Third Quarter 2017 Financial Results October 26, 2017

Transcription

1 October 26, 2017

2 EMCOR Participants Tony Guzzi President & Chief Executive Officer Mark Pompa EVP & Chief Financial Officer Maxine Mauricio SVP & General Counsel Mava Heffler VP, Marketing & Communications Kevin Matz EVP, Shared Services 2

3 2017 Qtr. 3 Executive Summary Continue to experience a steady non-residential environment Diluted EPS from continuing operations of $1.09 vs. $0.85 in Quarter Revenues decreased 1.9% to $1.89 billion Operating income as a percentage of revenues was 5.6% U.S. Electrical Construction and Facilities Services segment revenues were essentially flat with Quarter and operating margin was a strong 10.2% U.S. Mechanical Construction and Facilities Services segment revenues increased by $68.3 million vs. Quarter and operating margin was 7.6% 3

4 2017 Qtr. 3 Executive Summary U.S. Building Services segment revenues decreased by $23.6 million vs. Quarter ; however, operating margin expanded to 5.9% from 5.0% due to strong execution and better mix overall U.S. Industrial Services segment revenues decreased by $93.4 million vs. Quarter ; more than anticipated Hurricane Harvey Gulf Coast turnaround and maintenance work was curtailed during and after the storm Many operators still assessing way forward Prior year quarter benefited from a large specialty services project Active throughout the majority of

5 2017 Qtr. 3 Executive Summary Diverse backlog of $3.96 billion, up 1.5% compared to Quarter U.S. backlog UP $49 million or 1.3% Domestic Construction UP U.S. Building Services Segment DOWN U.S. Industrial Services Segment UP Private Sector UP (Commercial, Hospitality & Gaming, Industrial) Public Sector UP (Transportation, Water/Wastewater, Institutional, Healthcare) Sept $47M 1.6% $(5M) -0.7% $6M 12.3% $109M 5.6% $(47M) -2.4% Balance sheet remains strong and liquid, including $480.5 million of cash 5

6 2017 Qtr. 3 Financial Results Highlights Third Quarter 2017 Financial Results Revenues decreased 1.9% quarter-over-quarter to $1.89 billion ($ Millions) (Unaudited) Change from Qtr Qtr $ % U.S. Electrical Construction & Facilities Services $ $ (0.7) -0.1% U.S. Mechanical Construction & Facilities Services % Sub-Total 1, % U.S. Building Services (23.6) -5.1% U.S. Industrial Services (93.4) -39.1% Total U.S. Operations 1,800.8 (49.4) -2.7% U.K. Building Services % Total EMCOR $ 1,886.7 $ (36.5) -1.9% 6

7 2017 Qtr. 3 Financial Results Highlights Third Quarter 2017 Financial Results 7 SG&A expenses increased $7.1 million to $188.6 million or 10.0% of revenues vs. $181.4 million or 9.4% of revenues for Qtr Operating income of $106.5 million or 5.6% of revenues includes: Ended Sept. 30, (Unaudited) U.S. Electrical Construction and Facilities Services of $46.6 million: $15.7 million or 50.6% increase U.S. Mechanical Construction and Facilities Services of $57.5 million: $18.6 million or 47.8% increase Total U.S. Construction U.S. Building Services of $26.0 million: $2.9 million or 12.4% increase U.S. Industrial Services of $(4.8) million: $(19.4) million or 133.2% decrease U.K. Building Services of $3.9 million: $1.3 million or 51.8% increase Total EMCOR Operating Margin Qtr cash provided by operations of $135.4 million For the Three Months % 6.7% 7.6% 5.6% 8.5% 6.1% 5.9% 5.0% -3.3% 6.1% 4.6% 3.5% 5.6% 4.5%

8 Key Financial Data Income Statement ($ Thousands, except per share information) (Unaudited) For the Three Months Ended September 30, Variance $ % Revenues $ 1,886,691 $ 1,923,174 $ (36,483) -1.9% Gross Profit 295, ,044 27, % 15.6% 13.9% Selling, General and Administrative Expenses 188, ,441 7, % Restructuring Expenses (493) -91.5% N/M Operating Income $ 106,459 $ 86,064 $ 20, % 5.6% 4.5% Diluted Earnings per Common Share from Continuing Operations $ 1.09 $ 0.85 $ % 8

9 Key Financial Data Income Statement ($ Thousands, except per share information) (Unaudited) $ % Revenues $ 5,674,360 $ 5,601,560 $ 72, % Gross Profit 835, ,893 70, % 14.7% 13.7% Selling, General and Administrative Expenses 552, ,654 22, % Restructuring Expenses 954 1,271 (317) N/M Operating Income $ 282,054 $ 233,968 $ 48, % 5.0% 4.2% Diluted Earnings per Common Share from Continuing Operations $ 2.93 $ 2.33 $ % Non-GAAP Operating Income Excluding: - Transaction Expenses Related to the Acquisition $ 282,054 $ 237,806 $ 44, % of Ardent in % 4.2% Non-GAAP Diluted Earnings per Common Share from Continuing Operations Excluding: For the Nine Months Ended September 30, Variance - Transaction Expenses Related to the Acquisition of Ardent in 2016 $ 2.93 $ 2.37 $ % 9

10 Key Financial Data Balance Sheet ($ Thousands) (Unaudited) 09/30/17 12/31/16 Cash $ 480,496 $ 464,617 Working Capital $ 679,693 $ 657,341 Goodwill $ 1,010,399 $ 979,628 Identifiable Intangible Assets, Net $ 497,278 $ 487,398 Total Debt $ 413,870 $ 423,326 Stockholders' Equity $ 1,617,865 $ 1,537,942 Total Debt / Total Capitalization 20.4% 21.6% 10

11 Backlog by Market Sector ($ Millions) $5,000 $4,000 $3,634 $3,771 $3,903 $3,963 $3,000 $2,953 $3,224 $3,302 $3,344 $2,000 $1, $ Commercial Hospitality Industrial Healthcare Qtr. 33 Commercial Commercial Institutional Hospi / Gaming Industrial Transportation Hospitality Healthcare Institutional Transportation Water & Wastewater Industrial Water & Wastewater Healthcare Institutional Transportation Water & Wastewater

12 Backlog by Segment ($ Millions) $5,000 $4,000 $3,634 $3,771 $3,903 $3,963 $3,000 $2,953 $3,224 $3,302 $3,344 $2,000 $1, $ Qtr. 33 Mechanical Electrical Building Services Mechanical Industrial Services Electrical US Building EMCOR Services UK US Industrial Services EMCOR UK

13 Year End 2017 Outlook Non-residential construction market continues to grow Backlog growth positive for Domestic Construction Building Services benefitting from continued growth in retrofit and energy savings projects Industrial Services: Prior to Hurricane Harvey, we expected Fall turnaround season comparable to 2016 Customers reevaluating Fall 2017 and Spring 2018 turnaround scope and timing Continued headwinds in new build heat exchanger fabrication pricing Hurricanes: Short-term to medium-term negative impact on Industrial Services May result in increased opportunities in late 2018 and into 2019 Strong and liquid balance sheet 13

14 2017 Guidance Revenues ~$7.6 Billion Diluted EPS from Continuing Operations $3.70 $

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