Summary
EMCOR Group, Inc. reported solid revenue growth in the first quarter of 2012, with a 21.6% increase year-over-year, reaching $1.54 billion. This growth was driven by all business segments and contributions from recent acquisitions, particularly in the United States mechanical construction and facilities services and United States facilities services segments. While revenue increased, operating income saw a more modest rise to $46.2 million, and operating margins slightly compressed to 3.0% from 3.3% in the prior year period. This margin compression was mainly due to lower operating margins in the United States mechanical construction and facilities services and United States facilities services segments, partially offset by improvements in the electrical construction and United Kingdom segments. The company also demonstrated a commitment to shareholder returns by initiating a quarterly dividend and continuing its share repurchase program. Liquidity remains adequate, supported by cash flow from operations and a $750 million revolving credit facility, although the company reported a net cash used in operating activities for the quarter. Investors should note the impact of acquisitions on revenue and segment performance, as well as the ongoing focus on disciplined bidding in a competitive market. The company's backlog also showed a slight increase, indicating future revenue potential.
Financial Highlights
50 data points| Revenue | $1.54B |
| Cost of Revenue | $1.36B |
| Gross Profit | $180.69M |
| SG&A Expenses | $134.50M |
| Operating Income | $46.19M |
| Interest Expense | $1.77M |
| Net Income | $27.14M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.40 |
| Shares Outstanding (Basic) | 66.69M |
| Shares Outstanding (Diluted) | 67.95M |
Key Highlights
- 1Revenue increased by 21.6% to $1.54 billion for the three months ended March 31, 2012, compared to $1.27 billion in the prior year period.
- 2Operating income grew to $46.2 million, up from $41.8 million year-over-year, but operating margin declined slightly to 3.0% from 3.3%.
- 3The United States mechanical construction and facilities services segment saw the largest revenue increase, up 30.0% to $552.9 million.
- 4The company initiated a quarterly dividend of $0.05 per common share and continued its share repurchase program, buying back $13.2 million in the quarter.
- 5Backlog increased to $3.39 billion at March 31, 2012, from $3.29 billion at March 31, 2011, excluding the disposed Canadian subsidiary.
- 6Net cash used in operating activities was $33.1 million for the quarter, a slight improvement from $35.1 million in the prior year period, primarily due to working capital management.
- 7The company finalized its purchase price allocation for a 2011 acquisition (USM Services Holdings, Inc.) and reported an immaterial acquisition in the first quarter of 2012.