8-KEarnings & ResultsExhibits & Filings

EMCOR Group, Inc. 8-K Report, Financial Results (Apr 30, 2009)

Filed April 30, 2009For Securities:EME

Summary

EMCOR Group, Inc. (EME) reported record first quarter 2009 results on April 28, 2009, despite a year-over-year decline in revenues. Net income attributable to EMCOR Group, Inc. increased by 25.4% to $36.8 million, or $0.55 per diluted share, up from $29.3 million, or $0.44 per diluted share, in the prior year's first quarter. This profit growth was driven by a significant increase in operating income, which rose 29.5% to $64.3 million, and an expansion in operating margin to 4.6% from 3.0%. The company attributed these improved profitability metrics to effective cost management, including a decrease in selling, general, and administrative (SG&A) expenses, and a more balanced business mix. Although revenues decreased to $1.39 billion from $1.66 billion, EMCOR's management expressed confidence in its strategic positioning and financial strength to navigate the challenging economic environment. The company's contract backlog stood at $3.67 billion as of March 31, 2009, a decrease from the previous year, primarily due to reduced contract awards in the hospitality/gaming and commercial sectors. However, growth in transportation, industrial, institutional, and water/wastewater sectors partially offset this decline. Looking ahead, EMCOR reaffirmed its full-year 2009 guidance for revenues between $6.0 billion and $6.3 billion and diluted "base line" EPS of $1.80, while acknowledging continued economic uncertainty. Management highlighted the potential benefits from the federal economic stimulus program and the resilient nature of its Facilities Services segment, which relies on essential maintenance.

Key Highlights

  • 1EMCOR Group reported record first quarter 2009 net income of $36.8 million, a 25.4% increase year-over-year.
  • 2Diluted Earnings Per Share (EPS) rose 25.0% to $0.55 in Q1 2009 compared to $0.44 in Q1 2008.
  • 3Operating income surged 29.5% to $64.3 million, with the operating margin improving to 4.6% from 3.0%.
  • 4Revenues declined 16.1% to $1.39 billion in Q1 2009 from $1.66 billion in Q1 2008, reflecting challenging market conditions.
  • 5Selling, General, and Administrative (SG&A) expenses decreased by $12.4 million year-over-year.
  • 6Contract backlog was $3.67 billion as of March 31, 2009, down from $4.39 billion in the prior year.
  • 7The company reaffirmed its full-year 2009 revenue guidance of $6.0-$6.3 billion and diluted "base line" EPS of $1.80.

Frequently Asked Questions

EMCOR reported record net income attributable to the company of $36.8 million, or $0.55 per diluted share, a significant increase from $29.3 million, or $0.44 per diluted share, in the first quarter of 2008. Operating income also increased substantially by 29.5% to $64.3 million.

Revenues decreased by 16.1% to $1.39 billion due to reduced contract awards in certain sectors like hospitality/gaming and commercial. However, improved operating efficiencies, effective cost management (including lower SG&A expenses), and a stronger margin performance on the remaining work allowed the company to achieve higher net income and operating income.

EMCOR's contract backlog stood at $3.67 billion as of March 31, 2009. This represents a decrease from $4.39 billion in the prior year, mainly attributed to a slowdown in contract awards within the hospitality/gaming and commercial sectors. Offsetting factors include growth in transportation, industrial, institutional, and water/wastewater segments.

EMCOR reaffirmed its full-year 2009 guidance, projecting revenues between $6.0 billion and $6.3 billion and diluted "base line" Earnings Per Share (EPS) of $1.80. Management noted that while market conditions remain uncertain, potential upside could come from the federal economic stimulus plan, accretive acquisitions, or improved credit markets.