10-KPeriod: FY2014

EMCOR Group, Inc. Annual Report, Year Ended Dec 31, 2014

Filed February 26, 2015For Securities:EME

Summary

EMCOR Group, Inc. reported 2014 revenues of $6.4 billion, a 1.4% increase from the previous year, driven by growth in its United States industrial services and United Kingdom building services segments, partially offset by declines in other segments. The company's strategic withdrawal from the UK construction market, completed in Q3 2014, is now fully reflected as discontinued operations. Operating income saw a significant improvement, rising to $290 million from $240 million in 2013, with an improved operating margin of 4.5% compared to 3.8%. This growth was supported by a $11.7 million gain on the sale of a building and better operating performance across most segments, although the US electrical construction segment experienced a slight decline in operating income and margin. The company also managed its backlog effectively, increasing it to $3.63 billion from $3.34 billion, indicating strong future revenue potential. EMCOR continued its commitment to shareholder returns by paying quarterly dividends and actively repurchasing shares, demonstrating a focus on financial health and shareholder value.

Financial Highlights

51 data points
Beta

Revenue

$6.42B

14.1% Gross Margin

Net Income

$168.66M

2.6% Net Margin

EPS (Diluted)

$2.52

Total Assets

$3.38B

Cash & Equivalents

$432.06M

Free Cash Flow

$246.66M

Financial Statements
Beta
Revenue$6.42B
Cost of Revenue$5.52B
Gross Profit$907.25M
SG&A Expenses$626.48M
Operating Income$289.88M
Interest Expense$9.07M
Net Income$168.66M
EPS (Basic)$2.54
EPS (Diluted)$2.52
Shares Outstanding (Basic)66.33M
Shares Outstanding (Diluted)67.06M

Key Highlights

  • 1EMCOR generated $6.4 billion in revenues for 2014, a 1.4% increase year-over-year.
  • 2Operating income improved significantly, reaching $289.9 million in 2014, up from $240.4 million in 2013, with operating margin expanding from 3.8% to 4.5%.
  • 3The backlog at year-end 2014 grew to $3.63 billion, an increase from $3.34 billion in the prior year, signaling strong future demand for services.
  • 4The company completed its withdrawal from the UK construction market in Q3 2014, with results now fully presented as discontinued operations.
  • 5EMCOR repurchased approximately $206 million of its common stock in 2014 and continued to pay quarterly dividends, increasing them to $0.08 per share starting in Q1 2014.
  • 6The United States industrial services segment showed robust revenue growth, bolstered by the acquisition of Repcon-Strickland, Inc. in 2013.
  • 7A $1.5 million non-cash impairment charge was recognized for subsidiary trade names within the US mechanical and building services segments.

Frequently Asked Questions

EMCOR's revenue in 2014 was primarily driven by its United States industrial services segment, which benefited from the acquisition of Repcon-Strickland, Inc., and its United Kingdom building services segment. While overall revenues increased by 1.4% to $6.4 billion, segments like US electrical and mechanical construction experienced slight revenue declines.

EMCOR saw a substantial improvement in profitability. Operating income increased by approximately 20.6% to $289.9 million in 2014, and the operating margin improved from 3.8% in 2013 to 4.5%. This was partly due to a $11.7 million gain on the sale of a building and better operational performance across most segments.

EMCOR ceased construction operations in the United Kingdom during the third quarter of 2014 and has now fully presented these operations as discontinued operations in its financial statements. The company will now focus solely on building services in the UK, aiming to improve profitability and streamline operations.

EMCOR's backlog increased to $3.63 billion at the end of 2014, up from $3.34 billion in 2013. This growth was mainly in the US electrical and mechanical construction segments, indicating positive future revenue prospects and strong demand for the company's services.