8-KEarnings & ResultsExhibits & Filings

EMCOR Group, Inc. 8-K Report, Financial Results (Feb 22, 2007)

Filed February 22, 2007For Securities:EME

Summary

EMCOR Group, Inc. (EME) reported strong financial results for its fourth quarter and full year ended December 31, 2006. The company announced record annual revenues of $5.02 billion, a 6.9% increase year-over-year. Both annual operating income and net income saw significant growth, rising 45.9% and over 44% respectively. This robust performance was driven by strong demand for EMCOR's services, particularly in its U.S. mechanical and facilities services segments, and effective project selectivity and cost management. Furthermore, EMCOR achieved a record year-end backlog of $3.50 billion, up 26.7% from the prior year. The company highlighted a strategic shift towards the private sector and commercial marketplace, which contributed to improved financial performance and a strong balance sheet. The company provided guidance for 2007, expecting revenues between $5.3 billion and $5.5 billion, with diluted earnings per share projected to be between $2.45 and $2.80, reflecting continued optimism for growth and operational efficiency.

Key Highlights

  • 1Record annual revenues of $5.02 billion for fiscal year 2006, a 6.9% increase from 2005.
  • 2Annual operating income increased by 45.9% to $118.0 million, with operating margin improving to 2.4% from 1.7%.
  • 3Full-year net income rose to $86.6 million, a 44.3% increase, with diluted EPS of $2.65.
  • 4Fourth quarter revenues grew 11.9% to $1.38 billion, with net income soaring 108.0% to $40.2 million ($1.22 per diluted share).
  • 5Year-end backlog reached a record $3.50 billion, up 26.7% from the previous year, indicating strong future business prospects.
  • 6Positive performance in U.S. mechanical and facilities services segments, with facilities services revenue accelerating by nearly 24% in Q4.
  • 7Generated strong cash flow from operations of $209.3 million for the year.

Frequently Asked Questions

For the full year 2006, EMCOR reported record revenues of $5.02 billion, a 6.9% increase from 2005. Operating income rose 45.9% to $118.0 million, and net income increased by over 44% to $86.6 million. The fourth quarter also showed strong growth, with revenues up 11.9% to $1.38 billion and net income more than doubling to $40.2 million.

EMCOR's year-end backlog reached a record $3.50 billion, a 26.7% increase year-over-year. This substantial backlog, particularly weighted towards higher-margin private sector commercial work, indicates strong demand for EMCOR's services and provides a solid foundation for future revenue and earnings growth in 2007.

The company highlighted particularly strong performance from its U.S. mechanical and facilities services segments in the fourth quarter. Facilities services revenue accelerated significantly, driven by demand for both site-based and mobile services. EMCOR sees continued strength and robust demand in these sectors, especially in the private sector commercial marketplace, and expects this to drive performance in 2007.

EMCOR expects revenues for 2007 to be between $5.3 billion and $5.5 billion. Diluted earnings per share are projected to be in the range of $2.45 to $2.80. This outlook is based on current market conditions and assumes a tax rate of 41% for 2007.