8-KEarnings & ResultsExhibits & Filings

EMCOR Group, Inc. 8-K Report, Financial Results (Jul 30, 2010)

Filed July 30, 2010For Securities:EME

Summary

EMCOR Group, Inc. (EME) reported its second quarter 2010 financial results, with revenues declining to $1.28 billion from $1.42 billion in the prior year's second quarter. Net income also saw a decrease to $27.1 million ($0.40 per diluted share) compared to $44.8 million ($0.67 per diluted share) in Q2 2009. This decline was impacted by a non-cash impairment charge of $19.9 million related to trade names and restructuring expenses. Despite the year-over-year decrease in reported net income and revenues, EMCOR's performance was supported by a selective bidding strategy, operational execution, and cost control initiatives. The company highlighted improved profitability in its UK operations and a recovery in demand for its facilities services segment, driven by deferred projects and seasonal HVAC demand. EMCOR updated its full-year 2010 non-GAAP diluted EPS guidance to a range of $1.60 to $1.85, reflecting continued optimism amidst gradually improving market conditions.

Key Highlights

  • 1Second quarter 2010 revenues decreased to $1.28 billion from $1.42 billion in Q2 2009.
  • 2Net income for Q2 2010 was $27.1 million ($0.40 per diluted share), down from $44.8 million ($0.67 per diluted share) in Q2 2009.
  • 3The results were impacted by a $19.9 million non-cash impairment charge and $0.8 million in restructuring expenses.
  • 4Excluding these items, non-GAAP net income was $31.2 million, or $0.46 per diluted share for Q2 2010.
  • 5Contract backlog remained stable at $3.15 billion as of June 30, 2010.
  • 6The company updated its full-year 2010 non-GAAP diluted EPS guidance to a range of $1.60 to $1.85.
  • 7Positive performance was noted in UK operations, and the facilities services segment saw improved demand.

Frequently Asked Questions

The decrease in net income and revenue for the second quarter of 2010 compared to the second quarter of 2009 was primarily due to a $19.9 million non-cash impairment charge related to trade names from prior acquisitions, along with $0.8 million in restructuring expenses. Additionally, overall revenues declined to $1.28 billion from $1.42 billion.

EMCOR Group has updated its full-year 2010 non-GAAP diluted earnings per share guidance to a range of $1.60 to $1.85, excluding certain items. Including those items, the expected diluted EPS range is $1.54 to $1.79.

The company's contract backlog as of June 30, 2010, was $3.15 billion, which is essentially flat compared to the backlog at the end of 2009 and slightly down from the end of the first quarter of 2010. Growth in healthcare, industrial, and institutional sectors offset declines in commercial, hospitality/gaming, and transportation markets.

EMCOR noted consistently good performance across its business segments, with UK operations showing a strong improvement in profitability. However, portions of the facilities services segment faced challenges in the refining sector. Offsetting this, other parts of the facilities services segment saw improvement due to re-visited deferred projects and increased demand for HVAC services during the hot summer weather.