EMCOR Group, Inc. Reports Fourth Quarter and Full Year 2013 Results

  EMCOR Group, Inc. Reports Fourth Quarter and Full Year 2013 Results

               - 2013 Revenue Growth of 1.1% to $6.42 billion -

             - Quarter Four Operating Cash Flow - $82.0 million -

             - Announces 2014 Revenue and Diluted EPS Guidance -

Business Wire

NORWALK, Conn. -- February 25, 2014

EMCOR Group, Inc. (NYSE:EME) today reported results for the fourth quarter and
the year ended December 31, 2013.

For the fourth quarter of 2013, net income attributable to EMCOR was $45.9
million, or $0.68 per diluted share. Excluding several one-time charges
discussed below, non-GAAP net income was $51.5 million, or $0.76 per diluted
share, compared to non-GAAP net income of $50.6 million, or $0.75 per diluted
share in the fourth quarter of 2012. Revenues in the fourth quarter of 2013
totaled $1.66 billion, compared to revenues of $1.61 billion in the year ago
period.

Operating income for the fourth quarter of 2013 was $68.8 million, or 4.1% of
revenues, which included operating losses and expenses aggregating
approximately $7.2 million (including restructuring expenses of $2.1 million)
primarily relating to the Company's decision to withdraw from the UK
construction market. Excluding these losses and expense items, the Company's
non-GAAP operating income for the fourth quarter of 2013 was $76.0 million, or
4.6% of revenues, compared to non-GAAP operating income in the 2012 fourth
quarter of $84.4 million, or 5.3% of revenues, as adjusted to exclude 2012 UK
construction operating losses.

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 for the 2013 fourth quarter were
$163.2 million, or 9.8% of revenues, compared to $149.6 million, or 9.3% of
revenues, in the year ago period.

The Company's income tax rate in the 2013 fourth quarter was 30.4%, compared
to an income tax rate of 39.8% in the year ago period.

Backlog as of December 31, 2013 was $3.36 billion, a decrease of 0.4% from
$3.37 billion at the end of the 2012 fourth quarter. Fourth quarter backlog
growth of $45 million in the Company's domestic operations nearly offset a
backlog decline of $58 million related to the Company's decision to withdraw
from the UK construction market. Backlog growth in the transportation,
healthcare, water/wastewater and commercial sectors was more than offset by
declines in the institutional and industrial sectors. Total backlog of $3.36
billion was a decrease of 0.9% from $3.39 billion compared to September 30,
2013.

Tony Guzzi, President and Chief Executive Officer of EMCOR Group commented,
“Our performance in 2013 highlights the strength from the diversity of our
business which insulates us from weakness in any one sector of the economy.
Growth in the non-residential construction market remained sluggish, and we
continue to contend with a slowdown in government spending. In spite of this,
our U.S. electrical construction segment performed well, and we saw marked
improvement in our building services segment. Although results in our U.S.
mechanical construction segment were hindered by challenges related to two
project write-downs in the year, we are confident that this segment will
rebound in 2014.

Mr. Guzzi continued, “During 2013, we made several key strategic moves to
position the Company for long-term success, most notably our mid-year
acquisition of RepconStrickland and our second quarter decision to exit from
the UK construction business. We are pleased with the progress made on the
integration and performance of RepconStrickland to date which has been teamed
with our Ohmstede subsidiary. We now have a market-leading industrial services
business focused on refineries and petrochemical facilities. As we continue to
focus on producing sustainable long-term growth, our new $1.1 billion credit
agreement, announced in December, provides us with the financial flexibility
needed to pursue strategic growth opportunities. Finally, by returning $38.2
million to our shareholders through our share repurchase program and dividends
during 2013, we demonstrated our commitment to enhancing shareholder value.”

Mr. Guzzi concluded, “We are optimistic about our prospects for 2014, despite
ongoing challenges in some markets. We anticipate that improvements in the
non-residential construction cycle will lead to greater opportunities
resulting in increased revenue growth. We continue to operate from a position
of financial strength with a robust balance sheet and strong cash generation.
Overall, we are now in a better position financially and operationally than we
were at the same point last year and believe 2014 has the potential to be a
strong year for EMCOR.”

Revenues for the 2013 full-year period increased 1.1% to $6.42 billion
compared to $6.35 billion for the 2012 full-year period.

Net income attributable to EMCOR for the 2013 full-year period was $123.8
million, or $1.82 per diluted share. Excluding losses associated with the
withdrawal from the UK construction market, transaction expenses associated
with the acquisition of RepconStrickland, and UK restructuring expenses,
non-GAAP net income was $151.2 million, or $2.22 per diluted share, compared
to non-GAAP net income of $154.4 million, or $2.28 per diluted share, in the
year ago period, excluding 2012 UK construction losses.

Operating income in the 2013 full-year period was $210.3 million, or 3.3% of
revenues. Excluding the items mentioned in the immediately preceding
paragraph, non-GAAP operating income for the 2013 full-year period was $246.5
million, or 3.9% of revenues, compared to non-GAAP operating income of $260.3
million, or 4.2% of revenues, in 2012.

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.

For the 2013 full-year period, SG&A totaled $591.1 million, or 9.2% of
revenues, compared to $556.2 million, or 8.8% of revenues, in 2012.

The Company noted that, based on the current size and mix of its backlog and
assuming the continuation of current market conditions, it expects in 2014
revenues to be approximately $6.8 billion and diluted earnings per share to be
between $2.40 to $2.70 excluding restructuring and other costs associated with
the withdrawal from the UK construction market.

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 fourth quarter conference call will be available live via
internet broadcast today, Tuesday, February 25, 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
2013 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)
                                                                                                                   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                  
                       
                       (Unaudited)
                       For the three months ended                      For the twelve months ended

                       December 31,                                    December 31,
                       2013                2012                    2013                    2012
Revenues               $  1,662,937           $  1,611,881           $  6,417,158           $  6,346,679
Cost of sales          1,428,862              1,383,432              5,604,100              5,540,325     
Gross profit           234,075                 228,449                 813,058                 806,354
Selling,
general and            163,208                 149,586                 591,063                 556,242
administrative
expenses
Restructuring          2,061                  —                      11,703                 145           
expenses
Operating              68,806                  78,863                  210,292                 249,967
income
Interest               (2,791        )         (1,815        )         (8,769        )         (7,275        )
expense
Interest               266                    391                    1,128                  1,556         
income
Income before          66,281                  77,439                  202,651                 244,248
income taxes
Income tax             20,012                 30,651                 75,297                 95,362        
provision
Net income
including              46,269                  46,788                  127,354                 148,886
noncontrolling
interests
Less: Net
income
attributable           (348          )         (378          )         (3,562        )         (2,302        )
to
noncontrolling
interests
Net income
attributable           $  45,921             $  46,410             $  123,792            $  146,584   
to EMCOR
Group, Inc.
                                                                                                                   
Basic earnings
per common             $  0.69               $  0.69               $  1.85               $  2.20      
share
Diluted
earnings per           $  0.68               $  0.68               $  1.82               $  2.16      
common share
                                                                                                                   
Weighted
average shares
of common
stock
outstanding:
Basic                  66,966,303              66,805,577              67,086,299              66,701,869
Diluted                67,950,697              67,801,701              68,076,841              67,738,418
                                                                                                                   
Dividends
declared per           $  —                  $  0.36               $  0.18               $  0.51      
common share
                                                                                                                   

                                                                         
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                              
                                                                             
                              December 31,             December 31,

                              2013                     2012
ASSETS
Current assets:
Cash and cash                 $   439,813            $   605,303
equivalents
Accounts receivable,          1,268,226                1,221,956
net
Costs and estimated
earnings in excess of         90,727                   93,061
billings on
uncompleted contracts
Inventories                   52,123                   50,512
Prepaid expenses and          79,216                   73,621
other
Total current assets          1,930,105                2,044,453
Investments, notes
and other long-term           6,799                    4,959
receivables
Property, plant &             123,414                  116,631
equipment, net
Goodwill                      834,825                  566,588
Identifiable
intangible assets,            541,497                  343,748
net
Other assets                  29,275                   30,691
Total assets                  $   3,465,915          $   3,107,070
LIABILITIES AND
EQUITY
Current liabilities:
Borrowings under
revolving credit              $     —                  $     —
facility
Current maturities of
long-term debt and            19,332                   1,787
capital lease
obligations
Accounts payable              487,738                  490,621
Billings in excess of
costs and estimated           381,295                  383,527
earnings on
uncompleted contracts
Accrued payroll and           237,779                  224,555
benefits
Other accrued
expenses and                  172,599                  194,029
liabilities
Total current                 1,298,743                1,294,519
liabilities
Borrowings under
revolving credit              —                        150,000
facility
Long-term debt and
capital lease                 335,331                  4,112
obligations
Other long-term               352,215                  301,260
obligations
Total liabilities             1,986,289                1,749,891
Equity:
Total EMCOR Group,
Inc. stockholders’            1,466,265                1,346,080
equity
Noncontrolling                13,361                   11,099
interests
Total equity                  1,479,626                1,357,179
Total liabilities and         $   3,465,915          $   3,107,070
equity
                                                                             

EMCOR GROUP, INC.                                                        
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twelve Months Ended December 31, 2013 and 2012
(In thousands)
                                          
                                                                             
                               2013                    2012
Cash flows -
operating
activities:
Net income
including                      $   127,354           $   148,886
noncontrolling
interests
Depreciation
and                            36,310                  31,204
amortization
Amortization
of
identifiable                   31,028                  29,762
intangible
assets
Deferred                       11,857                  6,626
income taxes
Excess tax
benefits from                  (4,624        )         (7,083        )
share-based
compensation
Equity income
from                           (1,048        )         (930          )
unconsolidated
entities
Other non-cash                 (6,262        )         8,978
items
Distributions
from                           679                     887
unconsolidated
entities
Changes in
operating
assets and
liabilities,                   (45,225       )         (33,922       )
excluding the
effect of
businesses
acquired
Net cash
provided by                    150,069                184,408       
operating
activities
Cash flows -
investing
activities:
Payments for
acquisitions
of businesses,
net of cash
acquired, and                  (454,671      )         (20,613       )
related
contingent

consideration
agreement
Proceeds from
sale of
property,                      2,930                   3,070
plant and
equipment
Purchase of
property,                      (35,497       )         (37,875       )
plant and
equipment
Investments in
and advances
to                             (800          )         —
unconsolidated
entities and
joint ventures
Purchase of
short-term                     —                       (22,433       )
investments
Maturity of
short-term                     4,616                  35,305        
investments
Net cash used
in investing                   (483,422      )         (42,546       )
activities
Cash flows -
financing
activities:
Proceeds from
revolving                      250,000                 —
credit
facility
Repayments of
revolving                      (400,000      )         —
credit
facility
Borrowings
from long-term                 350,000                 —
debt
Repayments of                  (3,013        )         (40           )
long-term debt
Repayments of
capital lease                  (1,692        )         (1,978        )
obligations
Dividends paid
to                             (12,080       )         (34,073       )
stockholders
Repurchase of                  (26,070       )         (23,912       )
common stock
Proceeds from
exercise of                    5,172                   8,786
stock options
Payments to
satisfy                        (927          )         (1,654        )
minimum tax
withholding
Issuance of
common stock
under employee                 2,854                   2,549
stock purchase
plan
Payments for
contingent                     (537          )         (5,748        )
consideration
arrangements
Distributions
to                             (1,300        )         (1,600        )
noncontrolling
interests
Excess tax
benefits from                  4,624                  7,083         
share-based
compensation
Net cash
provided by
(used in)                      167,031                (50,587       )
financing
activities
Effect of
exchange rate
changes on                     832                    2,706         
cash and cash
equivalents
(Decrease)
increase in                    (165,490      )         93,981
cash and cash
equivalents
Cash and cash
equivalents at                 605,303                511,322       
beginning of
year
Cash and cash
equivalents at                 $   439,813          $   605,303 
end of period
                                                                             

                                                                         
EMCOR GROUP, INC.
SEGMENT INFORMATION
(In thousands)
                     
                                                                             
                             (Unaudited)
                             For the three months ended

                             December 31,
                                                  
                             2013                      2012
Revenues from
unrelated
entities:
United States
electrical
construction                 $   361,307             $   306,349
and facilities
services
United States
mechanical
construction                 588,351                   592,230
and facilities
services
United States
building                     433,586                   465,977
services
United States
industrial                   184,055                  113,188
services
Total United
States                       1,567,299                 1,477,744
operations
United Kingdom
construction                 95,638                   134,137
and building
services
Total
worldwide                    $   1,662,937          $   1,611,881
operations
                                                                             
                                                                             
                             For the twelve months ended

                             December 31,
                             2013                      2012
Revenues from
unrelated
entities:
United States
electrical
construction                 $     1,345,750           $     1,211,692
and facilities
services
United States
mechanical
construction                 2,329,834                 2,386,498
and facilities
services
United States
building                     1,794,978                 1,807,917
services
United States
industrial                   519,413                  401,793
services
Total United
States                       5,989,975                 5,807,900
operations
United Kingdom
construction                 427,183                  538,779
and building
services
Total
worldwide                    $   6,417,158          $   6,346,679
operations
                                                                             

EMCOR GROUP, INC.                                                         
SEGMENT INFORMATION
(In thousands)
                     
                                                                             
                             (Unaudited)
                             For the three months ended

                             December 31,
                             2013                  2012
Operating
income (loss):
United States
electrical
construction                 $   29,967                $   32,615
and facilities
services
United States
mechanical
construction                 36,956                      42,573
and facilities
services
United States
building                     14,297                      9,637
services
United States
industrial                   12,444                     14,624        
services
Total United
States                       93,664                      99,449
operations
United Kingdom
construction                 (3,859        )             (2,038        )
and building
services
Corporate                    (18,938       )             (18,548       )
administration
Restructuring                (2,061        )             —             
expenses
Total
worldwide                    68,806                      78,863
operations
Other
corporate
items:
Interest                     (2,791        )             (1,815        )
expense
Interest                     266                        391           
income
Income before                $   66,281               $   77,439  
income taxes
                                                                             
                                                                             
                             For the twelve months ended

                             December 31,
                             2013                        2012
Operating
income (loss):
United States
electrical
construction                 $     98,114                $     100,736
and facilities
services
United States
mechanical
construction                 93,765                      125,261
and facilities
services
United States
building                     67,225                      43,290
services
United States
industrial                   38,763                     37,241        
services
Total United
States                       297,867                     306,528
operations
United Kingdom
construction                 (5,981        )             7,052
and building
services
Corporate                    (69,891       )             (63,468       )
administration
Restructuring                (11,703       )             (145          )
expenses
Total
worldwide                    210,292                     249,967
operations
Other
corporate
items:
Interest                     (8,769        )             (7,275        )
expense
Interest                     1,128                      1,556         
income
Income before                $   202,651              $   244,248 
income taxes
                                                                             


EMCOR GROUP, INC.
RECONCILIATION OF 2013 AND 2012 OPERATING INCOME
(In thousands) (Unaudited)

In our press release, we provide actual 2013 and 2012 fourth quarter and
year-to-date December 31, 2013 and 2012 operating income. The following table
provides a reconciliation between 2013 and 2012 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,
                          2013               2012                 2013                2012
GAAP operating            $   68,806           $   78,863         $   210,292           $   249,967
income
Transaction
expenses related
to the                    90                     —                    6,140                   —
acquisition of
RepconStrickland,
Inc.
EMCOR UK
construction              5,034                  5,572                19,002                  10,337
losses
EMCOR UK
restructuring             2,066                 —                   11,056                 —
expenses
Non-GAAP
operating income,
excluding
RepconStrickland
transaction
expenses, UK
losses
and UK
restructuring             $   75,996          $   84,435        $   246,490          $   260,304
expenses
                                                                                                                  
                                                                                                                  


EMCOR GROUP, INC.
RECONCILIATION OF 2013 AND 2012 NET INCOME

(In thousands) (Unaudited)

In our press release, we provide actual 2013 and 2012 fourth quarter and
year-to-date December 31, 2013 and 2012 net income attributable to EMCOR
Group, Inc. The following table provides a reconciliation between 2013 and
2012 net income 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,
                          2013                2012                 2013                 2012
GAAP net income
attributable to           $   45,921             $   46,410         $   123,792             $   146,584
EMCOR Group, Inc.
Transaction
expenses related
to the                    107                      —                    4,363                     —
acquisition of
RepconStrickland,
Inc. ^(1)
EMCOR UK
construction              3,863                    4,206                14,584                    7,804
losses ^(2)
EMCOR UK
restructuring             1,585                   —                   8,485                    —
expenses ^(3)
Non-GAAP net
income
attributable to
EMCOR Group,
Inc., excluding
RepconStrickland
transaction
expenses, UK
losses and UK             $   51,476            $   50,616        $   151,224            $   154,388
restructuring
expenses
                                                                                                                    
                                                                                                                    

(1)  Amount is net of tax effect of $0.0 million in the quarter and $1.8
      million in the twelve-month period.
(2)   Amount is net of tax effect of $1.2 million in the 2013 quarter and $4.4
      million in the 2013 twelve-month period.
      Amount is net of tax effect of $1.4 million in the 2012 quarter and $2.5
      million in the 2012 twelve-month period.
(3)   Amount is net of tax effect of $0.5 million in the quarter and $2.6
      million in the twelve-month period.
      


EMCOR GROUP, INC.
RECONCILIATION OF 2013 AND 2012 DILUTED EARNINGS PER SHARE FIGURES

(Unaudited)

In our press release, we provide actual 2013 and 2012 fourth quarter and
year-to-date December 31, 2013 and 2012 diluted earnings per share. The
following table provides a reconciliation between 2013 and 2012 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,
                                  2013            2012                    2013            2012
GAAP diluted
earnings per                      $   0.68          $   0.68              $   1.82          $   2.16
common share
Transaction
expenses related
to the
acquisition of                    0.00                 —                       0.06                —

RepconStrickland,
Inc. ^(1)
EMCOR UK
construction                      0.06                 0.06                    0.21                0.12
losses ^(2)
EMCOR UK
restructuring                     0.02                 —                       0.12                —
expenses ^(3)
Non-GAAP diluted
earnings per
common
share, excluding
RepconStrickland
transaction
expenses, UK
losses and UK
restructuring                     $     0.76           $     0.75              $     2.22          $     2.28
expenses
                                                                                                         
                                                                                                         

(1)  Amount is net of tax effect of $0.0 million in the quarter and $1.8
      million in the twelve-month period.
(2)   Amount is net of tax effect of $1.2 million in the 2013 quarter and $4.4
      million in the 2013 twelve-month period.
      Amount is net of tax effect of $1.4 million in the 2012 quarter and $2.5
      million in the 2012 twelve-month period.
(3)   Amount is net of tax effect of $0.5 million in the quarter and $2.6
      million in the twelve-month period.

Contact:

FOREMCOR 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
LAK Public Relations, Inc.
Media:
Lisa Linden / Mollie Fullington
212-575-4545 / 917-346-6123
 
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