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Emcor Group, Inc. Reports First Quarter 2021 Results

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- Record First Quarter Revenues of $2.30 billion -
- Record First Quarter Diluted EPS of $1.54, 14.1% Increase Year-over-Year -
- Record Remaining Performance Obligations of $4.78 billion, 7.9% Increase Year-over-Year -
- Increases 2021 Diluted EPS Guidance Range to $6.35 - $6.75 from $6.20 - $6.70 -

EMCOR Group, Inc. (NYSE: EME) today reported results for the first quarter ended March 31, 2021.

For the first quarter of 2021, net income was $84.8 million, or $1.54 per diluted share, compared to $75.7 million, or $1.35 per diluted share, for the first quarter of 2020. Revenues for the first quarter of 2021 totaled $2.30 billion, up 0.2% from the year ago period.

Operating income for the first quarter of 2021 was $117.0 million, or 5.1% of revenues. This compared to $106.0 million, or 4.6% of revenues, for the first quarter of 2020.

Selling, general and administrative expenses for the first quarter of 2021 totaled $224.1 million, or 9.7% of revenues, compared to $227.0 million, or 9.9% of revenues, for the first quarter of 2020.

The Company's income tax rate for the first quarter of 2021 was 27.2% compared to an income tax rate of 27.4% for the first quarter of 2020.

Remaining performance obligations as of March 31, 2021 were $4.78 billion compared to $4.42 billion as of March 31, 2020. Total remaining performance obligations grew approximately $351.3 million year-over-year.

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, "The Company had an outstanding start to the year, achieving record first quarter revenues, gross profit, gross profit margin, operating income, operating income margin, net income, and diluted earnings per share. Our focus on executing for our customers allowed us to deliver a robust operating income margin of 5.1%, up 50 basis points year-over-year. Additionally, we continue to see a healthy project pipeline as evidenced by our record remaining performance obligations of $4.78 billion, which increased 7.9% year-over-year."

Mr. Guzzi added, "Our U.S. Construction segments continue to deliver outstanding results, posting combined revenue and operating income growth of 5.0% and 23.1% year-over-year, respectively, led by our U.S. Mechanical Construction segment in particular, which delivered revenue growth of 8.4% year-over-year and operating income growth of 43.8% year-over-year. U.S. Building Services performed exceptionally well, generating revenue and operating income growth of 10.3% and 38.0%, respectively, driven primarily by our commercial site-based and mobile mechanical services businesses. Our U.S. Industrial Services segment experienced a difficult quarter as the Texas Freeze impacted our turnaround schedule, but we remain well-positioned to assist our customers when the market strengthens. Lastly, our U.K. Building Services segment continued to take advantage of strong project demand, delivering revenue and operating income growth of 12.8% and 63.3%, respectively, which led to operating margin expansion of 230 basis points year-over-year."

Based on year-to-date performance and assuming a gradual improvement of current market conditions as the year progresses, EMCOR is raising its full-year 2021 diluted earnings per share guidance range to $6.35 to $6.75, an increase from the prior guidance range of $6.20 to $6.70. The Company is maintaining its full-year 2021 revenue guidance of $9.2 billion to $9.4 billion.

Mr. Guzzi concluded, "We are optimistic about our prospects for the remainder of the year. Our values of Mission First, People Always will continue to guide us as we focus on the health and safety of our employees, while executing our work for our customers with excellence. Looking ahead, we will continue to invest in our business and pursue strategic acquisition opportunities, while also returning capital to shareholders through share repurchases and dividends."

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.

EMCOR Group's first quarter conference call will be available live via internet broadcast today, Thursday, April 29, at 10:30 AM Eastern Daylight Time. The live call may be accessed through the Company's website at www.emcorgroup.com.

Forward Looking Statements:

This release contains certain forward-looking statements. Any such comments speak only as of April 29, 2021 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, the nature and impact of our remaining performance obligations, our ability to pursue acquisitions, our ability to return capital to shareholders, market opportunities, market growth and customer trends. 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 are no guarantee of future performance. Such risks 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, mix of business, and the impact of the COVID-19 pandemic on our revenue and operations, including employees, construction activity, and facilities utilization, and certain of the risk factors associated with EMCOR’s business discussed in Part I, Item 1A "Risk Factors," of the Company’s 2020 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 any forward-looking statements.

EMCOR GROUP, INC.

FINANCIAL HIGHLIGHTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share information)

(Unaudited)

For the three months ended
March 31,

2021

2020

Revenues

$

2,304,049

$

2,299,832

Cost of sales

1,962,976

1,966,771

Gross profit

341,073

333,061

Selling, general and administrative expenses

224,069

226,997

Restructuring expenses

69

Operating income

117,004

105,995

Net periodic pension (cost) income

908

742

Interest expense, net

(1,363)

(2,488)

Income before income taxes

116,549

104,249

Income tax provision

31,604

28,584

Net income including noncontrolling interests

84,945

75,665

Less: Net income attributable to noncontrolling interests

(171)

Net income attributable to EMCOR Group, Inc.

$

84,774

$

75,665

Basic earnings per common share

$

1.54

$

1.35

Diluted earnings per common share

$

1.54

$

1.35

Weighted average shares of common stock outstanding:

Basic

54,896,548

56,007,122

Diluted

55,135,304

56,210,728

Dividends declared per common share

$

0.13

$

0.08

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

March 31, 2021
(Unaudited)

December 31,
2020

ASSETS

Current assets:

Cash and cash equivalents

$

758,833

$

902,867

Accounts receivable, net

2,037,525

1,922,096

Contract assets

192,369

171,956

Inventories

48,212

53,338

Prepaid expenses and other

68,692

70,679

Total current assets

3,105,631

3,120,936

Property, plant and equipment, net

157,202

158,427

Operating lease right-of-use assets

239,457

242,155

Goodwill

862,323

851,783

Identifiable intangible assets, net

580,555

582,893

Other assets

116,021

107,646

Total assets

$

5,061,189

$

5,063,840

LIABILITIES AND EQUITY

Current liabilities:

Current maturities of long-term debt and finance lease liabilities

$

16,713

$

16,910

Accounts payable

624,884

671,886

Contract liabilities

739,572

722,252

Accrued payroll and benefits

384,942

450,955

Other accrued expenses and liabilities

272,942

247,597

Operating lease liabilities, current

54,354

53,632

Total current liabilities

2,093,407

2,163,232

Long-term debt and finance lease liabilities

259,714

259,619

Operating lease liabilities, long-term

201,894

205,362

Other long-term obligations

385,502

382,383

Total liabilities

2,940,517

3,010,596

Equity:

Total EMCOR Group, Inc. stockholders’ equity

2,119,968

2,052,668

Noncontrolling interests

704

576

Total equity

2,120,672

2,053,244

Total liabilities and equity

$

5,061,189

$

5,063,840

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2021 and 2020

(In thousands) (Unaudited)

2021

2020

Cash flows - operating activities:

Net income including noncontrolling interests

$

84,945

$

75,665

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

12,001

11,767

Amortization of identifiable intangible assets

14,989

14,747

Provision for credit losses

507

2,614

Deferred income taxes

14

4,375

Non-cash share-based compensation expense

3,193

3,291

Other reconciling items

(739)

42

Changes in operating assets and liabilities, excluding the effect of businesses acquired

(203,899)

(191,314)

Net cash used in operating activities

(88,989)

(78,813)

Cash flows - investing activities:

Payments for acquisitions of businesses, net of cash acquired

(24,326)

(2,582)

Proceeds from sale or disposal of property, plant and equipment

766

196

Purchases of property, plant and equipment

(8,204)

(12,035)

Net cash used in investing activities

(31,764)

(14,421)

Cash flows - financing activities:

Proceeds from revolving credit facility

200,000

Repayments of revolving credit facility

(50,000)

Proceeds from long-term debt

300,000

Repayments of long-term debt and debt issuance costs

(257,549)

Repayments of finance lease liabilities

(1,145)

(1,277)

Dividends paid to stockholders

(7,121)

(4,500)

Repurchases of common stock

(12,917)

(99,048)

Taxes paid related to net share settlements of equity awards

(3,750)

(2,492)

Issuances of common stock under employee stock purchase plan

1,731

1,638

Payments for contingent consideration arrangements

(693)

(653)

Distributions to noncontrolling interests

(43)

Net cash (used in) provided by financing activities

(23,938)

86,119

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

886

(4,678)

Decrease in cash, cash equivalents, and restricted cash

(143,805)

(11,793)

Cash, cash equivalents, and restricted cash at beginning of year (1)

903,562

359,920

Cash, cash equivalents, and restricted cash at end of period (2)

$

759,757

$

348,127

_________

(1)

Includes $0.7 million and $1.1 million of restricted cash classified as "Prepaid expenses and other" in the Consolidated Balance Sheets as of December 31, 2020 and 2019, respectively.

(2)

Includes $0.9 million and $1.0 million of restricted cash classified as "Prepaid expenses and other" in the Consolidated Balance Sheets as of March 31, 2021 and 2020, respectively.

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands) (Unaudited)

For the three months ended
March 31,

2021

2020

Revenues from unrelated entities:

United States electrical construction and facilities services

$

456,168

$

461,803

United States mechanical construction and facilities services

903,925

834,112

United States building services

581,839

527,611

United States industrial services

235,382

363,929

Total United States operations

2,177,314

2,187,455

United Kingdom building services

126,735

112,377

Total operations

$

2,304,049

$

2,299,832

For the three months ended
March 31,

2021

2020

Operating income (loss):

United States electrical construction and facilities services

$

40,264

$

40,312

United States mechanical construction and facilities services

64,950

45,171

United States building services

29,334

21,261

United States industrial services

(2,443)

15,425

Total United States operations

132,105

122,169

United Kingdom building services

9,411

5,764

Corporate administration

(24,512)

(21,869)

Restructuring expenses

(69)

Total operations

117,004

105,995

Other corporate items:

Net periodic pension (cost) income

908

742

Interest expense, net

(1,363)

(2,488)

Income before income taxes

$

116,549

$

104,249

View source version on businesswire.com: https://www.businesswire.com/news/home/20210429005588/en/

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(203) 849-7938

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