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
EMCOR GROUP, INC.
(Exact name of registrant as specified in its charter)
Date of Report (Date of earliest event reported) July 24, 2003
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)
203-849-7800
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Description of Exhibit
99.1 Press Release dated July 24, 2003
Item 9. Regulation FD Disclosure (Information provided under Item 12)
On July 24, 2003, EMCOR Group, Inc. issued a press release disclosing the
results of operations for its fiscal 2003 second quarter ended June 30, 2003. A
copy of this press release, attached as Exhibit 99.1, is furnished under Item 9.
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release issued by EMCOR Group, Inc.
on July 24, 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, thereunto 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: July 24, 2003
EMCOR GROUP, INC. REPORTS 2003 SECOND QUARTER RESULTS
-- Revenues, Backlog Reach Record Levels --
-- Mechanical Service Margins Decline --
NORWALK, CONNECTICUT, July 24, 2003 - EMCOR Group, Inc. (NYSE: EME) today
reported second quarter results.
Net income for the second quarter of 2003 was $8.3 million, or $0.53 per diluted
share, compared with net income of $14.8 million, or $0.96 per diluted share, in
the second quarter of 2002. Revenues for the 2003 second quarter were $1.1
billion, an increase of 16.0% over revenues of $986.4 million in the year ago
period. Organic revenue growth was 4.4% in the second quarter of 2003 compared
to the second quarter of 2002.
For the 2003 second quarter, gross profit rose to $123.3 million from $120.2
million in the second quarter of last year. Gross profit as a percentage of
revenues was 10.8% in the second quarter of 2003, compared to 12.2% in the
second quarter of 2002. The Company's gross margins reflect decreased
profitability in its mechanical business, primarily due to difficult economic
conditions in the Midwest which, combined with a later than expected start of
hot summer weather, resulted in an unexpected decline in higher-margin,
discretionary work orders. Gross margins were also impacted by operating losses
from the Company's U.K. operations.
For the second quarter of 2003, the Company reported operating income of $16.6
million, versus operating income of $26.9 million in the second quarter of 2002.
Operating income as a percentage of revenues was 1.5% versus 2.7% in the same
quarter last year.
On December 19, 2002, the Company acquired Consolidated Engineering Services,
Inc. ("CES"). The acquisition contributed $109.0 million in revenues and $4.5
million in operating income to the Company's 2003 second quarter results.
EMCOR Announces 2003 Second Quarter Results Page 2
Selling, General and Administrative expenses were $106.6 million in the second
quarter of 2003, compared with $93.3 million in the second quarter of 2002,
primarily reflecting the inclusion and integration of CES in the Company's
financial results. As a percentage of revenues, Selling, General and
Administrative expenses decreased to 9.3% in the 2003 second quarter from 9.5% a
year ago, reflecting aggressive expense control and substantial completion of
the integration process. Selling, General & Administrative expenses in the 2003
first quarter were $109.2 million, or 10.3% of sales.
At June 30, 2003, the Company's backlog of construction and facilities
management contracts was $3.2 billion, an increase of approximately 14% versus
backlog of $2.8 billion on June 30, 2002 and an increase of approximately 2%
over its $3.1 billion backlog on March 31, 2003. Organic growth of the Company's
backlog versus the year ago period was approximately 8%.
For the 2003 six-month period, net income was $11.5 million, or $0.74 per
diluted share, compared with net income of $22.1 million, or $1.43 per diluted
share, in the first half of 2002. Revenues for the 2003 six-month period rose
22.7% to $2.2 billion versus revenues of $1.8 billion in the same period a year
ago. Organic revenue growth in the 2003 six-month period was 5.2%.
For the first six months of 2003, the Company reported operating income of $24.2
million, compared with operating income of $39.5 million in the year-ago period.
As a percentage of revenues, operating income for the 2003 first half was 1.1%
compared with 2.2% last year.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "The 2003 second
quarter was a mixture of successes and challenges for the Company. Our lower
overall level of operating profits masked solid performance in our electrical
and facilities services businesses and the substantial progress we've made in
the integration of CES. Furthermore, our diversity model allowed us to continue
to retain market share and grow, as revenue and backlog rose to record levels
with solid organic growth."
Mr. MacInnis continued, "Last year, we announced the acquisition of CES, a
watershed event in the history of our Company that significantly expands our
sector-leading capabilities in the developing market for facilities services. We
are very pleased with the performance of the CES business since its acquisition.
With the successful integration of CES into our EMCOR Facilities Services
business largely behind us, we look forward to leveraging the unique platform we
have built and driving the growth of this business in the future."
EMCOR Announces 2003 Second Quarter Results Page 3
Mr. MacInnis added, "Looking ahead, we see little evidence of any short-term
improvement in the private sector commercial market. While we are comfortable
reiterating revenue guidance for 2003 of between $4.4 billion to $4.6 billion,
especially in light of our strong year to date revenue and backlog performance,
we currently expect diluted earnings per share for the 2003 full-year period to
be in the range of $2.90 - $3.10."
Mr. MacInnis concluded, "While market conditions are certainly difficult, we
believe that our diversity model, combined with our leading presence in the
facilities services market, will continue to generate solid revenue growth and
allow us in the longer term to surpass our previous levels of profitability. We
have taken various actions to reduce risk, including the replacement of senior
management at our U.K. operations and aggressive control of administrative
expenses. Our careful attention to the cash management process means that EMCOR
continues to possess one of the strongest balance sheets in the industry, and is
perfectly positioned to profit from the inevitable economic recovery."
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 second quarter conference call will be available live via Internet
broadcast today, Thursday, July 24, 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 Six Months Ended
June 30, June 30,
2003 2002 2003 2002
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Revenues $1,144,378 $986,399 $2,205,408 $1,796,698
Cost of sales 1,021,103 866,183 1,965,364 1,587,096
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Gross profit 123,275 120,216 240,044 209,602
Selling, general and
administrative expenses 106,638 93,292 215,813 170,147
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Operating income 16,637 26,924 24,231 39,455
Interest expense, net 1,842 445 3,644 28
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Income before taxes 14,795 26,479 20,587 39,427
Income tax provision 6,522 11,651 9,058 17,348
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Net income $ 8,273 $ 14,828 $ 11,529 $ 22,079
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Basic earnings per share $ 0.55 $ 1.00 $ 0.77 $ 1.49
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Diluted earnings per share $ 0.53 $ 0.96 $ 0.74 $ 1.43
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Weighted average shares of
Common Stock outstanding:
Basic 14,988,836 14,863,074 14,959,666 14,846,079
Diluted 15,506,799 15,491,302 15,476,662 15,451,295
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2003 2002
(Unaudited)
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ASSETS
Cash and cash equivalents $ 57,752 $ 93,103
Accounts receivable, net 986,307 964,968
Costs and estimated earnings in excess of billings
on uncompleted contracts 257,988 235,809
Inventories 11,944 12,271
Prepaid expenses and other 34,737 28,784
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Total current assets 1,348,728 1,334,935
Investments, notes, and other long-term receivables 28,999 24,642
Property, plant & equipment, net 69,832 70,750
Goodwill 293,889 290,412
Identifiable intangible assets, net 12,094 13,845
Other assets 20,945 23,907
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Total assets $1,774,487 $1,758,491
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ 166,800 $ 112,000
Current maturities of long-term debt and capital
lease obligations 588 22,276
Accounts payable 380,720 409,562
Billings in excess of costs and estimated earnings
on uncompleted contracts 379,432 363,092
Accrued payroll and benefits 128,037 159,416
Other accrued expenses and liabilities 115,791 113,529
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Total current liabilities 1,171,368 1,179,875
Long-term debt and capital lease obligations 689 905
Other long-term obligations 93,321 87,841
Total stockholders' equity 509,109 489,870
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Total liabilities and stockholders' equity $1,774,487 $1,758,491
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