01—Abstract
Summary
Summary of the 10-K filed February 26, 2015. Cited figures are marked; the original filing is the authoritative source.
EMCOR Group, Inc. reported 2014 revenues of $6.4 billiona, 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 millionb 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 billionc 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.
02—Key points
Key Highlights
- EMCOR generated $6.4 billion in revenues for 2014, a 1.4% increase year-over-year.
- Operating 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%.
- The 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.
- The company completed its withdrawal from the UK construction market in Q3 2014, with results now fully presented as discontinued operations.
- EMCOR 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.
- The United States industrial services segment showed robust revenue growth, bolstered by the acquisition of Repcon-Strickland, Inc. in 2013.
- A $1.5 million non-cash impairment charge was recognized for subsidiary trade names within the US mechanical and building services segments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, EMCOR Group kept $0.03.
- Revenue$6.42B100.0%
- Cost of revenue−$5.52B85.9%
- Gross profit$907.2M14.1%
- Operating costs−$617.4M9.6%
- Operating income$289.9M4.5%
- Interest, other & tax−$121.2M1.9%
- Net income$168.7M2.6%
Where FY2014 revenue went
$6.42B- Cost of revenue: $5.52B, 86% of revenue
- Net income: $168.7M, 2.6% of revenue
- SG&A: $626.5M, 9.8% of revenue
- Interest, other & tax: $121.2M, 1.9% of revenue
Kept 2.6% as net incomeNet income $168.7M · 2.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 26, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $6.42B$6.33B | +1.4% |
| Cost of Revenue | $5.52B$5.51B | +0.1% |
| Gross Profit | $907.25M$821.65M | +10.4% |
| SG&A Expenses | $626.48M$580.65M | +7.9% |
| Operating Income | $289.88M$240.35M | +20.6% |
| Interest Expense | $9.07M$8.77M | +3.5% |
| Net Income | $168.66M$123.79M | +36.2% |
| EPS (Basic) | $2.54$1.85 | +37.3% |
| EPS (Diluted) | $2.52$1.82 | +38.5% |
| Shares Outstanding (Basic) | 66.33M67.09M | −1.1% |
| Shares Outstanding (Diluted) | 67.06M68.08M | −1.5% |
05—Questions
Frequently Asked Questions
What were EMCOR's main revenue drivers in 2014?
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.
How did EMCOR's profitability change in 2014 compared to 2013?
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.
What is the significance of the UK construction market withdrawal for EMCOR?
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.
What is EMCOR's outlook regarding its backlog?
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.
06—Continue