EMCOR Group, Inc. Reports Fourth Quarter and Full-Year 2023 Results
Record Quarterly and Full-Year Revenues of
Record Quarterly and Full-Year Diluted EPS of
Non-GAAP Full-Year Diluted EPS of
Record Remaining Performance Obligations of
2024 Revenues and Diluted EPS Guidance of
Board Approves Increase in Quarterly Dividend to
Fourth Quarter 2023 Results of Operations
For the fourth quarter of 2023, net income was
Operating income for the fourth quarter of 2023 was
Selling, general and administrative expenses for the fourth quarter of 2023 totaled
The Company's income tax rate for the fourth quarter of 2023 was 27.5%, compared to 27.4% for the fourth quarter of 2022.
Remaining performance obligations as of
Full Year 2023 Results of Operations
Revenues for the 2023 full-year period totaled
Operating income for the 2023 full-year period was
Refer to the attached tables for a reconciliation of non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share to the comparable GAAP measures.
SG&A totaled
The Company's income tax rate for the 2023 full-year period was 27.5%, compared to 27.3% for the 2022 full-year period.
Full Year 2024 Guidance
Based on expected project mix and our current visibility into the coming year,
We recently signed agreements to acquire several companies that are leaders in their respective offerings and regions, reflecting our strategy of expanding and complementing the capabilities and geographical footprint of our existing businesses to better serve the evolving needs of our customers.”
Dividend Increase
The Company today announced that its Board of Directors has approved an increase to the Company’s regular quarterly dividend to
Fourth Quarter Earnings Conference Call Information
About
Forward Looking Statements:
This release contains forward-looking statements. Such statements speak only as of
Non-GAAP Measures:
This release also includes certain financial measures that were not prepared in accordance with
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(Unaudited) |
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||||||||||
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For the quarters ended
|
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For the years ended
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||||||||||||
|
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2023 |
|
2022 |
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2023 |
|
2022 |
||||||||
Revenues |
|
$ |
3,439,221 |
|
|
$ |
2,949,822 |
|
|
$ |
12,582,873 |
|
|
$ |
11,076,120 |
|
Cost of sales |
|
|
2,821,476 |
|
|
|
2,495,022 |
|
|
|
10,493,534 |
|
|
|
9,472,526 |
|
Gross profit |
|
|
617,745 |
|
|
|
454,800 |
|
|
|
2,089,339 |
|
|
|
1,603,594 |
|
Selling, general and administrative expenses |
|
|
328,549 |
|
|
|
277,618 |
|
|
|
1,211,233 |
|
|
|
1,038,717 |
|
Impairment loss on long-lived assets |
|
|
— |
|
|
|
— |
|
|
|
2,350 |
|
|
|
— |
|
Operating income |
|
|
289,196 |
|
|
|
177,182 |
|
|
|
875,756 |
|
|
|
564,877 |
|
Net periodic pension (cost) income |
|
|
(279 |
) |
|
|
1,023 |
|
|
|
(1,119 |
) |
|
|
4,311 |
|
Interest income (expense), net |
|
|
2,830 |
|
|
|
(4,204 |
) |
|
|
(1,784 |
) |
|
|
(10,438 |
) |
Income before income taxes |
|
|
291,747 |
|
|
|
174,001 |
|
|
|
872,853 |
|
|
|
558,750 |
|
Income tax provision |
|
|
80,232 |
|
|
|
47,701 |
|
|
|
239,524 |
|
|
|
152,628 |
|
Net income including noncontrolling interests |
|
|
211,515 |
|
|
|
126,300 |
|
|
|
633,329 |
|
|
|
406,122 |
|
Net (loss) income attributable to noncontrolling interests |
|
|
(2 |
) |
|
|
— |
|
|
|
335 |
|
|
|
— |
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Net income attributable to |
|
$ |
211,517 |
|
|
$ |
126,300 |
|
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$ |
632,994 |
|
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$ |
406,122 |
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Basic earnings per common share: |
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$ |
4.49 |
|
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$ |
2.65 |
|
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$ |
13.37 |
|
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$ |
8.13 |
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|
|
|
|
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|
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Diluted earnings per common share: |
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$ |
4.47 |
|
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$ |
2.63 |
|
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$ |
13.31 |
|
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$ |
8.10 |
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Weighted average shares of common stock outstanding: |
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|
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||||||||
Basic |
|
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47,097,762 |
|
|
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47,710,479 |
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|
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47,358,467 |
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|
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49,931,940 |
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Diluted |
|
|
47,331,532 |
|
|
|
47,936,737 |
|
|
|
47,564,258 |
|
|
|
50,136,262 |
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|
|
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|
|
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Dividends declared per common share |
|
$ |
0.18 |
|
|
$ |
0.15 |
|
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$ |
0.69 |
|
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$ |
0.54 |
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ASSETS |
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Current assets: |
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|
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Cash and cash equivalents |
|
$ |
789,750 |
|
$ |
456,439 |
Accounts receivable, net |
|
|
3,203,490 |
|
|
2,567,371 |
Contract assets |
|
|
269,885 |
|
|
273,176 |
Inventories |
|
|
110,774 |
|
|
85,641 |
Prepaid expenses and other |
|
|
73,072 |
|
|
79,346 |
Total current assets |
|
|
4,446,971 |
|
|
3,461,973 |
Property, plant, and equipment, net |
|
|
179,378 |
|
|
157,819 |
Operating lease right-of-use assets |
|
|
310,498 |
|
|
268,063 |
|
|
|
956,549 |
|
|
919,151 |
Identifiable intangible assets, net |
|
|
586,032 |
|
|
593,975 |
Other assets |
|
|
130,293 |
|
|
123,626 |
Total assets |
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$ |
6,609,721 |
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$ |
5,524,607 |
LIABILITIES AND EQUITY |
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Current liabilities: |
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Current maturities of long-term debt and finance lease liabilities |
|
$ |
2,465 |
|
$ |
15,567 |
Accounts payable |
|
|
935,967 |
|
|
849,284 |
Contract liabilities |
|
|
1,595,109 |
|
|
1,098,263 |
Accrued payroll and benefits |
|
|
596,936 |
|
|
465,000 |
Other accrued expenses and liabilities |
|
|
312,642 |
|
|
258,190 |
Operating lease liabilities, current |
|
|
75,236 |
|
|
67,218 |
Total current liabilities |
|
|
3,518,355 |
|
|
2,753,522 |
Long-term debt and finance lease liabilities |
|
|
2,838 |
|
|
231,625 |
Operating lease liabilities, long-term |
|
|
259,430 |
|
|
220,764 |
Other long-term obligations |
|
|
358,283 |
|
|
344,405 |
Total liabilities |
|
|
4,138,906 |
|
|
3,550,316 |
Equity: |
|
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||
|
|
|
2,469,778 |
|
|
1,973,589 |
Noncontrolling interests |
|
|
1,037 |
|
|
702 |
Total equity |
|
|
2,470,815 |
|
|
1,974,291 |
Total liabilities and equity |
|
$ |
6,609,721 |
|
$ |
5,524,607 |
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2023 |
|
2022 |
||||
Cash flows - operating activities: |
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|
|
|
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Net income including noncontrolling interests |
|
$ |
633,329 |
|
|
$ |
406,122 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
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Depreciation and amortization |
|
|
51,822 |
|
|
|
47,296 |
|
Amortization of identifiable intangible assets |
|
|
67,143 |
|
|
|
61,315 |
|
Provision for credit losses |
|
|
7,859 |
|
|
|
5,166 |
|
Deferred income taxes |
|
|
(16,651 |
) |
|
|
10,483 |
|
Gain on sale or disposal of property, plant, and equipment |
|
|
(2,057 |
) |
|
|
(6,393 |
) |
Non-cash expense for impairment of long-lived assets |
|
|
2,350 |
|
|
|
— |
|
Non-cash share-based compensation expense |
|
|
13,739 |
|
|
|
12,125 |
|
Other reconciling items |
|
|
268 |
|
|
|
925 |
|
Changes in operating assets and liabilities, excluding the effect of businesses acquired |
|
|
141,853 |
|
|
|
(39,106 |
) |
Net cash provided by operating activities |
|
|
899,655 |
|
|
|
497,933 |
|
Cash flows - investing activities: |
|
|
|
|
||||
Payments for acquisitions of businesses, net of cash acquired |
|
|
(96,491 |
) |
|
|
(98,656 |
) |
Proceeds from sale or disposal of property, plant, and equipment |
|
|
13,604 |
|
|
|
7,145 |
|
Purchases of property, plant, and equipment |
|
|
(78,404 |
) |
|
|
(49,289 |
) |
Net cash used in investing activities |
|
|
(161,291 |
) |
|
|
(140,800 |
) |
Cash flows - financing activities: |
|
|
|
|
||||
Proceeds from revolving credit facility |
|
|
200,000 |
|
|
|
270,000 |
|
Repayments of revolving credit facility |
|
|
(200,000 |
) |
|
|
(270,000 |
) |
Repayments of long-term debt and debt issuance costs |
|
|
(246,171 |
) |
|
|
(13,875 |
) |
Repayments of finance lease liabilities |
|
|
(2,776 |
) |
|
|
(3,551 |
) |
Dividends paid to stockholders |
|
|
(32,684 |
) |
|
|
(27,187 |
) |
Repurchases of common stock |
|
|
(127,713 |
) |
|
|
(660,609 |
) |
Taxes paid related to net share settlements of equity awards |
|
|
(6,060 |
) |
|
|
(7,539 |
) |
Issuances of common stock under employee stock purchase plan |
|
|
9,189 |
|
|
|
8,177 |
|
Payments for contingent consideration arrangements |
|
|
(5,839 |
) |
|
|
(5,534 |
) |
Net cash used in financing activities |
|
|
(412,054 |
) |
|
|
(710,118 |
) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
6,372 |
|
|
|
(12,515 |
) |
Increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
332,682 |
|
|
|
(365,500 |
) |
Cash, cash equivalents, and restricted cash at beginning of year (1) |
|
|
457,068 |
|
|
|
822,568 |
|
Cash, cash equivalents, and restricted cash at end of period (1) |
|
$ |
789,750 |
|
|
$ |
457,068 |
|
(1) |
|
Includes |
|
||||||
|
|
(Unaudited) |
||||
|
|
For the quarters ended
|
||||
|
|
2023 |
|
2022 |
||
Revenues from unrelated entities: |
|
|
|
|
||
|
|
$ |
763,404 |
|
$ |
713,589 |
|
|
|
1,472,532 |
|
|
1,133,260 |
|
|
|
802,029 |
|
|
713,398 |
|
|
|
292,476 |
|
|
276,243 |
Total |
|
|
3,330,441 |
|
|
2,836,490 |
|
|
|
108,780 |
|
|
113,332 |
Total operations |
|
$ |
3,439,221 |
|
$ |
2,949,822 |
|
|
|
|
|
||
|
|
For the years ended
|
||||
|
|
2023 |
|
2022 |
||
Revenues from unrelated entities: |
|
|
|
|
||
|
|
$ |
2,783,723 |
|
$ |
2,433,114 |
|
|
|
5,074,803 |
|
|
4,292,208 |
|
|
|
3,120,134 |
|
|
2,754,953 |
|
|
|
1,167,790 |
|
|
1,118,767 |
Total |
|
|
12,146,450 |
|
|
10,599,042 |
|
|
|
436,423 |
|
|
477,078 |
Total operations |
|
$ |
12,582,873 |
|
$ |
11,076,120 |
|
||||||||
|
|
(Unaudited) |
||||||
|
|
For the quarters ended
|
||||||
|
|
2023 |
|
2022 |
||||
Operating income (loss): |
|
|
|
|
||||
|
|
$ |
76,275 |
|
|
$ |
58,082 |
|
|
|
|
186,094 |
|
|
|
104,780 |
|
|
|
|
42,052 |
|
|
|
37,941 |
|
|
|
|
12,642 |
|
|
|
1,463 |
|
Total |
|
|
317,063 |
|
|
|
202,266 |
|
|
|
|
5,461 |
|
|
|
4,466 |
|
Corporate administration |
|
|
(33,328 |
) |
|
|
(29,550 |
) |
Total operations |
|
|
289,196 |
|
|
|
177,182 |
|
Other items: |
|
|
|
|
||||
Net periodic pension (cost) income |
|
|
(279 |
) |
|
|
1,023 |
|
Interest income (expense), net |
|
|
2,830 |
|
|
|
(4,204 |
) |
Income before income taxes |
|
$ |
291,747 |
|
|
$ |
174,001 |
|
|
|
|
|
|
||||
|
|
For the years ended
|
||||||
|
|
2023 |
|
2022 |
||||
Operating income (loss): |
|
|
|
|
||||
|
|
$ |
230,640 |
|
|
$ |
148,728 |
|
|
|
|
530,644 |
|
|
|
330,325 |
|
|
|
|
182,995 |
|
|
|
146,639 |
|
|
|
|
35,375 |
|
|
|
19,787 |
|
Total |
|
|
979,654 |
|
|
|
645,479 |
|
|
|
|
25,681 |
|
|
|
29,838 |
|
Corporate administration |
|
|
(127,229 |
) |
|
|
(110,440 |
) |
Impairment loss on long-lived assets |
|
|
(2,350 |
) |
|
|
— |
|
Total operations |
|
|
875,756 |
|
|
|
564,877 |
|
Other items: |
|
|
|
|
||||
Net periodic pension (cost) income |
|
|
(1,119 |
) |
|
|
4,311 |
|
Interest expense, net |
|
|
(1,784 |
) |
|
|
(10,438 |
) |
Income before income taxes |
|
$ |
872,853 |
|
|
$ |
558,750 |
|
RECONCILIATION OF ORGANIC REVENUE GROWTH
(In thousands, except for percentages) (Unaudited)
The following table provides a reconciliation between organic revenue growth, a non-GAAP measure, and total revenue growth for the quarter and year ended
|
|
For the quarter ended |
|
For the year ended |
||||||||||
|
|
$ |
|
% |
|
$ |
|
% |
||||||
GAAP revenue growth |
|
$ |
489,399 |
|
|
16.6 |
% |
|
$ |
1,506,753 |
|
|
13.6 |
% |
Incremental revenues from acquisitions |
|
|
(10,863 |
) |
|
(0.4 |
)% |
|
|
(107,133 |
) |
|
(1.0 |
)% |
Organic revenue growth, a non-GAAP measure |
|
$ |
478,536 |
|
|
16.2 |
% |
|
$ |
1,399,620 |
|
|
12.6 |
% |
RECONCILIATION OF 2023 AND 2022 NON-GAAP MEASURES
(In thousands, except for percentages and per share data) (Unaudited)
In our press release and related presentation, we provide non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per common share for the years ended
|
For the years ended
|
||||
|
2023 |
|
2022 |
||
GAAP operating income |
$ |
875,756 |
|
$ |
564,877 |
Impairment loss on long-lived assets |
|
2,350 |
|
|
— |
Non-GAAP operating income |
$ |
878,106 |
|
$ |
564,877 |
|
For the years ended
|
||||
|
2023 |
|
2022 |
||
GAAP operating margin |
7.0 |
% |
|
5.1 |
% |
Impairment loss on long-lived assets |
0.0 |
% |
|
— |
% |
Non-GAAP operating margin |
7.0 |
% |
|
5.1 |
% |
|
For the years ended
|
|||||
|
2023 |
|
2022 |
|||
GAAP net income |
$ |
632,994 |
|
|
$ |
406,122 |
Impairment loss on long-lived assets |
|
2,350 |
|
|
|
— |
Tax effect of impairment loss on long-lived assets |
|
(651 |
) |
|
|
— |
Non-GAAP net income |
$ |
634,693 |
|
|
$ |
406,122 |
|
For the years ended
|
|||||
|
2023 |
|
2022 |
|||
GAAP diluted earnings per common share |
$ |
13.31 |
|
|
$ |
8.10 |
Impairment loss on long-lived assets |
|
0.05 |
|
|
|
— |
Tax effect of impairment loss on long-lived assets |
|
(0.01 |
) |
|
|
— |
Non-GAAP diluted earnings per common share |
$ |
13.34 |
|
|
$ |
8.10 |
_________ |
Amounts presented in this table may not foot due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228527223/en/
FOR:
Vice President,
Investor Relations
(203) 849-7938
FTI Consulting, Inc.
Investors:
(718) 578-3706
Source: