01—Abstract
Summary
Summary of the 10-K filed February 23, 2023. Cited figures are marked; the original filing is the authoritative source.
EMCOR Group, Inc. reported strong revenue growth in 2022, reaching a new annual record of $11.1 billiona, an increase of 11.8% from the prior year.
This growth was driven by broad-based demand across most of its service segments, particularly in United States construction and building services. Despite this top-line expansion, the company experienced a slight decrease in its gross profit margin to 14.5%b from 15.2% in the prior year, largely due to a less favorable project mix and specific project losses within its U.S. construction segments. These margin pressures were partly offset by improved operating leverage in selling, general, and administrative expenses.
Looking ahead, EMCOR faces ongoing challenges including supply chain disruptions, inflation, and rising interest rates, which are impacting material costs, labor productivity, and project scheduling. The company is actively managing these challenges through enhanced planning, pricing adjustments, and supplier relationships.
EMCOR's strong backlog, reflected in its remaining performance obligations of $7.46 billionc, indicates continued demand for its services, providing a solid foundation for future revenue generation. The company also continues its commitment to shareholder returns through dividends and share repurchases.
02—Key points
Key Highlights
- Achieved record revenues of $11.1 billion in 2022, an 11.8% increase year-over-year, driven by strong demand across most segments.
- Experienced a slight compression in gross profit margin to 14.5% (from 15.2% in 2021) due to project mix and specific losses, impacting U.S. construction segments.
- Operating income increased to $564.9 million, though operating margin slightly decreased to 5.1% from 5.4% due to lower gross margins.
- Net income attributable to EMCOR increased to $406.1 million, or $8.10 per diluted share, benefiting from higher revenues and reduced share count.
- Remaining performance obligations (backlog) grew significantly to $7.46 billion, indicating strong future demand for services.
- Acquired six companies in 2022 for $100.8 million, enhancing service offerings and geographic presence.
- Increased quarterly dividend by 20% to $0.18 per share, signaling confidence in future performance and commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, EMCOR Group kept $0.04.
- Revenue$11.08B100.0%
- Cost of revenue−$9.47B85.5%
- Gross profit$1.60B14.5%
- Operating costs−$1.04B9.4%
- Operating income$564.9M5.1%
- Interest, other & tax−$158.8M1.4%
- Net income$406.1M3.7%
Where FY2022 revenue went
$11.08B- Cost of revenue: $9.47B, 86% of revenue
- Net income: $406.1M, 3.7% of revenue
- SG&A: $1.04B, 9.4% of revenue
- Interest, other & tax: $158.8M, 1.4% of revenue
Kept 3.7% as net incomeNet income $406.1M · 3.7%Interest, other & tax $158.8M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 23, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $11.08B$9.90B | +11.8% |
| Cost of Revenue | $9.47B$8.40B | +12.7% |
| Gross Profit | $1.60B$1.50B | +6.8% |
| SG&A Expenses | $1.04B$970.94M | +7.0% |
| Operating Income | $564.88M$530.80M | +6.4% |
| Interest Expense | $13.20M$6.07M | +117.4% |
| Net Income | $406.12M$383.53M | +5.9% |
| EPS (Basic) | $8.13$7.09 | +14.7% |
| EPS (Diluted) | $8.10$7.06 | +14.7% |
| Shares Outstanding (Basic) | 49.93M54.07M | −7.7% |
| Shares Outstanding (Diluted) | 50.14M54.35M | −7.7% |
05—Questions
Frequently Asked Questions
What were EMCOR's key financial performance indicators in 2022?
EMCOR reported record revenues of $11.1 billion in 2022, up 11.8% from 2021. Operating income was $564.9 million, and net income attributable to EMCOR was $406.1 million, or $8.10 per diluted share. The company's gross profit margin was 14.5%.
What are the primary challenges EMCOR is facing?
EMCOR is navigating challenges such as supply chain disruptions leading to material and equipment lead times, inflationary pressures on fuel, materials, and wages, rising interest rates impacting borrowing costs, and skilled labor shortages in certain regions. These factors have affected project scheduling, labor productivity, and, in some cases, gross profit margins.
How is EMCOR managing the current economic and operational challenges?
EMCOR is implementing strategies such as enhanced labor planning and project scheduling, increasing prices where contractually permitted, and leveraging relationships with suppliers and customers. The company also continues to focus on disciplined cost management and operational efficiency.
What is the outlook for EMCOR's business based on its backlog?
EMCOR's remaining performance obligations, or backlog, increased to $7.46 billion as of December 31, 2022. This significant backlog, driven by strong demand across various market sectors including commercial, data centers, and life sciences, indicates a robust demand for EMCOR's services and provides a positive outlook for future revenue realization.
06—Continue