EMCOR Group, Inc. Reports First Quarter 2019 Results

EMCOR Group, Inc. (NYSE: EME) today reported results for the first quarter ended March 31, 2019.

For the first quarter of 2019, net income from continuing operations attributable to EMCOR was $72.4 million, or $1.28 per diluted share, compared to $55.7 million, or $0.94 per diluted share, for the first quarter of 2018. Revenues for the first quarter of 2019 totaled $2.16 billion, an increase of 13.6%, compared to $1.90 billion for the first quarter of 2018.

Operating income for the first quarter of 2019 was $102.3 million, or 4.7% of revenues. This compares to $78.0 million, or 4.1% of revenues, for the first quarter of 2018.

Selling, general and administrative expenses for the first quarter of 2019 totaled $206.2 million, or 9.6% of revenues, compared to $191.0 million, or 10.1% of revenues, for the first quarter of 2018.

The Company's income tax rate for the first quarter of 2019 was 27.5%, compared to an income tax rate of 27.0% in the year ago period.

Remaining performance obligations as of March 31, 2019 were $4.16 billion compared to $3.60 billion at March 31, 2018. Total U.S. remaining performance obligations grew $560.6 million year-over-year.

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, “The Company reported record first quarter revenues, operating income, operating margin, net income attributable to EMCOR and diluted earnings per share from continuing operations, building upon our strong momentum in 2018. We delivered a 13.6% year-over-year increase in revenues, 11.0% of which was organic, driven by strength in each of our segments, including double-digit growth in our U.S. Electrical Construction, U.S. Building Services and U.S. Industrial Services segments. Consistent execution across our business drove operating income growth of 31.2% year-over-year and 60 basis points of operating margin expansion. Additionally, remaining performance obligations increased 15.3% year-over-year and 4.9% sequentially, underscoring the value proposition of our services portfolio and the strength we are seeing in the geographies and end markets in which we operate.”

Mr. Guzzi added, “Our U.S. Electrical Construction and U.S. Mechanical Construction segments continued to perform exceptionally, posting revenue increases of 16.1% and 9.9% year-over-year, respectively. Our U.S. Electrical Construction segment reported a strong 12.1% organic revenue growth rate, while the segment’s overall growth was further supported by the contribution from a recent acquisition. Strong project execution drove solid operating performance, with our U.S. Construction segments posting a combined 11.2% year-over-year increase in operating income and a very healthy combined operating margin of 6.6%. Despite mild winter conditions, our U.S. Building Services segment recorded double-digit revenue and operating income growth for the first quarter of 2019, driven by broad based strength across their mobile mechanical services and commercial site-based services businesses. Our U.S. Industrial Services segment also had solid performance in the quarter, driven by much improved spring turnaround activity compared to the year ago period, resulting in revenue growth of 29.8% year-over-year and 200 basis points of operating margin expansion. Despite significant foreign exchange headwinds, our U.K. Building Services segment continued to perform well, driven by new customer wins and strong demand for small- to mid-sized project activity.”

Based on year-to-date performance, favorable project mix and assuming the continuation of current market conditions, EMCOR is raising its full-year 2019 revenue guidance range to $8.5-$8.6 billion, an increase from the prior guidance range of $8.3-$8.4 billion. The Company now also expects full-year 2019 diluted earnings per share from continuing operations to be in the range of $5.00-$5.50, an increase from the prior guidance range of $4.70-$5.40.

Mr. Guzzi concluded, “We are very pleased with our first quarter results and believe our growing and diverse project pipeline positions us well for the remainder of 2019. Our updated guidance reflects our strong first quarter results, as well as our expectation for sustained growth in the non-residential construction market moving forward. Looking ahead and consistent with our strategy, we will continue to leverage our flexible balance sheet to invest in our business and return capital to shareholders through share buybacks and dividends.”

EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure and building services. This press release and other press releases may be viewed at the Company’s website at www.emcorgroup.com.

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

Forward Looking Statements:

This release contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Any such comments speak only as of this date and EMCOR assumes no obligation to update any such forward-looking statements. These forward-looking statements may include statements regarding anticipated future operating and financial performance, the nature and impact of our remaining performance obligations, our ability to pursue acquisitions, our ability to return capital to shareholders, market opportunities, market growth and customer trends. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. Such risks and uncertainties include, but are not limited to, adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for EMCOR’s services, adverse business conditions, availability of adequate levels of surety bonding, increased competition, unfavorable labor productivity and mix of 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 2018 Form 10-K and in other reports filed from time to time with the Securities and Exchange Commission and available at www.sec.gov and www.emcorgroup.com. Such risk factors should be taken into account in evaluating any forward-looking statements.

Non-GAAP Measures:

This release may include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). 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 historical 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.

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