EMCOR Group, Inc. Reports Second Quarter 2024 Results

Record Quarterly Revenues of $3.67 billion, 20.4% Increase Year-over-Year

Record Quarterly Diluted EPS of $5.25, 78.0% Increase Year-over-Year

Remaining Performance Obligations of $9.0 billion, 8.6% Increase Year-over-Year

Increases 2024 Revenue Guidance Range to $14.5 billion - $15.0 billion from $14.0 billion - $14.5 billion

Increases 2024 Diluted EPS Guidance Range to $19.00 - $20.00 from $15.50 - $16.50

EMCOR Group, Inc. (NYSE:EME) today reported results for the quarter ended June 30, 2024.

Second Quarter 2024 Results of Operations

For the second quarter of 2024, revenues totaled $3.67 billion, an increase of 20.4%, compared to $3.05 billion for the second quarter of 2023. Net income for the second quarter of 2024 was $247.6 million, or $5.25 per diluted share, compared to $140.6 million, or $2.95 per diluted share, for the second quarter of 2023.

Operating income for the second quarter of 2024 was $332.8 million, or 9.1% of revenues, compared to $196.7 million, or 6.5% of revenues, for the second quarter of 2023. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $34.2 million and $29.0 million for the second quarter of 2024 and 2023, respectively.

Selling, general and administrative expenses for the second quarter of 2024 totaled $351.2 million, or 9.6% of revenues, compared to $293.4 million, or 9.6% of revenues, for the second quarter of 2023.

The Company's income tax rate for the second quarter of 2024 was 27.0%, compared to 27.4% for the second quarter of 2023.

Remaining performance obligations as of June 30, 2024 were $9.0 billion compared to $8.3 billion as of June 30, 2023, up $713.1 million year-over-year.

Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, "We had an exceptional first half of the year, the Company maintained its excellent momentum in the second quarter and again set new records across key financial and operational metrics. Demand for EMCOR's specialty contracting services remains high, further reinforcing our confidence in the trajectory of the business. Our Remaining Performance Obligations are at near record levels, and our pipeline continues to be robust, all supporting our positive outlook for the rest of the year and gives us confidence to increase financial guidance for 2024."

First Six Months 2024 Results of Operations

Revenues for the first six months of 2024 totaled $7.10 billion, an increase of 19.6%, compared to $5.94 billion for the first six months of 2023. Net income for the first six months of 2024 was $444.7 million, or $9.41 per diluted share, compared to net income of $252.1 million, or $5.28 per diluted share, for the first six months of 2023.

Operating income for the first six months of 2024 was $592.8 million, or 8.3% of revenues, compared to operating income of $351.6 million, or 5.9% of revenues, for the first six months of 2023. Operating income included depreciation and amortization expense, inclusive of amortization of identifiable intangible assets, of $63.8 million and $57.5 million for the first six months of 2024 and 2023, respectively.

Selling, general and administrative expenses totaled $680.5 million, or 9.6% of revenues, for the first six months of 2024, compared $574.5 million, or 9.7% of revenues, for the first six months of 2023.

Mr. Guzzi continued, "Our Electrical and Mechanical Construction segments continued to perform exceptionally well, driving our overall strong performance. With quarterly and year-to-date revenue growth of over 35%, our Mechanical Construction segment generated record revenues and operating income, and a record operating margin of 12.9% for the quarter and 11.8% on a year-to-date basis. Our Electrical Construction segment posted record revenues, with growth of 18% on both a quarterly and year-to-date basis and achieved a record second quarter operating margin, earning over 11% in both the quarter and year-to-date periods. We continue to perform exceptionally well against strong demand across the majority of the sectors we serve, including high-tech and traditional manufacturing, network and communications, institutional, and healthcare. Within our U.S. Building Services segment, which is executing as expected, our mechanical services business continued to deliver exceptional performance with high-single digit operating margins, and low-double digit revenue growth, as strong demand continues for our energy efficiency services, building controls installations and upgrades, and retrofit projects. Our Industrial Services segment reported its best second quarter post-pandemic as improved demand continued for both shop and field services."

Increases Full Year 2024 Guidance

Based on year-to-date 2024 performance, current operating conditions, and near-term visibility, the Company is:

1. Increasing its full-year 2024 revenue guidance range to $14.5 billion - $15.0 billion, from the prior guidance range of $14.0 billion - $14.5 billion.
2. Increasing its full-year 2024 diluted earnings per share guidance range to $19.00 - $20.00, from the prior guidance range of $15.50 - $16.50.

Mr. Guzzi concluded, "With our strong first half performance, we are again raising our 2024 guidance. We continue to execute well by deploying our resources to serve our customers and believe we are positioned in the right geographies and sectors that have long-term growth prospects. We also continue to deliver for our shareholders by maintaining our focus on operational excellence and balanced capital allocation."

Second Quarter Earnings Conference Call Information

EMCOR Group's second quarter conference call will be broadcast live via internet today, Thursday, July 25, at 10:30 AM Eastern Daylight Time and can be accessed through the Company's website at www.emcorgroup.com.

About EMCOR

EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure and building services. This press release and other press releases may be viewed at the Company's website at www.emcorgroup.com. EMCOR routinely posts information that may be important to investors in the "Investor Relations" section of our website at www.emcorgroup.com. Investors and potential investors are encouraged to consult the EMCOR website regularly for important information about EMCOR.

Forward Looking Statements:

This release and related presentation contain forward-looking statements. Such statements speak only as of July 25, 2024, and EMCOR assumes no obligation to update any such forward-looking statements, unless required by law. These forward-looking statements may include statements regarding anticipated future operating and financial performance, including financial guidance and projections underlying that guidance; the nature and impact of our remaining performance obligations and timing of future projects; our ability to be prudent capital allocators; our ability to pursue organic and strategic investments and acquisitions; our ability to return capital to shareholders, including through share repurchases and dividends; market opportunities; market growth prospects; customer trends; and project mix. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated (whether expressly or implied) by the forward-looking statements. Accordingly, these statements do not guarantee future performance or events. Applicable risks and uncertainties include, but are not limited to, adverse effects of general economic conditions; domestic and international political developments; changes in the specific markets for EMCOR's services; adverse business conditions, including labor market tightness and/or disruption, productivity challenges, the impact of claims and litigation, the nature and extent of supply chain disruptions impacting availability and pricing of materials, global conflicts, and inflationary trends more generally, including fluctuations in energy costs; the impact of legislation and/or government regulations; changes in interest rates; the availability of adequate levels of surety bonding; increased competition; and unfavorable developments in the mix of our business. Certain of the risk factors associated with EMCOR's business are also discussed in Part I, Item 1A "Risk Factors," of the Company's 2023 Form 10-K, and in other reports filed from time to time with the Securities and Exchange Commission and available at www.sec.gov and www.emcorgroup.com. Such risk factors should be taken into account in evaluating our business, including any forward-looking statements.

Non-GAAP Measures:

This release and related presentation also include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (GAAP). Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this release. The Company uses these non-GAAP measures as key performance indicators for the purpose of evaluating performance internally. We also believe that these non-GAAP measures provide investors with useful information with respect to our ongoing operations. Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP, and may not be comparable to the calculation of similar measures of other companies.

_________

(1) Includes $0.6 million of restricted cash classified as "Prepaid expenses and other" in the Consolidated Balance Sheets as of December 31, 2022.

(2) Includes $0.9 million of restricted cash classified as "Prepaid expenses and other" in the Consolidated Balance Sheets as of June 30, 2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725280306/en/