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) July 27, 2006
EMCOR Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8267 11-2125338
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(Commission File Number) (I.R.S. Employer Identification No.)
301 Merritt Seven, Norwalk, CT 06851
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(Address of Principal Executive Offices)(Zip Code)
(203) 849-7800
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(Registrant's Telephone Number, Including Area Code)
N/A
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(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 July 27, 2006, EMCOR Group, Inc. issued a press release disclosing
results of operations for the fiscal 2006 second quarter ended June 30, 2006. 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 July 27, 2006
disclosing results of operations for the fiscal 2006 second
quarter ended June 30, 2006.
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
Dated: July 27, 2006
Exhibit 99.1
EMCOR GROUP, INC. REPORTS 2006 SECOND QUARTER RESULTS
- Second Quarter Operating Income and Net Income Increase
72.6% and 112.5%, respectively -
- Contract Backlog Grows 18.2% to a Record $3.22 Billion -
- 2006 Full Year Guidance Raised -
NORWALK, CONNECTICUT, July 27, 2006 - EMCOR Group, Inc. (NYSE: EME) today
reported results for the second quarter and six months ended June 30, 2006. The
Company's financial results for the prior year periods have been adjusted to
reflect its 2-for-1 stock split, effective February 10, 2006.
For the 2006 second quarter, net income increased 112.5% to $16.9 million, or
$0.52 per diluted share, versus net income of $7.9 million, or $0.25 per diluted
share, in the second quarter of 2005. Second quarter 2006 revenues totaled $1.22
billion compared to $1.17 billion in the second quarter of 2005, an increase of
4.4%. The Company's results for the 2006 second quarter included after-tax
expenses related to the adoption of FAS 123(R) (Accounting for Stock-Based
Compensation) of $1.3 million, equating to $0.04 per diluted share, which were
not present in the second quarter of 2005. Results for the second quarter of
2005 included restructuring expenses of $0.3 million.
Operating income for the 2006 second quarter increased 72.6% to $25.3 million
from $14.7 million in the second quarter of 2005. As a percentage of revenues,
operating income improved to 2.1% from 1.3% in the year-ago period. Selling,
general and administrative expenses in the second quarter of 2006 increased to
$108.2 million, or 8.9% of revenues, from $97.0 million, or 8.3% of revenues in
the second quarter of 2005.
The Company reported record contract backlog of $3.22 billion as of June 30,
2006, compared to $2.72 billion a year ago and $2.82 billion at March 31, 2006.
Private sector commercial and hospitality backlog represented 54% of total
backlog at June 30, 2006, versus 34% at June 30, 2005.
For the 2006 six-month period, net income was $23.9 million, or $0.73 per
diluted share, an increase of 142.5% over net income of $9.8 million, or $0.31
per diluted share, for the first half of 2005. 2006 year-to-date revenues
totaled $2.37 billion versus revenues of $2.25 billion in the same period last
year, an increase of 5.3%.
EMCOR Announces 2006 Second Quarter Results Page 2
Operating income for the first half of 2006 was $37.7 million, or 1.6% of
revenues, versus operating income of $20.4 million, or 0.9% of revenues, for the
first half of 2005. The Company's results for the first half of 2006 include a
loss from discontinued operations of $0.6 million, amounting to $0.02 per
diluted share, as well as expenses related to the Company's adoption of FAS
123(R) of $1.7 million, or $0.05 per diluted share, which were not present in
the year-ago period. Included in the Company's 2005 six-month results were
restructuring expenses of $1.5 million and income from discontinued operations
of $0.2 million.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "We are very
pleased with our strong performance during the second quarter, which built upon
the excellent start we had to 2006. Our success was driven by solid performance
across all of our businesses, including improved results within our UK and
Canadian operations. The second quarter also saw the continued successful growth
of our facilities services business, reflecting over 20% revenue growth for both
the second quarter and six-month period. Facilities Services reported enhanced
profitability due to strong market demand and our ability to leverage that
business' existing infrastructure."
Mr. MacInnis added, "Over the past few years, EMCOR Group has executed on a
strategy of reducing our exposure to certain public sector markets and reserving
capacity for an expected recovery within the more profitable private and
commercial sectors. We have seen this recovery over the past few quarters, and
today over half of our contract backlog is represented by the commercial and
hospitality sectors, while we have maintained strong positions in other
attractive sectors of the marketplace. We believe the actions we have taken have
resulted in a stronger, better balanced backlog that positions us well for
continued performance in the future."
Mr. MacInnis concluded, "We continue to see strong demand within our targeted
markets, including additional growth in the small-task projects that are typical
of our facilities services business. At the same time, we remain in an excellent
position financially to invest in the future growth of our business. Based on
current market conditions, we expect revenues for 2006 of between $5.0 billion
and $5.2 billion, resulting in diluted earnings per share for the year of
between $1.90 and $2.10, which includes $0.07 per diluted share in expenses
related to the Company's adoption of FAS 123(R)."
EMCOR Group, Inc. is a Fortune 500(R) worldwide leader in mechanical and
electrical construction services, energy infrastructure 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 27, at 10:30 AM Eastern Daylight Time. You can
access the live call through the Home Page of the Company's Web site at
www.emcorgroup.com.
EMCOR Announces 2006 Second Quarter Results Page 3
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, availability
of adequate levels of surety bonding, 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 2005 Form 10-K, its Form 10-Q for the second quarter
ended June 30, 2006, 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 Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2006 2005 2006 2005
---- ---- ---- ----
Revenues $1,220,423 $1,168,831 $2,371,500 $2,252,586
Cost of sales 1,086,895 1,056,860 2,123,139 2,041,413
---------- ---------- ---------- ----------
Gross profit 133,528 111,971 248,361 211,173
Selling, general and
administrative expenses 108,194 96,994 210,700 189,301
Restructuring expenses -- 301 -- 1,472
---------- ---------- ---------- ----------
Operating income 25,334 14,676 37,661 20,400
Interest income (expense), net 490 (1,637) 728 (3,277)
Minority interest (672) (987) (928) (1,852)
---------- ---------- ---------- ----------
Income from continuing
operations before taxes 25,152 12,052 37,461 15,271
Income tax provision 8,291 4,413 12,967 5,598
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Income from continuing
operations 16,861 7,639 24,494 9,673
Income (loss) from discontinued
operations, net -- 294 (620) 173
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Net income $ 16,861 $ 7,933 $ 23,874 $ 9,846
========== ========== ========== ==========
Basic earnings per share -
continuing operations $ 0.53 $ 0.24 $ 0.78 $ 0.31
Basic earnings per share -
discontinued operations -- $ 0.01 $ (0.02) $ 0.01
---------- ---------- ---------- ----------
$ 0.53 $ 0.25 $ 0.76 $ 0.32
========== ========== ========== ==========
Diluted earnings per share -
continuing operations $ 0.52 $ 0.24 $ 0.75 $ 0.31
Diluted earnings per share -
discontinued operations -- $ 0.01 $ (0.02) $ 0.00
---------- ---------- ---------- ----------
$ 0.52 $ 0.25 $ 0.73 $ 0.31
========== ========== ========== ==========
Weighted average shares of
Common stock outstanding:
Basic 31,571,736 31,281,690 31,444,264 30,997,812
Diluted 32,710,882 31,777,160 32,494,054 31,591,804
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, 2006 December 31,
(Unaudited) 2005
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ASSETS
Current assets:
Cash and cash equivalents $ 180,900 $ 103,785
Accounts receivable, net 1,078,615 1,046,380
Costs and estimated earnings in excess of billings
on uncompleted contracts 158,922 185,634
Inventories 13,112 10,175
Prepaid expenses and other 47,514 43,829
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Total current assets 1,479,063 1,389,803
Investments, notes, and other long-term receivables 25,453 28,659
Property, plant & equipment, net 47,070 46,443
Goodwill 283,039 283,412
Identifiable intangible assets, net 15,429 16,990
Other assets 9,925 13,634
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Total assets $1,859,979 $1,778,941
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ - $ -
Current maturities of long-term debt and capital
lease obligations 659 551
Accounts payable 452,860 452,709
Billings in excess of costs and estimated earnings
on uncompleted contracts 388,146 330,235
Accrued payroll and benefits 128,427 154,276
Other accrued expenses and liabilities 96,108 107,545
---------- ----------
Total current liabilities 1,066,200 1,045,316
Long-term debt and capital lease obligations 1,377 1,406
Other long-term obligations 133,628 116,783
Total stockholders' equity 658,774 615,436
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Total liabilities and stockholders' equity $1,859,979 $1,778,941
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