EMCOR Group, Inc. Reports Record Third Quarter Results.Revenues and Operating Income Operating Income
The profit realized from a business' own operations.
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Rise 21% and 58% over 2006
Contract Backlog Reaches Record $4.48 Billion
2007 Full Year Revenues and Earnings Guidance Raised
NORWALK, Conn. -- EMCOR Group EMCOR Group NYSE: EME is a Fortune 500 company based in Norwalk, Connecticut. This company's businesses include mechanical and electrical construction, energy infrastructure, and facilities services. , Inc. (NYSE NYSE
See: New York Stock Exchange : EME n. 1. An uncle. ) today reported results for the third quarter and nine months ended September 30, 2007. The Company's financial results for the prior year periods have been adjusted to reflect its 2-for-1 stock split, effective July 9, 2007.
Income from continuing operations continuing operations
Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the third quarter of 2007 rose 68.3% to $37.1 million, or $0.55 per diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $22.0 million, or $0.33 per diluted share, in the third quarter of 2006.
Including income from discontinued operations Discontinued operations
Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $1.3 million, net income for the third quarter of 2007 was $38.3 million, or $0.57 per diluted share. Including income from discontinued operations of $0.5 million, net income for the third quarter of 2006 was $22.6 million, or $0.34 per diluted share. The Company's results for the third quarter of 2006 also include restructuring expenses of $0.6 million, as previously announced.
In the third quarter of 2007, the Company reported revenues of $1.50 billion, an increase of 21.1% over revenues of $1.24 billion in the year ago period. After excluding revenues from 2007 acquisitions, organic revenue growth in the 2007 third quarter was 13.8%.
Operating income was $54.9 million in the third quarter of 2007, an increase of 57.8% over operating income of $34.8 million in the same period last year. As a percentage of revenues, operating income improved to 3.7% in the 2007 third quarter from 2.8% a year ago. Selling, general and administrative (SG&A) expenses were $114.0 million, or 7.6% of revenues, in the 2007 third quarter, versus $108.6 million, or 8.8% of revenues in the third quarter of 2006, primarily reflecting the Company's previous restructuring initiatives and the success of its efforts to control costs despite strong revenue growth. During the 2007 third quarter, the Company's tax rate declined to 34% from 37.8% in the year ago period as a result of a reduction in United Kingdom income before income taxes.
Contract backlog at September 30, 2007 was a record $4.48 billion, compared with backlog of $3.40 billion at September 30, 2006, an increase of 31.8%. On a sequential basis, the Company's backlog rose $223 million, or 5.3%, from a previous record of $4.26 billion at June 30, 2007.
During the quarter, the Company completed its acquisition of Ohmstede, Ltd. ("Ohmstede"), the leading provider of aftermarket Aftermarket
See: Secondary market.
See secondary market. maintenance and repair services, replacement parts and fabrication fabrication (fab´rikā´shn),
n the construction or making of a restoration. services for highly engineered shell and tube heat exchangers A shell and tube heat exchanger is a class of heat exchanger designs. It is the most common type of heat exchanger in oil refineries and other large chemical processes, and is suited for higher-pressure applications. for the refinery and petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. industries, for approximately $455 million in cash, as previously announced. Ohmstede contributed $19.0 million in revenues to the Company's results during the 2007 third quarter, and was slightly accretive to diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the period. Ohmstede also contributed $125.9 million to the Company's total backlog as of September 30, 2007.
For the first nine months of 2007, income from continuing operations rose 61.9% to $74.0 million, or $1.11 per diluted share, from $45.7 million, or $0.70 per diluted share, in the first nine months of 2006. Including income from discontinued operations of $2.5 million, net income for the 2007 nine-month period was $76.5 million, or $1.15 per diluted share. Including income from discontinued operations of $0.7 million and restructuring expenses of $0.6 million, net income for the 2006 nine-month period was $46.4 million, or $0.71 per diluted share.
Revenues for the 2007 nine-month period rose 17.0% to $4.16 billion, from $3.55 billion in the year ago period. After excluding revenues from 2007 acquisitions, organic revenue growth was 12.2% for the first nine months of 2007.
For the 2007 nine-month period, operating income rose 63.3% to $113.7 million, or 2.7% of revenues, from $69.6 million, or 2.0% of revenues from the year ago period. SG&A expenses for the first nine months of 2007 totaled $348.7 million, or 8.4% of revenues, compared with $315.2 million, or 8.9% of revenues, in the first nine months of 2006.
Frank T. MacInnis, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of EMCOR Group, commented, "The 2007 third quarter marked another strong period of execution and performance by EMCOR Group, and our results reflect our outstanding competitive position and the robust markets we have experienced throughout the year. Our performance was driven by strong growth across all our segments in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . This is particularly true in the U.S. market, as our U.S. Mechanical, Electrical and Facilities Services divisions continued to post strong growth in revenues and profitability. We also continue to grow our business from a position of financial strength. We generated excellent cash flows during the third quarter and our balance sheet remains strong notwithstanding the completion of the Ohmstede acquisition. The initial stages of the integration of Ohmstede have gone well, and we have already identified opportunities to extend their business into new markets."
Mr. MacInnis concluded, "Our major markets continue to reflect strong demand for our broad range of services. In addition, EMCOR's recent trend towards longer-duration, higher-margin projects has continued, as illustrated by our high level of activity in the healthcare, hospitality and gaming sectors. In short, we remain well positioned to take advantage of the opportunities before us. Based on the trajectory Trajectory
The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. and composition of our backlog, we are again increasing our 2007 performance estimates to revenues of $5.8 billion and diluted earnings per share from continuing operations of $1.75 - $1.80."
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 third quarter conference call will be available live via Internet broadcast today, Thursday, October 25, 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.
This release may contain certain forward-looking statements forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 surety bond
An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. , 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 2006 Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. , its Form 10-Q Form 10-Q
See 10-Q. for the third quarter ended September 30, 2007, 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.
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