UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 23, 2003
EMCOR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-2315 11-2125338
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
301 Merritt Seven Corporate Park
Norwalk, Connecticut 06851
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code) 203-849-7800
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Description of Exhibit
99.1 Press Release dated October 23, 2003
Item 12 Results of Operations and Financial Condition
On October 23, 2003, EMCOR Group, Inc. issued a press release disclosing
the results of operations for the fiscal 2003 third quarter ended September 30,
2003. A copy of this press release is attached as Exhibit 99.1.
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release issued by EMCOR Group, Inc.
on October 23, 2003
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
Date: October 23, 2003
Exhibit 99.1
EMCOR GROUP, INC. REPORTS 2003 THIRD QUARTER RESULTS
-- $0.42 per diluted share in line with recent guidance --
NORWALK, CONNECTICUT, October 23, 2003 - EMCOR Group, Inc. (NYSE: EME) today
reported results for the third quarter and nine months ended September 30, 2003
that were consistent with recently announced guidance.
Net income for the third quarter of 2003 was $6.5 million, or $0.42 per diluted
share, compared with net income of $19.5 million, or $1.26 per diluted share, in
the 2002 third quarter. For the third quarter of 2003, revenues were $1.16
billion, an increase of 10.0% over revenues of $1.05 billion in the third
quarter of last year, due primarily to the acquisition of Consolidated
Engineering Services, Inc. ("CES") in December 2002. On an organic basis,
revenues were approximately equal to those for the year ago period.
Operating income in the third quarter of 2003 was $13.5 million, compared with
operating income of $35.9 million in the third quarter of 2002. As a percentage
of revenues, 2003 third quarter operating income was 1.2% versus 3.4% in the
year ago period.
Selling, General and Administrative expenses ("SG&A") for the 2003 third quarter
were $104.7 million or 9.0% of revenues, compared with $93.4 million, or 8.9% of
revenues, in the third quarter of 2002. The increase was principally
attributable to the inclusion of CES in the Company's results for the third
quarter of 2003. Excluding CES, SG&A in the third quarter of 2003 was $87.4
million or 8.3% of revenues. For the second quarter of 2003, SG&A was $106.6
million or 9.3% of revenues.
At September 30, 2003, the Company's contract backlog was $3.11 billion, an
increase of approximately 9.1% versus backlog of $2.85 billion on September 30,
2002 and virtually level with contract backlog on June 30, 2003. Organic growth
of the Company's contract backlog versus the year ago period was approximately
3.6%.
- MORE -
EMCOR Announces 2003 Third Quarter Results Page 2
As expected, the Company's 2003 third quarter results demonstrate continued
solid revenue growth reflecting the Company's position as a market leader. The
decline in profit margins was a result of an unusually high proportion of public
sector work, a reduced level of higher margin private sector, discretionary and
small project work, increased competition, unfavorable contract performance on
certain construction projects, and market conditions attributable to the
recession not favorable to construction project closeouts. Additionally, EMCOR's
UK operations experienced slower than anticipated profitability recovery in its
markets. Somewhat offsetting these factors was continued strong performance by
the Company's facilities services operations, including those within CES, which
continued to meet its performance targets.
For the first nine months of 2003, net income was $18.0 million, or $1.16 per
diluted share, compared with net income of $41.6 million, or $2.69 per diluted
share, in the first nine months of 2002. Revenues for the 2003 nine month period
were $3.36 billion versus $2.85 billion in the same period a year ago,
representing growth of 18.0%. Organic revenue growth in the 2003 nine month
period was 3.2%.
For the first nine months of 2003, the Company reported operating income of
$37.8 million, compared with operating income of $75.3 million in the year ago
period. As a percentage of revenues, operating income for the first nine months
of 2003 was 1.1%, compared with 2.6% last year.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "Our third
quarter results came in as anticipated, reflecting a variety of factors
affecting our business. In light of the conditions we've faced, we have worked
to further reduce our cost structure, and as a result we were able to decrease
SG&A as a percentage of revenues on a sequential basis, and also below year ago
organic base levels."
Mr. MacInnis continued, "The third quarter also marked the continued strong
performance of our facilities services business, which as expected is providing
a higher margin, counter-cyclical balance to our traditional business lines. The
acquisition of CES, in particular, has worked out well as the former CES
companies contributed $104.8 million in revenues and $4.7 million in operating
income to the Company's results in the 2003 third quarter."
Based on current market conditions, EMCOR Group expects revenues in the fourth
quarter of 2003 to be between $1.1 billion and $1.2 billion and diluted earnings
per share to be between $0.51 and $0.56; this would result in revenues for the
2003 full year period of between $4.5 billion and $4.6 billion and diluted
earnings per share of between $1.67 and $1.72. Additionally, the Company
reiterated that, based on its existing contract backlog, reports from subsidiary
managers, and opportunities in
- MORE -
EMCOR Announces 2003 Third Quarter Results Page 3
its facilities service businesses, it looks for "baseline" EBIT performance in
2004 at about 2% of revenues, with a significant likelihood of enhanced
performance if private sector capital spending strengthens as predicted by many
economists. The anticipated "baseline" level of performance would reflect EPS
growth of at least 40% in 2004 over expected 2003 levels.
Mr. MacInnis concluded, "Going forward, we remain committed to fostering the
growth of our facilities services business as illustrated by the alliance
agreement we recently announced with Siemens Building Technologies while
maintaining strict control over operating costs across the Company. Further, by
exercising increased selectivity in choosing projects we undertake, we will
manage our backlog toward increased profitability and will ensure the retention
of sufficient contracting capacity to participate in the inevitable upswing in
spending by our private sector customers."
EMCOR Group, Inc. is a worldwide leader in mechanical and electrical
construction services 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 23, at 10:30 AM Eastern Time. You can access
the live call through the Home Page of the Company's Web site at
www.emcorgroup.com.
This release may include "forward looking statements." These statements are
based on certain assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate. Such
statements are subject to a number of assumptions, risks and uncertainties,
general economic and business conditions, business opportunities that may be
presented to and pursued by the Company and other factors, many of which are
beyond the control of the Company. Actual results may differ materially from
those anticipated in the 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,
-------------------------- -------------------------
2003 2002 2003 2002
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Revenues $1,157,588 $1,052,285 $3,362,996 $2,848,983
Cost of sales 1,039,382 923,052 3,004,746 2,510,148
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Gross profit 118,206 129,233 358,250 338,835
Selling, general and administrative expenses 104,671 93,375 320,484 263,522
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Operating income 13,535 35,858 37,766 75,313
Interest expense, net 1,987 1,073 5,631 1,101
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Income before taxes 11,548 34,785 32,135 74,212
Income tax provision 5,080 15,306 14,138 32,654
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Net income $ 6,468 $ 19,479 $ 17,997 $ 41,558
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Basic earnings per share $ 0.43 $ 1.31 $ 1.20 $ 2.80
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Diluted earnings per share $ 0.42 $ 1.26 $ 1.16 $ 2.69
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Weighted average shares of
Common Stock outstanding:
Basic 15,003,737 14,905,849 14,974,590 14,866,212
Diluted 15,461,106 15,465,967 15,471,711 15,456,395
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2003 2002
(Unaudited)
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ASSETS
Cash and cash equivalents $ 82,162 $ 93,103
Accounts receivable, net 1,012,911 964,968
Costs and estimated earnings in excess of
billings on uncompleted contracts 272,969 235,809
Inventories 11,876 12,271
Prepaid expenses and other 35,423 28,784
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Total current assets 1,415,341 1,334,935
Investments, notes, and other long-term
receivables 29,008 24,642
Property, plant & equipment, net 68,363 70,750
Goodwill 293,538 290,412
Identifiable intangible assets, net 11,561 13,845
Other assets 20,824 23,907
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Total assets $1,838,635 $1,758,491
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ 194,979 $ 112,000
Current maturities of long-term debt and
capital lease obligations 544 22,276
Accounts payable 389,270 409,562
Billings in excess of costs and estimated
earnings on uncompleted contracts 372,714 363,092
Accrued payroll and benefits 138,266 159,416
Other accrued expenses and liabilities 131,870 113,529
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Total current liabilities 1,227,643 1,179,875
Long-term debt and capital lease obligations 622 905
Other long-term obligations 94,367 87,841
Total stockholders' equity 516,003 489,870
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Total liabilities and stockholders' equity $1,838,635 $1,758,491
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