10-QPeriod: Q2 FY2019

EMCOR Group, Inc. Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 30, 2019For Securities:EME

Summary

EMCOR Group, Inc. reported strong financial results for the second quarter and the first half of 2019, demonstrating significant revenue and profit growth across its segments. Revenues increased by 19% year-over-year for the quarter to $2.32 billion and by 16.3% for the first half to $4.48 billion. This growth was driven by broad-based strength across all reportable segments, particularly in United States industrial services and United States electrical construction and facilities services. The company achieved record quarterly revenues, operating income, net income, and diluted earnings per share from continuing operations. Profitability also improved, with operating income rising by 20.3% to $120 million for the quarter and by 25.1% to $222.3 million for the first half, leading to an expansion in operating margins. Acquisitions played a role in the revenue growth, contributing $72.8 million and $121.2 million in incremental revenues for the respective periods. The company maintained a solid backlog of $4.23 billion in remaining performance obligations, indicating strong future revenue potential. EMCOR also reported continued compliance with its debt covenants and a remaining authorization of $158.5 million for share repurchases, underscoring its financial stability and commitment to shareholder returns.

Financial Highlights

50 data points
Beta

Revenue

$2.32B

14.9% Gross Margin

Net Income

$83.97M

3.6% Net Margin

EPS (Diluted)

$1.49

Total Assets

$4.39B

Cash & Equivalents

$213.37M

Free Cash Flow

$15.24M

Financial Statements
Beta
Revenue$2.32B
Cost of Revenue$1.98B
Gross Profit$346.38M
SG&A Expenses$226.25M
Operating Income$119.96M
Net Income$83.97M
EPS (Basic)$1.49
EPS (Diluted)$1.49
Shares Outstanding (Basic)56.18M
Shares Outstanding (Diluted)56.50M

Key Highlights

  • 1EMCOR reported record quarterly revenues of $2.32 billion for Q2 2019, a 19.0% increase year-over-year.
  • 2Net income attributable to EMCOR Group, Inc. for Q2 2019 was $83.97 million, a significant increase from $70.82 million in Q2 2018.
  • 3Diluted EPS from continuing operations was $1.49 for Q2 2019, up from $1.21 in the prior year's second quarter.
  • 4All reportable segments experienced revenue growth, with United States industrial services and United States electrical construction and facilities services showing particularly strong performance.
  • 5Operating income increased by 20.3% to $119.96 million in Q2 2019, with operating margin improving to 5.2% from 5.1%.
  • 6The company's backlog of remaining performance obligations stood at $4.23 billion as of June 30, 2019, up from $3.96 billion at the end of 2018, indicating robust future revenue potential.
  • 7EMCOR's strong financial performance was supported by strategic acquisitions, contributing incremental revenues and operating income.

Frequently Asked Questions

EMCOR's revenue growth in the second quarter of 2019 was driven by broad-based increases across all its reportable segments. Notably, the United States industrial services and United States electrical construction and facilities services segments showed significant expansion. Acquisitions also contributed to the revenue increase, adding $72.8 million in incremental revenue for the quarter.

Profitability improved significantly. Operating income increased by 20.3% to $119.96 million, and operating margin expanded slightly to 5.2% from 5.1% in the prior year's second quarter. Net income attributable to EMCOR Group, Inc. rose by 18.5% to $83.97 million, and diluted earnings per share from continuing operations increased to $1.49 from $1.21.

EMCOR's backlog of remaining performance obligations stood at $4.23 billion as of June 30, 2019, an increase from $3.96 billion at the end of 2018. This substantial backlog indicates strong future revenue visibility and provides a solid foundation for continued performance.

Yes, EMCOR acquired three companies in the first half of 2019. One company provides mobile mechanical services, another offers electrical contracting services, and the third provides building automation and controls solutions. These acquisitions contributed to the revenue growth and are reflected in the respective segment results.