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EMCOR Group, Inc. Reports Second Quarter 2012 Results

Stocks in this article: EME

EMCOR Group, Inc. (NYSE: EME) today reported results for the second quarter ended June 30, 2012.

As previously announced, the Company completed the sale of its Canadian subsidiary, Comstock Canada, in August 2011. Accordingly, Comstock’s results for 2011 have been classified as discontinued operations.

For the second quarter of 2012, net income from continuing operations attributable to EMCOR increased 16.1% to $33.4 million, or $0.49 per diluted share, from $29.3 million, or $0.43 per diluted share, in the second quarter of 2011. Revenues increased 18.0% to $1.59 billion in the second quarter of 2012, compared to revenues of $1.35 billion in the year ago period. Organic revenue growth in the quarter, compared to the second quarter of 2011, was 9.4%.

For the second quarter of 2012, operating income was $56.3 million, or 3.5% of revenues. Including transaction expenses of $4.5 million, or $0.05 per diluted share after-tax, related to the Company’s previously announced acquisition of USM Services Holdings, Inc. (“USM”), operating income for the second quarter of 2011 was $50.0 million, or 3.7% of revenues. Excluding these transaction expenses, the Company’s non-GAAP operating income for the 2011 second quarter was $54.6 million, or 4.0% of revenues.

Selling, general and administrative expenses were $137.7 million, or 8.7% of revenues, in the second quarter of 2012, compared to $124.5 million, or 9.2% of revenues, in the second quarter of 2011.

Excluding the USM transaction expenses referred to above, the Company’s non-GAAP net income from continuing operations for the second quarter of 2011 was $32.6 million, or $0.48 per diluted share.

Inclusive of discrete items, the income tax rate as reported in the 2012 second quarter was 38.3% compared with an income tax rate of 37.9% in the year ago period.

Backlog as of June 30, 2012 was $3.28 billion, a decrease of 7.3% from $3.54 billion a year ago, excluding Comstock Canada. The majority of this decrease relates to the Company’s UK operations as the Company continues to deemphasize its construction operations in favor of its facilities services business. Additionally, the decrease reflects declines in the healthcare, institutional, water/wastewater and transportation sectors, partially offset by continued increases in the commercial and industrial sectors. Commercial backlog increased $174 million, or 21.5%, from year ago levels to $987 million. This commercial increase includes a $19 million, or 8% increase in backlog at the Company’s USM business since its acquisition on June 30, 2011. Total backlog decreased 3.1% from $3.39 billion on March 31, 2012.

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