UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 23, 2008
EMCOR Group, Inc.
--------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
--------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
1-8267 11-2125338
------------------------ ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
301 Merritt Seven, Norwalk, CT 06851
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(203) 849-7800
--------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
--------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
__ Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 23, 2008, EMCOR Group, Inc. issued a press release disclosing
results of operations for its fiscal 2008 third quarter ended September 30,
2008. A copy of such press release is furnished as Exhibit 99.1 to this Current
Report on Form 8-K.
The information contained in this Current Report on Form 8-K shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that
Section, nor shall it be incorporated by reference into a filing under the
Securities Act of 1933, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
Item. 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit Number Description
-------------- ---------------------------------------------------------------
99.1 Press Release issued by EMCOR Group, Inc. on October 23, 2008
disclosing results of operations for its fiscal 2008 third
quarter ended September 30, 2008.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMCOR Group, Inc.
Dated: October 23, 2008 By: /s/ Frank T. MacInnis
---------------------------
Frank T. MacInnis
Chairman of the Board of
Directors and Chief
Executive Officer
Exhibit 99.1
FOR: EMCOR GROUP, INC.
CONTACT: R. Kevin Matz
Executive Vice President
Shared Services
(203) 849-7938
FD
Investors: Eric Boyriven - 212-850-5600
Linden Alschuler & Kaplan, Inc.
Media: Suzanne Dawson / Cecile Fradkin
(212) 575-4545
EMCOR GROUP, INC. REPORTS RECORD THIRD QUARTER RESULTS
- Revenues Increase 14.6% to $1.72 Billion -
- Operating Income Increases 43.2% to $78.6 Million -
- Diluted EPS from Continuing Operations Increases 30.9% to $0.72 -
- 2008 Earnings Guidance Raised -
NORWALK, CONNECTICUT, October 23, 2008 - EMCOR Group, Inc., (NYSE: EME) today
reported results for the third quarter and nine months ended September 30, 2008.
For the third quarter of 2008, the Company reported net income of $48.6 million,
or $0.72 per diluted share, an increase of 26.9% over net income of $38.3
million, or $0.57 per diluted share, for the third quarter of 2007. In the 2008
third quarter, revenues were $1.72 billion compared to $1.50 billion in the
third quarter of 2007, an increase of 14.6%, of which 8.0% was organic growth
which excludes the contribution from businesses acquired during the past year.
Operating income in the third quarter of 2008 was $78.6 million, an increase of
43.2% from operating income of $54.9 million in the same quarter a year ago. As
a percentage of revenues, operating income rose to 4.6% from 3.7% in the third
quarter of 2007 and was the highest achieved for a third quarter in the
Company's history. Selling, general and administrative (SG&A) expenses were
$145.7 million in the third quarter of 2008 compared to $114.0 million in the
prior year period. The increase in SG&A expenses compared to the comparable
year-ago period primarily reflects expenses associated with companies acquired
during the past twelve months, as well as with incentive compensation accruals.
The Company's income tax rate for the 2008 third quarter was 37.3%, compared
with 34.0% in the third quarter of 2007.
Contract backlog as of September 30, 2008 was $4.42 billion, compared to backlog
of $4.48 billion as of September 30, 2007 and $4.67 billion at the end of the
2008 second quarter. The decline in backlog was principally attributable to a
decrease in work in the commercial and hospitality/gaming sectors, but was
largely offset by increases in healthcare, water/wastewater, transportation and
industrial contract awards.
EMCOR Announces 2008 Third Quarter Results Page 2
For the 2008 nine-month period, the Company reported net income of $121.9
million, or $1.82 per diluted share, an increase of 59.4%, compared to net
income of $76.5 million, or $1.15 per diluted share, for the first nine months
of 2007. Revenues in the 2008 nine-month period rose 22.7% to $5.1 billion from
$4.2 billion for the nine months ended September 30, 2007. Organic revenue
growth, excluding revenues from companies acquired during the past twelve
months, was 12.0% in the first nine months of 2008.
Operating income was $201.6 million, or 4.0% of revenues, in the first nine
months of 2008, an increase of 77.3% from operating income of $113.7 million, or
2.7% of revenues, in the same period last year. SG&A expenses were $437.8
million, or 8.6% of revenues, in the 2008 nine-month period, versus $348.7
million, or 8.4% of revenues, in the nine months ended September 30, 2007.
The Company's results for the 2008 nine-month period include a one-time charge,
substantially all of which is non-cash, of $7.9 million, or $0.07 per diluted
share after-tax, resulting from an adverse jury verdict in a construction
contract case in the 2008 second quarter, as previously announced.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "The 2008 third
quarter reflects another quarter of outstanding performance by our Company
during which we continued to benefit from the steps we have taken over the last
decade to diversify our business across markets, services and geographies. The
quarter saw continued margin expansion across most of our business segments, as
both our organic and acquired businesses continued to perform strongly,
supported by end markets with demand drivers not tied to the current economic
cycle and rising demand for higher margin facilities services. Our focus on
working capital management enabled EMCOR to continue to generate excellent cash
flows with year to date cash flows from operations of $199.7 million, a clear
testament to the quality of our earnings and our client relationships."
Mr. MacInnis continued, "The keystone of our long-term strategic growth plan has
been the diversification of our business to hedge against construction
cyclicality and to provide a solid underlying level of earnings power for the
Company through targeted growth of our facilities services businesses. At the
same time, we have undertaken strategic acquisitions, such as Ohmstede, S.A.
Comunale and a number of mechanical services companies, which have shifted the
mix of our business to stable end markets such as refining, fire protection and
mechanical services which are less capital intensive and not as vulnerable to
economic downturns than construction. As a result, we are a market leader with a
broad range of services, substantial reach and financial strength to support our
customers through economic cycles."
Mr. MacInnis concluded, "While we are closely watching developments in the
financial markets, we are confident that EMCOR is well positioned as we enter
the fourth quarter. Although continued uncertainty in the credit markets may
ultimately affect the capital budgets of some of our customers, there continues
to be a need to maintain and upgrade facilities, and EMCOR is a leading provider
of these services. Furthermore, our market diversification provides us with the
flexibility to follow demand across sectors as the economic cycle evolves. The
strength and liquidity of our balance sheet is a competitive differentiator
during these credit-constrained times, and allows us to meet the performance
requirements of our clients and will enable us to pursue opportunities in an
environment that is favorable for strategic investors."
EMCOR Announces 2008 Third Quarter Results Page 3
Based on current market conditions, the Company now expects revenues of between
$6.8 billion and $7.0 billion and diluted earnings per share of between $2.48
and $2.58 for the 2008 full-year period.
EMCOR Group, Inc. is a Fortune 500(R) worldwide leader in mechanical and
electrical construction services, energy infrastructure and facilities services.
This press release and other press releases may be viewed at the Company's Web
site at www.emcorgroup.com.
EMCOR Group's third quarter conference call will be available live via internet
broadcast today, Thursday, October 23, at 10:30 AM Eastern Daylight Time. You
can access the live call through the Home Page of the Company's Web site at
www.emcorgroup.com.
This release may contain certain forward-looking statements within the
meaning of the Private Securities Reform Act of 1995. Any such comments are
based upon information available to EMCOR management and its perception thereof,
as of this date, and EMCOR assumes no obligation to update any such
forward-looking statements. These forward-looking statements may include
statements regarding market opportunities, market share growth, gross profit,
backlog mix, projects with varying profit margins, and selling, general and
administrative expenses. 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 risk 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 risks and factors associated with EMCOR's business are also
discussed in the Company's 2007 Form 10-K, its Form 10-Q for the third quarter
ended September 30, 2008, and in other reports filed from time to time with the
Securities and Exchange Commission. All these risks and factors should be taken
into account in evaluating any forward-looking statements.
- FINANCIAL TABLES FOLLOW -
EMCOR GROUP, INC.
FINANCIAL HIGHLIGHTS
(In thousands, except share and per share information)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---- ---- ---- ----
Revenues $1,720,349 $1,500,798 $5,104,724 $4,159,519
Cost of sales 1,496,003 1,331,887 4,465,242 3,696,996
---------- ---------- ---------- ----------
Gross profit 224,346 168,911 639,482 462,523
Selling, general and
administrative expenses 145,708 113,996 437,774 348,711
Restructuring expenses -- -- 71 93
---------- ---------- ---------- ----------
Operating income 78,638 54,915 201,637 113,719
Interest (expense) income, net (162) 2,166 (1,595) 7,656
Minority interest (905) (931) (1,258) (2,046)
---------- ---------- ---------- ----------
Income from continuing
operations before income taxes 77,571 56,150 198,784 119,329
Income tax provision 28,936 19,067 76,867 45,370
---------- ---------- ---------- ----------
Income from continuing
operations 48,635 37,083 121,917 73,959
Income from discontinued
operation, net -- 1,253 -- 2,519
---------- ---------- ---------- ----------
Net income $ 48,635 $ 38,336 $ 121,917 $ 76,478
========== ========== ========== ==========
Basic earnings per common share -
From continuing operations $ 0.74 $ 0.57 $ 1.87 $ 1.15
Basic earnings per common share -
From discontinued operation -- 0.02 -- 0.04
---------- ---------- ---------- ----------
$ 0.74 $ 0.59 $ 1.87 $ 1.19
========== ========== ========== ==========
Diluted earnings per common share -
From continuing operations $ 0.72 $ 0.55 $ 1.82 $ 1.11
Diluted earnings per common share -
From discontinued operation -- 0.02 -- 0.04
---------- ---------- ---------- ----------
$ 0.72 $ 0.57 $ 1.82 $ 1.15
========== ========== ========== ==========
Weighted average shares of common stock outstanding:
Basic 65,404,404 64,591,883 65,331,538 64,208,289
Diluted 67,425,722 66,922,011 67,164,880 66,622,958
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2008 2007
(Unaudited)
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 340,849 $ 251,637
Accounts receivable, net 1,489,495 1,435,268
Costs and estimated earnings in excess of billings
on uncompleted contracts 130,808 144,919
Inventories 61,570 52,247
Prepaid expenses and other 52,841 56,935
---------- ----------
Total current assets 2,075,563 1,941,006
Investments, notes and other long-term receivables 22,791 22,669
Property, plant & equipment, net 90,609 83,963
Goodwill 574,363 563,918
Identifiable intangible assets, net 270,803 252,146
Other assets 12,797 13,157
---------- ----------
Total assets $3,046,926 $2,876,859
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ -- $ --
Current maturities of long-term debt and capital
lease obligations 3,816 3,791
Accounts payable 489,099 537,314
Billings in excess of costs and estimated earnings
on uncompleted contracts 684,597 572,431
Accrued payroll and benefits 227,776 215,554
Other accrued expenses and liabilities 194,228 190,349
---------- ----------
Total current liabilities 1,599,516 1,519,439
Long-term debt and capital lease obligations 196,745 223,453
Other long-term obligations 239,604 248,926
Total stockholders' equity 1,011,061 885,041
---------- ----------
Total liabilities and stockholders' equity $3,046,926 $2,876,859
========== ==========