10-KPeriod: FY2004

EMCOR Group, Inc. Annual Report, Year Ended Dec 31, 2004

Filed March 9, 2005For Securities:EME

Summary

EMCOR Group, Inc. reported revenues of $4.75 billion for the year ended December 31, 2004. The company experienced a net income of $33.2 million, a notable increase from the previous year's $20.6 million, with diluted earnings per share rising to $2.13 from $1.33 in 2003. This improvement was driven by better performance in the UK operations and increased gross profits in specific US segments, partially offset by challenges in certain mechanical and Canadian construction segments. The company is focusing on controlling operating expenses, growing its facilities services contracts, and strategically bidding on new work. EMCOR operates a diversified business model, providing both mechanical and electrical construction services, as well as comprehensive facilities services, across the United States, Canada, and the United Kingdom. The company's strategic initiatives, including management changes and a curtailment in bidding for public sector work, are aimed at improving profitability and positioning for future growth. Investors should note the company's significant backlog of approximately $2.8 billion at the end of 2004, which is expected to impact 2005 revenues.

Key Highlights

  • 1EMCOR generated $4.75 billion in revenue for fiscal year 2004.
  • 2Net income increased to $33.2 million in 2004, up from $20.6 million in 2003.
  • 3Diluted earnings per share improved to $2.13 in 2004, compared to $1.33 in 2003.
  • 4The United Kingdom construction and facilities services segment moved from an operating loss to breakeven, significantly improving performance.
  • 5The company had a contract backlog of $2.8 billion as of December 31, 2004, a slight decrease from $3.0 billion in the prior year.
  • 6EMCOR did not pay dividends in 2003 or 2004 and does not anticipate paying them in the foreseeable future due to working capital credit facility limitations.
  • 7The company is subject to various legal proceedings and investigations, including a securities litigation class action and investigations into business practices, which could potentially have a material adverse effect on financial position.

Frequently Asked Questions

EMCOR Group, Inc. is one of the largest mechanical and electrical construction and facilities services firms. They design, install, operate, and maintain mechanical and electrical systems, and provide comprehensive services for the operation, maintenance, and management of facilities.

EMCOR's revenue increased from $4.53 billion in 2003 to $4.75 billion in 2004. Net income saw a significant improvement, rising from $20.6 million in 2003 to $33.2 million in 2004. Diluted earnings per share also increased from $1.33 in 2003 to $2.13 in 2004.

EMCOR is involved in several legal proceedings. These include investigations into business practices by the New York County District Attorney's office, a securities litigation class action related to alleged misstatements, and an investigation into Poole & Kent's use of minority and woman-owned businesses. Additionally, a significant arbitration claim exists from John Mowlem Construction plc against its UK subsidiary. The company states it believes it has valid defenses but acknowledges that adverse outcomes could materially affect its financial position.

No, EMCOR did not pay dividends on its common stock in 2003 or 2004 and does not anticipate doing so in the foreseeable future. This is partly due to limitations imposed by its working capital credit facility.