01—Abstract
Summary
Summary of the 10-K filed February 25, 2014. Cited figures are marked; the original filing is the authoritative source.
EMCOR Group, Inc. reported revenues of approximately $6.4 billiona for the fiscal year ending December 31, 2013.
The company, a major player in electrical and mechanical construction and facilities services, saw a slight increase in revenue year-over-year, driven in part by acquisitions, notably Repcon Strickland, Inc. (RSI). However, operating income and margins declined due to performance issues at specific projects within the United States mechanical construction segment and restructuring costs in the United Kingdom construction operations. The company strategically decided to exit the UK construction market due to recurring losses.
EMCOR maintained a stable backlog of approximately $3.36 billionb. The company demonstrated its commitment to returning capital to shareholders by continuing to pay quarterly dividends and announcing an intention to increase the regular quarterly dividend.
The acquisition of RSI significantly increased goodwill and identifiable intangible assets on the balance sheet, reflecting the company's growth strategy through acquisitions while also increasing borrowings. Investors should monitor the integration of RSI and the performance of key segments, particularly in light of the ongoing economic uncertainties and competitive landscape.
02—Key points
Key Highlights
- EMCOR generated $6.4 billion in revenue for the fiscal year 2013.
- The company acquired Repcon Strickland, Inc. (RSI) in Q3 2013, expanding its industrial services segment.
- Operating income decreased to $210.3 million in 2013 from $250.0 million in 2012.
- EMCOR is exiting its UK construction operations due to persistent losses.
- Backlog remained stable at $3.36 billion as of December 31, 2013.
- The company continued to pay and planned to increase its quarterly dividend.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, EMCOR Group kept $0.02.
- Revenue$6.33B100.0%
- Cost of revenue−$5.51B87.0%
- Gross profit$821.6M13.0%
- Operating costs−$581.3M9.2%
- Operating income$240.3M3.8%
- Interest, other & tax−$116.6M1.8%
- Net income$123.8M2.0%
Where FY2013 revenue went
$6.33B- Cost of revenue: $5.51B, 87% of revenue
- Net income: $123.8M, 2.0% of revenue
- SG&A: $580.6M, 9.2% of revenue
- Interest, other & tax: $116.6M, 1.8% of revenue
Kept 2.0% as net incomeNet income $123.8M · 2.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 25, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $6.33B$6.20B | +2.2% |
| Cost of Revenue | $5.51B$5.39B | +2.2% |
| Gross Profit | $821.65M$803.98M | +2.2% |
| SG&A Expenses | $580.65M$543.53M | +6.8% |
| Operating Income | $240.35M$260.30M | −7.7% |
| Interest Expense | $8.77M$7.28M | +20.5% |
| Net Income | $123.79M$146.58M | −15.5% |
| EPS (Basic) | $1.85$2.20 | −15.9% |
| EPS (Diluted) | $1.82$2.16 | −15.7% |
| Shares Outstanding (Basic) | 67.09M66.70M | +0.6% |
| Shares Outstanding (Diluted) | 68.08M67.74M | +0.5% |
05—Questions
Frequently Asked Questions
What was EMCOR's financial performance in 2013?
In 2013, EMCOR reported revenues of approximately $6.4 billion, a slight increase from the previous year. However, operating income decreased to $210.3 million from $250.0 million in 2012, primarily due to project-specific losses in the US mechanical construction segment and restructuring expenses related to exiting the UK construction market.
What are EMCOR's key business segments, and how did they perform?
EMCOR operates in five reportable segments: US Electrical Construction and Facilities Services, US Mechanical Construction and Facilities Services, US Building Services, US Industrial Services, and UK Construction and Building Services. The US Electrical segment saw revenue growth, while the US Mechanical segment experienced a revenue decline and significant project losses. The US Building Services segment had stable revenues but improved operating income. The US Industrial Services segment grew significantly due to the acquisition of RSI. The UK Construction and Building Services segment's revenues declined, impacted by the decision to withdraw from the UK construction market.
What impact did the RSI acquisition have on EMCOR?
The acquisition of Repcon Strickland, Inc. (RSI) in the third quarter of 2013 was a significant event for EMCOR. It bolstered the United States Industrial Services segment, contributing $123.6 million in revenue and $3.0 million in operating income (net of amortization). This acquisition also led to a substantial increase in goodwill and identifiable intangible assets on the balance sheet and increased the company's debt levels.
How is EMCOR returning capital to shareholders?
EMCOR continued its practice of paying quarterly dividends in 2013 and announced its intention to increase the regular quarterly dividend to $0.08 per share starting in Q1 2014. The company also had an active stock repurchase program, with $122.5 million available for repurchases as of December 31, 2013.
06—Continue