Le Lézard
Classified in: Business
Subjects: EARNINGS, Conference Call, Webcast

EMCOR Group, Inc. Reports Fourth Quarter and Full-Year 2019 Results


EMCOR Group, Inc. (NYSE: EME) today reported results for the fourth quarter ended December 31, 2019.

For the fourth quarter of 2019, net income from continuing operations attributable to EMCOR was $86.9 million, or $1.54 per diluted share, compared to $79.3 million, or $1.38 per diluted share, for the fourth quarter of 2018. Revenues for the fourth quarter of 2019 totaled $2.40 billion, an increase of 7.8%, compared to $2.23 billion for the fourth quarter of 2018.

Operating income for the fourth quarter of 2019 was $122.9 million, or 5.1% of revenues. This compares to $113.6 million, or 5.1% of revenues, for the fourth quarter of 2018.

Selling, general and administrative expenses for the fourth quarter of 2019 totaled $240.9 million, or 10.0% of revenues, compared to $220.9 million, or 9.9% of revenues, for the fourth quarter of 2018.

The Company's income tax rate for the fourth quarter of 2019 was 27.8%, compared to an income tax rate of 28.9% in the year ago period.

Remaining performance obligations as of December 31, 2019 were $4.04 billion compared to $3.96 billion at December 31, 2018. Total U.S. remaining performance obligations grew $78.4 million year-over-year.

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, "The Company once again delivered record performance, with record annual and quarterly revenues, operating income, net income attributable to EMCOR, and diluted EPS from continuing operations. We generated revenue growth of 12.8% for the year, 9.3% of which was organic, with broad-based improvement across our business, underscored by double-digit growth in each of our domestic reportable segments. Our focus on cost discipline and excellent execution led to increases in operating income of 8.1% for the fourth quarter and 14.3% for the full year. Additionally, we are pleased that our remaining performance obligations remain solid, despite exceptional revenue growth, positioning us well for 2020."

Mr. Guzzi added, "Our U.S. Construction segments continue to perform exceptionally well, delivering combined revenue growth of 9.9% during the fourth quarter and 13.0% for the full year, supported by project wins across our key market sectors and geographies. Our solid operational execution in these segments drove a combined 7.6% increase in operating income and a healthy margin of 7.0% for the full year. Our U.S. Building Services segment posted its fifth consecutive quarter of double-digit revenue growth supported by excellent results in our mechanical services division and a number of large contract wins in our commercial site-based services division. During the fourth quarter, our U.S. Industrial Services segment faced a difficult comparison to the prior year period; however, we are pleased with the overall trajectory of this segment, as evidenced by full-year revenue and operating income growth of 17.8% and 60.2%, respectively. Lastly, our U.K. Building Services segment maintained its strong position and reported fourth quarter revenue and operating income growth of 3.6% and 27.4%, respectively."

Revenues for the 2019 full-year period increased 12.8% to $9.17 billion compared to $8.13 billion for the 2018 full-year period. Net income from continuing operations attributable to EMCOR for the 2019 full-year period was $325.1 million, or $5.75 per diluted share, compared to $285.9 million, or $4.89 per diluted share, for the 2018 full-year period. Excluding an impairment charge of $0.9 million recorded in the second quarter of 2018, non-GAAP net income from continuing operations attributable to EMCOR for the 2018 full-year period was $286.8 million, or $4.91 per diluted share.

Operating income for the 2019 full-year period was $460.9 million, or 5.0% of revenues, compared to $403.1 million, or 5.0% of revenues, for the 2018 full-year period. Excluding the impairment charge referenced above, non-GAAP operating income for the 2018 full-year period was $404.0 million, or 5.0% of revenues. SG&A totaled $893.5 million, or 9.7% of revenues, for the 2019 full-year period compared to $799.2 million, or 9.8% of revenues, for the 2018 full-year period.

Please see the attached tables for a reconciliation of non-GAAP operating income, non-GAAP net income from continuing operations and non-GAAP diluted earnings per share from continuing operations to the comparable GAAP figures.

Based on favorable project mix and assuming the continuation of current market conditions, EMCOR expects full-year 2020 revenues to be between $9.5 billion and $9.7 billion, and full-year 2020 diluted earnings per share from continuing operations to be in the range of $5.60 to $6.30.

On February 15, 2020, EMCOR determined that it was the target of a RYUK ransomware attack infecting certain of the Company's systems with malware. As a precautionary measure, the Company promptly shut down certain IT systems to help contain the problem. We implemented business continuity plans to facilitate ongoing operations and are restoring systems, where appropriate. While some of the Company's systems are still coming back online, EMCOR continues to service customers. Through counsel, the Company retained a leading cybersecurity forensic firm to assist with an extensive review of the situation. At this time, we have not uncovered any direct evidence that employee or customer data has been taken in the attack. While the investigation is ongoing, the financial impact of the ransomware attack has been contemplated in the Company's full-year 2020 guidance.

Mr. Guzzi concluded, "Following another record year in 2019, we are encouraged by our prospects in 2020, supported by our excellent operating position, robust project pipeline and the sustained growth we see in the non-residential construction market. Over the last year, we completed several acquisitions, extending our geographic presence and bolstering our technical capabilities. Moving forward, we will continue to execute our balanced capital allocation strategy, utilizing our healthy balance sheet to pursue strategic acquisition opportunities and to return capital to shareholders through share repurchases 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 routinely posts information that may be important to investors in the "Investor Relations" section of our website at www.emcorgroup.com. Investors and potential investors are encouraged to consult the EMCOR website regularly for important information about EMCOR.

EMCOR Group's fourth quarter conference call will be available live via internet broadcast today, Thursday, February 27, at 10:30 AM Eastern Standard Time. The live call may be accessed through the Company's website at www.emcorgroup.com.

Forward Looking Statements:

This release contains certain forward-looking statements. Any such comments speak only as of this date and EMCOR assumes no obligation to update any such forward-looking statements, unless required by law. 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, mix of business, and the impact of the 2020 ransomware attack. Certain of the risk factors associated with EMCOR's business are also discussed in Part I, Item 1A "Risk Factors," of the Company's 2019 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 includes certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this release. 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 on-going 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.

EMCOR GROUP, INC.

FINANCIAL HIGHLIGHTS

(In thousands, except share and per share information)

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

For the three months ended
December 31,

 

For the twelve months ended
December 31,

 

 

2019

 

2018

 

2019

 

2018

Revenues

 

$

2,403,940

 

 

$

2,229,308

 

 

$

9,174,611

 

 

$

8,130,631

 

Cost of sales

 

2,039,193

 

 

1,893,157

 

 

7,818,743

 

 

6,925,178

 

Gross profit

 

364,747

 

 

336,151

 

 

1,355,868

 

 

1,205,453

 

Selling, general and administrative expenses

 

240,917

 

 

220,891

 

 

893,453

 

 

799,157

 

Restructuring expenses

 

956

 

 

1,613

 

 

1,523

 

 

2,306

 

Impairment loss on identifiable intangible assets

 

?

 

 

?

 

 

?

 

 

907

 

Operating income

 

122,874

 

 

113,647

 

 

460,892

 

 

403,083

 

Net periodic pension (cost) income

 

366

 

 

674

 

 

1,553

 

 

2,743

 

Interest expense, net

 

(2,824

)

 

(2,787

)

 

(11,556

)

 

(10,798

)

Income from continuing operations before income taxes

 

120,416

 

 

111,534

 

 

450,889

 

 

395,028

 

Income tax provision

 

33,492

 

 

32,233

 

 

125,749

 

 

109,106

 

Income from continuing operations

 

86,924

 

 

79,301

 

 

325,140

 

 

285,922

 

Loss from discontinued operation, net of income taxes

 

?

 

 

(1,335

)

 

?

 

 

(2,345

)

Net income including noncontrolling interests

 

86,924

 

 

77,966

 

 

325,140

 

 

283,577

 

Less: Net loss (income) attributable to noncontrolling interests

 

?

 

 

2

 

 

?

 

 

(46

)

Net income attributable to EMCOR Group, Inc.

 

$

86,924

 

 

$

77,968

 

 

$

325,140

 

 

$

283,531

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

From continuing operations

 

$

1.54

 

 

$

1.39

 

 

$

5.78

 

 

$

4.92

 

From discontinued operation

 

$

?

 

 

$

(0.02

)

 

$

?

 

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

From continuing operations

 

$

1.54

 

 

$

1.38

 

 

$

5.75

 

 

$

4.89

 

From discontinued operation

 

$

?

 

 

$

(0.02

)

 

$

?

 

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

 

Basic

 

56,263,774

 

 

57,187,490

 

 

56,208,280

 

 

58,112,838

 

Diluted

 

56,592,654

 

 

57,514,189

 

 

56,519,281

 

 

58,443,467

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.08

 

 

$

0.08

 

 

$

0.32

 

 

$

0.32

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

 

 

 

 

December 31,
2019

 

December 31,
2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

358,818

 

 

$

363,907

 

Accounts receivable, net

 

2,030,813

 

 

1,773,620

 

Contract assets

 

177,830

 

 

158,243

 

Inventories

 

40,446

 

 

42,321

 

Prepaid expenses and other

 

51,976

 

 

48,116

 

Total current assets

 

2,659,883

 

 

2,386,207

 

Property, plant & equipment, net

 

156,187

 

 

134,351

 

Operating lease right-of-use assets

 

245,471

 

 

?

 

Goodwill

 

1,063,911

 

 

990,887

 

Identifiable intangible assets, net

 

611,444

 

 

488,286

 

Other assets

 

93,462

 

 

89,076

 

Total assets

 

$

4,830,358

 

 

$

4,088,807

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Current maturities of long-term debt and finance lease liabilities

 

$

18,092

 

 

$

16,013

 

Accounts payable

 

665,402

 

 

652,091

 

Contract liabilities

 

623,642

 

 

552,290

 

Accrued payroll and benefits

 

382,573

 

 

343,069

 

Other accrued expenses and liabilities

 

195,757

 

 

170,935

 

Operating lease liabilities, current

 

53,144

 

 

?

 

Total current liabilities

 

1,938,610

 

 

1,734,398

 

Borrowings under revolving credit facility

 

50,000

 

 

25,000

 

Long-term debt and finance lease liabilities

 

244,139

 

 

254,764

 

Operating lease liabilities, long-term

 

204,950

 

 

?

 

Other long-term obligations

 

334,879

 

 

333,204

 

Total liabilities

 

2,772,578

 

 

2,347,366

 

Equity:

 

 

 

 

Total EMCOR Group, Inc. stockholders' equity

 

2,057,134

 

 

1,740,545

 

Noncontrolling interests

 

646

 

 

896

 

Total equity

 

2,057,780

 

 

1,741,441

 

Total liabilities and equity

 

$

4,830,358

 

 

$

4,088,807

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Twelve Months Ended December 31, 2019 and 2018

(In thousands)

 

 

 

 

 

 

 

2019

 

2018

Cash flows - operating activities:

 

 

 

 

Net income including noncontrolling interests

 

$

325,140

 

 

$

283,577

 

Depreciation and amortization

 

43,945

 

 

38,472

 

Amortization of identifiable intangible assets

 

48,142

 

 

42,443

 

Deferred income taxes

 

1,701

 

 

4,249

 

Excess tax benefits from share-based compensation

 

(984

)

 

(1,646

)

Equity loss (income) from unconsolidated entities

 

2,990

 

 

(347

)

Non-cash expense for impairment of identifiable intangible assets

 

?

 

 

907

 

Non-cash share-based compensation expense

 

11,386

 

 

11,030

 

Distributions from unconsolidated entities

 

1,074

 

 

3,110

 

Other reconciling items

 

1,206

 

 

2,906

 

Changes in operating assets and liabilities, excluding the effect of businesses acquired

 

(78,900

)

 

(113,690

)

Net cash provided by operating activities

 

355,700

 

 

271,011

 

Cash flows - investing activities:

 

 

 

 

Payments for acquisitions of businesses, net of cash acquired

 

(300,980

)

 

(72,080

)

Proceeds from sale or disposal of property, plant and equipment

 

5,487

 

 

1,237

 

Purchase of property, plant and equipment

 

(48,432

)

 

(43,479

)

Investments in and advances to unconsolidated entities

 

(2,252

)

 

(3,484

)

Distributions from unconsolidated entities

 

838

 

 

84

 

Net cash used in investing activities

 

(345,339

)

 

(117,722

)

Cash flows - financing activities:

 

 

 

 

Proceeds from revolving credit facility

 

50,000

 

 

?

 

Repayments of revolving credit facility

 

(25,000

)

 

?

 

Repayments of long-term debt

 

(15,198

)

 

(15,235

)

Repayments of finance lease liabilities

 

(4,571

)

 

(1,501

)

Dividends paid to stockholders

 

(17,950

)

 

(18,640

)

Repurchase of common stock

 

?

 

 

(216,244

)

Taxes paid related to net share settlements of equity awards

 

(6,451

)

 

(3,848

)

Issuance of common stock under employee stock purchase plan

 

6,090

 

 

5,765

 

Payments for contingent consideration arrangements

 

(5,917

)

 

(3,339

)

Distributions to noncontrolling interests

 

(250

)

 

?

 

Net cash used in financing activities

 

(19,247

)

 

(253,042

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

2,592

 

 

(3,421

)

Decrease in cash, cash equivalents and restricted cash

 

(6,294

)

 

(103,174

)

Cash, cash equivalents and restricted cash at beginning of year

 

366,214

 

 

469,388

 

Cash, cash equivalents and restricted cash at end of period

 

$

359,920

 

 

$

366,214

 

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands)

 

 

 

 

 

(Unaudited)

 

 

For the three months ended December 31,

 

 

2019

 

2018

Revenues from unrelated entities:

 

 

 

 

United States electrical construction and facilities services

 

$

564,491

 

 

$

534,055

 

United States mechanical construction and facilities services

 

895,654

 

 

794,716

 

United States building services

 

538,973

 

 

485,999

 

United States industrial services

 

299,272

 

 

312,630

 

Total United States operations

 

2,298,390

 

 

2,127,400

 

United Kingdom building services

 

105,550

 

 

101,908

 

Total worldwide operations

 

$

2,403,940

 

 

$

2,229,308

 

 

 

 

 

 

 

 

For the twelve months ended December 31,

 

 

2019

 

2018

Revenues from unrelated entities:

 

 

 

 

United States electrical construction and facilities services

 

$

2,216,600

 

 

$

1,954,323

 

United States mechanical construction and facilities services

 

3,340,337

 

 

2,962,843

 

United States building services

 

2,106,872

 

 

1,875,485

 

United States industrial services

 

1,087,543

 

 

923,109

 

Total United States operations

 

8,751,352

 

 

7,715,760

 

United Kingdom building services

 

423,259

 

 

414,871

 

Total worldwide operations

 

$

9,174,611

 

 

$

8,130,631

 

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands)

 

 

 

 

 

(Unaudited)

 

 

For the three months ended December 31,

 

 

2019

 

2018

Operating income (loss):

 

 

 

 

United States electrical construction and facilities services

 

$

41,304

 

 

$

33,121

 

United States mechanical construction and facilities services

 

68,888

 

 

63,580

 

United States building services

 

24,219

 

 

25,005

 

United States industrial services

 

13,131

 

 

15,359

 

Total United States operations

 

147,542

 

 

137,065

 

United Kingdom building services

 

3,952

 

 

3,102

 

Corporate administration

 

(27,664

)

 

(24,907

)

Restructuring expenses

 

(956

)

 

(1,613

)

Total worldwide operations

 

122,874

 

 

113,647

 

Other corporate items:

 

 

 

 

Net periodic pension (cost) income

 

366

 

 

674

 

Interest expense, net

 

(2,824

)

 

(2,787

)

Income from continuing operations before income taxes

 

$

120,416

 

 

$

111,534

 

 

 

 

 

 

 

 

For the twelve months ended December 31,

 

 

2019

 

2018

Operating income (loss):

 

 

 

 

United States electrical construction and facilities services

 

$

161,684

 

 

$

139,430

 

United States mechanical construction and facilities services

 

225,040

 

 

219,853

 

United States building services

 

114,754

 

 

93,827

 

United States industrial services

 

44,340

 

 

27,671

 

Total United States operations

 

545,818

 

 

480,781

 

United Kingdom building services

 

18,323

 

 

15,930

 

Corporate administration

 

(101,726

)

 

(90,415

)

Restructuring expenses

 

(1,523

)

 

(2,306

)

Impairment loss on goodwill and identifiable intangible assets

 

?

 

 

(907

)

Total worldwide operations

 

460,892

 

 

403,083

 

Other corporate items:

 

 

 

 

Net periodic pension (cost) income

 

1,553

 

 

2,743

 

Interest expense, net

 

(11,556

)

 

(10,798

)

Income from continuing operations before income taxes

 

$

450,889

 

 

$

395,028

 

EMCOR GROUP, INC.
RECONCILIATION OF 2019 AND 2018 OPERATING INCOME
(In thousands) (Unaudited)

In our press release, we provide non-GAAP 2019 and 2018 fourth quarter and year ending December 31, 2019 and 2018 operating income. The following table provides a reconciliation between 2019 and 2018 operating income based on non-GAAP measures to the most directly comparable GAAP measures.

 

 

For the three months ended December 31,

 

For the twelve months ended December 31,

 

 

2019

 

2018

 

2019

 

2018

GAAP operating income

 

$

122,874

 

 

$

113,647

 

 

$

460,892

 

 

$

403,083

 

Impairment loss on identifiable intangible assets

 

?

 

 

?

 

 

?

 

 

907

 

Non-GAAP operating income, excluding the impairment loss on identifiable intangible assets

 

$

122,874

 

 

$

113,647

 

 

$

460,892

 

 

$

403,990

 

EMCOR GROUP, INC.
RECONCILIATION OF 2019 AND 2018 NET INCOME
(In thousands) (Unaudited)

In our press release, we provide non-GAAP 2019 and 2018 fourth quarter and year ending December 31, 2019 and 2018 net income from continuing operations attributable to EMCOR Group, Inc. The following table provides a reconciliation between 2019 and 2018 net income from continuing operations attributable to EMCOR Group, Inc. based on non-GAAP measures to the most directly comparable GAAP measures.

 

 

For the three months ended December 31,

 

For the twelve months ended December 31,

 

 

2019

 

2018

 

2019

 

2018

GAAP net income from continuing operations attributable to EMCOR Group, Inc. (1)

 

$

86,924

 

 

$

79,303

 

 

$

325,140

 

 

$

285,876

 

Impairment loss on identifiable intangible assets (2)

 

?

 

 

?

 

 

?

 

 

907

 

Non-GAAP net income from continuing operations attributable to EMCOR Group, Inc., excluding the impairment loss on identifiable intangible assets

 

$

86,924

 

 

$

79,303

 

 

$

325,140

 

 

$

286,783

 

(1)

Amount is income from continuing operations less net income attributable to noncontrolling interest.

(2)

Amount excludes de minimis income tax benefit in the 2018 year-to-date period.

EMCOR GROUP, INC.
RECONCILIATION OF 2019 AND 2018 DILUTED EARNINGS PER SHARE FIGURES
(Unaudited)

In our press release, we provide non-GAAP 2019 and 2018 fourth quarter and year ending December 31, 2019 and 2018 diluted earnings per common share from continuing operations. The following table provides a reconciliation between 2019 and 2018 EPS based on non-GAAP measures to the most directly comparable GAAP measures.

 

 

For the three months ended December 31,

 

For the twelve months ended December 31,

 

 

2019

 

2018

 

2019

 

2018

GAAP diluted earnings per common share from continuing operations

 

$

1.54

 

 

$

1.38

 

 

$

5.75

 

 

$

4.89

 

Impairment loss on identifiable intangible assets (1)

 

?

 

 

?

 

 

?

 

 

0.02

 

Non-GAAP diluted earnings per common share from continuing operations, excluding the impairment loss on identifiable intangible assets

 

$

1.54

 

 

$

1.38

 

 

$

5.75

 

 

$

4.91

 

(1)

Amount excludes de minimis income tax benefit in the 2018 year-to-date period.

 


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Sunset Grill Restaurants has partnered with third-party delivery platforms Uber Eats and Doordash to bring Canadians' favourite breakfast directly to their doors....

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USANA Health Sciences, Inc. today announced that first quarter results will be released after the close of market Tuesday, April 21, 2020. Shortly following the issuance of the Company's earnings release, the Company will post a "Management...



News published on 27 february 2020 at 07:35 and distributed by: