Record Quarterly Revenues of $3.67 billion,
20.4% Increase Year-over-Year
Record Quarterly Diluted EPS of $5.25, 78.0%
Increase Year-over-Year
Remaining Performance Obligations of $9.0
billion, 8.6% Increase Year-over-Year
Increases 2024 Revenue Guidance Range to
$14.5 billion - $15.0 billion from $14.0 billion - $14.5
billion
Increases 2024 Diluted EPS Guidance Range to
$19.00 - $20.00 from $15.50 - $16.50
EMCOR Group, Inc. (NYSE: EME) today reported results for the
quarter ended June 30, 2024.
Second Quarter 2024 Results of
Operations
For the second quarter of 2024, revenues totaled $3.67 billion,
an increase of 20.4%, compared to $3.05 billion for the second
quarter of 2023. Net income for the second quarter of 2024 was
$247.6 million, or $5.25 per diluted share, compared to $140.6
million, or $2.95 per diluted share, for the second quarter of
2023.
Operating income for the second quarter of 2024 was $332.8
million, or 9.1% of revenues, compared to $196.7 million, or 6.5%
of revenues, for the second quarter of 2023. Operating income
included depreciation and amortization expense, inclusive of
amortization of identifiable intangible assets, of $34.2 million
and $29.0 million for the second quarter of 2024 and 2023,
respectively.
Selling, general and administrative expenses for the second
quarter of 2024 totaled $351.2 million, or 9.6% of revenues,
compared to $293.4 million, or 9.6% of revenues, for the second
quarter of 2023.
The Company's income tax rate for the second quarter of 2024 was
27.0%, compared to 27.4% for the second quarter of 2023.
Remaining performance obligations as of June 30, 2024 were $9.0
billion compared to $8.3 billion as of June 30, 2023, up $713.1
million year-over-year.
Tony Guzzi, Chairman, President, and Chief Executive Officer of
EMCOR, commented, “We had an exceptional first half of the year,
the Company maintained its excellent momentum in the second quarter
and again set new records across key financial and operational
metrics. Demand for EMCOR’s specialty contracting services remains
high, further reinforcing our confidence in the trajectory of the
business. Our Remaining Performance Obligations are at near record
levels, and our pipeline continues to be robust, all supporting our
positive outlook for the rest of the year and gives us confidence
to increase financial guidance for 2024.”
First Six Months 2024 Results of
Operations
Revenues for the first six months of 2024 totaled $7.10 billion,
an increase of 19.6%, compared to $5.94 billion for the first six
months of 2023. Net income for the first six months of 2024 was
$444.7 million, or $9.41 per diluted share, compared to net income
of $252.1 million, or $5.28 per diluted share, for the first six
months of 2023.
Operating income for the first six months of 2024 was $592.8
million, or 8.3% of revenues, compared to operating income of
$351.6 million, or 5.9% of revenues, for the first six months of
2023. Operating income included depreciation and amortization
expense, inclusive of amortization of identifiable intangible
assets, of $63.8 million and $57.5 million for the first six months
of 2024 and 2023, respectively.
Selling, general and administrative expenses totaled $680.5
million, or 9.6% of revenues, for the first six months of 2024,
compared $574.5 million, or 9.7% of revenues, for the first six
months of 2023.
Mr. Guzzi continued, “Our Electrical and Mechanical
Construction segments continued to perform exceptionally well,
driving our overall strong performance. With quarterly and
year-to-date revenue growth of over 35%, our Mechanical
Construction segment generated record revenues and operating
income, and a record operating margin of 12.9% for the quarter and
11.8% on a year-to-date basis. Our Electrical Construction
segment posted record revenues, with growth of 18% on both a
quarterly and year-to-date basis and achieved a record second
quarter operating margin, earning over 11% in both the quarter and
year-to-date periods. We continue to perform exceptionally well
against strong demand across the majority of the sectors we serve,
including high-tech and traditional manufacturing, network and
communications, institutional, and healthcare. Within our U.S.
Building Services segment, which is executing as expected, our
mechanical services business continued to deliver exceptional
performance with high-single digit operating margins, and
low-double digit revenue growth, as strong demand continues for our
energy efficiency services, building controls installations and
upgrades, and retrofit projects. Our Industrial Services
segment reported its best second quarter post-pandemic as improved
demand continued for both shop and field services.”
Increases Full Year 2024
Guidance
Based on year-to-date 2024 performance, current operating
conditions, and near-term visibility, the Company is:
- Increasing its full-year 2024 revenue guidance range to $14.5
billion - $15.0 billion, from the prior guidance range of $14.0
billion - $14.5 billion.
- Increasing its full-year 2024 diluted earnings per share
guidance range to $19.00 - $20.00, from the prior guidance range of
$15.50 - $16.50.
Mr. Guzzi concluded, “With our strong first half performance, we
are again raising our 2024 guidance. We continue to execute well by
deploying our resources to serve our customers and believe we are
positioned in the right geographies and sectors that have long-term
growth prospects. We also continue to deliver for our shareholders
by maintaining our focus on operational excellence and balanced
capital allocation.”
Second Quarter Earnings Conference Call
Information
EMCOR Group's second quarter conference call will be broadcast
live via internet today, Thursday, July 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 July 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 impact of claims and litigation, the nature and
extent of supply chain disruptions impacting availability and
pricing of materials, global conflicts, 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
June 30,
For the six months
ended
June 30,
2024
2023
2024
2023
Revenues
$
3,666,897
$
3,045,622
$
7,099,173
$
5,936,054
Cost of sales
2,982,896
2,555,562
5,825,863
5,009,932
Gross profit
684,001
490,060
1,273,310
926,122
Selling, general and administrative
expenses
351,193
293,393
680,549
574,545
Operating income
332,808
196,667
592,761
351,577
Net periodic pension income (cost)
221
(282
)
443
(556
)
Interest income (expense), net
6,106
(2,692
)
13,647
(4,524
)
Income before income taxes
339,135
193,693
606,851
346,497
Income tax provision
91,563
53,098
162,130
94,429
Net income
$
247,572
$
140,595
$
444,721
$
252,068
Basic earnings per common share
$
5.27
$
2.97
$
9.45
$
5.30
Diluted earnings per common share
$
5.25
$
2.95
$
9.41
$
5.28
Weighted average shares of common stock
outstanding:
Basic
46,972,032
47,393,493
47,053,768
47,584,656
Diluted
47,159,660
47,588,669
47,236,738
47,767,242
Dividends declared per common share
$
0.25
$
0.18
$
0.43
$
0.33
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
June 30,
2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
807,318
$
789,750
Accounts receivable, net
3,459,270
3,203,490
Contract assets
293,677
269,885
Inventories
103,896
110,774
Prepaid expenses and other
76,628
73,072
Total current assets
4,740,789
4,446,971
Property, plant, and equipment, net
201,168
179,378
Operating lease right-of-use assets
331,313
310,498
Goodwill
998,571
956,549
Identifiable intangible assets, net
661,920
586,032
Other assets
138,788
130,293
Total assets
$
7,072,549
$
6,609,721
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
922,002
$
935,967
Contract liabilities
1,783,909
1,595,109
Accrued payroll and benefits
584,113
596,936
Other accrued expenses and liabilities
304,482
315,107
Operating lease liabilities, current
78,726
75,236
Total current liabilities
3,673,232
3,518,355
Operating lease liabilities, long-term
279,465
259,430
Other long-term obligations
374,255
361,121
Total liabilities
4,326,952
4,138,906
Equity:
Total EMCOR Group, Inc. stockholders’
equity
2,744,560
2,469,778
Noncontrolling interests
1,037
1,037
Total equity
2,745,597
2,470,815
Total liabilities and equity
$
7,072,549
$
6,609,721
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30,
2024 and 2023
(In thousands) (Unaudited)
2024
2023
Cash flows - operating activities:
Net income
$
444,721
$
252,068
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
27,408
25,393
Amortization of identifiable intangible
assets
36,412
32,100
Provision for credit losses
12,251
3,115
Non-cash share-based compensation
expense
11,371
7,535
Other reconciling items
(5,240
)
(6,800
)
Changes in operating assets and
liabilities, excluding the effect of businesses acquired
(114,965
)
(98,479
)
Net cash provided by operating
activities
411,958
214,932
Cash flows - investing activities:
Payments for acquisitions of businesses,
net of cash acquired
(173,265
)
(22,384
)
Proceeds from sale or disposal of
property, plant, and equipment
1,655
10,514
Purchases of property, plant, and
equipment
(39,529
)
(36,564
)
Net cash used in investing
activities
(211,139
)
(48,434
)
Cash flows - financing activities:
Proceeds from revolving credit
facility
—
100,000
Repayments of revolving credit
facility
—
(100,000
)
Repayments of finance lease
liabilities
(1,393
)
(1,477
)
Dividends paid to stockholders
(20,219
)
(15,714
)
Repurchases of common stock
(149,009
)
(105,299
)
Taxes paid related to net share
settlements of equity awards
(11,766
)
(5,295
)
Issuances of common stock under employee
stock purchase plan
943
4,441
Payments for contingent consideration
arrangements
—
(3,026
)
Net cash used in financing
activities
(181,444
)
(126,370
)
Effect of exchange rate changes on
cash, cash equivalents, and restricted cash
(927
)
5,856
Increase in cash, cash equivalents, and
restricted cash
18,448
45,984
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)
$
808,198
$
503,052
_________
(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 $0.9 million of restricted cash classified as
“Prepaid expenses and other” in the Consolidated Balance Sheets as
of June 30, 2024.
EMCOR GROUP, INC.
SEGMENT INFORMATION
(In thousands, except for
percentages) (Unaudited)
For the quarters ended June
30,
2024
% of Total
2023
% of Total
Revenues from unrelated
entities:
United States electrical construction and
facilities services
$
799,994
22
%
$
678,167
22
%
United States mechanical construction and
facilities services
1,655,181
45
%
1,194,113
39
%
United States building services
781,108
21
%
775,012
26
%
United States industrial services
324,047
9
%
292,283
10
%
Total United States operations
3,560,330
97
%
2,939,575
97
%
United Kingdom building services
106,567
3
%
106,047
3
%
Total operations
$
3,666,897
100
%
$
3,045,622
100
%
For the six months ended June
30,
2024
% of Total
2023
% of Total
Revenues from unrelated
entities:
United States electrical construction and
facilities services
$
1,564,705
22
%
$
1,322,913
22
%
United States mechanical construction and
facilities services
3,082,846
43
%
2,272,671
38
%
United States building services
1,562,268
22
%
1,500,387
25
%
United States industrial services
678,100
10
%
623,166
11
%
Total United States operations
6,887,919
97
%
5,719,137
96
%
United Kingdom building services
211,254
3
%
216,917
4
%
Total operations
$
7,099,173
100
%
$
5,936,054
100
%
EMCOR GROUP, INC.
SEGMENT INFORMATION
(In thousands, except for
percentages) (Unaudited)
For the quarters ended June
30,
2024
% of Segment Revenues
2023
% of Segment Revenues
Operating income (loss):
United States electrical construction and
facilities services
$
88,577
11.1
%
$
50,722
7.5
%
United States mechanical construction and
facilities services
213,440
12.9
%
119,847
10.0
%
United States building services
46,839
6.0
%
46,137
6.0
%
United States industrial services
12,746
3.9
%
7,887
2.7
%
Total United States operations
361,602
10.2
%
224,593
7.6
%
United Kingdom building services
5,777
5.4
%
5,927
5.6
%
Corporate administration
(34,571
)
—
(33,853
)
—
Total operations
332,808
9.1
%
196,667
6.5
%
Other items:
Net periodic pension income (cost)
221
(282
)
Interest income (expense), net
6,106
(2,692
)
Income before income taxes
$
339,135
$
193,693
For the six months ended June
30,
2024
% of Segment Revenues
2023
% of Segment Revenues
Operating income (loss):
United States electrical construction and
facilities services
$
180,166
11.5
%
$
91,238
6.9
%
United States mechanical construction and
facilities services
364,160
11.8
%
206,074
9.1
%
United States building services
80,298
5.1
%
83,787
5.6
%
United States industrial services
30,712
4.5
%
22,907
3.7
%
Total United States operations
655,336
9.5
%
404,006
7.1
%
United Kingdom building services
11,154
5.3
%
11,351
5.2
%
Corporate administration
(73,729
)
—
(63,780
)
—
Total operations
592,761
8.3
%
351,577
5.9
%
Other items:
Net periodic pension income (cost)
443
(556
)
Interest income (expense), net
13,647
(4,524
)
Income before income taxes
$
606,851
$
346,497
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 and six months ended June
30, 2024.
For the quarter ended
June 30, 2024
For the six months
ended
June 30, 2024
$
%
$
%
GAAP revenue growth
$
621,275
20.4
%
$
1,163,119
19.6
%
Incremental revenues from acquisitions
(80,869
)
(2.7
)%
(88,803
)
(1.5
)%
Organic revenue growth, a non-GAAP
measure
$
540,406
17.7
%
$
1,074,316
18.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240725280306/en/
Andrew G. Backman Vice President Investor Relations (203)
849-7938 FTI Consulting, Inc. Investors: Blake Mueller (718)
578-3706
EMCOR (NYSE:EME)
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