Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries EMCOR Group, Inc. Reports Fourth Quarter and Full-Year 2023 Results By: EMCOR Group, Inc. via Business Wire February 28, 2024 at 07:30 AM EST Record Quarterly and Full-Year Revenues of $3.44 billion and $12.58 billion, respectively Record Quarterly and Full-Year Diluted EPS of $4.47 and $13.31, respectively Non-GAAP Full-Year Diluted EPS of $13.34 Record Remaining Performance Obligations of $8.85 billion, 18.6% Increase Year-over-Year 2024 Revenues and Diluted EPS Guidance of $13.5 billion - $14.0 billion and $14.00 - $15.00 Board Approves Increase in Quarterly Dividend to $0.25 per share from $0.18 per share EMCOR Group, Inc. (NYSE: EME) today reported results for the fourth quarter and year ended December 31, 2023. Fourth Quarter 2023 Results of Operations For the fourth quarter of 2023, net income was $211.5 million, or $4.47 per diluted share, compared to $126.3 million, or $2.63 per diluted share, for the fourth quarter of 2022. Revenues for the fourth quarter of 2023 totaled $3.44 billion, an increase of 16.6%, compared to $2.95 billion for the fourth quarter of 2022. Operating income for the fourth quarter of 2023 was $289.2 million, or 8.4% of revenues, compared to $177.2 million, or 6.0% of revenues, for the fourth quarter of 2022. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $31.2 million and $28.0 million for the fourth quarter of 2023 and 2022, respectively. Selling, general and administrative expenses for the fourth quarter of 2023 totaled $328.5 million, or 9.6% of revenues, compared to $277.6 million, or 9.4% of revenues, for the fourth quarter of 2022. The Company's income tax rate for the fourth quarter of 2023 was 27.5%, compared to 27.4% for the fourth quarter of 2022. Remaining performance obligations as of December 31, 2023 were a record $8.85 billion compared to $7.46 billion as of December 31, 2022, up approximately $1.39 billion year-over-year. Full Year 2023 Results of Operations Revenues for the 2023 full-year period totaled $12.58 billion, an increase of 13.6%, compared to $11.08 billion for the 2022 full-year period. Net income for the 2023 full-year period was $633.0 million, or $13.31 per diluted share, compared to $406.1 million, or $8.10 per diluted share, for the 2022 full-year period. Net income for the 2023 full-year period included a long-lived asset impairment charge of $2.4 million, or $1.7 million after taxes. Excluding this impairment charge, non-GAAP net income for the 2023 full-year period was $634.7 million, or $13.34 per diluted share. Operating income for the 2023 full-year period was $875.8 million, or 7.0% of revenues, compared to $564.9 million, or 5.1% of revenues, for the 2022 full-year period. Excluding the previously referenced impairment charge, non-GAAP operating income for the 2023 full-year period was $878.1 million, or 7.0% of revenues. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $119.0 million and $108.6 million for the 2023 and 2022 full-year periods, respectively. Refer to the attached tables for a reconciliation of non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share to the comparable GAAP measures. SG&A totaled $1.21 billion, or 9.6% of revenues, for the 2023 full-year period, compared to $1.04 billion, or 9.4% of revenues, for the 2022 full-year period. The Company's income tax rate for the 2023 full-year period was 27.5%, compared to 27.3% for the 2022 full-year period. Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, “The Company reported exceptional results for the fourth quarter and full year of 2023, achieving record quarterly and annual revenues, operating income, operating margin, and diluted earnings per share. As we look forward, we continue to expect demand for our services to remain strong, which is reflected in the 18.6% year-over-year increase in our remaining performance obligations.” Mr. Guzzi added, “Our U.S. Construction segments posted another quarter of exceptional results, concluding an outstanding year. On a combined basis, these segments achieved record revenues and operating income for both the fourth quarter and full year. We remain confident in the future of these businesses given several tailwinds working in our favor, including a strong project pipeline with a solid margin profile. Our U.S. Mechanical Construction segment had a particularly exceptional year with 18.2% annual revenue growth, all of which was organic, driven by strong performance across virtually all end markets. We believe that our investments in building information modeling, prefabrication, digital tools, and robotics have increased our productivity, yielding positive results and enhancing our operational efficiencies across this segment, as evidenced in part by an operating margin of 10.5% for the full year. Our U.S. Electrical Construction segment continued to perform very well as we benefited from consistent strong demand, particularly in the data center market, the energy sector, including several renewable energy projects, and the healthcare market sector, all of which is reflected in the segment’s revenue growth of 14.4% and operating margin of 8.3% for the full year. This segment also benefited from growth within the high-tech manufacturing market sector as demand for our electrical construction services strengthened throughout the year. Our U.S. Building Services segment had another strong year with revenue growth of 13.3% year-over-year. Key end markets remained resilient with energy efficiency and indoor air quality projects driving retrofit demand. Our U.S. Industrial Services segment continued to improve at a measured pace, delivering revenue growth of 4.4% and operating income growth of 79%, year-over-year. Our U.K. Building Services segment reported an operating margin of 5.9% for the full year, despite operating in a challenged macroeconomic environment.” Full Year 2024 Guidance Based on expected project mix and our current visibility into the coming year, EMCOR expects full-year 2024 revenues to be between $13.5 billion and $14.0 billion and full-year 2024 diluted earnings per share to be in the range of $14.00 to $15.00. Mr. Guzzi continued, “2023 was another outstanding year for EMCOR, with record-breaking achievements across virtually every metric. Our revenue and operating income growth was exceptional in 2023, driven by our ability to win and execute well in large, growing market sectors such as high-tech manufacturing, network and communications, manufacturing and industrial, and healthcare, all of which are benefiting from long-term secular trends that require excellence in specialty trade contracting. 2023 was not without its difficulties as the operating environment remained challenging, but we met those challenges with resolve and strong, focused execution, demonstrating the resilience and adaptability of our business as we capitalized on long-term, enduring market trends. Investments in BIM and prefabrication continue to create efficiencies and differentiate us during the bidding process, particularly when coupled with the project-level expertise of our teams in the field and the strength of our balance sheet.” Mr. Guzzi concluded, “We believe our growth strategy continues to position EMCOR for long-term success, as both our organic and inorganic initiatives are driving record performance. Looking forward, we believe we are positioned in the right market sectors and geographies to continue to win complex projects that allow us an opportunity to perform well for our customers. Our record remaining performance obligations provide solid visibility into 2024, despite some macroeconomic headwinds and other factors that could impact our performance and execution. As always, we will continue to maintain our proven and disciplined approach to capital allocation. We remain focused on returning capital to our shareholders, as evidenced by the latest increase in our dividend, and on investing in the sustainable growth of the Company, both in our existing businesses and through our disciplined acquisition strategy. We recently signed agreements to acquire several companies that are leaders in their respective offerings and regions, reflecting our strategy of expanding and complementing the capabilities and geographical footprint of our existing businesses to better serve the evolving needs of our customers.” Dividend Increase The Company today announced that its Board of Directors has approved an increase to the Company’s regular quarterly dividend to $0.25 per share from $0.18 per share. The Board expects to declare this cash dividend starting in the second quarter of 2024. Mr. Guzzi said, “This planned dividend increase is a testament to the exceptional execution of our employees, confidence in our business, and solid financial foundation. We believe our strong performance across key end markets positions us for sustained success going into 2024.” Fourth Quarter Earnings Conference Call Information EMCOR Group's fourth quarter conference call will be available live via internet broadcast today, Wednesday, February 28, at 10:30 AM Eastern Standard Time. The live call may 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 contains forward-looking statements. Such statements speak only as of February 28, 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; our ability to be prudent capital allocators; our ability to pursue organic investments and acquisitions; our ability to return capital to shareholders; 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 also includes 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 December 31, For the years ended December 31, 2023 2022 2023 2022 Revenues $ 3,439,221 $ 2,949,822 $ 12,582,873 $ 11,076,120 Cost of sales 2,821,476 2,495,022 10,493,534 9,472,526 Gross profit 617,745 454,800 2,089,339 1,603,594 Selling, general and administrative expenses 328,549 277,618 1,211,233 1,038,717 Impairment loss on long-lived assets — — 2,350 — Operating income 289,196 177,182 875,756 564,877 Net periodic pension (cost) income (279 ) 1,023 (1,119 ) 4,311 Interest income (expense), net 2,830 (4,204 ) (1,784 ) (10,438 ) Income before income taxes 291,747 174,001 872,853 558,750 Income tax provision 80,232 47,701 239,524 152,628 Net income including noncontrolling interests 211,515 126,300 633,329 406,122 Net (loss) income attributable to noncontrolling interests (2 ) — 335 — Net income attributable to EMCOR Group, Inc. $ 211,517 $ 126,300 $ 632,994 $ 406,122 Basic earnings per common share: $ 4.49 $ 2.65 $ 13.37 $ 8.13 Diluted earnings per common share: $ 4.47 $ 2.63 $ 13.31 $ 8.10 Weighted average shares of common stock outstanding: Basic 47,097,762 47,710,479 47,358,467 49,931,940 Diluted 47,331,532 47,936,737 47,564,258 50,136,262 Dividends declared per common share $ 0.18 $ 0.15 $ 0.69 $ 0.54 EMCOR GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 789,750 $ 456,439 Accounts receivable, net 3,203,490 2,567,371 Contract assets 269,885 273,176 Inventories 110,774 85,641 Prepaid expenses and other 73,072 79,346 Total current assets 4,446,971 3,461,973 Property, plant, and equipment, net 179,378 157,819 Operating lease right-of-use assets 310,498 268,063 Goodwill 956,549 919,151 Identifiable intangible assets, net 586,032 593,975 Other assets 130,293 123,626 Total assets $ 6,609,721 $ 5,524,607 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt and finance lease liabilities $ 2,465 $ 15,567 Accounts payable 935,967 849,284 Contract liabilities 1,595,109 1,098,263 Accrued payroll and benefits 596,936 465,000 Other accrued expenses and liabilities 312,642 258,190 Operating lease liabilities, current 75,236 67,218 Total current liabilities 3,518,355 2,753,522 Long-term debt and finance lease liabilities 2,838 231,625 Operating lease liabilities, long-term 259,430 220,764 Other long-term obligations 358,283 344,405 Total liabilities 4,138,906 3,550,316 Equity: Total EMCOR Group, Inc. stockholders’ equity 2,469,778 1,973,589 Noncontrolling interests 1,037 702 Total equity 2,470,815 1,974,291 Total liabilities and equity $ 6,609,721 $ 5,524,607 EMCOR GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 and 2022 (In thousands) 2023 2022 Cash flows - operating activities: Net income including noncontrolling interests $ 633,329 $ 406,122 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51,822 47,296 Amortization of identifiable intangible assets 67,143 61,315 Provision for credit losses 7,859 5,166 Deferred income taxes (16,651 ) 10,483 Gain on sale or disposal of property, plant, and equipment (2,057 ) (6,393 ) Non-cash expense for impairment of long-lived assets 2,350 — Non-cash share-based compensation expense 13,739 12,125 Other reconciling items 268 925 Changes in operating assets and liabilities, excluding the effect of businesses acquired 141,853 (39,106 ) Net cash provided by operating activities 899,655 497,933 Cash flows - investing activities: Payments for acquisitions of businesses, net of cash acquired (96,491 ) (98,656 ) Proceeds from sale or disposal of property, plant, and equipment 13,604 7,145 Purchases of property, plant, and equipment (78,404 ) (49,289 ) Net cash used in investing activities (161,291 ) (140,800 ) Cash flows - financing activities: Proceeds from revolving credit facility 200,000 270,000 Repayments of revolving credit facility (200,000 ) (270,000 ) Repayments of long-term debt and debt issuance costs (246,171 ) (13,875 ) Repayments of finance lease liabilities (2,776 ) (3,551 ) Dividends paid to stockholders (32,684 ) (27,187 ) Repurchases of common stock (127,713 ) (660,609 ) Taxes paid related to net share settlements of equity awards (6,060 ) (7,539 ) Issuances of common stock under employee stock purchase plan 9,189 8,177 Payments for contingent consideration arrangements (5,839 ) (5,534 ) Net cash used in financing activities (412,054 ) (710,118 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 6,372 (12,515 ) Increase (decrease) in cash, cash equivalents, and restricted cash 332,682 (365,500 ) Cash, cash equivalents, and restricted cash at beginning of year (1) 457,068 822,568 Cash, cash equivalents, and restricted cash at end of period (1) $ 789,750 $ 457,068 (1) Includes $0.6 million and $1.2 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively. EMCOR GROUP, INC. SEGMENT INFORMATION (In thousands) (Unaudited) For the quarters ended December 31, 2023 2022 Revenues from unrelated entities: United States electrical construction and facilities services $ 763,404 $ 713,589 United States mechanical construction and facilities services 1,472,532 1,133,260 United States building services 802,029 713,398 United States industrial services 292,476 276,243 Total United States operations 3,330,441 2,836,490 United Kingdom building services 108,780 113,332 Total operations $ 3,439,221 $ 2,949,822 For the years ended December 31, 2023 2022 Revenues from unrelated entities: United States electrical construction and facilities services $ 2,783,723 $ 2,433,114 United States mechanical construction and facilities services 5,074,803 4,292,208 United States building services 3,120,134 2,754,953 United States industrial services 1,167,790 1,118,767 Total United States operations 12,146,450 10,599,042 United Kingdom building services 436,423 477,078 Total operations $ 12,582,873 $ 11,076,120 EMCOR GROUP, INC. SEGMENT INFORMATION (In thousands) (Unaudited) For the quarters ended December 31, 2023 2022 Operating income (loss): United States electrical construction and facilities services $ 76,275 $ 58,082 United States mechanical construction and facilities services 186,094 104,780 United States building services 42,052 37,941 United States industrial services 12,642 1,463 Total United States operations 317,063 202,266 United Kingdom building services 5,461 4,466 Corporate administration (33,328 ) (29,550 ) Total operations 289,196 177,182 Other items: Net periodic pension (cost) income (279 ) 1,023 Interest income (expense), net 2,830 (4,204 ) Income before income taxes $ 291,747 $ 174,001 For the years ended December 31, 2023 2022 Operating income (loss): United States electrical construction and facilities services $ 230,640 $ 148,728 United States mechanical construction and facilities services 530,644 330,325 United States building services 182,995 146,639 United States industrial services 35,375 19,787 Total United States operations 979,654 645,479 United Kingdom building services 25,681 29,838 Corporate administration (127,229 ) (110,440 ) Impairment loss on long-lived assets (2,350 ) — Total operations 875,756 564,877 Other items: Net periodic pension (cost) income (1,119 ) 4,311 Interest expense, net (1,784 ) (10,438 ) Income before income taxes $ 872,853 $ 558,750 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 year ended December 31, 2023. For the quarter ended December 31, 2023 For the year ended December 31, 2023 $ % $ % GAAP revenue growth $ 489,399 16.6 % $ 1,506,753 13.6 % Incremental revenues from acquisitions (10,863 ) (0.4 )% (107,133 ) (1.0 )% Organic revenue growth, a non-GAAP measure $ 478,536 16.2 % $ 1,399,620 12.6 % EMCOR GROUP, INC. RECONCILIATION OF 2023 AND 2022 NON-GAAP MEASURES (In thousands, except for percentages and per share data) (Unaudited) In our press release and related presentation, we provide non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per common share for the years ended December 31, 2023 and 2022. The following tables provide a reconciliation between these amounts determined on a non-GAAP basis and the most directly comparable GAAP measures for such periods. For the years ended December 31, 2023 2022 GAAP operating income $ 875,756 $ 564,877 Impairment loss on long-lived assets 2,350 — Non-GAAP operating income $ 878,106 $ 564,877 For the years ended December 31, 2023 2022 GAAP operating margin 7.0 % 5.1 % Impairment loss on long-lived assets 0.0 % — % Non-GAAP operating margin 7.0 % 5.1 % For the years ended December 31, 2023 2022 GAAP net income $ 632,994 $ 406,122 Impairment loss on long-lived assets 2,350 — Tax effect of impairment loss on long-lived assets (651 ) — Non-GAAP net income $ 634,693 $ 406,122 For the years ended December 31, 2023 2022 GAAP diluted earnings per common share $ 13.31 $ 8.10 Impairment loss on long-lived assets 0.05 — Tax effect of impairment loss on long-lived assets (0.01 ) — Non-GAAP diluted earnings per common share $ 13.34 $ 8.10 _________ Amounts presented in this table may not foot due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240228527223/en/Contacts FOR: EMCOR GROUP, INC. Andy Backman Vice President, Investor Relations (203) 849-7938 FTI Consulting, Inc. Investors: Blake Mueller (718) 578-3706 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
EMCOR Group, Inc. Reports Fourth Quarter and Full-Year 2023 Results By: EMCOR Group, Inc. via Business Wire February 28, 2024 at 07:30 AM EST Record Quarterly and Full-Year Revenues of $3.44 billion and $12.58 billion, respectively Record Quarterly and Full-Year Diluted EPS of $4.47 and $13.31, respectively Non-GAAP Full-Year Diluted EPS of $13.34 Record Remaining Performance Obligations of $8.85 billion, 18.6% Increase Year-over-Year 2024 Revenues and Diluted EPS Guidance of $13.5 billion - $14.0 billion and $14.00 - $15.00 Board Approves Increase in Quarterly Dividend to $0.25 per share from $0.18 per share EMCOR Group, Inc. (NYSE: EME) today reported results for the fourth quarter and year ended December 31, 2023. Fourth Quarter 2023 Results of Operations For the fourth quarter of 2023, net income was $211.5 million, or $4.47 per diluted share, compared to $126.3 million, or $2.63 per diluted share, for the fourth quarter of 2022. Revenues for the fourth quarter of 2023 totaled $3.44 billion, an increase of 16.6%, compared to $2.95 billion for the fourth quarter of 2022. Operating income for the fourth quarter of 2023 was $289.2 million, or 8.4% of revenues, compared to $177.2 million, or 6.0% of revenues, for the fourth quarter of 2022. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $31.2 million and $28.0 million for the fourth quarter of 2023 and 2022, respectively. Selling, general and administrative expenses for the fourth quarter of 2023 totaled $328.5 million, or 9.6% of revenues, compared to $277.6 million, or 9.4% of revenues, for the fourth quarter of 2022. The Company's income tax rate for the fourth quarter of 2023 was 27.5%, compared to 27.4% for the fourth quarter of 2022. Remaining performance obligations as of December 31, 2023 were a record $8.85 billion compared to $7.46 billion as of December 31, 2022, up approximately $1.39 billion year-over-year. Full Year 2023 Results of Operations Revenues for the 2023 full-year period totaled $12.58 billion, an increase of 13.6%, compared to $11.08 billion for the 2022 full-year period. Net income for the 2023 full-year period was $633.0 million, or $13.31 per diluted share, compared to $406.1 million, or $8.10 per diluted share, for the 2022 full-year period. Net income for the 2023 full-year period included a long-lived asset impairment charge of $2.4 million, or $1.7 million after taxes. Excluding this impairment charge, non-GAAP net income for the 2023 full-year period was $634.7 million, or $13.34 per diluted share. Operating income for the 2023 full-year period was $875.8 million, or 7.0% of revenues, compared to $564.9 million, or 5.1% of revenues, for the 2022 full-year period. Excluding the previously referenced impairment charge, non-GAAP operating income for the 2023 full-year period was $878.1 million, or 7.0% of revenues. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $119.0 million and $108.6 million for the 2023 and 2022 full-year periods, respectively. Refer to the attached tables for a reconciliation of non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share to the comparable GAAP measures. SG&A totaled $1.21 billion, or 9.6% of revenues, for the 2023 full-year period, compared to $1.04 billion, or 9.4% of revenues, for the 2022 full-year period. The Company's income tax rate for the 2023 full-year period was 27.5%, compared to 27.3% for the 2022 full-year period. Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, “The Company reported exceptional results for the fourth quarter and full year of 2023, achieving record quarterly and annual revenues, operating income, operating margin, and diluted earnings per share. As we look forward, we continue to expect demand for our services to remain strong, which is reflected in the 18.6% year-over-year increase in our remaining performance obligations.” Mr. Guzzi added, “Our U.S. Construction segments posted another quarter of exceptional results, concluding an outstanding year. On a combined basis, these segments achieved record revenues and operating income for both the fourth quarter and full year. We remain confident in the future of these businesses given several tailwinds working in our favor, including a strong project pipeline with a solid margin profile. Our U.S. Mechanical Construction segment had a particularly exceptional year with 18.2% annual revenue growth, all of which was organic, driven by strong performance across virtually all end markets. We believe that our investments in building information modeling, prefabrication, digital tools, and robotics have increased our productivity, yielding positive results and enhancing our operational efficiencies across this segment, as evidenced in part by an operating margin of 10.5% for the full year. Our U.S. Electrical Construction segment continued to perform very well as we benefited from consistent strong demand, particularly in the data center market, the energy sector, including several renewable energy projects, and the healthcare market sector, all of which is reflected in the segment’s revenue growth of 14.4% and operating margin of 8.3% for the full year. This segment also benefited from growth within the high-tech manufacturing market sector as demand for our electrical construction services strengthened throughout the year. Our U.S. Building Services segment had another strong year with revenue growth of 13.3% year-over-year. Key end markets remained resilient with energy efficiency and indoor air quality projects driving retrofit demand. Our U.S. Industrial Services segment continued to improve at a measured pace, delivering revenue growth of 4.4% and operating income growth of 79%, year-over-year. Our U.K. Building Services segment reported an operating margin of 5.9% for the full year, despite operating in a challenged macroeconomic environment.” Full Year 2024 Guidance Based on expected project mix and our current visibility into the coming year, EMCOR expects full-year 2024 revenues to be between $13.5 billion and $14.0 billion and full-year 2024 diluted earnings per share to be in the range of $14.00 to $15.00. Mr. Guzzi continued, “2023 was another outstanding year for EMCOR, with record-breaking achievements across virtually every metric. Our revenue and operating income growth was exceptional in 2023, driven by our ability to win and execute well in large, growing market sectors such as high-tech manufacturing, network and communications, manufacturing and industrial, and healthcare, all of which are benefiting from long-term secular trends that require excellence in specialty trade contracting. 2023 was not without its difficulties as the operating environment remained challenging, but we met those challenges with resolve and strong, focused execution, demonstrating the resilience and adaptability of our business as we capitalized on long-term, enduring market trends. Investments in BIM and prefabrication continue to create efficiencies and differentiate us during the bidding process, particularly when coupled with the project-level expertise of our teams in the field and the strength of our balance sheet.” Mr. Guzzi concluded, “We believe our growth strategy continues to position EMCOR for long-term success, as both our organic and inorganic initiatives are driving record performance. Looking forward, we believe we are positioned in the right market sectors and geographies to continue to win complex projects that allow us an opportunity to perform well for our customers. Our record remaining performance obligations provide solid visibility into 2024, despite some macroeconomic headwinds and other factors that could impact our performance and execution. As always, we will continue to maintain our proven and disciplined approach to capital allocation. We remain focused on returning capital to our shareholders, as evidenced by the latest increase in our dividend, and on investing in the sustainable growth of the Company, both in our existing businesses and through our disciplined acquisition strategy. We recently signed agreements to acquire several companies that are leaders in their respective offerings and regions, reflecting our strategy of expanding and complementing the capabilities and geographical footprint of our existing businesses to better serve the evolving needs of our customers.” Dividend Increase The Company today announced that its Board of Directors has approved an increase to the Company’s regular quarterly dividend to $0.25 per share from $0.18 per share. The Board expects to declare this cash dividend starting in the second quarter of 2024. Mr. Guzzi said, “This planned dividend increase is a testament to the exceptional execution of our employees, confidence in our business, and solid financial foundation. We believe our strong performance across key end markets positions us for sustained success going into 2024.” Fourth Quarter Earnings Conference Call Information EMCOR Group's fourth quarter conference call will be available live via internet broadcast today, Wednesday, February 28, at 10:30 AM Eastern Standard Time. The live call may 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 contains forward-looking statements. Such statements speak only as of February 28, 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; our ability to be prudent capital allocators; our ability to pursue organic investments and acquisitions; our ability to return capital to shareholders; 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 also includes 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 December 31, For the years ended December 31, 2023 2022 2023 2022 Revenues $ 3,439,221 $ 2,949,822 $ 12,582,873 $ 11,076,120 Cost of sales 2,821,476 2,495,022 10,493,534 9,472,526 Gross profit 617,745 454,800 2,089,339 1,603,594 Selling, general and administrative expenses 328,549 277,618 1,211,233 1,038,717 Impairment loss on long-lived assets — — 2,350 — Operating income 289,196 177,182 875,756 564,877 Net periodic pension (cost) income (279 ) 1,023 (1,119 ) 4,311 Interest income (expense), net 2,830 (4,204 ) (1,784 ) (10,438 ) Income before income taxes 291,747 174,001 872,853 558,750 Income tax provision 80,232 47,701 239,524 152,628 Net income including noncontrolling interests 211,515 126,300 633,329 406,122 Net (loss) income attributable to noncontrolling interests (2 ) — 335 — Net income attributable to EMCOR Group, Inc. $ 211,517 $ 126,300 $ 632,994 $ 406,122 Basic earnings per common share: $ 4.49 $ 2.65 $ 13.37 $ 8.13 Diluted earnings per common share: $ 4.47 $ 2.63 $ 13.31 $ 8.10 Weighted average shares of common stock outstanding: Basic 47,097,762 47,710,479 47,358,467 49,931,940 Diluted 47,331,532 47,936,737 47,564,258 50,136,262 Dividends declared per common share $ 0.18 $ 0.15 $ 0.69 $ 0.54 EMCOR GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 789,750 $ 456,439 Accounts receivable, net 3,203,490 2,567,371 Contract assets 269,885 273,176 Inventories 110,774 85,641 Prepaid expenses and other 73,072 79,346 Total current assets 4,446,971 3,461,973 Property, plant, and equipment, net 179,378 157,819 Operating lease right-of-use assets 310,498 268,063 Goodwill 956,549 919,151 Identifiable intangible assets, net 586,032 593,975 Other assets 130,293 123,626 Total assets $ 6,609,721 $ 5,524,607 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt and finance lease liabilities $ 2,465 $ 15,567 Accounts payable 935,967 849,284 Contract liabilities 1,595,109 1,098,263 Accrued payroll and benefits 596,936 465,000 Other accrued expenses and liabilities 312,642 258,190 Operating lease liabilities, current 75,236 67,218 Total current liabilities 3,518,355 2,753,522 Long-term debt and finance lease liabilities 2,838 231,625 Operating lease liabilities, long-term 259,430 220,764 Other long-term obligations 358,283 344,405 Total liabilities 4,138,906 3,550,316 Equity: Total EMCOR Group, Inc. stockholders’ equity 2,469,778 1,973,589 Noncontrolling interests 1,037 702 Total equity 2,470,815 1,974,291 Total liabilities and equity $ 6,609,721 $ 5,524,607 EMCOR GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 and 2022 (In thousands) 2023 2022 Cash flows - operating activities: Net income including noncontrolling interests $ 633,329 $ 406,122 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51,822 47,296 Amortization of identifiable intangible assets 67,143 61,315 Provision for credit losses 7,859 5,166 Deferred income taxes (16,651 ) 10,483 Gain on sale or disposal of property, plant, and equipment (2,057 ) (6,393 ) Non-cash expense for impairment of long-lived assets 2,350 — Non-cash share-based compensation expense 13,739 12,125 Other reconciling items 268 925 Changes in operating assets and liabilities, excluding the effect of businesses acquired 141,853 (39,106 ) Net cash provided by operating activities 899,655 497,933 Cash flows - investing activities: Payments for acquisitions of businesses, net of cash acquired (96,491 ) (98,656 ) Proceeds from sale or disposal of property, plant, and equipment 13,604 7,145 Purchases of property, plant, and equipment (78,404 ) (49,289 ) Net cash used in investing activities (161,291 ) (140,800 ) Cash flows - financing activities: Proceeds from revolving credit facility 200,000 270,000 Repayments of revolving credit facility (200,000 ) (270,000 ) Repayments of long-term debt and debt issuance costs (246,171 ) (13,875 ) Repayments of finance lease liabilities (2,776 ) (3,551 ) Dividends paid to stockholders (32,684 ) (27,187 ) Repurchases of common stock (127,713 ) (660,609 ) Taxes paid related to net share settlements of equity awards (6,060 ) (7,539 ) Issuances of common stock under employee stock purchase plan 9,189 8,177 Payments for contingent consideration arrangements (5,839 ) (5,534 ) Net cash used in financing activities (412,054 ) (710,118 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 6,372 (12,515 ) Increase (decrease) in cash, cash equivalents, and restricted cash 332,682 (365,500 ) Cash, cash equivalents, and restricted cash at beginning of year (1) 457,068 822,568 Cash, cash equivalents, and restricted cash at end of period (1) $ 789,750 $ 457,068 (1) Includes $0.6 million and $1.2 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively. EMCOR GROUP, INC. SEGMENT INFORMATION (In thousands) (Unaudited) For the quarters ended December 31, 2023 2022 Revenues from unrelated entities: United States electrical construction and facilities services $ 763,404 $ 713,589 United States mechanical construction and facilities services 1,472,532 1,133,260 United States building services 802,029 713,398 United States industrial services 292,476 276,243 Total United States operations 3,330,441 2,836,490 United Kingdom building services 108,780 113,332 Total operations $ 3,439,221 $ 2,949,822 For the years ended December 31, 2023 2022 Revenues from unrelated entities: United States electrical construction and facilities services $ 2,783,723 $ 2,433,114 United States mechanical construction and facilities services 5,074,803 4,292,208 United States building services 3,120,134 2,754,953 United States industrial services 1,167,790 1,118,767 Total United States operations 12,146,450 10,599,042 United Kingdom building services 436,423 477,078 Total operations $ 12,582,873 $ 11,076,120 EMCOR GROUP, INC. SEGMENT INFORMATION (In thousands) (Unaudited) For the quarters ended December 31, 2023 2022 Operating income (loss): United States electrical construction and facilities services $ 76,275 $ 58,082 United States mechanical construction and facilities services 186,094 104,780 United States building services 42,052 37,941 United States industrial services 12,642 1,463 Total United States operations 317,063 202,266 United Kingdom building services 5,461 4,466 Corporate administration (33,328 ) (29,550 ) Total operations 289,196 177,182 Other items: Net periodic pension (cost) income (279 ) 1,023 Interest income (expense), net 2,830 (4,204 ) Income before income taxes $ 291,747 $ 174,001 For the years ended December 31, 2023 2022 Operating income (loss): United States electrical construction and facilities services $ 230,640 $ 148,728 United States mechanical construction and facilities services 530,644 330,325 United States building services 182,995 146,639 United States industrial services 35,375 19,787 Total United States operations 979,654 645,479 United Kingdom building services 25,681 29,838 Corporate administration (127,229 ) (110,440 ) Impairment loss on long-lived assets (2,350 ) — Total operations 875,756 564,877 Other items: Net periodic pension (cost) income (1,119 ) 4,311 Interest expense, net (1,784 ) (10,438 ) Income before income taxes $ 872,853 $ 558,750 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 year ended December 31, 2023. For the quarter ended December 31, 2023 For the year ended December 31, 2023 $ % $ % GAAP revenue growth $ 489,399 16.6 % $ 1,506,753 13.6 % Incremental revenues from acquisitions (10,863 ) (0.4 )% (107,133 ) (1.0 )% Organic revenue growth, a non-GAAP measure $ 478,536 16.2 % $ 1,399,620 12.6 % EMCOR GROUP, INC. RECONCILIATION OF 2023 AND 2022 NON-GAAP MEASURES (In thousands, except for percentages and per share data) (Unaudited) In our press release and related presentation, we provide non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per common share for the years ended December 31, 2023 and 2022. The following tables provide a reconciliation between these amounts determined on a non-GAAP basis and the most directly comparable GAAP measures for such periods. For the years ended December 31, 2023 2022 GAAP operating income $ 875,756 $ 564,877 Impairment loss on long-lived assets 2,350 — Non-GAAP operating income $ 878,106 $ 564,877 For the years ended December 31, 2023 2022 GAAP operating margin 7.0 % 5.1 % Impairment loss on long-lived assets 0.0 % — % Non-GAAP operating margin 7.0 % 5.1 % For the years ended December 31, 2023 2022 GAAP net income $ 632,994 $ 406,122 Impairment loss on long-lived assets 2,350 — Tax effect of impairment loss on long-lived assets (651 ) — Non-GAAP net income $ 634,693 $ 406,122 For the years ended December 31, 2023 2022 GAAP diluted earnings per common share $ 13.31 $ 8.10 Impairment loss on long-lived assets 0.05 — Tax effect of impairment loss on long-lived assets (0.01 ) — Non-GAAP diluted earnings per common share $ 13.34 $ 8.10 _________ Amounts presented in this table may not foot due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240228527223/en/Contacts FOR: EMCOR GROUP, INC. Andy Backman Vice President, Investor Relations (203) 849-7938 FTI Consulting, Inc. Investors: Blake Mueller (718) 578-3706
Record Quarterly and Full-Year Revenues of $3.44 billion and $12.58 billion, respectively Record Quarterly and Full-Year Diluted EPS of $4.47 and $13.31, respectively Non-GAAP Full-Year Diluted EPS of $13.34 Record Remaining Performance Obligations of $8.85 billion, 18.6% Increase Year-over-Year 2024 Revenues and Diluted EPS Guidance of $13.5 billion - $14.0 billion and $14.00 - $15.00 Board Approves Increase in Quarterly Dividend to $0.25 per share from $0.18 per share
EMCOR Group, Inc. (NYSE: EME) today reported results for the fourth quarter and year ended December 31, 2023. Fourth Quarter 2023 Results of Operations For the fourth quarter of 2023, net income was $211.5 million, or $4.47 per diluted share, compared to $126.3 million, or $2.63 per diluted share, for the fourth quarter of 2022. Revenues for the fourth quarter of 2023 totaled $3.44 billion, an increase of 16.6%, compared to $2.95 billion for the fourth quarter of 2022. Operating income for the fourth quarter of 2023 was $289.2 million, or 8.4% of revenues, compared to $177.2 million, or 6.0% of revenues, for the fourth quarter of 2022. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $31.2 million and $28.0 million for the fourth quarter of 2023 and 2022, respectively. Selling, general and administrative expenses for the fourth quarter of 2023 totaled $328.5 million, or 9.6% of revenues, compared to $277.6 million, or 9.4% of revenues, for the fourth quarter of 2022. The Company's income tax rate for the fourth quarter of 2023 was 27.5%, compared to 27.4% for the fourth quarter of 2022. Remaining performance obligations as of December 31, 2023 were a record $8.85 billion compared to $7.46 billion as of December 31, 2022, up approximately $1.39 billion year-over-year. Full Year 2023 Results of Operations Revenues for the 2023 full-year period totaled $12.58 billion, an increase of 13.6%, compared to $11.08 billion for the 2022 full-year period. Net income for the 2023 full-year period was $633.0 million, or $13.31 per diluted share, compared to $406.1 million, or $8.10 per diluted share, for the 2022 full-year period. Net income for the 2023 full-year period included a long-lived asset impairment charge of $2.4 million, or $1.7 million after taxes. Excluding this impairment charge, non-GAAP net income for the 2023 full-year period was $634.7 million, or $13.34 per diluted share. Operating income for the 2023 full-year period was $875.8 million, or 7.0% of revenues, compared to $564.9 million, or 5.1% of revenues, for the 2022 full-year period. Excluding the previously referenced impairment charge, non-GAAP operating income for the 2023 full-year period was $878.1 million, or 7.0% of revenues. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $119.0 million and $108.6 million for the 2023 and 2022 full-year periods, respectively. Refer to the attached tables for a reconciliation of non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share to the comparable GAAP measures. SG&A totaled $1.21 billion, or 9.6% of revenues, for the 2023 full-year period, compared to $1.04 billion, or 9.4% of revenues, for the 2022 full-year period. The Company's income tax rate for the 2023 full-year period was 27.5%, compared to 27.3% for the 2022 full-year period. Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, “The Company reported exceptional results for the fourth quarter and full year of 2023, achieving record quarterly and annual revenues, operating income, operating margin, and diluted earnings per share. As we look forward, we continue to expect demand for our services to remain strong, which is reflected in the 18.6% year-over-year increase in our remaining performance obligations.” Mr. Guzzi added, “Our U.S. Construction segments posted another quarter of exceptional results, concluding an outstanding year. On a combined basis, these segments achieved record revenues and operating income for both the fourth quarter and full year. We remain confident in the future of these businesses given several tailwinds working in our favor, including a strong project pipeline with a solid margin profile. Our U.S. Mechanical Construction segment had a particularly exceptional year with 18.2% annual revenue growth, all of which was organic, driven by strong performance across virtually all end markets. We believe that our investments in building information modeling, prefabrication, digital tools, and robotics have increased our productivity, yielding positive results and enhancing our operational efficiencies across this segment, as evidenced in part by an operating margin of 10.5% for the full year. Our U.S. Electrical Construction segment continued to perform very well as we benefited from consistent strong demand, particularly in the data center market, the energy sector, including several renewable energy projects, and the healthcare market sector, all of which is reflected in the segment’s revenue growth of 14.4% and operating margin of 8.3% for the full year. This segment also benefited from growth within the high-tech manufacturing market sector as demand for our electrical construction services strengthened throughout the year. Our U.S. Building Services segment had another strong year with revenue growth of 13.3% year-over-year. Key end markets remained resilient with energy efficiency and indoor air quality projects driving retrofit demand. Our U.S. Industrial Services segment continued to improve at a measured pace, delivering revenue growth of 4.4% and operating income growth of 79%, year-over-year. Our U.K. Building Services segment reported an operating margin of 5.9% for the full year, despite operating in a challenged macroeconomic environment.” Full Year 2024 Guidance Based on expected project mix and our current visibility into the coming year, EMCOR expects full-year 2024 revenues to be between $13.5 billion and $14.0 billion and full-year 2024 diluted earnings per share to be in the range of $14.00 to $15.00. Mr. Guzzi continued, “2023 was another outstanding year for EMCOR, with record-breaking achievements across virtually every metric. Our revenue and operating income growth was exceptional in 2023, driven by our ability to win and execute well in large, growing market sectors such as high-tech manufacturing, network and communications, manufacturing and industrial, and healthcare, all of which are benefiting from long-term secular trends that require excellence in specialty trade contracting. 2023 was not without its difficulties as the operating environment remained challenging, but we met those challenges with resolve and strong, focused execution, demonstrating the resilience and adaptability of our business as we capitalized on long-term, enduring market trends. Investments in BIM and prefabrication continue to create efficiencies and differentiate us during the bidding process, particularly when coupled with the project-level expertise of our teams in the field and the strength of our balance sheet.” Mr. Guzzi concluded, “We believe our growth strategy continues to position EMCOR for long-term success, as both our organic and inorganic initiatives are driving record performance. Looking forward, we believe we are positioned in the right market sectors and geographies to continue to win complex projects that allow us an opportunity to perform well for our customers. Our record remaining performance obligations provide solid visibility into 2024, despite some macroeconomic headwinds and other factors that could impact our performance and execution. As always, we will continue to maintain our proven and disciplined approach to capital allocation. We remain focused on returning capital to our shareholders, as evidenced by the latest increase in our dividend, and on investing in the sustainable growth of the Company, both in our existing businesses and through our disciplined acquisition strategy. We recently signed agreements to acquire several companies that are leaders in their respective offerings and regions, reflecting our strategy of expanding and complementing the capabilities and geographical footprint of our existing businesses to better serve the evolving needs of our customers.” Dividend Increase The Company today announced that its Board of Directors has approved an increase to the Company’s regular quarterly dividend to $0.25 per share from $0.18 per share. The Board expects to declare this cash dividend starting in the second quarter of 2024. Mr. Guzzi said, “This planned dividend increase is a testament to the exceptional execution of our employees, confidence in our business, and solid financial foundation. We believe our strong performance across key end markets positions us for sustained success going into 2024.” Fourth Quarter Earnings Conference Call Information EMCOR Group's fourth quarter conference call will be available live via internet broadcast today, Wednesday, February 28, at 10:30 AM Eastern Standard Time. The live call may 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 contains forward-looking statements. Such statements speak only as of February 28, 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; our ability to be prudent capital allocators; our ability to pursue organic investments and acquisitions; our ability to return capital to shareholders; 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 also includes 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 December 31, For the years ended December 31, 2023 2022 2023 2022 Revenues $ 3,439,221 $ 2,949,822 $ 12,582,873 $ 11,076,120 Cost of sales 2,821,476 2,495,022 10,493,534 9,472,526 Gross profit 617,745 454,800 2,089,339 1,603,594 Selling, general and administrative expenses 328,549 277,618 1,211,233 1,038,717 Impairment loss on long-lived assets — — 2,350 — Operating income 289,196 177,182 875,756 564,877 Net periodic pension (cost) income (279 ) 1,023 (1,119 ) 4,311 Interest income (expense), net 2,830 (4,204 ) (1,784 ) (10,438 ) Income before income taxes 291,747 174,001 872,853 558,750 Income tax provision 80,232 47,701 239,524 152,628 Net income including noncontrolling interests 211,515 126,300 633,329 406,122 Net (loss) income attributable to noncontrolling interests (2 ) — 335 — Net income attributable to EMCOR Group, Inc. $ 211,517 $ 126,300 $ 632,994 $ 406,122 Basic earnings per common share: $ 4.49 $ 2.65 $ 13.37 $ 8.13 Diluted earnings per common share: $ 4.47 $ 2.63 $ 13.31 $ 8.10 Weighted average shares of common stock outstanding: Basic 47,097,762 47,710,479 47,358,467 49,931,940 Diluted 47,331,532 47,936,737 47,564,258 50,136,262 Dividends declared per common share $ 0.18 $ 0.15 $ 0.69 $ 0.54 EMCOR GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 789,750 $ 456,439 Accounts receivable, net 3,203,490 2,567,371 Contract assets 269,885 273,176 Inventories 110,774 85,641 Prepaid expenses and other 73,072 79,346 Total current assets 4,446,971 3,461,973 Property, plant, and equipment, net 179,378 157,819 Operating lease right-of-use assets 310,498 268,063 Goodwill 956,549 919,151 Identifiable intangible assets, net 586,032 593,975 Other assets 130,293 123,626 Total assets $ 6,609,721 $ 5,524,607 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt and finance lease liabilities $ 2,465 $ 15,567 Accounts payable 935,967 849,284 Contract liabilities 1,595,109 1,098,263 Accrued payroll and benefits 596,936 465,000 Other accrued expenses and liabilities 312,642 258,190 Operating lease liabilities, current 75,236 67,218 Total current liabilities 3,518,355 2,753,522 Long-term debt and finance lease liabilities 2,838 231,625 Operating lease liabilities, long-term 259,430 220,764 Other long-term obligations 358,283 344,405 Total liabilities 4,138,906 3,550,316 Equity: Total EMCOR Group, Inc. stockholders’ equity 2,469,778 1,973,589 Noncontrolling interests 1,037 702 Total equity 2,470,815 1,974,291 Total liabilities and equity $ 6,609,721 $ 5,524,607 EMCOR GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 and 2022 (In thousands) 2023 2022 Cash flows - operating activities: Net income including noncontrolling interests $ 633,329 $ 406,122 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51,822 47,296 Amortization of identifiable intangible assets 67,143 61,315 Provision for credit losses 7,859 5,166 Deferred income taxes (16,651 ) 10,483 Gain on sale or disposal of property, plant, and equipment (2,057 ) (6,393 ) Non-cash expense for impairment of long-lived assets 2,350 — Non-cash share-based compensation expense 13,739 12,125 Other reconciling items 268 925 Changes in operating assets and liabilities, excluding the effect of businesses acquired 141,853 (39,106 ) Net cash provided by operating activities 899,655 497,933 Cash flows - investing activities: Payments for acquisitions of businesses, net of cash acquired (96,491 ) (98,656 ) Proceeds from sale or disposal of property, plant, and equipment 13,604 7,145 Purchases of property, plant, and equipment (78,404 ) (49,289 ) Net cash used in investing activities (161,291 ) (140,800 ) Cash flows - financing activities: Proceeds from revolving credit facility 200,000 270,000 Repayments of revolving credit facility (200,000 ) (270,000 ) Repayments of long-term debt and debt issuance costs (246,171 ) (13,875 ) Repayments of finance lease liabilities (2,776 ) (3,551 ) Dividends paid to stockholders (32,684 ) (27,187 ) Repurchases of common stock (127,713 ) (660,609 ) Taxes paid related to net share settlements of equity awards (6,060 ) (7,539 ) Issuances of common stock under employee stock purchase plan 9,189 8,177 Payments for contingent consideration arrangements (5,839 ) (5,534 ) Net cash used in financing activities (412,054 ) (710,118 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 6,372 (12,515 ) Increase (decrease) in cash, cash equivalents, and restricted cash 332,682 (365,500 ) Cash, cash equivalents, and restricted cash at beginning of year (1) 457,068 822,568 Cash, cash equivalents, and restricted cash at end of period (1) $ 789,750 $ 457,068 (1) Includes $0.6 million and $1.2 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively. EMCOR GROUP, INC. SEGMENT INFORMATION (In thousands) (Unaudited) For the quarters ended December 31, 2023 2022 Revenues from unrelated entities: United States electrical construction and facilities services $ 763,404 $ 713,589 United States mechanical construction and facilities services 1,472,532 1,133,260 United States building services 802,029 713,398 United States industrial services 292,476 276,243 Total United States operations 3,330,441 2,836,490 United Kingdom building services 108,780 113,332 Total operations $ 3,439,221 $ 2,949,822 For the years ended December 31, 2023 2022 Revenues from unrelated entities: United States electrical construction and facilities services $ 2,783,723 $ 2,433,114 United States mechanical construction and facilities services 5,074,803 4,292,208 United States building services 3,120,134 2,754,953 United States industrial services 1,167,790 1,118,767 Total United States operations 12,146,450 10,599,042 United Kingdom building services 436,423 477,078 Total operations $ 12,582,873 $ 11,076,120 EMCOR GROUP, INC. SEGMENT INFORMATION (In thousands) (Unaudited) For the quarters ended December 31, 2023 2022 Operating income (loss): United States electrical construction and facilities services $ 76,275 $ 58,082 United States mechanical construction and facilities services 186,094 104,780 United States building services 42,052 37,941 United States industrial services 12,642 1,463 Total United States operations 317,063 202,266 United Kingdom building services 5,461 4,466 Corporate administration (33,328 ) (29,550 ) Total operations 289,196 177,182 Other items: Net periodic pension (cost) income (279 ) 1,023 Interest income (expense), net 2,830 (4,204 ) Income before income taxes $ 291,747 $ 174,001 For the years ended December 31, 2023 2022 Operating income (loss): United States electrical construction and facilities services $ 230,640 $ 148,728 United States mechanical construction and facilities services 530,644 330,325 United States building services 182,995 146,639 United States industrial services 35,375 19,787 Total United States operations 979,654 645,479 United Kingdom building services 25,681 29,838 Corporate administration (127,229 ) (110,440 ) Impairment loss on long-lived assets (2,350 ) — Total operations 875,756 564,877 Other items: Net periodic pension (cost) income (1,119 ) 4,311 Interest expense, net (1,784 ) (10,438 ) Income before income taxes $ 872,853 $ 558,750 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 year ended December 31, 2023. For the quarter ended December 31, 2023 For the year ended December 31, 2023 $ % $ % GAAP revenue growth $ 489,399 16.6 % $ 1,506,753 13.6 % Incremental revenues from acquisitions (10,863 ) (0.4 )% (107,133 ) (1.0 )% Organic revenue growth, a non-GAAP measure $ 478,536 16.2 % $ 1,399,620 12.6 % EMCOR GROUP, INC. RECONCILIATION OF 2023 AND 2022 NON-GAAP MEASURES (In thousands, except for percentages and per share data) (Unaudited) In our press release and related presentation, we provide non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per common share for the years ended December 31, 2023 and 2022. The following tables provide a reconciliation between these amounts determined on a non-GAAP basis and the most directly comparable GAAP measures for such periods. For the years ended December 31, 2023 2022 GAAP operating income $ 875,756 $ 564,877 Impairment loss on long-lived assets 2,350 — Non-GAAP operating income $ 878,106 $ 564,877 For the years ended December 31, 2023 2022 GAAP operating margin 7.0 % 5.1 % Impairment loss on long-lived assets 0.0 % — % Non-GAAP operating margin 7.0 % 5.1 % For the years ended December 31, 2023 2022 GAAP net income $ 632,994 $ 406,122 Impairment loss on long-lived assets 2,350 — Tax effect of impairment loss on long-lived assets (651 ) — Non-GAAP net income $ 634,693 $ 406,122 For the years ended December 31, 2023 2022 GAAP diluted earnings per common share $ 13.31 $ 8.10 Impairment loss on long-lived assets 0.05 — Tax effect of impairment loss on long-lived assets (0.01 ) — Non-GAAP diluted earnings per common share $ 13.34 $ 8.10 _________ Amounts presented in this table may not foot due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240228527223/en/
FOR: EMCOR GROUP, INC. Andy Backman Vice President, Investor Relations (203) 849-7938 FTI Consulting, Inc. Investors: Blake Mueller (718) 578-3706
