10-QPeriod: Q1 FY2023

EMCOR Group, Inc. Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 27, 2023For Securities:EME

Summary

EMCOR Group, Inc. reported strong financial performance for the first quarter of 2023, demonstrating significant year-over-year growth in revenue and operating income. Revenue increased by 11.5% to $2.89 billion, driven by broad-based growth across most of its segments, including notable contributions from data center, healthcare, and high-tech manufacturing projects. Profitability saw a substantial improvement, with operating income rising by 55% to $154.9 million, translating to a 150 basis point increase in operating margin to 5.4%. This was attributed to better project execution, a more favorable project mix, and a decrease in the impact of supply chain disruptions compared to the prior year. Diluted EPS also saw a strong increase to $2.32. The company's backlog of remaining performance obligations reached $7.87 billion, indicating robust future revenue potential. EMCOR also announced an increase in its quarterly dividend, signaling confidence in its financial health.

Financial Highlights

47 data points
Beta

Revenue

$2.89B

15.1% Gross Margin

Net Income

$111.47M

3.9% Net Margin

EPS (Diluted)

$2.32

Total Assets

$5.64B

Cash & Equivalents

$420.07M

Free Cash Flow

-$84.58M

Financial Statements
Beta
Revenue$2.89B
Cost of Revenue$2.45B
Gross Profit$436.06M
SG&A Expenses$281.15M
Operating Income$154.91M
Net Income$111.47M
EPS (Basic)$2.33
EPS (Diluted)$2.32
Shares Outstanding (Basic)47.78M
Shares Outstanding (Diluted)47.95M

Key Highlights

  • 1Revenue increased 11.5% year-over-year to $2.89 billion, setting a new first-quarter record.
  • 2Operating income surged 55% to $154.9 million, with the operating margin improving by 150 basis points to 5.4%.
  • 3Diluted Earnings Per Share (EPS) rose to $2.32 from $1.39 in the prior year period.
  • 4Remaining Performance Obligations (backlog) stood at $7.87 billion as of March 31, 2023, up from $7.46 billion at the end of 2022.
  • 5The company repurchased approximately $16.1 million of common stock during the quarter.
  • 6EMCOR announced an increase in its quarterly dividend from $0.15 to $0.18 per share, effective with the April 2023 payment.

Frequently Asked Questions

EMCOR reported a significant increase in both revenue and profitability. Revenue grew by 11.5% to $2.89 billion, while operating income increased by 55% to $154.9 million. The operating margin also improved by 150 basis points to 5.4%.

EMCOR's remaining performance obligations (backlog) stood at $7.87 billion as of March 31, 2023, an increase from $7.46 billion at the end of 2022. This growth, driven by strong demand in key market sectors like high-tech manufacturing and network communications, suggests a positive outlook for future revenue.

EMCOR continues to experience supply chain pressures and inflationary costs but is managing these through diligent contract negotiation, enhanced labor planning, project scheduling, and increased supplier engagement. The company has also sought pricing increases to combat cost inflation and has seen improved project execution and a more favorable mix of work compared to the prior year. While supply chain lead times remain elevated, their impact was less severe in Q1 2023 than in Q1 2022.

EMCOR focuses on efficient cash conversion for working capital needs, growth investments (acquisitions, capital expenditures), and shareholder returns. The company announced an increase in its quarterly dividend to $0.18 per share and repurchased approximately $16.1 million of its common stock during the quarter. A significant amount ($373.7 million) remains authorized for future repurchases.