EME EMCOR Group Inc

Record Quarterly Revenues of $3.70 billion, 15.3% Increase Year-over-Year

Record Quarterly Diluted EPS of $5.80, 62.5% Increase Year-over-Year

Record Remaining Performance Obligations of $9.79 billion, 13.4% Increase Year-over-Year

2024 Revenue Guidance of at least $14.5 billion (previously $14.5 billion - $15.0 billion)

2024 Diluted EPS Guidance Range Increased to $20.50 - $21.00 (previously $19.00 - $20.00)

EMCOR Group, Inc. (NYSE: EME) today reported results for the quarter ended September 30, 2024.

Third Quarter 2024 Results of Operations

For the third quarter of 2024, revenues totaled $3.70 billion, up 15.3% from the third quarter of 2023. Net income for the third quarter of 2024 was $270.3 million, or $5.80 per diluted share, compared to net income of $169.4 million, or $3.57 per diluted share, for the third quarter of 2023. Net income for the third quarter of 2023 included a long-lived asset impairment charge of $2.4 million, or $1.7 million net of tax. Excluding this impairment charge, non-GAAP net income for the third quarter of 2023 was $171.1 million, or $3.61 per diluted share.

Operating income for the third quarter of 2024 was $363.5 million, or 9.8% of revenues, compared to operating income of $235.0 million, or 7.3% of revenues, for the third quarter of 2023. Excluding the previously referenced impairment charge, non-GAAP operating income for the third quarter of 2023 was $237.3 million, or 7.4% of revenues. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $34.5 million and $30.3 million for the third quarter of 2024 and 2023, respectively.

Refer to the attached tables for a reconciliation of non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share to the comparable GAAP measures.

Selling, general and administrative expenses for the third quarter of 2024 totaled $371.2 million, or 10.0% of revenues, compared to $308.1 million, or 9.6% of revenues, for the third quarter of 2023.

The Company's income tax rate for the third quarter of 2024 was 27.4%, compared to 27.7% for the third quarter of 2023.

Remaining performance obligations (“RPO”) as of September 30, 2024 were a record $9.79 billion compared to $8.64 billion as of September 30, 2023, an increase of $1.15 billion year-over-year.

Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, “Our team continued to perform exceptionally well and delivered another great quarter, maintaining our momentum and again setting new records across key financial and operational metrics. Record RPOs of $9.8 billion, along with a robust and diverse pipeline of future opportunities, demonstrates the continued demand for our services. Our record operating cash flow and strong and liquid balance sheet enable us to compete and win on sophisticated projects, and support our organic growth and balanced capital allocation strategy.”

First Nine Months 2024 Results of Operations

Revenues for the first nine months of 2024 totaled $10.80 billion, an increase of 18.1%, compared to $9.14 billion for the first nine months of 2023. Net income for the first nine months of 2024 was $715.0 million, or $15.21 per diluted share, compared to net income of $421.5 million, or $8.85 per diluted share, for the first nine months of 2023. Excluding the impact of the previously referenced impairment charge recorded in the third quarter of 2023, non-GAAP net income for the first nine months of 2023 was $423.2 million, or $8.88 per diluted share.

Operating income for the first nine months of 2024 was $956.3 million, or 8.9% of revenues, compared to operating income of $586.6 million, or 6.4% of revenues, for the first nine months of 2023. Excluding the previously referenced impairment charge, non-GAAP operating income for the first nine months of 2023 was $588.9 million. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $98.4 million and $87.8 million for the first nine months of 2024 and 2023, respectively.

Refer to the attached tables for a reconciliation of non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per share to the comparable GAAP measures.

Selling, general and administrative expenses totaled $1.05 billion, or 9.7% of revenues, for the first nine months of 2024, compared to $882.7 million, or 9.7% of revenues, for the first nine months of 2023.

Mr. Guzzi continued, “Our Electrical and Mechanical Construction segments continued their very strong performance, with combined third quarter revenue growth of nearly 24% and a combined operating margin of 13.3%. With quarterly and year-to-date revenue growth of 25% and 32%, respectively, our Mechanical Construction segment again generated record revenues, and achieved record operating margins of 12.9% in the quarter and 12.2% year-to-date. Our Electrical Construction segment also posted record revenues, with growth of 21% on a quarterly basis and 19% for the year-to-date period, and achieved record operating margins of 14.1% in the quarter and 12.4% year-to-date. Our impressive execution and performance were driven by excellent field leadership and a commitment to continuous innovation, coupled with a favorable mix of work including data centers and semi-conductor plants, other high-tech and traditional manufacturing projects, and growing demand within the institutional, healthcare, and water and wastewater sectors. Our U.S. Building Services segment performed as expected, with our mechanical services business benefiting from strong performance across its portfolio of work, including HVAC retrofits, repair service, building controls upgrades, and service maintenance agreements. This segment continues to experience quality aftermarket opportunities across most sectors. Our Industrial Services segment continues to experience a gradual resumption of demand, performing well in both the field and our shops as we execute against a more typical fall turnaround season. Our U.K. Building Services segment also continues to perform well in a difficult market, winning new work and poised to secure additional opportunities with customers that demand a strong technical solution for their facilities.”

Full Year 2024 Guidance

Based on year-to-date 2024 performance, current operating conditions, and near-term visibility, the Company is:

1. Adjusting its full-year 2024 revenue guidance to at least $14.5 billion, from the prior guidance range of $14.5 billion - $15.0 billion.
2. Increasing its full-year 2024 diluted earnings per share guidance range to $20.50 - $21.00, from the prior guidance range of $19.00 - $20.00.

Mr. Guzzi concluded, “Given our momentum and execution to date, in addition to our record RPOs and strong and diverse project pipeline, we are again raising our 2024 diluted earnings per share guidance. We remain confident in our strategic positioning within growth-oriented sectors and geographies and believe our dedication to operational excellence and prudent capital allocation will deliver continued value for our customers and shareholders."

Third Quarter Earnings Conference Call Information

EMCOR Group's third quarter conference call will be broadcast live via internet today, Thursday, October 31, at 10:30 AM Eastern Daylight Time and can be accessed through the Company's website at www.emcorgroup.com.

About EMCOR

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 routinely posts information that may be important to investors in the “Investor Relations” section of our website at www.emcorgroup.com. Investors and potential investors are encouraged to consult the EMCOR website regularly for important information about EMCOR.

Forward Looking Statements:

This release and related presentation contain forward-looking statements. Such statements speak only as of October 31, 2024, and EMCOR assumes no obligation to update any such forward-looking statements, unless required by law. These forward-looking statements include statements regarding anticipated future operating and financial performance, including financial guidance and projections underlying that guidance; the nature and impact of our remaining performance obligations and timing of future projects; our ability to support organic growth and balanced capital allocation; market opportunities; market growth prospects; customer trends; and project mix. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated (whether expressly or implied) by the forward-looking statements. Accordingly, these statements do not guarantee future performance or events. Applicable risks and uncertainties include, but are not limited to, adverse effects of general economic conditions; domestic and international political developments; changes in the specific markets for EMCOR’s services; adverse business conditions, including labor market tightness and/or disruption, productivity challenges, the impact of claims and litigation, the nature and extent of supply chain disruptions impacting availability and pricing of materials, global conflicts, and inflationary trends more generally, including fluctuations in energy costs; the impact of legislation and/or government regulations; changes in interest rates; the availability of adequate levels of surety bonding; increased competition; and unfavorable developments in the mix of our 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 2023 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 our business, including any forward-looking statements.

Non-GAAP Measures:

This release and related presentation also include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this release. 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 ongoing 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.

EMCOR GROUP, INC. FINANCIAL HIGHLIGHTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share information)

(Unaudited)

 

 

 

For the quarters ended September 30,

 

For the nine months ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Revenues

 

$

3,696,924

 

$

3,207,598

 

$

10,796,097

 

$

9,143,652

Cost of sales

 

 

2,962,198

 

 

2,662,126

 

 

8,788,061

 

 

7,672,058

Gross profit

 

 

734,726

 

 

545,472

 

 

2,008,036

 

 

1,471,594

Selling, general and administrative expenses

 

 

371,188

 

 

308,139

 

 

1,051,737

 

 

882,684

Impairment loss on long-lived assets

 

 

—

 

 

2,350

 

 

—

 

 

2,350

Operating income

 

 

363,538

 

 

234,983

 

 

956,299

 

 

586,560

Net periodic pension income (cost)

 

 

227

 

 

(284)

 

 

670

 

 

(840)

Interest income (expense), net

 

 

8,312

 

 

(90)

 

 

21,959

 

 

(4,614)

Income before income taxes

 

 

372,077

 

 

234,609

 

 

978,928

 

 

581,106

Income tax provision

 

 

101,814

 

 

64,863

 

 

263,944

 

 

159,292

Net income including noncontrolling interests

 

 

270,263

 

 

169,746

 

 

714,984

 

 

421,814

Net income attributable to noncontrolling interests

 

 

—

 

 

337

 

 

—

 

 

337

Net income attributable to EMCOR Group, Inc.

 

$

270,263

 

$

169,409

 

$

714,984

 

$

421,477

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

5.83

 

$

3.59

 

$

15.27

 

$

8.88

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

 

$

5.80

 

$

3.57

 

$

15.21

 

$

8.85

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

46,394,857

 

 

47,173,974

 

 

46,829,458

 

 

47,446,298

Diluted

 

 

46,588,760

 

 

47,398,197

 

 

47,016,072

 

 

47,642,763

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.25

 

$

0.18

 

$

0.68

 

$

0.51

 

 

 

 

 

 

 

 

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

(Unaudited) September 30, 2024

 

December 31, 2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,035,534

 

$

789,750

Accounts receivable, net

 

 

3,509,202

 

 

3,203,490

Contract assets

 

 

296,523

 

 

269,885

Inventories

 

 

94,475

 

 

110,774

Prepaid expenses and other

 

 

70,681

 

 

73,072

Total current assets

 

 

5,006,415

 

 

4,446,971

Property, plant, and equipment, net

 

 

204,547

 

 

179,378

Operating lease right-of-use assets

 

 

322,912

 

 

310,498

Goodwill

 

 

1,002,218

 

 

956,549

Identifiable intangible assets, net

 

 

648,123

 

 

586,032

Other assets

 

 

137,737

 

 

130,293

Total assets

 

$

7,321,952

 

$

6,609,721

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

897,059

 

$

935,967

Contract liabilities

 

 

1,881,444

 

 

1,595,109

Accrued payroll and benefits

 

 

753,680

 

 

596,936

Other accrued expenses and liabilities

 

 

312,799

 

 

315,107

Operating lease liabilities, current

 

 

80,245

 

 

75,236

Total current liabilities

 

 

3,925,227

 

 

3,518,355

Operating lease liabilities, long-term

 

 

269,517

 

 

259,430

Other long-term obligations

 

 

368,089

 

 

361,121

Total liabilities

 

 

4,562,833

 

 

4,138,906

Equity:

 

 

 

 

Total EMCOR Group, Inc. stockholders’ equity

 

 

2,758,082

 

 

2,469,778

Noncontrolling interests

 

 

1,037

 

 

1,037

Total equity

 

 

2,759,119

 

 

2,470,815

Total liabilities and equity

 

$

7,321,952

 

$

6,609,721

 

EMCOR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2024 and 2023

(In thousands) (Unaudited)

 

 

 

 

2024

 

 

2023

Cash flows - operating activities:

 

 

 

 

Net income including noncontrolling interests

 

$

714,984

 

$

421,814

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

41,799

 

 

38,444

Amortization of identifiable intangible assets

 

 

56,559

 

 

49,335

Provision for credit losses

 

 

12,585

 

 

5,256

Non-cash expense for impairment of long-lived assets

 

 

—

 

 

2,350

Non-cash share-based compensation expense

 

 

16,170

 

 

10,703

Other reconciling items

 

 

(7,893)

 

 

(9,121)

Changes in operating assets and liabilities, excluding the effect of businesses acquired

 

 

104,198

 

 

(42,884)

Net cash provided by operating activities

 

 

938,402

 

 

475,897

Cash flows - investing activities:

 

 

 

 

Payments for acquisitions of businesses, net of cash acquired

 

 

(189,208)

 

 

(89,741)

Proceeds from sale or disposal of property, plant, and equipment

 

 

2,765

 

 

12,015

Purchases of property, plant, and equipment

 

 

(57,244)

 

 

(56,306)

Net cash used in investing activities

 

 

(243,687)

 

 

(134,032)

Cash flows - financing activities:

 

 

 

 

Proceeds from revolving credit facility

 

 

—

 

 

100,000

Repayments of revolving credit facility

 

 

—

 

 

(100,000)

Repayments of long-term debt

 

 

—

 

 

(142,813)

Repayments of finance lease liabilities

 

 

(2,144)

 

 

(2,138)

Dividends paid to stockholders

 

 

(31,884)

 

 

(24,198)

Repurchases of common stock

 

 

(405,425)

 

 

(105,299)

Taxes paid related to net share settlements of equity awards

 

 

(12,095)

 

 

(5,365)

Issuances of common stock under employee stock purchase plan

 

 

943

 

 

6,769

Payments for contingent consideration arrangements

 

 

(4,427)

 

 

(3,113)

Net cash used in financing activities

 

 

(455,032)

 

 

(276,157)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

7,377

 

 

856

Increase in cash, cash equivalents, and restricted cash

 

 

247,060

 

 

66,564

Cash, cash equivalents, and restricted cash at beginning of year (1)

 

 

789,750

 

 

457,068

Cash, cash equivalents, and restricted cash at end of period (2)

 

$

1,036,810

 

$

523,632

_____________

(1) Includes $0.6 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheet as of December 31, 2022. (2) Includes $1.3 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheet as of September 30, 2024.

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands, except for percentages) (Unaudited)

 

 

 

For the quarters ended September 30,

 

 

 

2024

 

 

% of Total

 

 

2023

 

 

% of Total

Revenues from unrelated entities:

 

 

 

 

 

 

 

 

United States electrical construction and facilities services

 

$

845,030

 

23 %

 

$

697,406

 

22 %

United States mechanical construction and facilities services

 

 

1,662,211

 

45 %

 

 

1,329,600

 

41 %

United States building services

 

 

796,923

 

21 %

 

 

817,718

 

26 %

United States industrial services

 

 

286,410

 

8 %

 

 

252,148

 

8 %

Total United States operations

 

 

3,590,574

 

97 %

 

 

3,096,872

 

97 %

United Kingdom building services

 

 

106,350

 

3 %

 

 

110,726

 

3 %

Total operations

 

$

3,696,924

 

100 %

 

$

3,207,598

 

100 %

 

 

For the nine months ended September 30,

 

 

 

2024

 

 

% of Total

 

 

2023

 

 

% of Total

Revenues from unrelated entities:

 

 

 

 

 

 

 

 

United States electrical construction and facilities services

 

$

2,409,735

 

22 %

 

$

2,020,319

 

22 %

United States mechanical construction and facilities services

 

 

4,745,057

 

44 %

 

 

3,602,271

 

39 %

United States building services

 

 

2,359,191

 

22 %

 

 

2,318,105

 

25 %

United States industrial services

 

 

964,510

 

9 %

 

 

875,314

 

10 %

Total United States operations

 

 

10,478,493

 

97 %

 

 

8,816,009

 

96 %

United Kingdom building services

 

 

317,604

 

3 %

 

 

327,643

 

4 %

Total operations

 

$

10,796,097

 

100 %

 

$

9,143,652

 

100 %

 

EMCOR GROUP, INC.

SEGMENT INFORMATION

(In thousands, except for percentages) (Unaudited)

 

 

 

For the quarters ended September 30,

 

 

 

2024

 

 

% of Segment Revenues

 

 

2023

 

 

% of Segment Revenues

Operating income (loss):

 

 

 

 

 

 

 

 

United States electrical construction and facilities services

 

$

119,118

 

14.1 %

 

$

63,127

 

9.1 %

United States mechanical construction and facilities services

 

 

214,831

 

12.9 %

 

 

138,476

 

10.4 %

United States building services

 

 

55,562

 

7.0 %

 

 

57,156

 

7.0 %

United States industrial services

 

 

3,292

 

1.1 %

 

 

(174)

 

(0.1) %

Total United States operations

 

 

392,803

 

10.9 %

 

 

258,585

 

8.3 %

United Kingdom building services

 

 

5,497

 

5.2 %

 

 

8,869

 

8.0 %

Corporate administration

 

 

(34,762)

 

—

 

 

(30,121)

 

—

Impairment loss on long-lived assets

 

 

—

 

—

 

 

(2,350)

 

—

Total operations

 

 

363,538

 

9.8 %

 

 

234,983

 

7.3 %

Other items:

 

 

 

 

 

 

 

 

Net periodic pension income (cost)

 

 

227

 

 

 

 

(284)

 

 

Interest income (expense), net

 

 

8,312

 

 

 

 

(90)

 

 

Income before income taxes

 

$

372,077

 

 

 

$

234,609

 

 

 

 

For the nine months ended September 30,

 

 

 

2024

 

% of Segment Revenues

 

 

2023

 

% of Segment Revenues

Operating income (loss):

 

 

 

 

 

 

 

 

United States electrical construction and facilities services

 

$

299,284

 

12.4 %

 

$

154,365

 

7.6 %

United States mechanical construction and facilities services

 

 

578,991

 

12.2 %

 

 

344,550

 

9.6 %

United States building services

 

 

135,860

 

5.8 %

 

 

140,943

 

6.1 %

United States industrial services

 

 

34,004

 

3.5 %

 

 

22,733

 

2.6 %

Total United States operations

 

 

1,048,139

 

10.0 %

 

 

662,591

 

7.5 %

United Kingdom building services

 

 

16,651

 

5.2 %

 

 

20,220

 

6.2 %

Corporate administration

 

 

(108,491)

 

—

 

 

(93,901)

 

—

Impairment loss on long-lived assets

 

 

—

 

—

 

 

(2,350)

 

—

Total operations

 

 

956,299

 

8.9 %

 

 

586,560

 

6.4 %

Other items:

 

 

 

 

 

 

 

 

Net periodic pension income (cost)

 

 

670

 

 

 

 

(840)

 

 

Interest income (expense), net

 

 

21,959

 

 

 

 

(4,614)

 

 

Income before income taxes

 

$

978,928

 

 

 

$

581,106

 

 

EMCOR GROUP, INC. RECONCILIATION OF ORGANIC REVENUE GROWTH (In thousands, except for percentages) (Unaudited)

The following table provides a reconciliation between organic revenue growth, a non-GAAP measure, and total revenue growth for the quarter and nine months ended September 30, 2024.

 

 

For the quarter ended September 30, 2024

 

For the nine months ended September 30, 2024

 

 

$

 

 

%

 

$

 

 

%

GAAP revenue growth

 

$

489,326

 

15.3 %

 

$

1,652,445

 

18.1 %

Incremental revenues from acquisitions

 

 

(84,935)

 

(2.7) %

 

 

(173,738)

 

(1.9) %

Organic revenue growth, a non-GAAP measure

 

$

404,391

 

12.6 %

 

$

1,478,707

 

16.2 %

EMCOR GROUP, INC. RECONCILIATION OF 2024 AND 2023 NON-GAAP MEASURES (In thousands, except for percentages and per share data) (Unaudited)

In our press release, we provide non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted earnings per common share for the quarter and nine months ended September 30, 2023. The following tables provide a reconciliation between these amounts determined on a non-GAAP basis and the most directly comparable GAAP measures.

 

 

For the quarter ended September 30,

 

For the nine months ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

GAAP operating income

 

$

363,538

 

$

234,983

 

$

956,299

 

$

586,560

Impairment loss on long-lived assets

 

 

—

 

 

2,350

 

 

—

 

 

2,350

Non-GAAP operating income

 

$

363,538

 

$

237,333

 

$

956,299

 

$

588,910

 

 

For the quarter ended September 30,

 

For the nine months ended September 30,

 

 

2024

 

2023

 

2024

 

2023

GAAP operating margin

 

9.8 %

 

7.3 %

 

8.9 %

 

6.4 %

Impairment loss on long-lived assets

 

— %

 

0.1 %

 

— %

 

0.0 %

Non-GAAP operating margin

 

9.8 %

 

7.4 %

 

8.9 %

 

6.4 %

 

 

For the quarter ended September 30,

 

For the nine months ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

GAAP net income

 

$

270,263

 

$

169,409

 

$

714,984

 

$

421,477

Impairment loss on long-lived assets

 

 

—

 

 

2,350

 

 

—

 

 

2,350

Tax effect of impairment loss on long-lived assets

 

 

—

 

 

(651)

 

 

—

 

 

(651)

Non-GAAP net income

 

$

270,263

 

$

171,108

 

$

714,984

 

$

423,176

 

 

For the quarter ended September 30,

 

For the nine months ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

GAAP diluted earnings per common share

 

$

5.80

 

$

3.57

 

$

15.21

 

$

8.85

Impairment loss on long-lived assets

 

 

—

 

 

0.05

 

 

—

 

 

0.05

Tax effect of impairment loss on long-lived assets

 

 

—

 

 

(0.01)

 

 

—

 

 

(0.01)

Non-GAAP diluted earnings per common share

 

$

5.80

 

$

3.61

 

$

15.21

 

$

8.88

_________

Amounts presented in this table may not foot due to rounding.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241031893772/en/

EMCOR GROUP, INC.

Andrew G. Backman Vice President Investor Relations (203) 849-7938

FTI Consulting, Inc. Investors: Blake Mueller (718) 578-3706