EX-99.1 2 eme-ex99_2019331xq1.htm FIRST QUARTER 2019 PRESS RELEASE Exhibit

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EXHIBIT 99.1


FOR:
 
EMCOR GROUP, INC.
News Release
 
 
CONTACT:
 
R. Kevin Matz
Executive Vice President
Shared Services
(203) 849-7938
 
 
 
 
 
FTI Consulting, Inc.
Investors: Jamie Baird
(212) 850-5659


EMCOR GROUP, INC. REPORTS FIRST QUARTER 2019 RESULTS
 
 - Record First Quarter Revenues of $2.16 billion, 13.6% Increase Year-over-Year -
 - Record First Quarter Diluted EPS from Cont. Operations of $1.28, 36.2% Increase Year-over-Year -
 - Total Remaining Performance Obligations of $4.16 billion, 15.3% Increase Year-over-Year -
 - Increases 2019 Revenue Guidance Range to $8.5-$8.6 billion from $8.3-$8.4 billion -
 - Increases 2019 Diluted EPS Guidance Range to $5.00-$5.50 from $4.70-$5.40 -



NORWALK, CONNECTICUT, April 30, 2019 - EMCOR Group, Inc. (NYSE: EME) today reported results for the first quarter ended March 31, 2019.

For the first quarter of 2019, net income from continuing operations attributable to EMCOR was $72.4 million, or $1.28 per diluted share, compared to $55.7 million, or $0.94 per diluted share, for the first quarter of 2018. Revenues for the first quarter of 2019 totaled $2.16 billion, an increase of 13.6%, compared to $1.90 billion for the first quarter of 2018.

Operating income for the first quarter of 2019 was $102.3 million, or 4.7% of revenues. This compares to $78.0 million, or 4.1% of revenues, for the first quarter of 2018.

Selling, general and administrative expenses for the first quarter of 2019 totaled $206.2 million, or 9.6% of revenues, compared to $191.0 million, or 10.1% of revenues, for the first quarter of 2018.

The Company's income tax rate for the first quarter of 2019 was 27.5%, compared to an income tax rate of 27.0% in the year ago period.

Remaining performance obligations as of March 31, 2019 were $4.16 billion compared to $3.60 billion at March 31, 2018. Total U.S. remaining performance obligations grew $560.6 million year-over-year.





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EMCOR Reports First Quarter Results
 Page 2

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, “The Company reported record first quarter revenues, operating income, operating margin, net income attributable to EMCOR and diluted earnings per share from continuing operations, building upon our strong momentum in 2018. We delivered a 13.6% year-over-year increase in revenues, 11.0% of which was organic, driven by strength in each of our segments, including double-digit growth in our U.S. Electrical Construction, U.S. Building Services and U.S. Industrial Services segments. Consistent execution across our business drove operating income growth of 31.2% year-over-year and 60 basis points of operating margin expansion. Additionally, remaining performance obligations increased 15.3% year-over-year and 4.9% sequentially, underscoring the value proposition of our services portfolio and the strength we are seeing in the geographies and end markets in which we operate.”

Mr. Guzzi added, “Our U.S. Electrical Construction and U.S. Mechanical Construction segments continued to perform exceptionally, posting revenue increases of 16.1% and 9.9% year-over-year, respectively. Our U.S. Electrical Construction segment reported a strong 12.1% organic revenue growth rate, while the segment’s overall growth was further supported by the contribution from a recent acquisition. Strong project execution drove solid operating performance, with our U.S. Construction segments posting a combined 11.2% year-over-year increase in operating income and a very healthy combined operating margin of 6.6%. Despite mild winter conditions, our U.S. Building Services segment recorded double-digit revenue and operating income growth for the first quarter of 2019, driven by broad based strength across their mobile mechanical services and commercial site-based services businesses. Our U.S. Industrial Services segment also had solid performance in the quarter, driven by much improved spring turnaround activity compared to the year ago period, resulting in revenue growth of 29.8% year-over-year and 200 basis points of operating margin expansion. Despite significant foreign exchange headwinds, our U.K. Building Services segment continued to perform well, driven by new customer wins and strong demand for small- to mid-sized project activity.”

Based on year-to-date performance, favorable project mix and assuming the continuation of current market conditions, EMCOR is raising its full-year 2019 revenue guidance range to $8.5-$8.6 billion, an increase from the prior guidance range of $8.3-$8.4 billion. The Company now also expects full-year 2019 diluted earnings per share from continuing operations to be in the range of $5.00-$5.50, an increase from the prior guidance range of $4.70-$5.40.

Mr. Guzzi concluded, “We are very pleased with our first quarter results and believe our growing and diverse project pipeline positions us well for the remainder of 2019. Our updated guidance reflects our strong first quarter results, as well as our expectation for sustained growth in the non-residential construction market moving forward. Looking ahead and consistent with our strategy, we will continue to leverage our flexible balance sheet to invest in our business and return capital to shareholders through share buybacks and dividends.”

EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure and building services. This press release and other press releases may be viewed at the Company’s website at www.emcorgroup.com.

EMCOR Group's first quarter conference call will be available live via internet broadcast today, Tuesday, April 30, at 10:30 AM Eastern Daylight Time. The live call may be accessed through the Company's website at www.emcorgroup.com.


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EMCOR Reports First Quarter Results
 Page 3

Forward Looking Statements:

This release contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Any such comments speak only as of this date and EMCOR assumes no obligation to update any such forward-looking statements. These forward-looking statements may include statements regarding anticipated future operating and financial performance, the nature and impact of our remaining performance obligations, our ability to pursue acquisitions, our ability to return capital to shareholders, market opportunities, market growth and customer trends. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. Such risks and uncertainties include, but are not limited to, adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for EMCOR’s services, adverse business conditions, availability of adequate levels of surety bonding, increased competition, unfavorable labor productivity and mix of business. Certain of the risk factors associated with EMCOR’s business are also discussed in Part I, Item 1A “Risk Factors,” of the Company’s 2018 Form 10-K and in other reports filed from time to time with the Securities and Exchange Commission and available at www.sec.gov and www.emcorgroup.com. Such risk factors should be taken into account in evaluating any forward-looking statements.


Non-GAAP Measures:

This release may include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Company uses these non-GAAP measures as key performance indicators for the purpose of evaluating performance internally. We also believe that these non-GAAP measures provide investors with useful information with respect to our historical operations. Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP and may not be comparable to the calculation of similar measures of other companies.

 



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EMCOR GROUP, INC.
FINANCIAL HIGHLIGHTS
(In thousands, except share and per share information)
(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
For the three months ended March 31,
 
 
2019
 
2018
Revenues
 
$
2,158,728

 
$
1,900,388

Cost of sales
 
1,849,974

 
1,631,269

Gross profit
 
308,754

 
269,119

Selling, general and administrative expenses
 
206,169

 
191,025

Restructuring expenses
 
275

 
90

Operating income
 
102,310

 
78,004

Net periodic pension (cost) income
 
406

 
737

Interest expense, net
 
(2,823
)
 
(2,452
)
Income from continuing operations before income taxes
 
99,893

 
76,289

Income tax provision
 
27,483

 
20,633

Income from continuing operations
 
72,410

 
55,656

Loss from discontinued operation, net of income taxes
 

 
(282
)
Net income including noncontrolling interests
 
72,410

 
55,374

Less: Net income attributable to noncontrolling interests
 

 

Net income attributable to EMCOR Group, Inc.
 
$
72,410

 
$
55,374

 
 
 
 
 
Basic earnings (loss) per common share:
 
 
 
 
From continuing operations
 
$
1.29

 
$
0.95

From discontinued operation
 
$

 
$
(0.00
)
 
 
 
 
 
Diluted earnings (loss) per common share:
 
 
 
 
From continuing operations
 
$
1.28

 
$
0.94

From discontinued operation
 
$

 
$
(0.00
)
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 

 
 
   Basic
 
56,168,356

 
58,739,115

   Diluted
 
56,424,222

 
59,064,164

 
 
 
 
 
Dividends declared per common share
 
$
0.08

 
$
0.08

 
 
 
 
 













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EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

 
 
March 31, 2019
(Unaudited)
 
December 31,
2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
252,031

 
$
363,907

Accounts receivable, net
 
1,797,479

 
1,773,620

Contract assets
 
178,366

 
158,243

Inventories
 
39,443

 
42,321

Prepaid expenses and other
 
46,542

 
48,116

Total current assets
 
2,313,861

 
2,386,207

Investments, notes and other long-term receivables
 
3,638

 
2,899

Property, plant & equipment, net
 
145,056

 
134,351

Operating lease right-of-use assets
 
228,131

 

Goodwill
 
1,004,710

 
990,887

Identifiable intangible assets, net
 
491,175

 
488,286

Other assets
 
91,753

 
86,177

Total assets
 
$
4,278,324

 
$
4,088,807

LIABILITIES AND EQUITY
 
 

 
 

Current liabilities:
 
 

 
 

Current maturities of long-term debt and finance lease liabilities
 
$
18,532

 
$
16,013

Accounts payable
 
577,883

 
652,091

Contract liabilities
 
536,363

 
552,290

Accrued payroll and benefits
 
293,409

 
343,069

Other accrued expenses and liabilities
 
198,220

 
170,935

Operating lease liabilities, current
 
48,776

 

Total current liabilities
 
1,673,183

 
1,734,398

Borrowings under revolving credit facility
 
25,000

 
25,000

Long-term debt and finance lease liabilities
 
255,438

 
254,764

Operating lease liabilities, long-term
 
191,226

 

Other long-term obligations
 
321,855

 
333,204

Total liabilities
 
2,466,702

 
2,347,366

Equity:
 
 

 
 

Total EMCOR Group, Inc. stockholders’ equity
 
1,810,766

 
1,740,545

Noncontrolling interests
 
856

 
896

Total equity
 
1,811,622

 
1,741,441

Total liabilities and equity
 
$
4,278,324

 
$
4,088,807








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EMCOR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2019 and 2018
(In thousands) (Unaudited)

 
 
2019
 
2018
Cash flows - operating activities:
 
 
 
 
Net income including noncontrolling interests
 
$
72,410

 
$
55,374

Adjustments to reconcile net income to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
10,585

 
9,711

Amortization of identifiable intangible assets
 
11,610

 
10,668

(Recovery of) provision for doubtful accounts
 
(673
)
 
1,135

Deferred income taxes
 
2,496

 
2,944

Excess tax benefits from share-based compensation
 
(499
)
 
(716
)
Equity income from unconsolidated entities
 
(26
)
 
(41
)
Non-cash share-based compensation expense
 
3,557

 
3,268

Distributions from unconsolidated entities
 
80

 
1,585

Other reconciling items
 
413

 
379

Changes in operating assets and liabilities, excluding the effect of businesses acquired
 
(157,388
)
 
(143,394
)
Net cash used in operating activities
 
(57,435
)
 
(59,087
)
Cash flows - investing activities:
 
 

 
 

Payments for acquisitions of businesses, net of cash acquired
 
(31,124
)
 
(2,689
)
Proceeds from sale of property, plant and equipment
 
1,023

 
242

Purchase of property, plant and equipment
 
(13,113
)
 
(6,588
)
Investments in and advances to unconsolidated entities
 
(794
)
 
(2,804
)
Net cash used in investing activities
 
(44,008
)
 
(11,839
)
Cash flows - financing activities:
 
 

 
 

Repayments of long-term debt and debt issuance costs
 
(3,800
)
 
(3,800
)
Repayments of finance lease liabilities
 
(1,053
)
 
(372
)
Dividends paid to stockholders
 
(4,480
)
 
(4,704
)
Repurchase of common stock
 

 
(34,485
)
Taxes paid related to net share settlements of equity awards
 
(3,735
)
 
(3,267
)
Issuance of common stock under employee stock purchase plan
 
1,323

 
1,337

Payments for contingent consideration arrangements
 
(23
)
 

Distributions to noncontrolling interests
 
(40
)
 

Net cash used in financing activities
 
(11,808
)
 
(45,291
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
1,298

 
1,733

Decrease in cash, cash equivalents and restricted cash
 
(111,953
)
 
(114,484
)
Cash, cash equivalents and restricted cash at beginning of year
 
366,214

 
469,388

Cash, cash equivalents and restricted cash at end of period
 
$
254,261

 
$
354,904












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EMCOR GROUP, INC.
SEGMENT INFORMATION
(In thousands) (Unaudited)

 
 
For the three months ended March 31,
 
 
2019
 
2018
Revenues from unrelated entities:
 
 
 
 
United States electrical construction and facilities services
 
$
528,070

 
$
454,752

United States mechanical construction and facilities services
 
752,409

 
684,750

United States building services
 
512,079

 
454,752

United States industrial services
 
258,645

 
199,244

Total United States operations
 
2,051,203

 
1,793,498

United Kingdom building services
 
107,525

 
106,890

Total worldwide operations
 
$
2,158,728

 
$
1,900,388

 
 
 
 
 

 
 
For the three months ended March 31,
 
 
2019
 
2018
Operating income (loss):
 
 
 
 
United States electrical construction and facilities services
 
$
42,951

 
$
35,851

United States mechanical construction and facilities services
 
40,985

 
39,620

United States building services
 
27,483

 
17,077

United States industrial services
 
9,636

 
3,441

Total United States operations
 
121,055

 
95,989

United Kingdom building services
 
4,141

 
3,770

Corporate administration
 
(22,611
)
 
(21,665
)
Restructuring expenses
 
(275
)
 
(90
)
Total worldwide operations
 
102,310

 
78,004

Other corporate items:
 
 

 
 
Net periodic pension (cost) income
 
406

 
737

Interest expense, net
 
(2,823
)
 
(2,452
)
Income from continuing operations before income taxes
 
$
99,893

 
$
76,289

 
 
 
 
 







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