8-KEarnings & ResultsExhibits & Filings

EMCOR Group, Inc. 8-K Report, Financial Results (Mar 3, 2009)

Filed March 3, 2009For Securities:EME

Summary

EMCOR Group, Inc. (EME) filed an 8-K on March 3, 2009, to report its fourth quarter and full-year 2008 financial results, which concluded on December 31, 2008. The company announced record full-year diluted Earnings Per Share (EPS) of $2.71, a significant increase of 45.7% compared to the previous year. Fourth-quarter performance also showed strength, with diluted EPS rising 20.0% to $0.90 and operating income increasing 17.2% to $100.9 million. Despite a slight decrease in quarterly revenues to $1.68 billion from $1.77 billion in the prior year's fourth quarter, EMCOR demonstrated improved operational efficiency, with operating income as a percentage of revenues reaching a record 6.0% in Q4 2008. The company highlighted its strong liquidity position, with a 29% year-over-year increase in operating cash flows to $335 million, and a healthy balance sheet with substantial cash and no net debt, positioning it to navigate the anticipated economic downturn. The company provided guidance for 2009, expecting "base line" revenues between $6.0 billion and $6.3 billion and diluted EPS from continuing operations of $1.80. While acknowledging potential challenges from market conditions, EMCOR expressed confidence in its diversified business model, market position, operational flexibility, and financial strength to weather the economic climate. The report also noted specific charges impacting full-year results, including a $7.9 million charge from an adverse jury verdict and a $7.0 million non-cash charge for an impaired joint venture investment, which collectively impacted diluted EPS by approximately ($0.14). Contract backlog at year-end 2008 stood at $4.00 billion, down from $4.49 billion in the prior year, primarily due to declines in the hospitality/gaming and commercial sectors, though offset by growth in other areas.

Key Highlights

  • 1EMCOR Group reported record full-year 2008 diluted EPS of $2.71, a 45.7% increase from 2007.
  • 2Fourth-quarter 2008 diluted EPS rose 20.0% to $0.90, with operating income up 17.2% to $100.9 million.
  • 3Operating income margin improved significantly, reaching a record 6.0% in Q4 2008 and 4.5% for the full year.
  • 4The company generated strong operating cash flow, increasing 29% year-over-year to $335 million.
  • 5EMCOR ended 2008 with a robust balance sheet, featuring substantial cash and no net debt.
  • 6Full-year 2008 results were impacted by approximately $0.14 per diluted share in charges, including an adverse jury verdict and a joint venture impairment.
  • 72009 "base line" guidance includes revenues between $6.0-$6.3 billion and diluted EPS of $1.80.

Frequently Asked Questions

EMCOR reported strong results, with full-year 2008 diluted EPS reaching a record $2.71, up 45.7% from 2007. The fourth quarter saw a 20.0% increase in diluted EPS to $0.90 and a 17.2% rise in operating income to $100.9 million. Notably, operating margins improved, with the fourth quarter achieving a record 6.0%.

EMCOR's contract backlog at December 31, 2008, was $4.00 billion, a decrease from $4.49 billion at the end of 2007. This decline was primarily attributed to reduced activity in the hospitality/gaming (especially in Las Vegas) and commercial sectors. However, growth in transportation, industrial, institutional, and water/wastewater sectors partially offset these decreases.

EMCOR provided "base line" guidance for 2009, projecting revenues between $6.0 billion and $6.3 billion and diluted EPS from continuing operations of $1.80. This outlook assumes the continuation of existing market conditions, but the company is confident in its ability to adapt to challenges, with potential upside from economic stimulus packages, accretive acquisitions, or improved credit markets.

The company's full-year 2008 results were affected by a one-time charge of $7.9 million (largely non-cash) related to an adverse jury verdict, and a $7.0 million non-cash charge for the impairment of an equity investment in a joint venture. Combined, these charges reduced diluted EPS by approximately $0.14.