UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 26, 2006
EMCOR Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8267 11-2125338
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(Commission File Number) (I.R.S. Employer Identification No.)
301 Merritt Seven, Norwalk, CT 06851
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(Address of Principal Executive Offices)(Zip Code)
(203) 849-7800
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
- Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
- Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
- Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
- Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 26, 2006, EMCOR Group, Inc. issued a press release disclosing
results of operations for the fiscal 2006 third quarter ended September 30,
2006. A copy of such press release is furnished as Exhibit 99.1 to this Current
Report on Form 8-K.
The information contained in this Current Report on Form 8-K shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that
Section, nor shall it be incorporated by reference into a filing under the
Securities Act of 1933, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
Item. 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit Number Description
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99.1 Press Release issued by EMCOR Group, Inc. on October 26, 2006
disclosing results of operations for the fiscal 2006 third
quarter ended September 30, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMCOR Group, Inc.
By: /s/ Frank T. MacInnis
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Frank T. MacInnis
Chairman of the Board of
Directors and Chief
Executive Officer
Dated: October 26, 2006
Exhibit 99.1
EMCOR GROUP, INC. REPORTS 2006 THIRD QUARTER RESULTS
Operating Income Surges 24.7% Over Previous Year
Contract Backlog Increases 23.6% to a New Record $3.40 Billion
2006 Full Year Guidance Raised
NORWALK, CONNECTICUT, October 26, 2006 - EMCOR Group, Inc. (NYSE: EME) today
reported results for the third quarter and nine months ended September 30, 2006.
The Company's financial results for the prior year periods have been adjusted to
reflect its 2-for-1 stock split, effective February 10, 2006.
Revenues in the 2006 third quarter were $1.27 billion, an increase of 4.9% over
revenues of $1.21 billion in the third quarter of 2005. Operating income for the
third quarter of 2006 was $36.6 million, versus operating income of $29.3
million in the third quarter of last year, an increase of 24.7%. As a percentage
of revenues, operating income rose to 2.9% in the third quarter of 2006 from
2.4% in the same quarter last year. For the third quarter of 2006, selling,
general and administrative expenses totaled $110.7 million, or 8.7% of revenues,
versus $101.5 million, or 8.4% of revenues in the third quarter of 2005.
Net income in the third quarter of 2006 was $22.6 million, or $0.69 per diluted
share. Included in the Company's results for the third quarter of 2006 are
restructuring expenses of $0.6 million, or $0.01 per diluted share after tax,
and an after-tax expense related to the adoption of FAS 123(R) (Accounting for
Stock-Based Compensation) of $0.4 million, or $0.01 per diluted share, which was
not present in the year-ago period.
Including an income tax benefit of $17.5 million, or $0.55 per diluted share,
for income tax reserve adjustments, a loss from discontinued operations of $1.2
million, or $0.03 per diluted share after tax, and restructuring expenses of
$0.3 million, or $0.00 per diluted share after tax, the Company reported net
income for the 2005 third quarter of $30.9 million, or $0.97 per diluted share.
Contract backlog as of September 30, 2006 reached a record level of $3.40
billion, an increase of 23.6% over the backlog level of $2.75 billion at
September 30, 2005, and an increase over the Company's previous record backlog
level of $3.22 billion on June 30, 2006. Private sector commercial and
hospitality backlog represented 54% of total backlog at September 30, 2006,
versus 40% at September 30, 2005.
EMCOR Announces 2006 Third Quarter Results Page 2
For the first nine months of 2006, revenues totaled $3.64 billion, compared with
revenues of $3.46 billion for the first nine months of 2005, an increase of
5.1%. Operating income for the period increased 49.3% to $74.2 million, or 2.0%
of revenues, from $49.7 million, or 1.4% of revenues, in the year-ago period.
For the first nine months of 2006, the Company reported net income of $46.4
million, or $1.42 per diluted share. The Company's results for the period
included restructuring expenses of $0.6 million, or $0.01 per diluted share
after tax, a loss from discontinued operations of $0.6 million, or $0.02 per
diluted share after tax, and after-tax expenses related to the Company's
adoption of FAS 123(R) of $2.1 million, or $0.06 per diluted share. Cash flow
from operations for the period was $148.7 million, a 59.5% increase over cash
flow of $93.3 million in the previous year.
Net income for the 2005 nine months was $40.7 million, or $1.28 per diluted
share, and included an income tax benefit of $17.5 million, or $0.55 per diluted
share, for income tax reserve adjustments, restructuring expenses of $1.7
million, or $0.03 per diluted share after tax, and a loss from discontinued
operations of $1.0 million, or $0.03 per diluted share after tax.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "The third
quarter marks another quarter of strong performance by EMCOR Group, as
conditions remained robust across the markets in which we participate. We saw
good operational results in most of our businesses, with particularly strong
performance from our U.S. mechanical segment, which demonstrated significant
improvement in profitability as a result of the strategic steps we've taken. We
also experienced continued excellent growth within our facilities services
segment, with 2006 third quarter revenues and operating profits growing more
than 20% and 79%, respectively, from the comparable 2005 quarter. For years,
EMCOR Group has emphasized the opportunity represented by the facilities
services marketplace and the importance of these services to our customers. We
continue to win new business and gain market share in this growing sector, and
we remain very positive regarding future growth opportunities for our facilities
services business."
Mr. MacInnis concluded, "Looking forward, we continue to be optimistic about the
prospects for our business in total. Our expanded and diversified contract
backlog is a positive indicator for the future, and is indicative of our ability
to adapt to changing conditions in the marketplace and to focus our efforts on
those areas of the economy showing the best prospects for growth. Demand for our
services remains strong, and we believe we are in an excellent position for a
good fourth quarter. Based on current market conditions, we now expect revenues
for 2006 of between $5.0 billion and $5.2 billion, resulting in diluted earnings
per share for the year of between $2.05 and $2.15, which includes approximately
$0.07 per diluted share after tax in expenses related to the Company's adoption
of FAS 123(R)."
EMCOR Announces 2006 Third Quarter Results Page 3
EMCOR Group, Inc. is a Fortune 500(R) worldwide leader in mechanical and
electrical construction services, energy infrastructure and facilities services.
This press release and other press releases may be viewed at the Company's Web
site at www.emcorgroup.com.
EMCOR Group's third quarter conference call will be available live via Internet
broadcast today, Thursday, October 26, at 10:30 AM Eastern Daylight Time. You
can access the live call through the Home Page of the Company's Web site at
www.emcorgroup.com.
This release may contain certain forward-looking statements within the
meaning of the Private Securities Reform Act of 1995. Any such comments are
based upon information available to EMCOR management's perception thereof, as of
this date, and EMCOR assumes no obligation to update any such forward-looking
statements. These forward-looking statements may include statements regarding
market opportunities, market share growth, gross profit, project mix, projects
with varying profit margins, and selling, general and administrative expenses.
These forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
Accordingly these statements are no guarantee of future performance. Such risk
and uncertainties include, but are not limited to, adverse effects of general
economic conditions, changes in the political environment, changes in the
specific markets for EMCOR's services, adverse business conditions, availability
of adequate levels of surety bonding, increased competition, unfavorable labor
productivity, mix of business, and risks associated with foreign operations.
Certain of the risks and factors associated with EMCOR's business are also
discussed in the Company's 2005 Form 10-K, its Form 10-Q for the third quarter
ended September 30, 2006, and in other reports filed from time to time with the
Securities and Exchange Commission. All these risks and factors should be taken
into account in evaluating any forward-looking statements.
-FINANCIAL TABLES FOLLOW-
EMCOR GROUP, INC.
FINANCIAL HIGHLIGHTS
(In thousands, except share and per share information)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Revenues $1,269,634 $1,210,354 $3,641,132 $3,462,941
Cost of sales 1,121,762 1,079,271 3,244,902 3,120,685
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Gross profit 147,872 131,083 396,230 342,256
Selling, general and
administrative expenses 110,714 101,521 321,411 290,823
Restructuring expenses 604 256 604 1,727
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Operating income 36,554 29,306 74,215 49,706
Interest income (expense), net 1,463 (1,358) 2,193 (4,635)
Minority interest (1,699) (1,514) (2,628) (3,366)
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Income from continuing
operations before income taxes 36,318 26,434 73,780 41,705
Income tax provision (benefit) 13,765 (5,580) 26,733 18
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Income from continuing
operations 22,553 32,014 47,047 41,687
Loss from discontinued
operations, net of income taxes -- (1,150) (620) (977)
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Net income $ 22,553 $ 30,864 $ 46,427 $ 40,710
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Basic income per share -
continuing operations $ 0.71 $ 1.02 $ 1.49 $ 1.34
Basic loss per share -
discontinued operations -- (0.03) (0.02) (0.03)
---------- ---------- ---------- ----------
$ 0.71 $ 0.99 $ 1.47 $ 1.31
========== ========== ========== ==========
Diluted income per share -
continuing operations $ 0.69 $ 1.00 $ 1.44 $ 1.31
Diluted loss per share -
discontinued operations -- (0.03) (0.02) (0.03)
---------- ---------- ---------- ----------
$ 0.69 $ 0.97 $ 1.42 $ 1.28
========== ========== ========== ==========
Weighted average shares of
Common stock outstanding:
Basic 31,701,882 31,325,170 31,529,641 31,107,896
Diluted 32,891,509 31,977,194 32,626,044 31,721,232
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2006 2005
(Unaudited)
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ASSETS
Current assets:
Cash and cash equivalents $ 244,522 $ 103,785
Accounts receivable, net 1,110,934 1,046,380
Costs and estimated earnings in excess of billings
on uncompleted contracts 163,060 185,634
Inventories 14,582 10,175
Prepaid expenses and other 37,673 43,829
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Total current assets 1,570,771 1,389,803
Investments, notes, and other long-term receivables 27,838 28,659
Property, plant & equipment, net 46,437 46,443
Goodwill 285,234 283,412
Identifiable intangible assets, net 16,111 16,990
Other assets 10,202 13,634
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Total assets $1,956,593 $1,778,941
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ - $ -
Current maturities of long-term debt and capital
lease obligations 654 551
Accounts payable 461,676 452,709
Billings in excess of costs and estimated earnings
on uncompleted contracts 411,710 330,235
Accrued payroll and benefits 144,503 154,276
Other accrued expenses and liabilities 108,455 107,545
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Total current liabilities 1,126,998 1,045,316
Long-term debt and capital lease obligations 1,288 1,406
Other long-term obligations 143,008 116,783
Total stockholders' equity 685,299 615,436
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Total liabilities and stockholders' equity $1,956,593 $1,778,941
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