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) February 21, 2008
EMCOR Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8267 11-2125338
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(Commission File Number) (I.R.S. Employer Identification No.)
301 Merritt Seven, Norwalk, CT 06851
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(Address of Principal Executive Offices) (Zip Code)
(203) 849-7800
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(Registrant's Telephone Number, Including Area Code)
N/A
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(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 February 21, 2008, EMCOR Group, Inc. issued a press release disclosing
results of operations for its fiscal 2007 fourth quarter ended December 31,
2007. 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
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99.1 Press Release issued by EMCOR Group, Inc. on February 21, 2008
disclosing results of operations for its fiscal 2007 fourth
quarter ended December 31, 2007.
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: February 21, 2008 By: /s/ Frank T. MacInnis
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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: Josh Epstein - 212-575-4545
EMCOR GROUP, INC. REPORTS RECORD FOURTH QUARTER RESULTS
- Revenues and Operating Income Increase 31.2% and 104.3%, Respectively -
- 2007 EPS Reaches Record $1.90 -
NORWALK, CONNECTICUT, February 21, 2008 - EMCOR Group, Inc. (NYSE: EME) today
reported results for the fourth quarter and full year ended December 31, 2007.
The Company's financial results for prior year periods have been adjusted to
reflect its 2-for-1 stock split, effective July 9, 2007.
For the 2007 fourth quarter, the Company reported net income of $50.3 million,
or $0.75 per diluted share, an increase of 25.2% over net income of $40.2
million, or $0.61 per diluted share, in the fourth quarter of 2006. Excluding
income from discontinued operations of $0.2 million, or $0.00 per diluted share,
income from continuing operations for the fourth quarter of 2007 was $50.1
million, or $0.75 per diluted share. Excluding income from discontinued
operations of $0.5 million, or $0.01 per diluted share, 2006 fourth quarter
income from continuing operations was $39.7 million, or $0.60 per diluted share.
Also included in the Company's 2006 fourth quarter results were restructuring
expenses before tax of $1.0 million, or $0.02 per diluted share after tax, and
an income tax benefit resulting from the reversal of valuation allowances and
the reversal of income tax reserves of $14.2 million, or $0.21 per diluted
share, as previously announced.
Revenues for the 2007 fourth quarter were $1.77 billion, an increase of 31.2%
from revenues of $1.35 billion in the fourth quarter of last year. Organic
revenue growth in the fourth quarter of 2007 was 21.9%.
For the 2007 fourth quarter, operating income was $86.1 million compared to
operating income of $42.1 million in the 2006 fourth quarter, an increase of
104.3%. Operating income as a percentage of revenues rose to 4.9% in the 2007
fourth quarter from 3.1% in the year ago period. Fourth quarter 2007 selling,
general and administrative (SG&A) expenses were $153.9 million, compared with
$123.8 million a year ago. As a percentage of revenues, SG&A expenses declined
to 8.7% in the fourth quarter of 2007 from 9.2% in the fourth quarter of 2006.
EMCOR Reports Record Fourth Quarter Results Page 2
At December 31, 2007 contract backlog reached a record $4.49 billion, an
increase of 28.4% over contract backlog of $3.50 billion at December 31, 2007.
Organic backlog growth, excluding the contribution from acquisitions made in
2007, was 23.8%.
Income from continuing operations for the 2007 full-year period increased 45.2%
to $124.0 million, or $1.86 per diluted share, from $85.4 million, or $1.30 per
diluted share, a year ago.
For the 2007 full year period, the Company reported net income of $126.8
million, or $1.90 per diluted share, which includes income from discontinued
operations of $2.8 million, or $0.04 per diluted share, and pre-tax
restructuring expenses of $0.3 million, or $0.01 per share after-tax.
Net income for the 2006 full-year period was $86.6 million, or $1.32 per diluted
share, which includes pre-tax restructuring expenses of $1.6 million, or $0.02
per diluted share after tax, income from discontinued operations of $1.2
million, or $0.02 per diluted share, and an income tax benefit resulting from
the reversal of valuation allowances and the reversal of income tax reserves of
$14.2 million, or $0.21 per diluted share. If the 2006 income tax benefits of
$14.2 million were excluded from 2006 net income, which the Company believes
better reflects year to year comparability, earnings per share from continuing
operations for the 2006 full year period would have been $1.09.
For the 2007 full-year period, revenues rose 20.9% to $5.93 billion from $4.90
billion in 2006. Organic revenue growth (excluding acquisitions made in 2007)
for the 2007 full-year period was 14.8%.
Operating income for the 2007 full-year period was $199.8 million, or 3.4% of
revenues, an increase of 78.8% over operating income of $111.8 million a year
ago. SG&A expenses for the 2007 full-year period were $502.7 million, or 8.5% of
revenues, versus $439.0 million, or 9.0% of revenues, in 2006.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "The fourth
quarter was an emphatic conclusion to the most successful year in EMCOR history
and was, in fact, our 50th consecutive profitable quarter. Our strong
performance across North America continued, as a result of approximately 21.9%
organic revenue growth during the quarter, while our commitment to cost
containment helped to generate further expansion of our operating margins.
Demand for our services remains robust across the markets we serve, and as a
result we have been able to increase backlog levels in tandem with record
revenue generation. Cash flow from operations of $259 million allowed us to
repay $75 million of acquisition-related debt while maintaining one of the
strongest balance sheets in the Company's history. Given our financial strength,
we have the flexibility to adapt to changes in market conditions and to make
investments to achieve our strategic goals."
EMCOR Reports Record Fourth Quarter Results Page 3
Mr. MacInnis concluded, "We enter 2008 with strong momentum and excellent
prospects for growth. Our backlog contains a solid mix of short, medium and
long-term contracts including some of the most prominent customers and projects
in the country, providing us with solid revenue visibility. The integration of
our recent strategic acquisitions is progressing very well, and we continue to
build our presence in growth markets, such as oil and gas, healthcare and
transportation, that are either independent of or countercyclical to broader
economic trends. Our presence in these markets, combined with the substantial
growth of our facilities services business over the past few years and our
financial strength, means that EMCOR Group is better positioned than ever to
perform well and to benefit from the diversity of our markets, services and
geographies. It is this diversity that will continue to yield stability and
increased performance over time."
The Company noted that, based on current market conditions and the makeup of its
backlog, it expects to generate revenues for the 2008 full-year period of
between $6.3 billion and $6.5 billion, and diluted earnings per share for 2008
of $2.08 to $2.28.
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 fourth quarter conference call will be available live via Internet
broadcast today, Thursday, February 21, at 10:30 AM Eastern Standard 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 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)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
---- ---- ---- ----
Revenues $1,767,633 $1,347,448 $5,927,152 $4,901,783
Cost of sales 1,527,334 1,180,496 5,224,330 4,349,383
---------- ---------- ---------- ----------
Gross profit 240,299 166,952 702,822 552,400
Selling, general and
administrative expenses 153,943 123,788 502,654 439,006
Restructuring expenses 250 1,018 343 1,622
---------- ---------- ---------- ----------
Operating income 86,106 42,146 199,825 111,772
Interest (expense) income, net (3,681) 1,702 3,975 3,894
Minority interest (5) (733) (2,051) (1,071)
---------- ---------- ---------- ----------
Income from continuing
operations before income taxes 82,420 43,115 201,749 114,595
Income tax provision 32,336 3,405 77,706 29,195
---------- ---------- ---------- ----------
Income from continuing
operations 50,084 39,710 124,043 85,400
Income from discontinued
operations, net of income taxes 246 497 2,765 1,234
---------- ---------- ---------- ----------
Net income $ 50,330 $ 40,207 $ 126,808 $ 86,634
========== ========== ========== ==========
Basic earnings per share -
continuing operations $ 0.77 $ 0.62 $ 1.93 $ 1.35
Basic earnings per share -
discontinued operations 0.00 0.01 0.04 0.02
---------- ---------- ---------- ----------
$ 0.77 $ 0.63 $ 1.97 $ 1.37
========== ========== ========== ==========
Diluted earnings per share -
continuing operations $ 0.75 $ 0.60 $ 1.86 $ 1.30
Diluted earnings per share -
discontinued operations 0.00 0.01 0.04 0.02
---------- ---------- ---------- ----------
$ 0.75 $ 0.61 $ 1.90 $ 1.32
========== ========== ========== ==========
Weighted average shares of
Common stock outstanding:
Basic 65,093,750 63,686,487 64,431,471 63,215,431
Diluted 67,051,600 66,167,921 66,731,936 65,480,393
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2007 2006
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 251,637 $ 273,735
Accounts receivable, net 1,430,052 1,184,418
Costs and estimated earnings in excess of billings
on uncompleted contracts 144,919 147,848
Inventories 52,247 18,015
Prepaid expenses and other 56,935 38,397
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Total current assets 1,935,790 1,662,413
Investments, notes and other long-term receivables 22,669 29,630
Property, plant & equipment, net 83,963 52,780
Goodwill 563,918 288,165
Identifiable intangible assets, net 252,146 38,251
Other assets 13,157 17,784
---------- ----------
Total assets $2,871,643 $2,089,023
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ -- $ --
Current maturities of long-term debt and capital
lease obligations 3,791 659
Accounts payable 537,314 496,407
Billings in excess of costs and estimated earnings
on uncompleted contracts 572,431 412,069
Accrued payroll and benefits 211,849 177,490
Other accrued expenses and liabilities 188,838 121,723
---------- ----------
Total current liabilities 1,514,223 1,208,348
Long-term debt and capital lease obligations 223,453 1,239
Other long-term obligations 248,926 169,127
Total stockholders' equity 885,041 710,309
---------- ----------
Total liabilities and stockholders' equity $2,871,643 $2,089,023
========== ==========
EMCOR GROUP, INC.
COMPUTATION OF ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share information)
(Unaudited)
For the Year Ended December 31, 2006
--------------------------------------------------
Adjustments Adjustments As
As Reported (1) (2) Adjusted
----------- ----------- ----------- -----------
Revenues $ 4,901,783 $ 4,901,783
Cost of sales 4,349,383 4,349,383
----------- ----------- ----------- -----------
Gross profit 552,400 552,400
Selling, general and administrative expenses 439,006 439,006
Restructuring expenses 1,622 1,622
----------- ----------- ----------- -----------
Operating income 111,772 111,772
Interest income, net 3,894 3,894
Minority interest (1,071) (1,071)
----------- ----------- ----------- -----------
Income from continuing operations
before income taxes 114,595 114,595
Income tax provision 29,195 12,335 1,881 43,411
----------- ----------- ----------- -----------
Income from continuing operations 85,400 (12,335) (1,881) 71,184
Income from discontinued operations, net of
income taxes 1,234 1,234
----------- ----------- ----------- -----------
Net income $ 86,634 $ (12,335) $ (1,881) $ 72,418
=========== =========== =========== ===========
Diluted earnings per share - continuing
operations $ 1.30 $ 1.09
Diluted earnings per share - discontinued
operations $ 0.02 $ 0.02
Outstanding shares - diluted 65,480,393 65,480,393
(1) The adjustment represents the exclusion of an income tax benefit related to
the reversal of certain valuation allowances.
(2) The adjustment represents the exclusion of income tax benefits related to
the reversal of tax reserves no longer required.
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