Company Announcements

Emcor Group, Inc. Reports First Quarter 2021 Results

- Record First Quarter Revenues of $2.30 billion -
- Record First Quarter Diluted EPS of $1.54, 14.1% Increase Year-over-Year -
- Record Remaining Performance Obligations of $4.78 billion, 7.9% Increase Year-over-Year -
- Increases 2021 Diluted EPS Guidance Range to $6.35 - $6.75 from $6.20 - $6.70 -

NORWALK, Conn.--(BUSINESS WIRE)--Apr. 29, 2021-- EMCOR Group, Inc. (NYSE: EME) today reported results for the first quarter ended March 31, 2021.

For the first quarter of 2021, net income was $84.8 million, or $1.54 per diluted share, compared to $75.7 million, or $1.35 per diluted share, for the first quarter of 2020. Revenues for the first quarter of 2021 totaled $2.30 billion, up 0.2% from the year ago period.

Operating income for the first quarter of 2021 was $117.0 million, or 5.1% of revenues. This compared to $106.0 million, or 4.6% of revenues, for the first quarter of 2020.

Selling, general and administrative expenses for the first quarter of 2021 totaled $224.1 million, or 9.7% of revenues, compared to $227.0 million, or 9.9% of revenues, for the first quarter of 2020.

The Company's income tax rate for the first quarter of 2021 was 27.2% compared to an income tax rate of 27.4% for the first quarter of 2020.

Remaining performance obligations as of March 31, 2021 were $4.78 billion compared to $4.42 billion as of March 31, 2020. Total remaining performance obligations grew approximately $351.3 million year-over-year.

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, “The Company had an outstanding start to the year, achieving record first quarter revenues, gross profit, gross profit margin, operating income, operating income margin, net income, and diluted earnings per share. Our focus on executing for our customers allowed us to deliver a robust operating income margin of 5.1%, up 50 basis points year-over-year. Additionally, we continue to see a healthy project pipeline as evidenced by our record remaining performance obligations of $4.78 billion, which increased 7.9% year-over-year.”

Mr. Guzzi added, “Our U.S. Construction segments continue to deliver outstanding results, posting combined revenue and operating income growth of 5.0% and 23.1% year-over-year, respectively, led by our U.S. Mechanical Construction segment in particular, which delivered revenue growth of 8.4% year-over-year and operating income growth of 43.8% year-over-year. U.S. Building Services performed exceptionally well, generating revenue and operating income growth of 10.3% and 38.0%, respectively, driven primarily by our commercial site-based and mobile mechanical services businesses. Our U.S. Industrial Services segment experienced a difficult quarter as the Texas Freeze impacted our turnaround schedule, but we remain well-positioned to assist our customers when the market strengthens. Lastly, our U.K. Building Services segment continued to take advantage of strong project demand, delivering revenue and operating income growth of 12.8% and 63.3%, respectively, which led to operating margin expansion of 230 basis points year-over-year.”

Based on year-to-date performance and assuming a gradual improvement of current market conditions as the year progresses, EMCOR is raising its full-year 2021 diluted earnings per share guidance range to $6.35 to $6.75, an increase from the prior guidance range of $6.20 to $6.70. The Company is maintaining its full-year 2021 revenue guidance of $9.2 billion to $9.4 billion.

Mr. Guzzi concluded, “We are optimistic about our prospects for the remainder of the year. Our values of Mission First, People Always will continue to guide us as we focus on the health and safety of our employees, while executing our work for our customers with excellence. Looking ahead, we will continue to invest in our business and pursue strategic acquisition opportunities, while also returning 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 first quarter conference call will be available live via internet broadcast today, Thursday, April 29, at 10:30 AM Eastern Daylight 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 April 29, 2021 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 those anticipated (whether expressly or implied) by 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 COVID-19 pandemic on our revenue and operations, including employees, construction activity, and facilities utilization, and certain of the risk factors associated with EMCOR’s business discussed in Part I, Item 1A “Risk Factors,” of the Company’s 2020 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.

EMCOR GROUP, INC.

FINANCIAL HIGHLIGHTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share information)

(Unaudited)

 

 

 

For the three months ended
March 31,

 

 

2021

 

2020

Revenues

 

$

2,304,049

 

 

$

2,299,832

 

Cost of sales

 

1,962,976

 

 

1,966,771

 

Gross profit

 

341,073

 

 

333,061

 

Selling, general and administrative expenses

 

224,069

 

 

226,997

 

Restructuring expenses

 

 

 

69

 

Operating income

 

117,004

 

 

105,995

 

Net periodic pension (cost) income

 

908

 

 

742

 

Interest expense, net

 

(1,363)

 

 

(2,488)

 

Income before income taxes

 

116,549

 

 

104,249

 

Income tax provision

 

31,604

 

 

28,584

 

Net income including noncontrolling interests

 

84,945

 

 

75,665

 

Less: Net income attributable to noncontrolling interests

 

(171)

 

 

 

Net income attributable to EMCOR Group, Inc.

 

$

84,774

 

 

$

75,665

 

 

 

 

 

 

Basic earnings per common share

 

$

1.54

 

 

$

1.35

 

 

 

 

 

 

Diluted earnings per common share

 

$

1.54

 

 

$

1.35

 

 

 

 

 

 

Weighted average shares of common stock outstanding:

 

 

 

 

Basic

 

54,896,548

 

 

56,007,122

 

Diluted

 

55,135,304

 

 

56,210,728

 

 

 

 

 

 

Dividends declared per common share

 

$

0.13

 

 

$

0.08

 

 

 

 

 

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

March 31, 2021
(Unaudited)

 

December 31,
2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

758,833

 

 

$

902,867

 

Accounts receivable, net

 

2,037,525

 

 

1,922,096

 

Contract assets

 

192,369

 

 

171,956

 

Inventories

 

48,212

 

 

53,338

 

Prepaid expenses and other

 

68,692

 

 

70,679

 

Total current assets

 

3,105,631

 

 

3,120,936

 

Property, plant and equipment, net

 

157,202

 

 

158,427

 

Operating lease right-of-use assets

 

239,457

 

 

242,155

 

Goodwill

 

862,323

 

 

851,783

 

Identifiable intangible assets, net

 

580,555

 

 

582,893

 

Other assets

 

116,021

 

 

107,646

 

Total assets

 

$

5,061,189

 

 

$

5,063,840

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Current maturities of long-term debt and finance lease liabilities

 

$

16,713

 

 

$

16,910

 

Accounts payable

 

624,884

 

 

671,886

 

Contract liabilities

 

739,572

 

 

722,252

 

Accrued payroll and benefits

 

384,942

 

 

450,955

 

Other accrued expenses and liabilities

 

272,942

 

 

247,597

 

Operating lease liabilities, current

 

54,354

 

 

53,632

 

Total current liabilities

 

2,093,407

 

 

2,163,232

 

Long-term debt and finance lease liabilities

 

259,714

 

 

259,619

 

Operating lease liabilities, long-term

 

201,894

 

 

205,362

 

Other long-term obligations

 

385,502

 

 

382,383

 

Total liabilities

 

2,940,517

 

 

3,010,596

 

Equity:

 

 

 

 

Total EMCOR Group, Inc. stockholders’ equity

 

2,119,968

 

 

2,052,668

 

Noncontrolling interests

 

704

 

 

576

 

Total equity

 

2,120,672

 

 

2,053,244

 

Total liabilities and equity

 

$

5,061,189

 

 

$

5,063,840

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2021 and 2020

(In thousands) (Unaudited)

 

 

 

2021

 

2020

Cash flows - operating activities:

 

 

 

 

Net income including noncontrolling interests

 

$

84,945

 

 

$

75,665

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

12,001

 

 

11,767

 

Amortization of identifiable intangible assets

 

14,989

 

 

14,747

 

Provision for credit losses

 

507

 

 

2,614

 

Deferred income taxes

 

14

 

 

4,375

 

Non-cash share-based compensation expense

 

3,193

 

 

3,291

 

Other reconciling items

 

(739)

 

 

42

 

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

 

(203,899)

 

 

(191,314)

 

Net cash used in operating activities

 

(88,989)

 

 

(78,813)

 

Cash flows - investing activities:

 

 

 

 

Payments for acquisitions of businesses, net of cash acquired

 

(24,326)

 

 

(2,582)

 

Proceeds from sale or disposal of property, plant and equipment

 

766

 

 

196

 

Purchases of property, plant and equipment

 

(8,204)

 

 

(12,035)

 

Net cash used in investing activities

 

(31,764)

 

 

(14,421)

 

Cash flows - financing activities:

 

 

 

 

Proceeds from revolving credit facility

 

 

 

200,000

 

Repayments of revolving credit facility

 

 

 

(50,000)

 

Proceeds from long-term debt

 

 

 

300,000

 

Repayments of long-term debt and debt issuance costs

 

 

 

(257,549)

 

Repayments of finance lease liabilities

 

(1,145)

 

 

(1,277)

 

Dividends paid to stockholders

 

(7,121)

 

 

(4,500)

 

Repurchases of common stock

 

(12,917)

 

 

(99,048)

 

Taxes paid related to net share settlements of equity awards

 

(3,750)

 

 

(2,492)

 

Issuances of common stock under employee stock purchase plan

 

1,731

 

 

1,638

 

Payments for contingent consideration arrangements

 

(693)

 

 

(653)

 

Distributions to noncontrolling interests

 

(43)

 

 

 

Net cash (used in) provided by financing activities

 

(23,938)

 

 

86,119

 

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

 

886

 

 

(4,678)

 

Decrease in cash, cash equivalents, and restricted cash

 

(143,805)

 

 

(11,793)

 

Cash, cash equivalents, and restricted cash at beginning of year (1)

 

903,562

 

 

359,920

 

Cash, cash equivalents, and restricted cash at end of period (2)

 

$

759,757

 

 

$

348,127

 

_________

(1)

 

Includes $0.7 million and $1.1 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2020 and 2019, respectively.

(2)

 

Includes $0.9 million and $1.0 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of March 31, 2021 and 2020, respectively.

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands) (Unaudited)

 

 

 

For the three months ended
March 31,

 

 

2021

 

2020

Revenues from unrelated entities:

 

 

 

 

United States electrical construction and facilities services

 

$

456,168

 

 

$

461,803

 

United States mechanical construction and facilities services

 

903,925

 

 

834,112

 

United States building services

 

581,839

 

 

527,611

 

United States industrial services

 

235,382

 

 

363,929

 

Total United States operations

 

2,177,314

 

 

2,187,455

 

United Kingdom building services

 

126,735

 

 

112,377

 

Total operations

 

$

2,304,049

 

 

$

2,299,832

 

 

 

 

 

 

 

 

For the three months ended
March 31,

 

 

2021

 

2020

Operating income (loss):

 

 

 

 

United States electrical construction and facilities services

 

$

40,264

 

 

$

40,312

 

United States mechanical construction and facilities services

 

64,950

 

 

45,171

 

United States building services

 

29,334

 

 

21,261

 

United States industrial services

 

(2,443)

 

 

15,425

 

Total United States operations

 

132,105

 

 

122,169

 

United Kingdom building services

 

9,411

 

 

5,764

 

Corporate administration

 

(24,512)

 

 

(21,869)

 

Restructuring expenses

 

 

 

(69)

 

Total operations

 

117,004

 

 

105,995

 

Other corporate items:

 

 

 

 

Net periodic pension (cost) income

 

908

 

 

742

 

Interest expense, net

 

(1,363)

 

 

(2,488)

 

Income before income taxes

 

$

116,549

 

 

$

104,249

 

 

 

 

 

 

 

R. Kevin Matz
Executive Vice President
Shared Services
(203) 849-7938

FTI Consulting, Inc.
Investors: Haskel Kwestel
(212) 850-5646

Source: EMCOR Group, Inc.