Quarterly Revenues of $3.43 billion, 18.7%
Increase Year-over-Year
Quarterly Diluted EPS of $4.17, 79.7%
Increase Year-over-Year
Record Remaining Performance Obligations of
$9.18 billion, 16.5% Increase Year-over-Year
Increases 2024 Revenue Guidance Range to
$14.0 billion - $14.5 billion from $13.5 billion - $14.0
billion
Increases 2024 Diluted EPS Guidance Range to
$15.50 - $16.50 from $14.00 - $15.00
EMCOR Group, Inc. (NYSE: EME) today reported results for the
first quarter ended March 31, 2024.
For the first quarter of 2024, revenues totaled $3.43 billion,
an increase of 18.7%, compared to $2.89 billion for the first
quarter of 2023. Net income was $197.1 million, or $4.17 per
diluted share, compared to $111.5 million, or $2.32 per diluted
share, for the first quarter of 2023.
Operating income for the first quarter of 2024 was $260.0
million, or 7.6% of revenues, compared to $154.9 million, or 5.4%
of revenues, for the first quarter of 2023. Operating income
included depreciation and amortization expense, inclusive of
amortization of identifiable intangible assets, of $29.6 million
and $28.5 million for the first quarter of 2024 and 2023,
respectively.
Selling, general and administrative expenses for the first
quarter of 2024 totaled $329.4 million, or 9.6% of revenues,
compared to $281.2 million, or 9.7% of revenues, for the first
quarter of 2023.
The Company's income tax rate for the first quarter of 2024 was
26.4%, compared to 27.0% for the first quarter of 2023.
Remaining performance obligations as of March 31, 2024 were
$9.18 billion compared to $7.87 billion as of March 31, 2023, up
approximately $1.30 billion year-over-year.
Tony Guzzi, Chairman, President, and Chief Executive Officer of
EMCOR, commented, “The Company had an exceptional start to the
year, sustaining momentum throughout the first quarter and setting
new records in key financial and operational metrics. Our
confidence is reinforced by the significant year-over-year increase
in our remaining performance obligations and a healthy project
pipeline, all of which provide us with strong visibility into the
remainder of the year and is reflected in our increased financial
guidance for 2024.”
Mr. Guzzi continued, “Our Electrical and Mechanical
Construction segments continue to exceed our already high
expectations. Our Electrical Construction segment posted
record revenues and operating margin, with revenues growing 18.6%
and operating margin coming in at 12.0%. With organic growth of
32.4%, our Mechanical Construction segment generated record
first quarter revenues, and achieved a record first quarter
operating margin of 10.6%. We executed well with strong demand
across many of the market sectors we serve, including high-tech and
traditional manufacturing, as well as the network and
communications sector. We had outstanding performance on some of
the most demanding projects for our most sophisticated customers.
Our Industrial Services business reported its best quarter
post-pandemic. We continue to see improved demand for our services
and completed some of our largest turnarounds in over five years.
Within our U.S. Building Services segment, our mechanical
services business continues to perform well, with solid high-single
digit operating margins, and strong demand persists for our energy
efficiency, building controls and retrofit projects.”
Increases Full Year 2024 Guidance
Based on its first quarter 2024 performance, current operating
conditions, and near-term visibility, the Company is:
- Increasing its full-year 2024 revenue guidance range to $14.0
billion - $14.5 billion, an increase from the prior guidance range
of $13.5 billion - $14.0 billion.
- Increasing its full-year 2024 diluted earnings per share
guidance range to $15.50 - $16.50, an increase from the prior
guidance range of $14.00 - $15.00.
Mr. Guzzi added, “Our continued momentum in the first quarter
and our sustained success over the past several years reflects our
ability to efficiently deploy exceptionally skilled talent in the
field, and our focus on operational excellence. Looking forward, we
are well positioned to serve our customers and meet the evolving
demands of the markets in which we operate.”
Mr. Guzzi concluded, “We feel confident in raising our guidance
and believe we have the right strategy being implemented by a team
that can execute very well against the available market
opportunities. We will continue to be balanced capital allocators,
as evidenced by our year-to-date actions, including four recently
disclosed acquisitions, share repurchases, and our increased
dividend. Our priority is always to deploy capital to organic
growth first, and then expand our capacity and capability through
acquisitions to better serve our customers and increase value for
our shareholders.”
First Quarter Earnings Conference Call Information
EMCOR Group's first quarter conference call will be broadcast
live via internet today, Thursday, April 25, at 10:30 AM Eastern
Daylight Time and can be accessed through the Company's website at
www.emcorgroup.com.
About EMCOR
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.
Forward Looking Statements:
This release and related presentation contain forward-looking
statements. Such statements speak only as of April 25, 2024, 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, including financial guidance
and projections underlying that guidance; the nature and impact of
our remaining performance obligations and timing of future
projects; our ability to be prudent capital allocators; our ability
to pursue organic and strategic investments and acquisitions; our
ability to return capital to shareholders, including through share
repurchases and dividends; market opportunities; market growth
prospects; customer trends; and project mix. 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 do not guarantee future performance
or events. Applicable risks and uncertainties include, but are not
limited to, adverse effects of general economic conditions;
domestic and international political developments; changes in the
specific markets for EMCOR’s services; adverse business conditions,
including labor market tightness and/or disruption, productivity
challenges, the nature and extent of supply chain disruptions
impacting availability and pricing of materials, and inflationary
trends more generally, including fluctuations in energy costs; the
impact of legislation and/or government regulations; changes in
interest rates; the availability of adequate levels of surety
bonding; increased competition; and unfavorable developments in the
mix of our business. Certain of the risk factors associated with
EMCOR’s business are also discussed in Part I, Item 1A “Risk
Factors,” of the Company’s 2023 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 our business,
including any forward-looking statements.
Non-GAAP Measures:
This release and related presentation also include 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 ongoing 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
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share and
per share information)
(Unaudited)
For the quarters ended
March 31,
2024
2023
Revenues
$
3,432,276
$
2,890,432
Cost of sales
2,842,967
2,454,370
Gross profit
589,309
436,062
Selling, general and administrative
expenses
329,356
281,152
Operating income
259,953
154,910
Net periodic pension income (cost)
222
(274
)
Interest income (expense), net
7,541
(1,832
)
Income before income taxes
267,716
152,804
Income tax provision
70,567
41,331
Net income
$
197,149
$
111,473
Basic earnings per common share
$
4.18
$
2.33
Diluted earnings per common share
$
4.17
$
2.32
Weighted average shares of common stock
outstanding:
Basic
47,138,185
47,775,819
Diluted
47,316,497
47,945,815
Dividends declared per common share
$
0.18
$
0.15
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31,
2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
840,985
$
789,750
Accounts receivable, net
3,206,131
3,203,490
Contract assets
267,611
269,885
Inventories
113,751
110,774
Prepaid expenses and other
79,651
73,072
Total current assets
4,508,129
4,446,971
Property, plant, and equipment, net
186,410
179,378
Operating lease right-of-use assets
321,505
310,498
Goodwill
956,549
956,549
Identifiable intangible assets, net
569,781
586,032
Other assets
144,953
130,293
Total assets
$
6,687,327
$
6,609,721
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
865,059
$
935,967
Contract liabilities
1,649,207
1,595,109
Accrued payroll and benefits
477,529
596,936
Other accrued expenses and liabilities
363,677
315,107
Operating lease liabilities, current
76,013
75,236
Total current liabilities
3,431,485
3,518,355
Operating lease liabilities, long-term
269,799
259,430
Other long-term obligations
370,661
361,121
Total liabilities
4,071,945
4,138,906
Equity:
Total EMCOR Group, Inc. stockholders’
equity
2,614,345
2,469,778
Noncontrolling interests
1,037
1,037
Total equity
2,615,382
2,470,815
Total liabilities and equity
$
6,687,327
$
6,609,721
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Three Months Ended March
31, 2024 and 2023
(In thousands) (Unaudited)
2024
2023
Cash flows - operating activities:
Net income
$
197,149
$
111,473
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
13,337
12,621
Amortization of identifiable intangible
assets
16,251
15,877
Provision for (recovery of) credit
losses
9,898
(343
)
Non-cash share-based compensation
expense
6,527
4,087
Other reconciling items
(2,829
)
505
Changes in operating assets and
liabilities, excluding the effect of businesses acquired
(108,069
)
(228,803
)
Net cash provided by (used in)
operating activities
132,264
(84,583
)
Cash flows - investing activities:
Payments for acquisitions of businesses,
net of cash acquired
(100
)
(11,834
)
Proceeds from sale or disposal of
property, plant, and equipment
939
9,583
Purchases of property, plant, and
equipment
(20,278
)
(23,154
)
Net cash used in investing
activities
(19,439
)
(25,405
)
Cash flows - financing activities:
Proceeds from revolving credit
facility
—
100,000
Repayments of finance lease
liabilities
(773
)
(780
)
Dividends paid to stockholders
(8,470
)
(7,151
)
Repurchases of common stock
(39,000
)
(16,033
)
Taxes paid related to net share
settlements of equity awards
(11,648
)
(5,242
)
Issuances of common stock under employee
stock purchase plan
943
2,168
Payments for contingent consideration
arrangements
—
(1,456
)
Net cash (used in) provided by
financing activities
(58,948
)
71,506
Effect of exchange rate changes on
cash, cash equivalents, and restricted cash
(1,140
)
2,239
Increase (decrease) in cash, cash
equivalents, and restricted cash
52,737
(36,243
)
Cash, cash equivalents, and restricted
cash at beginning of year (1)
789,750
457,068
Cash, cash equivalents, and restricted
cash at end of period (2)
$
842,487
$
420,825
__________
(1)
Includes $0.6 million of
restricted cash classified as “Prepaid expenses and other” in the
Consolidated Balance Sheets as of December 31, 2022.
(2)
Includes $1.5 million and $0.8
million of restricted cash classified as “Prepaid expenses and
other” in the Consolidated Balance Sheets as of March 31, 2024 and
2023, respectively.
EMCOR GROUP, INC.
SEGMENT INFORMATION
(In thousands, except for
percentages) (Unaudited)
For the quarters ended March
31,
2024
% of Total
2023
% of Total
Revenues from unrelated
entities:
United States electrical construction and
facilities services
$
764,711
22
%
$
644,746
22
%
United States mechanical construction and
facilities services
1,427,665
42
%
1,078,558
38
%
United States building services
781,160
23
%
725,375
25
%
United States industrial services
354,053
10
%
330,883
11
%
Total United States operations
3,327,589
97
%
2,779,562
96
%
United Kingdom building services
104,687
3
%
110,870
4
%
Total operations
$
3,432,276
100
%
$
2,890,432
100
%
For the quarters ended March
31,
2024
% of Segment Revenues
2023
% of Segment Revenues
Operating income (loss):
United States electrical construction and
facilities services
$
91,589
12.0
%
$
40,516
6.3
%
United States mechanical construction and
facilities services
150,720
10.6
%
86,227
8.0
%
United States building services
33,459
4.3
%
37,650
5.2
%
United States industrial services
17,966
5.1
%
15,020
4.5
%
Total United States operations
293,734
8.8
%
179,413
6.5
%
United Kingdom building services
5,377
5.1
%
5,424
4.9
%
Corporate administration
(39,158
)
—
(29,927
)
—
Total operations
259,953
7.6
%
154,910
5.4
%
Other items:
Net periodic pension income (cost)
222
(274
)
Interest income (expense), net
7,541
(1,832
)
Income before income taxes
$
267,716
$
152,804
EMCOR GROUP, INC. 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 ended March 31, 2024.
For the quarter ended
March 31, 2024
$
%
GAAP revenue growth
$
541,844
18.7
%
Incremental revenues from acquisitions
(7,934
)
(0.2
)%
Organic revenue growth, a non-GAAP
measure
$
533,910
18.5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425492854/en/
EMCOR GROUP, INC. Andrew G. Backman Vice President Investor
Relations (203) 849-7938
FTI Consulting, Inc. Investors: Blake Mueller (718) 578-3706
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