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
EMCOR Group, Inc. Reports First Quarter 2013 Results
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