Summary
EMCOR Group, Inc.'s 2010 Form 10-K reveals a challenging year marked by a significant net loss and a substantial goodwill and intangible asset impairment charge. The company experienced a revenue decline compared to the prior year, primarily driven by the ongoing economic slowdown impacting demand for construction services across its segments. Despite efforts to manage costs, including staff reductions and reduced discretionary spending, the company's operating results were negatively affected by lower margins on new work and project write-downs in its Canadian operations. Key financial highlights include a significant non-cash impairment charge of $246.1 million, primarily impacting the United States facilities services segment, which led to an overall net loss for the year. The company's backlog saw a modest increase, suggesting some future revenue potential, but it operates in a highly competitive and cyclical industry. EMCOR's liquidity appears stable, supported by its revolving credit facility, but the company faces ongoing risks related to economic conditions, competition, and its significant unionized workforce.
Financial Highlights
51 data points| Revenue | $4.85B |
| Cost of Revenue | $4.16B |
| Gross Profit | $693.52M |
| SG&A Expenses | $472.13M |
| Operating Income | -$26.53M |
| Interest Expense | $12.15M |
| Net Income | -$86.69M |
| EPS (Basic) | $-1.31 |
| EPS (Diluted) | $-1.31 |
| Shares Outstanding (Basic) | 66.39M |
| Shares Outstanding (Diluted) | 66.39M |
Key Highlights
- 1EMCOR reported a net loss of $86.7 million for fiscal year 2010, a significant shift from a net income of $160.8 million in 2009.
- 2The company recorded a substantial non-cash impairment charge of $246.1 million, comprising $210.6 million for goodwill and $35.5 million for trade names, primarily in its U.S. Facilities Services segment, due to revised financial forecasts.
- 3Total revenues decreased by 7.7% to $5.12 billion in 2010, down from $5.55 billion in 2009, reflecting reduced demand across most business segments due to the economic downturn.
- 4The company's backlog increased to $3.42 billion at the end of 2010, up from $3.15 billion at the end of 2009, indicating potential future revenue.
- 5Operating income (loss) was negative $28.7 million in 2010, compared to a positive $262.4 million in 2009, heavily influenced by the impairment charge.
- 6EMCOR's reliance on fixed-price contracts and potential for project cost overruns remain a stated risk factor impacting profitability.
- 7Approximately 65% of EMCOR's workforce was unionized, with over 400 collective bargaining agreements in place, presenting potential operational and labor relations risks.