EMCOR Group, Inc. Reports Third Quarter 2009 Results

http://www.businesswire.com/news/home/20091029005317/en

- Third Quarter Operating Margin of 4.9% -
- Third Quarter Diluted EPS of $0.59 -
- 2009 Diluted EPS Guidance Increased to $2.20 - $2.35 -

NORWALK, Conn.--(Business Wire)--
EMCOR Group, Inc. (NYSE: EME) today reported results for the third quarter ended
September 30, 2009.

For the 2009 third quarter, the Company reported net income (1) of $40.0
million, or $0.59 per diluted share, compared to net income (1) of $48.6
million, or $0.72 per diluted share, in the third quarter of 2008. In the 2009
third quarter, revenues were $1.37 billion, compared to $1.72 billion in the
third quarter of 2008.

Operating income in the 2009 third quarter was $67.3 million, compared to
operating income of $78.6 million in the same quarter a year ago. As a
percentage of revenues, operating income in the third quarter of 2009 rose to
4.9% from 4.6% in the 2008 third quarter. Selling, general and administrative
expenses (SG&A) decreased $7.8 million to $137.9 million, or 10.1% of revenues,
in the third quarter of 2009, compared to $145.7 million, or 8.5% of revenues,
in the comparable prior year period.

Contract backlog as of September 30, 2009 was $3.39 billion, compared to
contract backlog of $4.42 billion as of September 30, 2008 and $3.40 billion as
of June 30, 2009. The year-over-year decline in backlog was principally
attributable to reduced contract awards in the hospitality/gaming sectors and in
the commercial sector, partially offset by backlog growth in the healthcare and
institutional sectors.

Net income (1) for the first nine months of 2009 was $121.6 million, or $1.81
per diluted share, compared to $121.9 million, or $1.82 per diluted share, a
year ago. Revenues for the first nine months of 2009 totaled $4.19 billion,
compared to $5.10 billion for the first nine months of 2008.

For the 2009 nine-month period, operating income was $206.4 million, or 4.9% of
revenues, compared to operating income of $201.6 million, or 4.0% of revenues,
in the year ago period. Operating income for the 2009 nine-month period included
restructuring expenses of $4.2 million. SG&A for the first nine months of 2009
was $402.7 million, or 9.6% of revenues, compared to $437.8 million, or 8.6% of
revenues, for the first nine months of 2008.

Frank T. MacInnis, Chairman and CEO of EMCOR Group, commented, "We are pleased
with our results in the 2009 third quarter, especially in light of the economic
conditions in our markets. Our results for the period were driven by record
gross and operating margins due to our focus on execution and project
management. This same operational focus allowed us to convert our outstanding
work into cash, which strengthened what was already a strong and highly liquid
balance sheet. This strong financial position gives us flexibility in managing
business opportunities and provides us with the liquidity to invest in strategic
growth opportunities in the future. Our strong cash flow points to the strength
of our relationships with high-quality clients and the value of the work we do
for them."

Mr. MacInnis continued, "Despite challenging conditions in some of our markets,
we see trends in the composition of our backlog that indicate a building base of
business that has begun to provide stability and that should eventually generate
growth opportunities going forward. The rate of decline in our backlog has
steadily decreased over the course of 2009, and excluding the hard hit
hospitality and commercial sectors, backlog growth was slightly positive in the
third quarter, driven by strong bookings in the healthcare and institutional
sectors. While market evidence has yet to indicate a definitive backlog bottom,
our ability to be agile among market sectors allows us to adapt to declining
demand in some of the markets we serve by redeploying resources to those markets
where there is stronger demand. We have also begun to see some traction in work
stemming from government stimulus spending, which we would expect to continue to
grow."

Mr. MacInnis concluded, "As we enter the fourth quarter, we remain cautious
given a continued lack of visibility into future demand and into credit markets
that continue to impact customers` ability to finance projects. In addition,
while we are operating at excellent levels of efficiency, the ongoing shift in
backlog mix will likely result in margins lower than the record levels seen in
the third quarter. Against this backdrop, we remain focused on bidding
discipline, strong project execution and maintaining a strong balance sheet that
provides us with the flexibility to perform well in today`s marketplace and take
advantage of the eventual recovery."

The Company noted that, based on its financial performance in the first nine
months of 2009, current market conditions and the composition of its contract
backlog, it has updated its full year 2009 guidance to include revenues of $5.5
billion to $5.6 billion and 2009 full year diluted EPS of $2.20 to $2.35. While
a material deterioration in market conditions from current levels could cause
the Company`s performance to decline, early benefits from the economic stimulus
plan, accretive acquisitions, and/or improved credit markets could provide
opportunities to exceed these estimates.

EMCOR Group, Inc. is a Fortune 500 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 29, 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.

(1)EMCOR adopted SFAS No. 160, "Noncontrolling Interests in Consolidated
Financial Statements," effective January 1, 2009, which, among other things,
changed the presentation format and certain captions of our Condensed
Consolidated Statements of Operations and Condensed Consolidated Balance
Sheets.EMCOR uses the captions recommended by this standard in its condensed
consolidated financial statements such as "net income attributable to EMCOR
Group, Inc." and "basic and diluted earnings per common share attributable to
EMCOR Group, Inc. common stockholders."However, in the preceding release EMCOR
has shortened this language to "net income" and "earnings per share".

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 2008 Form 10-K, its
Form 10-Q for the third quarter ended September 30, 2009, 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.

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 Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Revenues $ 1,371,985 $ 1,720,349 $ 4,189,291 $ 5,104,724
Cost of sales 1,166,740 1,496,003 3,576,003 4,465,242
Gross profit 205,245 224,346 613,288 639,482

Selling, general and administrative 137,895 145,708 402,664 437,774
expenses
Restructuring expenses 90 -- 4,200 71

Operating income 67,260 78,638 206,424 201,637
Interest expense, net (1,159 ) (162 ) (2,224 ) (1,595 )

Income before income taxes 66,101 78,476 204,200 200,042
Income tax provision 25,624 28,936 81,124 76,867

Net income including 40,477 49,540 123,076 123,175
noncontrolling interests
Less: Net income attributable to (491 ) (905 ) (1,503 ) (1,258 )
noncontrolling interests

Net income attributable $ 39,986 $ 48,635 $ 121,573 $ 121,917
to EMCOR Group, Inc. (1)

Basic earnings per common
share:

Net income attributable to EMCOR $ 0.61 $ 0.74 $ 1.85 $ 1.87
Group, Inc. common stockholders

Diluted earnings per common
share:

Net income attributable to EMCOR $ 0.59 $ 0.72 $ 1.81 $ 1.82
Group, Inc. common stockholders

Weighted average shares of
common stock outstanding:
Basic 65,897,546 65,404,404 65,864,793 65,331,538
Diluted 67,551,619 67,425,722 67,279,095 67,164,880

EMCOR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

September 30, December 31,
2009 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 648,231 $ 405,869
Accounts receivable, net 1,182,851 1,390,973
Costs and estimated earnings in excess of billings on uncompleted contracts 86,764 105,441
Inventories 39,895 54,601
Prepaid expenses and other 56,555 53,856
Total current assets 2,014,296 2,010,740

Investments, notes and other long-term receivables 21,463 14,958
Property, plant & equipment, net 92,813 96,716
Goodwill 587,259 582,714
Identifiable intangible assets, net 282,623 292,128
Other assets 11,675 11,148
Total assets $ 3,010,129 $ 3,008,404

LIABILITIES AND EQUITY
Current liabilities:
Borrowings under working capital credit line $ -- $ --
Current maturities of long-term debt and capital 3,332 3,886

lease obligations
Accounts payable 390,504 500,881
Billings in excess of costs and estimated earnings on uncompleted contracts 613,046 601,834
Accrued payroll and benefits 202,342 221,564
Other accrued expenses and liabilities 180,387 184,990
Total current liabilities 1,389,611 1,513,155
Long-term debt and capital lease obligations 192,875 196,218
Other long-term obligations 239,840 248,262
Total liabilities 1,822,326 1,957,635
Equity:
Total EMCOR Group, Inc. stockholders` equity 1,179,426 1,043,345
Noncontrolling interests 8,377 7,424
Total equity 1,187,803 1,050,769
Total liabilities and equity $ 3,010,129 $ 3,008,404

EMCOR Group, Inc.
R. Kevin Matz, 203-849-7938
Executive Vice President
Shared Services
or
Investors:
FD
Eric Boyriven / Alexandra Tramont, 212-850-5600
or
Media:
Linden Alschuler & Kaplan, Inc.
Suzanne Dawson / Cecile Fradkin, 212-575-4545

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