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EMCOR Group Annual Report, Year Ended Dec 31, 2000

Filing Date
Filed February 20, 2001
Period End
December 31, 2000
Security
EME
In the record · 2016–202610-K1110-Q338-K77

EME filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 77 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Aug ’16Aug ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Jun ’21Jun ’21
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed February 20, 2001. Cited figures are marked; the original filing is the authoritative source.

EMCOR Group, Inc. (NYSE: EME) reported a strong fiscal 2000, with revenues rising 19.6% to $3.46 billiona (from $2.89 billion in 1999) and net income increasing 44.1% to $40.1 million, or $2.95 per diluted share.

Operating income grew to $78.9 millionb from $58.1 million, and gross margin edged up to 10.3%. Growth was driven largely by the U.S. electrical and mechanical segments, which together accounted for about 75% of revenues, while the United Kingdom business declined after completion of the Jubilee Line project. The company is one of the largest mechanical and electrical construction and facilities services firms in the U.S., Canada, the U.K. and globally, with roughly 80% of revenue from the United States.

Balance sheet and cash flow strengthened meaningfully. Cash rose to $137.7 millionc from $58.6 million, operating cash flow reached $91.4 million, and stockholders' equity grew to $233.5 million. Backlog was about $1.80 billion, up modestly from $1.77 billion.

Results were partly offset by rising receivables and $115 milliond of 5.75% convertible subordinated notes due 2005. The company also moved its stock to the NYSE in November 2000 and does not pay dividends. Key risks include a pending ERISA class action tied to the former JWP, Inc. stock held in employee plans, and a New York County District Attorney investigation involving subsidiary Forest Electric Corp., in which Forest and certain officers are reported to be targets.

Management says it believes these matters will not produce significant liability, but notes that substantial settlements could have a material adverse effect. Losses on Poole & Kent jobs in the Carolinas also weighed on U.S. mechanical operating income.

02—Key points

Key Highlights

  1. Revenue grew 19.6% to $3.46 billion in 2000, driven mainly by U.S. electrical and mechanical operations and the BTENA facilities services joint venture with CB Richard Ellis.
  2. Net income rose 44.1% to $40.1 million; diluted EPS was $2.95, up from $2.21 in 1999.
  3. Operating income increased to $78.9 million from $58.1 million, with gross margin steady at about 10.3%.
  4. Cash and equivalents more than doubled to $137.7 million, and operating cash flow was $91.4 million, up from $34.5 million.
  5. Backlog was approximately $1.80 billion at year-end 2000, compared with $1.77 billion a year earlier.
  6. Facilities services made up about 16% of revenue, and roughly 57% of total revenue came from renovation, retrofit and facilities services, which tend to be less cyclical than new construction.
  7. Legal exposure includes an ERISA class action and a New York County DA investigation involving subsidiary Forest Electric Corp.; the company does not pay dividends and its stock began trading on the NYSE in November 2000.

03—Questions

Frequently Asked Questions

  1. What drove EMCOR's revenue and earnings growth in 2000?

    Revenue rose $566 million, or 19.6%, to $3.46 billion. About $420 million of the increase came from core operations, with roughly $146 million from BTENA and 1999 acquisitions. Favorable market conditions in U.S. electrical and mechanical construction and renovation markets were the main drivers. Net income grew 44.1% to $40.1 million, supported by higher gross profit and fixed-cost leverage in SG&A.

  2. How strong is EMCOR's balance sheet and liquidity position?

    Cash increased to $137.7 million at year-end 2000, and stockholders' equity rose to $233.5 million. Long-term debt is about $116 million, consisting almost entirely of the 5.75% convertible subordinated notes due 2005. The company had no revolving loans outstanding under its $150 million credit facility, which expires June 30, 2002. Management believes cash and available credit are sufficient for both short-term and foreseeable long-term needs.

  3. What are the most significant legal risks disclosed?

    Subsidiary Forest Electric Corp. has been informed that it and certain officers are targets of a New York County District Attorney investigation into illegal business practices in the New York City construction industry. Separately, a former employee has filed an ERISA class action over EMCOR stock (formerly JWP, Inc.) held in employee plans between 1991 and 1994. Management says it intends to defend both vigorously and that insurance may apply, but substantial settlements could materially harm the business.

  4. Are there any notable weaknesses or margin pressures in the business?

    Operating income from U.S. mechanical operations fell slightly in 2000 because of losses on jobs in the Carolinas undertaken by Poole & Kent before its acquisition. U.K. revenue declined 19.4% after the Jubilee Line project finished, and backlog in Canada and the U.K. fell about $110 million. Gross margin remained thin at 10.3%, and receivables grew faster than revenue, reducing working-capital efficiency.

04—Continue

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