01—Abstract
Summary
Summary of the 10-K filed February 25, 2021. Cited figures are marked; the original filing is the authoritative source.
EMCOR Group, Inc. reported revenues of approximately $8.8 billiona for the year ended December 31, 2020.
The company experienced a year-over-year revenue decrease of 4.1%, primarily attributed to declines in its United States industrial services segment due to adverse market conditions in the oil and gas industry, exacerbated by the COVID-19 pandemic. This was partially offset by revenue growth in its United States mechanical construction and building services segments. The company incurred a significant goodwill impairment charge of $232.8 millionb in the second quarter of 2020, largely impacting its industrial services segment.
Excluding this charge, operating income and margin saw an increase, reflecting improved operational performance in its construction segments. EMCOR's remaining performance obligations increased to $4.59 billionc at year-end 2020, indicating a strong backlog and future revenue potential. EMCOR also announced an increase in its quarterly dividend to $0.13 per share, signaling confidence in its financial stability and future prospects, supported by its share repurchase program and ongoing efforts to manage costs effectively amidst the challenging economic environment.
02—Key points
Key Highlights
- EMCOR Group reported revenues of $8.8 billion for fiscal year 2020, a 4.1% decrease from 2019, largely impacted by the oil and gas industry downturn and COVID-19.
- The company recorded a significant goodwill impairment charge of $232.8 million in Q2 2020, primarily affecting its United States industrial services segment.
- Despite the impairment, operating income excluding the charge saw an increase due to improved performance in U.S. construction segments.
- Remaining performance obligations grew to $4.59 billion by the end of 2020, signaling a robust project pipeline.
- EMCOR announced an increase in its quarterly dividend to $0.13 per share, effective Q1 2021, demonstrating a commitment to shareholder returns.
- The company maintained a strong safety record, with its Total Recordable Incident Rate being significantly lower than the industry average for the twelfth consecutive year.
- Share repurchases continued, with approximately $112.6 million spent in 2020, and $246.0 million remaining under the authorization as of December 31, 2020.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, EMCOR Group kept $0.02.
- Revenue$8.80B100.0%
- Cost of revenue−$7.40B84.1%
- Gross profit$1.40B15.9%
- Operating costs−$1.14B12.9%
- Operating income$256.8M2.9%
- Interest, other & tax−$123.9M1.4%
- Net income$132.9M1.5%
Where FY2020 revenue went
$8.80B- Cost of revenue: $7.40B, 84% of revenue
- Net income: $132.9M, 1.5% of revenue
- SG&A: $903.6M, 10% of revenue
- Other operating costs: $235.0M, 2.7% of revenue
- Interest, other & tax: $123.9M, 1.4% of revenue
Kept 1.5% as net incomeNet income $132.9M · 1.5%Interest, other & tax $123.9M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 25, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $8.80B$9.17B | −4.1% |
| Cost of Revenue | $7.40B$7.82B | −5.3% |
| Gross Profit | $1.40B$1.36B | +2.9% |
| SG&A Expenses | $903.58M$893.45M | +1.1% |
| Operating Income | $256.83M$460.89M | −44.3% |
| Interest Expense | $9.01M$13.82M | −34.8% |
| Net Income | $132.94M$325.14M | −59.1% |
| EPS (Basic) | $2.41$5.78 | −58.3% |
| EPS (Diluted) | $2.40$5.75 | −58.3% |
| Shares Outstanding (Basic) | 55.20M56.21M | −1.8% |
| Shares Outstanding (Diluted) | 55.42M56.52M | −1.9% |
05—Questions
Frequently Asked Questions
What was EMCOR's financial performance in 2020?
In 2020, EMCOR reported revenues of $8.8 billion, a 4.1% decrease compared to 2019. The company recorded a significant goodwill impairment charge of $232.8 million, impacting its net income. However, excluding this charge, operating performance improved due to strong execution in its U.S. construction segments.
How did the COVID-19 pandemic affect EMCOR's business?
The COVID-19 pandemic caused disruptions, including temporary job site shutdowns, reduced labor efficiency due to safety protocols, and deferral of customer projects. The industrial services segment was particularly impacted by the downturn in oil and gas markets. While most shelter-in-place orders were lifted in the latter half of the year, the extent of future impacts remains uncertain.
What is EMCOR's outlook and commitment to shareholders?
EMCOR's remaining performance obligations increased to $4.59 billion, indicating a solid backlog. The company also demonstrated a commitment to shareholders by increasing its quarterly dividend to $0.13 per share and continuing its share repurchase program, with $246 million remaining authorization at year-end 2020.
What significant events impacted EMCOR's financial results in 2020?
The most significant events were the widespread impact of the COVID-19 pandemic on operations and customer demand, particularly in the oil and gas sector, and a substantial goodwill impairment charge of $232.8 million, primarily related to the industrial services segment due to adverse market conditions.
06—Continue