EMCOR Group, Inc. Reports First Quarter 2013 Results

  EMCOR Group, Inc. Reports First Quarter 2013 Results

                 - Revenues Increase 1.9% to $1.57 Billion -

            - First Quarter Diluted Earnings Per Share of $0.44 -

              - Backlog as of March 31, 2013 of $3.42 Billion -

Business Wire

NORWALK, Conn. -- April 25, 2013

EMCOR Group, Inc. (NYSE: EME) today reported results for the first quarter
ended March 31, 2013.

For the first quarter of 2013, net income attributable to EMCOR increased
11.1% to $30.2 million, or $0.44 per diluted share, from $27.1 million, or
$0.40 per diluted share, in the first quarter of 2012. Revenues increased 1.9%
to $1.57 billion in the first quarter of 2013, compared to revenues of $1.54
billion in the year ago period.

Operating income for the first quarter of 2013 increased 11.0% to $51.3
million, or 3.3% of revenues, from $46.2 million, or 3.0% of revenues, in the
first quarter of 2012. Operating income in the first quarter of 2013 included
restructuring expenses of $1.4 million. Selling, general and administrative
expenses were $138.5 million, or 8.8% of revenues, in the first quarter of
2013, compared to $134.5 million, or 8.7% of revenues, in the year ago period.

The Company's income tax rate as reported in the 2013 first quarter was 38.7%,
compared to an income tax rate of 38.5% in the year ago period.

Backlog as of March 31, 2013 was $3.42 billion, an increase of 0.9% from $3.39
billion at the end of the 2012 first quarter. Domestically, continued strong
growth in the industrial sector combined with growth in the transportation and
hospitality/gaming sectors more than offset declines in the commercial,
institutional, healthcare and water/wastewater sectors. Total industrial
backlog increased $255 million, or 64.9%, from the year ago period to $648
million, an all-time record, while commercial backlog decreased $83 million,
or 7.8%, from year ago levels to $983 million. Backlog growth in the Company's
domestic operations more than offset a backlog decline of $51 million related
to the Company's efforts to reduce its UK construction operations and focus on
facilities services in that market. Backlog increased 1.3% from $3.37 billion
on December 31, 2012.

Tony Guzzi, President and Chief Executive Officer of EMCOR Group, commented,
“We had a good start to 2013 as the Company realized revenue and backlog
growth with expanded margins over a strong year ago performance in an
environment that remains uncertain and challenging. The benefit of our balance
across multiple market sectors and disciplines was clear in the quarter. Our
strong results were driven primarily by excellent execution in our facilities
services business, particularly in turnaround and maintenance services for our
industrial clients, as well as by improvements in our mechanical services and
commercial site-based services. Our domestic construction operations had a
slow start to the year and in the UK, we continued to make progress on
refocusing our operations to the facilities services market while downsizing
our presence in the construction sector.”

Mr. Guzzi concluded, “Our first quarter results are in-line with our
expectations, and we remain confident about our prospects for the remainder of
2013. We expect strong performance from our facilities services segment and
our domestic construction businesses should follow a seasonal pattern, as
performance builds during the year and we take advantage of specific project
opportunities as they arise and remain focused on strong project execution.
Overall, visibility remains somewhat limited, as corporate and government
budgets remain unclear. While we have seen strength in certain areas of our
business, the broader economic recovery continues to lag. Our focus therefore
continues to be on exercising cost discipline while continuing to pursue
opportunities to invest in our future growth.”

The Company noted that, based on the current size and mix of its backlog and
assuming the continuation of current market conditions, it continues to expect
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 worldwide 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 first quarter conference call will be available live via
Internet broadcast today, Thursday, April 25, at 10:30 AM Eastern Daylight
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
2012 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

                                               Three months ended
                                      
                                               March 31,
                                               2013            2012
Revenues                                       $ 1,568,401       $ 1,538,521
Cost of sales                                  1,377,263        1,357,828   
Gross profit                                   191,138           180,693
Selling, general and                           138,510           134,504
administrative expenses
Restructuring expenses                         1,363            —           
Operating income                               51,265            46,189
Interest expense                               (1,862      )     (1,775      )
Interest income                                357              416         
Income before income taxes                     49,760            44,830
Income tax provision                           19,042           17,022      
Net income including                           30,718            27,808
noncontrolling interests
Less: Net income attributable                  (551        )     (663        )
to noncontrolling interests
Net income attributable to                     $ 30,167         $ 27,145    
EMCOR Group, Inc.
                                                                 
Basic earnings per common                      $ 0.45           $ 0.41      
share
Diluted earnings per common                    $ 0.44           $ 0.40      
share
Weighted average shares of
common stock outstanding:
Basic                                          67,110,334        66,685,985
Diluted                                        68,099,121        67,946,245
                                                                 
Dividends declared per common                  $ —              0.05        
share
                                                                             


EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

                                                March 31,         December 31,
                                           2013           
                                                (Unaudited)       2012
ASSETS
Current assets:
Cash and cash equivalents                       $ 499,102         $  605,303
Accounts receivable, net                        1,253,264         1,221,956
Costs and estimated earnings in
excess of billings on uncompleted               97,742            93,061
contracts
Inventories                                     39,655            50,512
Prepaid expenses and other                      72,430           73,621
Total current assets                            1,962,193         2,044,453
Investments, notes and other                    4,116             4,959
long-term receivables
Property, plant & equipment, net                114,384           116,631
Goodwill                                        566,588           566,588
Identifiable intangible assets, net             337,412           343,748
Other assets                                    30,023           30,691
Total assets                                    $ 3,014,716      $  3,107,070
LIABILITIES AND EQUITY
Current liabilities:
Borrowings under revolving credit               $ —               $  —
facility
Current maturities of long-term debt            1,789             1,787
and capital lease obligations
Accounts payable                                457,769           490,621
Billings in excess of costs and
estimated earnings on uncompleted               354,854           383,527
contracts
Accrued payroll and benefits                    186,195           224,555
Other accrued expenses and                      175,305          194,029
liabilities
Total current liabilities                       1,175,912         1,294,519
Borrowings under revolving credit               150,000           150,000
facility
Long-term debt and capital lease                3,602             4,112
obligations
Other long-term obligations                     293,717          301,260
Total liabilities                               1,623,231        1,749,891
Equity:
Total EMCOR Group, Inc. stockholders’           1,380,885         1,346,080
equity
Noncontrolling interests                        10,600           11,099
Total equity                                    1,391,485        1,357,179
Total liabilities and equity                    $ 3,014,716      $  3,107,070
                                                                     


EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2013 and 2012

(In thousands) (Unaudited)

                                               2013          2012
Cash flows - operating activities:
Net income including noncontrolling                $ 30,718        $ 27,808
interests
Depreciation and amortization                      8,155           6,951
Amortization of identifiable intangible            6,336           7,545
assets
Deferred income taxes                              3,487           1,216
Excess tax benefits from share-based               (418      )     (5,229    )
compensation
Equity income from unconsolidated entities         (59       )     (232      )
Other non-cash items                               1,637           2,361
Distributions from unconsolidated entities         600             840
Changes in operating assets and
liabilities, excluding the effect of               (145,558  )     (74,389   )
businesses acquired
Net cash used in operating activities              (95,102   )     (33,129   )
Cash flows - investing activities:
Payments for acquisitions of businesses,
net of cash acquired, and related
contingent                                         —               (21,044   )

consideration agreement
Proceeds from sale of property, plant and          549             169
equipment
Purchase of property, plant and equipment          (7,005    )     (7,826    )
Net cash used in investing activities              (6,456    )     (28,701   )
Cash flows - financing activities:
Repayments of long-term debt                       (2        )     —
Repayments of capital lease obligations            (390      )     (755      )
Dividends paid to stockholders                     —               (3,323    )
Repurchase of common stock                         —               (13,192   )
Proceeds from exercise of stock options            1,714           1,909
Payments to satisfy minimum tax                    (927      )     (733      )
withholding
Issuance of common stock under employee            671             634
stock purchase plan
Payments of contingent consideration               (537      )     (2,214    )
arrangements
Distributions to noncontrolling interests          (1,050    )     —
Excess tax benefits from share-based               418            5,229     
compensation
Net cash used in financing activities              (103      )     (12,445   )
Effect of exchange rate changes on cash            (4,540    )     1,608     
and cash equivalents
Decrease in cash and cash equivalents              (106,201  )     (72,667   )
Cash and cash equivalents at beginning of          605,303        511,322   
year
Cash and cash equivalents at end of period         $ 499,102      $ 438,655 
                                                                             


EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands) (Unaudited)

                                                 For the three months ended
                                            
                                                 March 31,
                                                 2013            2012
Revenues from unrelated entities:
United States electrical construction            $ 307,584         $ 290,537
and facilities services
United States mechanical construction            541,117           574,203
and facilities services
United States facilities services                600,700          532,890
Total United States operations                   1,449,401         1,397,630
United Kingdom construction and                  119,000          140,891
facilities services
Total worldwide operations                       $ 1,568,401      $ 1,538,521

                                               
                                                    For the three months ended

                                                    March 31,
                                                    2013           2012
Operating income (loss):
United States electrical construction and           $  18,940       $ 23,566
facilities services
United States mechanical construction and           11,140          22,823
facilities services
United States facilities services                   35,627         11,429   
Total United States operations                      65,707          57,818
United Kingdom construction and facilities          1,279           3,482
services
Corporate administration                            (14,358    )    (15,111  )
Restructuring expenses                              (1,363     )    —        
Total worldwide operations                          51,265          46,189
Other corporate items:
Interest expense                                    (1,862     )    (1,775   )
Interest income                                     357            416      
Income before income taxes                          $  49,760      $ 44,830 
                                                                             

Contact:

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