and diluted earnings per share
of between $2.05 and $2.35.

EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical
construction services, energy infrastructure and facilities services. This
press release and other press releases may be viewed at the Company's Web site
at www.emcorgroup.com.

EMCOR Group's fourth quarter conference call will be available live via
internet broadcast today, Tuesday, February 26, at 10:30 AM Eastern Standard
Time. You can access the live call through the Home Page of the Company's Web
site at www.emcorgroup.com.

This release may contain certain forward-looking statements within the meaning
of the Private Securities Reform Act of 1995. Any such comments are based upon
information available to EMCOR management and its perception thereof, as of
this date, and EMCOR assumes no obligation to update any such forward-looking
statements. These forward-looking statements may include statements regarding
market opportunities, market share growth, gross profit, backlog mix, projects
with varying profit margins, and selling, general and administrative expenses.
These forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
Accordingly these statements are no guarantee of future performance. Such risk
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 and mix of business. Certain of the risks and
factors associated with EMCOR's business are also discussed in the Company's
Form 10-K and in other reports filed from time to time with the Securities and
Exchange Commission. All these risks and factors should be taken into account
in evaluating any forward-looking statements.

                                                  
EMCOR GROUP, INC.

FINANCIAL HIGHLIGHTS

(In thousands, except share and per share information)

(Unaudited)
                                                       
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                       
                   For the three months ended          For the twelve months ended
                   December 31,                        December 31,
                   2012            2011              2012            2011
Revenues           $ 1,611,881       $ 1,517,962       $ 6,346,679       $ 5,613,459
Cost of sales      1,383,432        1,303,645        5,540,325        4,879,510   
Gross profit       228,449           214,317           806,354           733,949
Selling,
general and        149,586           147,957           556,242           518,121
administrative
expenses
Restructuring      —                 141               145               1,240
expenses
Impairment
loss on
identifiable       —                3,795            —                3,795       
intangible
assets
Operating          78,863            62,424            249,967           210,793
income
Interest           (1,815      )     (2,887      )     (7,275      )     (11,261     )
expense
Interest           391              377              1,556            1,820       
income
Income from
continuing
operations         77,439            59,914            244,248           201,352
before income
taxes
Income tax         30,651           22,765           95,362           76,764      
provision
Income from
continuing         46,788            37,149            148,886           124,588
operations
Income from
discontinued
operation, net     —                341              —                9,083       
of income
taxes
Net income
including          46,788            37,490            148,886           133,671
noncontrolling
interests
Less: Net
income
attributable       (378        )     (825        )     (2,302      )     (2,845      )
to
noncontrolling
interests
Net income
attributable       $ 46,410         $ 36,665         $ 146,584        $ 130,826   
to EMCOR
Group, Inc.
Basic earnings
per common
share:
– continuing       $ 0.69           $ 0.54           $ 2.20           $ 1.82      
operations
– discontinued     $ —              $ 0.01           $ —              $ 0.14      
operation
Diluted
earnings per
common share:
– continuing       $ 0.68           $ 0.53           $ 2.16           $ 1.78      
operations
– discontinued     $ —              $ 0.01           $ —              $ 0.13      
operation
Weighted
average shares
of

common stock
outstanding:
Basic              66,805,577        66,504,802        66,701,869        66,780,093
Diluted            67,801,701        67,911,536        67,738,418        68,375,502
                                                                                     

                                                             
EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
                                                                  
                                                December 31,
                                                2012              December 31,
                                                (Unaudited)       2011
ASSETS
Current assets:
Cash and cash equivalents                       $ 605,303         $  511,322
Accounts receivable, net                        1,221,956         1,187,832
Costs and estimated earnings in excess of       93,061            114,836
billings on uncompleted contracts
Inventories                                     50,512            44,914
Prepaid expenses and other                      73,621           77,749
Total current assets                            2,044,453         1,936,653
Investments, notes and other long-term          4,959             5,618
receivables
Property, plant & equipment, net                116,631           101,663
Goodwill                                        566,588           566,805
Identifiable intangible assets, net             343,748           370,373
Other assets                                    30,691           32,964
Total assets                                    $ 3,107,070      $  3,014,076
LIABILITIES AND EQUITY
Current liabilities:
Borrowings under revolving credit facility      $ —               $  —
Current maturities of long-term debt and        1,787             1,522
capital lease obligations
Accounts payable                                490,621           477,801
Billings in excess of costs and estimated       383,527           441,695
earnings on uncompleted contracts
Accrued payroll and benefits                    224,555           204,785
Other accrued expenses and liabilities          194,029          205,110
Total current liabilities                       1,294,519         1,330,913
Borrowings under revolving credit facility      150,000           150,000
Long-term debt and capital lease                4,112             3,335
obligations
Other long-term obligations                     301,260          284,697
Total liabilities                               1,749,891        1,768,945
Equity:
Total EMCOR Group, Inc. stockholders’           1,346,080         1,234,734
equity
Noncontrolling interests                        11,099           10,397
Total equity                                    1,357,179        1,245,131
Total liabilities and equity                    $ 3,107,070      $  3,014,076
                                                                     

                                                              
EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Twelve Months Ended December 31, 2012 and 2011

(In thousands) (Unaudited)
                                                                   
                                                   2012            2011
Cash flows - operating activities:
Net income including noncontrolling interests      $ 148,886       $ 133,671
Depreciation and amortization                      31,204          27,426
Amortization of identifiable intangible assets     29,762          26,350
Deferred income taxes                              6,626           8,826
Gain on sale of discontinued operation, net of     —               (9,127    )
income taxes
Excess tax benefits from share-based               (7,083    )     (3,619    )
compensation
Equity income from unconsolidated entities         (930      )     (1,301    )
Non-cash expense for impairment of                 —               3,795
identifiable intangible assets
Other non-cash items                               3,032           7,917
Distributions from unconsolidated entities         887             606
Changes in operating assets and liabilities,       (27,976   )     (45,119   )
excluding the effect of businesses acquired
Net cash provided by operating activities          184,408        149,425   
Cash flows - investing activities:
Payments for acquisitions of businesses, net
of cash acquired, and related contingent           (20,613   )     (301,306  )
consideration agreement
Proceeds from sale of discontinued operation,      —               26,627
net of cash sold
Proceeds from sale of property, plant and          3,070           1,409
equipment
Purchase of property, plant and equipment          (37,875   )     (29,581   )
Investment in and advances to unconsolidated       —               (28       )
entities and joint ventures
Purchase of short-term investments                 (22,433   )     (17,639   )
Maturity of short-term investments                 35,305         —         
Net cash used in investing activities              (42,546   )     (320,518  )
Cash flows - financing activities:
Net repayments of long-term debt and debt          (40       )     (4,147    )
issuance costs
Repayments of capital lease obligations            (1,978    )     (1,095    )
Dividends paid to stockholders                     (34,073   )     (3,336    )
Repurchase of common stock                         (23,912   )     (27,523   )
Proceeds from exercise of stock options            8,786           5,608
Payments to satisfy minimum tax withholding        (1,654    )     (1,256    )
Issuance of common stock under employee stock      2,549           2,310
purchase plan
Payments of contingent consideration               (5,748    )     (1,118    )
arrangements
Distributions to noncontrolling interests          (1,600    )     (2,350    )
Excess tax benefits from share-based               7,083          3,619     
compensation
Net cash used in financing activities              (50,587   )     (29,288   )
Effect of exchange rate changes on cash and        2,706          867       
cash equivalents
Increase (decrease) in cash and cash               93,981          (199,514  )
equivalents
Cash and cash equivalents at beginning of year     511,322        710,836   
Cash and cash equivalents at end of period         $ 605,303      $ 511,322 
                                                                             

                                              
EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands) (Unaudited)
                                                 
                                                 For the three months ended
                                                 December 31,
                                                 2012            2011
Revenues from unrelated entities:
United States electrical construction and        $ 306,349         $ 289,689
facilities services
United States mechanical construction and        578,214           499,796
facilities services
United States facilities services                593,192          584,456
Total United States operations                   1,477,755         1,373,941
United Kingdom construction and facilities       134,126          144,021
services
Total worldwide operations                       $ 1,611,881      $ 1,517,962
                                                                   
                                                 For the twelve months ended
                                                 December 31,
                                                 2012              2011
Revenues from unrelated entities:
United States electrical construction and        $ 1,211,692       $ 1,155,079
facilities services
United States mechanical construction and        2,296,380         1,917,433
facilities services
United States facilities services                2,299,839        2,011,981
Total United States operations                   5,807,911         5,084,493
United Kingdom construction and facilities       538,768          528,966
services
Total worldwide operations                       $ 6,346,679      $ 5,613,459
                                                                     

                                                
EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands) (Unaudited)
                                                   
                                                   For the three months ended
                                                   December 31,
                                                   2012          2011
Operating income (loss):
United States electrical construction and          $ 32,615        $ 26,618
facilities services
United States mechanical construction and          44,498          36,329
facilities services
United States facilities services                  22,336         21,970    
Total United States operations                     99,449          84,917
United Kingdom construction and facilities         (2,038    )     1,075
services
Corporate administration                           (18,548   )     (19,632   )
Restructuring expenses                             —               (141      )
Impairment loss on identifiable intangible         —              (3,795    )
assets
Total worldwide operations                         78,863          62,424
Other corporate items:
Interest expense                                   (1,815    )     (2,887    )
Interest income                                    391            377       
Income from continuing operations before           $ 77,439       $ 59,914  
income taxes
                                                                   
                                                   For the twelve months ended
                                                   December 31,
                                                   2012            2011
Operating income (loss):
United States electrical construction and          $ 100,736       $ 84,601
facilities services
United States mechanical construction and          123,519         116,001
facilities services
United States facilities services                  82,273         69,125    
Total United States operations                     306,528         269,727
United Kingdom construction and facilities         7,052           9,225
services
Corporate administration                           (63,468   )     (63,124   )
Restructuring expenses                             (145      )     (1,240    )
Impairment loss on identifiable intangible         —              (3,795    )
assets
Total worldwide operations                         249,967         210,793
Other corporate items:
Interest expense                                   (7,275    )     (11,261   )
Interest income                                    1,556          1,820     
Income from continuing operations before           $ 244,248      $ 201,352 
income taxes
                                                                             

                              EMCOR GROUP, INC.
               RECONCILIATION OF 2012 AND 2011 OPERATING INCOME
                          (In thousands) (Unaudited)

In our press release, we provide actual 2012 and 2011 fourth quarter and
year-to-date December 31, 2012 and 2011 operating income. The following table
provides a reconciliation between 2012 and 2011 operating income based on
non-GAAP measures to the most direct comparable GAAP measures.

                                              
                    For the three months ended     For the twelve months ended
                    December 31,                   December 31,
                    2012           2011          2012            2011
GAAP operating      $  78,863        $  62,424     $  249,967        $ 210,793
income
Impairment loss
on identifiable     —                3,795         —                 3,795
intangible
assets
Transaction
expenses
related to the      —               21            —                 4,663
acquisition of
USM Holdings,
Inc.
Non-GAAP
operating
income,
excluding
impairment loss     $  78,863        $  66,240     $  249,967        $ 219,251
on identifiable
intangible
assets and USM
transaction
expenses
                                                                       

                              EMCOR GROUP, INC.
                  RECONCILIATION OF 2012 AND 2011 NET INCOME
                          (In thousands) (Unaudited)

In our press release, we provide actual 2012 and 2011 fourth quarter and
year-to-date December 31, 2012 and 2011 net income from continuing operations
attributable to EMCOR Group, Inc. The following table provides a
reconciliation between 2012 and 2011 net income from continuing operations
attributable to EMCOR Group, Inc. based on non-GAAP measures to the most
direct comparable GAAP measures.

                                              
                    For the three months ended     For the twelve months ended
                    December 31,                   December 31,
                    2012           2011          2012            2011
GAAP net income
from continuing
operations          $  46,410        $  36,324     $  146,584        $ 121,743
attributable to
EMCOR Group,
Inc. ^(1)
Impairment loss
on identifiable     —                2,277         —                 2,277
intangible
assets ^(2)
Transaction
expenses
related to the      —                21            —                 3,785
acquisition of
USM Holdings,
Inc. ^(3)
Non-GAAP net
income from
continuing
operations
attributable to
EMCOR Group,
Inc., excluding     $  46,410        $  38,622     $  146,584        $ 127,805
impairment loss
on identifiable
intangible
assets and USM
transaction
expenses
                                                                       

(1)  Amount is income from continuing operations less net income attributable
      to noncontrolling interest
(2)   Amount is net of tax effect of $1.5 million in the quarter and
      year-to-date periods
(3)   Amount is net of tax effect of $0.0 million in the quarter and $0.9
      million in the year-to-date period
      

                              EMCOR GROUP, INC.
      RECONCILIATION OF 2012 AND 2011 DILUTED EARNINGS PER SHARE FIGURES
                                 (Unaudited)

In our press release, we provide actual 2012 and 2011 fourth quarter and
year-to-date December 31, 2012 and 2011 diluted earnings per share from
continuing operations. The following table provides a reconciliation between
2012 and 2011 EPS based on non-GAAP measures to the most direct comparable
GAAP measures.

                                                            
                        For the three months ended     For the twelve months
                                                       ended
                        December 31,                   December 31,
                        2012              2011         2012           2011
GAAP diluted
earnings per common
share from              $   0.68          $  0.53      $  2.16        $  1.78
continuing
operations
Impairment loss on
identifiable            —                 0.03         —              0.03
intangible assets
^(1)
Transaction
expenses related to
the acquisition of      —                 0.00         —              0.06
USM Holdings, Inc.
^(2)
Non-GAAP diluted
earnings per common
share from
continuing
operations,
excluding
impairment loss on      $   0.68          $  0.57      $  2.16        $  1.87
identifiable
intangible assets
and USM

transaction
expenses
                                                                         

(1) Amount is net of tax effect of $1.5 million in the quarter and
year-to-date periods

(2) Amount is net of tax effect of $0.0 million in the quarter and $0.9
million in the year-to-date period

Contact:

EMCOR Group, Inc.
R. Kevin Matz, 203-849-7938
Executive Vice President
Shared Services
or
Investors:
FTI Consulting, Inc.
Eric Boyriven / Matt Steinberg, 212-850-5600
or
Media:
Linden Alschuler & Kaplan, Inc.
Lisa Linden / Mollie Fullington
212-575-4545 / 917-346-6123
 
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