10-QPeriod: Q3 FY2021

EMCOR Group, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 28, 2021For Securities:EME

Summary

EMCOR Group, Inc. reported strong revenue growth in the third quarter of 2021, reaching a new quarterly record of $2.52 billion, a 14.5% increase year-over-year. This growth was broad-based across most of its operating segments, including U.S. electrical and mechanical construction, U.S. building services, and U.K. building services. The company's net income attributable to EMCOR Group, Inc. also saw a significant increase to $99.7 million, or $1.85 per diluted share, up from $61.2 million, or $1.11 per diluted share, in the prior year's quarter. This improvement was driven by revenue growth, a more normalized tax rate, and a reduced share count due to ongoing share repurchases. While overall performance is robust, the U.S. industrial services segment continues to face headwinds due to lingering effects of the pandemic and lower demand in the oil and gas market, leading to a year-to-date operating loss for this segment. Despite this, the company's strong backlog of $5.38 billion indicates continued demand for its services, and management remains cautiously optimistic about future performance.

Financial Highlights

50 data points
Beta

Revenue

$2.52B

15.1% Gross Margin

Net Income

$99.74M

4.0% Net Margin

EPS (Diluted)

$1.85

Total Assets

$5.30B

Cash & Equivalents

$663.90M

Free Cash Flow

$120.91M

Financial Statements
Beta
Revenue$2.52B
Cost of Revenue$2.14B
Gross Profit$381.34M
SG&A Expenses$243.92M
Operating Income$137.42M
Net Income$99.74M
EPS (Basic)$1.86
EPS (Diluted)$1.85
Shares Outstanding (Basic)53.70M
Shares Outstanding (Diluted)53.98M

Key Highlights

  • 1Record quarterly revenues of $2.52 billion, up 14.5% year-over-year.
  • 2Net income attributable to EMCOR Group, Inc. increased by 63% to $99.7 million.
  • 3Diluted EPS rose to $1.85 from $1.11 in the prior year's quarter.
  • 4Strong backlog of remaining performance obligations stands at $5.38 billion.
  • 5U.S. Industrial Services segment continues to be impacted by adverse market conditions.
  • 6Company repurchased approximately 1.5 million shares for $183.2 million in the first nine months of 2021.
  • 7Dividend increased to $0.13 per share quarterly.

Frequently Asked Questions

EMCOR Group, Inc. reported a strong third quarter of 2021 with record revenues of $2.52 billion, up 14.5% from the prior year. Net income attributable to EMCOR Group, Inc. was $99.7 million, or $1.85 per diluted share, a significant increase compared to $61.2 million, or $1.11 per diluted share, in the same quarter of 2020. This performance reflects broad-based revenue growth across most segments, a more normalized tax rate, and reduced share count.

The U.S. Industrial Services segment continues to be negatively impacted by lingering effects of the COVID-19 pandemic and sustained lower demand in the oil and gas market. This has resulted in customers deferring projects and reducing capital spending. While revenues for the segment increased year-over-year in the third quarter, it reported an operating loss for the nine months ended September 30, 2021, primarily due to reduced maintenance and capital project activities and lower new build heat exchanger sales.

EMCOR Group, Inc. ended the third quarter with a robust backlog of remaining performance obligations totaling $5.38 billion. This represents a significant increase from both the prior year quarter and the end of 2020. The growth in backlog is attributed to new contract awards across various segments, particularly in U.S. construction and building services, indicating strong demand for the company's services in the near to medium term.

EMCOR demonstrated a commitment to shareholder returns through significant share repurchases, buying back approximately 1.5 million shares for $183.2 million in the first nine months of 2021, with approximately $62.7 million of authorization remaining as of September 30, 2021. Additionally, the company maintained its quarterly dividend payment of $0.13 per share. The company's liquidity position remains strong, supported by cash generated from operations and its revolving credit facility.