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 28, 2004
EMCOR Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-2315 11-2125338
(Commission File Number) (I.R.S. Employer Identification No.)
301 Merritt Seven, Norwalk, CT 06851
(Address of Principal Executive Offices) (Zip Code)
(203) 849-7800
(Registrant's Telephone Number, Including Area Code)
N/A
(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 28, 2004 EMCOR Group, Inc. issued a press release disclosing
results of operations for the fiscal 2004 third quarter ended September 30,
2004. 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
- -------------- ---------------------------------------------------------------
99.1 Press Release issued by EMCOR Group, Inc. on October 28, 2004
disclosing results of operations for the fiscal 2004 third
quarter ended September 30, 2004.
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
-----------------------------
Frank T. MacInnis
Chairman of the Board of
Directors and Chief
Executive Officer
Dated: October 28, 2004
Exhibit 99.1
EMCOR GROUP, INC. REPORTS 2004 THIRD QUARTER RESULTS
NORWALK, CONNECTICUT, October 28, 2004 - EMCOR Group, Inc. (NYSE: EME) today
reported results for the third quarter and nine months ended September 30, 2004.
Net income for the third quarter of 2004 was $15.5 million, or $0.99 per diluted
share, compared with net income of $6.5 million, or $0.42 per diluted share, in
the third quarter of 2003. Revenues in the 2004 third quarter totaled $1.22
billion, compared with total revenues of $1.16 billion a year ago.
Third quarter 2004 operating income was $19.6 million, compared to operating
income of $13.5 million in the third quarter of 2003. Selling, general and
administrative expenses ("SG&A") were $97.6 million, a decline of 6.7% from
$104.7 million in the third quarter of last year. As a percentage of revenues,
SG&A decreased to 8.0% from 9.0% a year ago as a result of actions the Company
has taken to reduce its operating costs.
Included in the Company's 2004 third quarter results were approximately $0.6
million in restructuring expenses, primarily related to its previously announced
management realignment and related initiatives, and a $4.3 million income tax
benefit for reserve adjustments. The effective income tax rate applicable for
the 2004 third quarter was 42% compared to 44% for the 2003 third quarter.
The Company's 2004 third quarter results also include a pre-tax gain of $2.8
million on the sale of certain assets of the equipment rental division of the
Company's United Kingdom subsidiary as part of the restructuring of operations
in the UK market, and a pre-tax gain of $1.8 million on the sale of the UK
subsidiary's interest in a South African facilities management joint venture.
Contract backlog as of September 30, 2004 was $2.96 billion compared to $3.11
billion at the same time a year ago. The reduction in backlog reflects the
Company's ongoing program to reduce the backlog of public sector construction
projects and to focus more on higher-margin, private sector work.
- MORE -
EMCOR Announces 2004 Third Quarter Results Page 2
Net income for the 2004 nine month period was $22.6 million, or $1.46 per
diluted share, compared to net income of $18.0 million, or $1.16 per diluted
share, in the first nine months of 2003. Revenues for the first nine months of
2004 were $3.52 billion versus revenues of $3.36 billion in the year ago period.
Operating income for the first nine months of 2004 was $18.8 million versus
operating income of $37.8 million for the comparable nine month period last
year.
The Company's results for the 2004 nine month period include approximately $5.9
million in restructuring expenses, primarily related to the Company's previously
announced management realignment and related initiatives, and a $13.9 million
income tax benefit for tax reserve adjustments.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, stated, "When we reported
2004 first quarter results, we noted our expectation that 2004 would be a
transition year, with a slower first half of the year due to the lingering
effects of the economic downturn, the slow recovery of private sector spending
and the continuing effects of a larger than typical proportion of public sector
work affecting our results. We expected to see an acceleration in the 2004
second half as the economy and demand from the private sector continued to
improve and our efforts to rebalance our mix between private and public sector
work gained traction. This has been the case in the third quarter, which saw
strong performance within our U.S. Electrical business and a significant
improvement at our U.K. operations. We're very pleased with the progress we've
seen in the U.K., which generated operating income during the period versus a
loss a year ago, as a result of the actions we've taken to restructure that
business. However, improvements were not consistent across all our businesses,
particularly as poor performance at one of our Mechanical operations on the West
Coast offset otherwise improved results from this segment. We continue to build
momentum within our Facilities Services business as we strengthen our reputation
as the premier provider of these services."
Mr. MacInnis added, "While our markets have certainly recovered from year ago
levels, the recovery remains gradual, with private sector spending recovering at
a slow pace. During the quarter, we continued our focus on controlling costs,
leading to a decrease in SG&A expenses of approximately 7% despite higher
revenues. As a result, operating income, excluding restructuring expenses and
gain on the sale of assets, increased 28.3% over the levels achieved a year ago.
Our constant focus on working capital management also made the third quarter an
excellent cash generation quarter, strengthening our balance sheet and our
ability to take advantage of new opportunities."
Mr. MacInnis concluded, "Throughout 2004, EMCOR Group has taken actions to
position itself for improvement in its markets. The restructuring efforts of our
realigned management team, that now include Tony Guzzi as our new President and
COO, are ongoing, and we are seeing their benefits, both in the U.S. and the
U.K. As we've stated before, we believe the major defining factor in EMCOR's
performance will be the overall pace of economic recovery. While not the
dramatic economic improvement our best-case scenario envisioned, we are
encouraged by recent positive momentum we've seen in the marketplace and believe
that this recovery will continue to build as we move into the
- MORE -
EMCOR Announces 2004 Third Quarter Results Page 3
fourth quarter of 2004 and beyond. Given year-to-date revenue performance, we
continue to expect full-year revenue for 2004 to be approximately $4.6 billion
and 2004 earnings per share on a diluted basis to be $2.05 to $2.15, which
includes the tax reserve adjustments as well as restructuring expenses and the
sale transactions."
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 28, 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 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, 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 2003 Form 10-K, its
Form 10-Q for the third quarter ended September 30, 2004, 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,
2004 2003 2004 2003
---- ---- ---- ----
Revenues $1,215,911 $1,157,588 $3,518,210 $3,362,996
Cost of sales 1,100,931 1,039,382 3,200,555 3,004,746
---------- ---------- ---------- ----------
Gross profit 114,980 118,206 317,655 358,250
Selling, general and
administrative expenses 97,616 104,671 295,758 320,484
Restructuring expenses 617 -- 5,936 --
Gain on sale of assets 2,839 -- 2,839 --
---------- ---------- ---------- ----------
Operating income 19,586 13,535 18,800 37,766
Interest expense, net (2,132) (1,987) (5,550) (5,631)
Gain on sale of
equity investment 1,844 -- 1,844 --
---------- ---------- ---------- ----------
Income before income taxes 19,298 11,548 15,094 32,135
Income tax provision (benefit) 3,832 5,080 (7,534) 14,138
---------- ---------- ---------- ----------
Net income $ 15,466 $ 6,468 $ 22,628 $ 17,997
========== ========== ========== ==========
Basic earnings per share $ 1.02 $ 0.43 $ 1.49 $ 1.20
========== ========== ========== ==========
Diluted earnings per share $ 0.99 $ 0.42 $ 1.46 $ 1.16
========== ========== ========== ==========
Weighted average shares of Common Stock outstanding:
Basic 15,202,938 15,003,737 15,178,938 14,974,590
Diluted 15,562,604 15,461,106 15,551,636 15,471,711
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
2004 2003
(Unaudited)
----------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 101,025 $ 78,260
Accounts receivable, net 1,114,532 1,009,170
Costs and estimated earnings in excess of billings
on uncompleted contracts 240,779 249,393
Inventories 9,480 9,863
Prepaid expenses and other 26,757 42,470
---------- ----------
Total current assets 1,492,573 1,389,156
Investments, notes, and other long-term receivables 29,367 26,452
Property, plant & equipment, net 57,467 66,156
Goodwill 280,761 277,994
Identifiable intangible assets, net 19,643 22,226
Other assets 14,666 13,263
---------- ----------
Total assets $1,894,477 $1,795,247
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ 127,300 $ 139,400
Current maturities of long-term debt and capital
lease obligations 261 367
Accounts payable 441,304 451,713
Billings in excess of costs and estimated earnings
on uncompleted contracts 447,719 345,207
Accrued payroll and benefits 132,925 131,623
Other accrued expenses and liabilities 92,493 110,147
---------- ----------
Total current liabilities 1,242,002 1,178,457
Long-term debt and capital lease obligations 588 561
Other long-term obligations 106,387 94,873
Total stockholders' equity 545,500 521,356
---------- ----------
Total liabilities and stockholders' equity $1,894,477 $1,795,247
========== ==========
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