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) February 23, 2006
EMCOR Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-8267 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 February 23, 2006 EMCOR Group, Inc. issued a press release disclosing
results of operations for its fiscal 2005 fourth quarter ended December 31,
2005. 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 February 23, 2006
disclosing results of operations for its fiscal 2005 fourth
quarter ended December 31, 2005.
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: February 23, 2006
EMCOR GROUP, INC. REPORTS 2005 FOURTH QUARTER RESULTS
- Fourth quarter income from continuing operations increases 89.5% -
- Fourth quarter diluted EPS of $0.61 from continuing operations -
NORWALK, CONNECTICUT, February 23, 2006 - EMCOR Group, Inc. (NYSE: EME) today
reported results for the fourth quarter and year ended December 31, 2005. The
Company's financial results for the fourth quarter and full year periods have
been adjusted to reflect its 2-for-1 stock split, effective February 10, 2006.
Fourth quarter 2005 income from continuing operations was $19.5 million, or
$0.61 per diluted share, an increase of 89.5% when compared to income from
continuing operations of $10.3 million, or $0.33 per diluted share, in the 2004
fourth quarter. Revenues in the 2005 fourth quarter rose 1.2% to $1.24 billion
from $1.22 billion in the same quarter of the preceding year.
For the fourth quarter of 2005, operating income was $31.2 million compared to
operating income of $22.8 million in the fourth quarter of 2004, which 2004
fourth quarter included restructuring expenses of $2.3 million. Excluding the
impact of those 2004 expenses, 2005 fourth quarter operating income increased
23.9%. Operating margin improved to 2.5% of revenues in the 2005 fourth quarter,
compared to 1.9% for the fourth quarter of 2004, reflecting improved market
conditions and actions the Company has taken to control costs and shift its
total backlog mix to a higher percentage of private sector commercial contracts.
Selling, general and administrative expenses were $125.2 million in the fourth
quarter of 2005, compared to $103.2 million in the fourth quarter of 2004, due
to increased incentive compensation expense as a result of improved
profitability.
At December 31, 2005, contract backlog was $2.76 billion, approximately even
with backlog levels at both December 31, 2004 and September 30, 2005. Backlog
levels have been managed in keeping with the Company's strategy throughout 2005
to reduce its exposure to selected public sector construction projects and to
conserve capacity for the more lucrative private sector market. Private sector
commercial backlog represented 35% of total backlog at December 31, 2005,
compared to 28% of total backlog at December 31, 2004.
EMCOR Announces 2005 Fourth Quarter Results Page 2
For the year ended December 31, 2005, income from continuing operations
increased 84.2% to $61.3 million, or $1.93 per diluted share, versus $33.3
million, or $1.07 per diluted share for 2004. Net income for 2005 (which
included a loss from discontinued operations of $1.3 million, or $0.04 per
diluted share) was $60.0 million, or $1.89 per diluted share, an increase of
80.8% from net income of $33.2 million, or $1.07 per diluted share (which
included a loss from discontinued operations of $0.08 million, or $0.00 per
diluted share), in 2004.
For 2005, revenues totaled $4.71 billion, roughly equal to revenues of $4.72
billion in the prior year. Operating income for 2005 rose 92.0% to $81.1 million
from $42.3 million in 2004.
As previously announced, the Company's results for 2005 included a net $17.5
million income tax benefit resulting from income tax reserve adjustments.
Results for 2004 included restructuring expenses of approximately $8.3 million,
a $2.8 million gain on the sale of assets, a $1.8 million gain on the sale of an
equity investment, and a net income tax benefit of approximately $15.5 million
resulting from income tax reserve adjustments.
Excluding the items in the two immediately preceding paragraphs, which
exclusions the Company believes better reflect year-to-year comparability,
earnings per diluted share for 2005 would have been $1.37 versus $0.69 per
diluted share in 2004, a 98.6% increase.
Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "We are very
pleased with our performance in the fourth quarter of 2005, which capped an
excellent year for EMCOR Group both operationally and financially. Our results
are the culmination of the successful execution of our strategy to realign
resources so as to focus on our core operational areas, to exercise discipline
in our project bidding and to optimize our cost structure. At the same time, we
committed to reduce our exposure to certain public sector projects in order to
preserve available capacity for our private sector client base. While keeping
revenues and backlog flat compared to 2004, our efforts, combined with an
ongoing recovery within the private sector, allowed us to expand our margins and
generate significant improvements in profitability."
Mr. MacInnis continued, "Our 2005 results reflect improved contributions from
the majority of our operations. We are particularly encouraged by the reliable
strength of our electrical construction businesses, the ongoing recovery of our
mechanical construction operations and our U.K. subsidiary, and the growth and
performance of our facilities services operations, which benefited from
increased demand for smaller, higher margin, discretionary projects and
continued to grow its service client roster. The performance of our facilities
services operations reinforces our commitment to this segment of our business,
and we anticipate continuing growth opportunities in both our mobile and
site-based service businesses as the trend towards outsourcing and energy
efficiency continues."
EMCOR Announces 2005 Fourth Quarter Results Page 3
Mr. MacInnis concluded, "EMCOR Group enters 2006 poised for future growth. Our
successful operational execution has placed us in an excellent position to
leverage the continuing improvements we see in private sector demand, which we
expect will result in revenue and margin growth. Our strong backlog of private
and certain public sector work is better balanced than in recent years, and we
expect this trend to continue. In addition, we completed the year with a strong
and liquid balance sheet, and we intend to leverage our strong financial
position to pursue growth opportunities. Based on current market conditions, we
expect to generate revenues of between $4.9 billion and $5.1 billion in 2006,
resulting in diluted earnings per share for the year of between $1.54 and $1.90.
This assumes $0.06 per diluted share in expenses related to the Company's
adoption of FAS 123R (Accounting for Stock-Based Compensation)."
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 fourth quarter conference call will be available live via Internet
broadcast today, Thursday, February 23, 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 and its 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, backlog 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 and mix of business. Certain of the risks and factors associated
with EMCOR's business are also discussed in the Company's 2005 Form 10-K 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)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Year Ended
December 31, December 31,
2005 2004 2005 2004
---- ---- ---- ----
Revenues $1,237,886 $1,223,624 $4,714,547 $4,718,010
Cost of sales 1,081,442 1,095,250 4,214,783 4,273,410
---------- ---------- ---------- ----------
Gross profit 156,444 128,374 499,764 444,600
Selling, general and
administrative expenses 125,223 103,192 416,883 396,915
Restructuring expenses 22 2,338 1,750 8,274
Gain on sale of assets - - - 2,839
---------- ---------- ---------- ----------
Operating income 31,199 22,844 81,131 42,250
Interest expense, net (951) (1,447) (5,586) (6,997)
Gain on sale of equity investment - - - 1,844
Minority interest (1,149) (3,814) (4,515) (3,814)
---------- ---------- ---------- ----------
Income from continuing operations
before income taxes 29,099 17,583 71,030 33,283
Income tax provision 9,627 7,306 9,738 1
---------- ---------- ------ ----------
Income from continuing
operations 19,472 10,277 61,292 33,282
(Loss) income from discontinued
operations, net of income taxes (140) 302 (1,250) (75)
---------- ---------- ---------- ----------
Net income $ 19,332 $ 10,579 $ 60,042 $ 33,207
========== ========== ========== ==========
Basic earnings per share -
continuing operations $ 0.62 $ 0.34 $ 1.97 $ 1.09
Basic (loss) earnings per share -
discontinued operations (0.00) 0.01 (0.04) (0.00)
---------- ---------- ---------- ----------
$ 0.62 $ 0.35 $ 1.93 $ 1.09
========== ========== ========== ==========
Diluted earnings per share -
continuing operations $ 0.61 $ 0.33 $ 1.93 $ 1.07
Diluted (loss) earnings per share -
discontinued operations (0.01) 0.01 (0.04) (0.00)
---------- ---------- ---------- ----------
$ 0.60 $ 0.34 $ 1.89 $ 1.07
========== ========== ========== ==========
Weighted average shares of
Common stock outstanding:
Basic 31,250,577 30,508,054 31,143,363 30,395,810
Diluted 32,176,639 31,222,522 31,834,881 31,133,474
EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2005 2004
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 103,785 $ 59,109
Accounts receivable, net 1,046,380 1,073,454
Costs and estimated earnings in excess of billings
on uncompleted contracts 185,634 240,716
Inventories 10,175 10,580
Prepaid expenses and other 43,829 41,712
---------- ----------
Total current assets 1,389,803 1,425,571
Investments, notes, and other long-term receivables 28,659 26,472
Property, plant & equipment, net 46,443 56,468
Goodwill 283,412 279,432
Identifiable intangible assets, net 16,990 18,782
Other assets 13,634 11,244
---------- ----------
Total assets $1,778,941 $1,817,969
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under working capital credit line $ - $ 80,000
Current maturities of long-term debt and capital
lease obligations 551 806
Accounts payable 452,709 467,415
Billings in excess of costs and estimated earnings
on uncompleted contracts 330,235 359,667
Accrued payroll and benefits 154,276 138,771
Other accrued expenses and liabilities 107,545 115,714
---------- ----------
Total current liabilities 1,045,316 1,162,373
Long-term debt and capital lease obligations 1,406 1,332
Other long-term obligations 116,783 91,903
Total stockholders' equity 615,436 562,361
---------- ----------
Total liabilities and stockholders' equity $1,778,941 $1,817,969
========== ==========
EMCOR GROUP, INC.
COMPUTATION OF ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share information)
(Unaudited)
For the Year Ended December 31, 2005
---------------------------------------------------------
As
As Reported Adjustments(1) Adjusted
----------- -------------- --------
Revenues $4,714,547 $4,714,547
Cost of sales 4,214,783 4,214,783
---------- ----------
Gross profit 499,764 499,764
Selling, general and administrative expenses 416,883 416,883
Restructuring expenses 1,750 1,750
---------- -------- ----------
Operating income 81,131 81,131
Interest expense, net (5,586) (5,586)
Minority interest (4,515) (4,515)
---------- -------- ----------
Income from continuing operations before income taxes 71,030 71,030
Income tax provision 9,738 17,564 27,302
---------- -------- ----------
Income from continuing operations 61,292 (17,564) 43,728
Loss from discontinued operations, net of income tax effect (1,250) (1,250)
---------- -------- ----------
Net income $ 60,042 $(17,564) $ 42,478
========== ======== ==========
Diluted earnings per share - continuing operations $ 1.93 $ 1.37
Diluted earnings per share - discontinued operations $ (0.04) $ (0.04)
Outstanding shares - diluted 31,834,881 31,834,881
(1) The adjustment represents the exclusion of an income tax reserve reversal
of $22.7 million and an income tax provision of $5.2 million to record a
valuation allowance to reduce deferred tax assets related to net operating
losses and other temporary differences of our Canadian segment.
EMCOR GROUP, INC.
COMPUTATION OF ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share information)
(Unaudited)
For the Year Ended December 31, 2004
--------------------------------------------------------------------
As
As Reported Adjustments(1) Adjusted
------------ -------------- ----------
Revenues $4,718,010 $4,718,010
Cost of sales 4,273,410 4,273,410
---------- ----------
Gross profit 444,600 444,600
Selling, general and administrative expenses 396,915 396,915
Restructuring expenses 8,274 (8,274) -
Gain on sale of assets 2,839 (2,839) -
---------- -------- ----------
Operating income 42,250 5,435 47,685
Interest expense, net (6,997) (6,997)
Gain on sale of equity investment 1,844 (1,844) -
Minority interest (3,814) (3,814)
---------- -------- ----------
Income from continuing operations before income taxes 33,283 3,591 36,874
Income tax provision 1 15,451 15,452
---------- -------- ----------
Income from continuing operations 33,282 (11,860) 21,422
Loss from discontinued operations, net of income tax effect (75) (75)
---------- -------- ----------
Net income $ 33,207 $(11,860) $ 21,347
========== ======== ==========
Diluted earnings per share - continuing operations $ 1.07 $ 0.69
Diluted earnings per share - discontinued operations $ (0.00) $ (0.00)
Outstanding shares - diluted 31,133,474 31,133,474
(1) The adjustments reverse certain items, from the "as reported" consolidated
statement of operations. The income tax adjustment is net of the reversal
of tax reserves adjustments and the effect on income taxes related to the
restructuring expenses, gain on sale of assets and gain on sale of equity
investment.
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