Emcor group, inc. reports third quarter 2015 results
Norwalk, conn.--(business wire)--emcor group, inc. (nyse:eme) today reported results for the third quarter ended september 30, 2015. net income from continuing operations attributable to emcor was $41.8 million in the third quarter, or $0.66 per diluted share, compared to $45.6 million, or $0.68 per diluted share, in the third quarter of 2014. included in net income from continuing operations attributable to emcor for the third quarter of 2014 was an after-tax gain of $7.1 million, or $0.11 per diluted share, associated with the sale of a building owned by one of our subsidiaries. revenues in the third quarter of 2015 were $1.70 billion, an increase of 8.5% from revenues of $1.57 billion in the third quarter of 2014. operating income for the third quarter of 2015 was $70.0 million, or 4.1% of revenues, compared to operating income of $73.6 million, or 4.7% of revenues, in the third quarter of 2014. included in operating income for the third quarter of 2014 was a pre-tax gain of $11.7 million associated with the sale of the aforementioned building. excluding this gain, non-gaap operating income for the third quarter of 2014 was $61.8 million, or 3.9% of revenues. selling, general and administrative expenses for the third quarter of 2015 were $165.1 million, or 9.7% of revenues, compared to $160.0 million, or 10.2% of revenues, in the year ago period. the company's income tax rate in the 2015 third quarter was 38.1%, compared to an income tax rate of 34.5% in the year ago period. backlog as of september 30, 2015 was $3.77 billion compared to $3.70 billion at the end of the third quarter of 2014 and $3.62 billion as of june 30, 2015. domestic backlog grew 1.8% on a year-over-year basis in the third quarter of 2015, reflecting backlog growth in the u.s. electrical and mechanical construction segments, offset by declines in backlog in the u.s. building services and u.s. industrial services segments. backlog growth in the industrial, water/wastewater, and hospitality/gaming sectors was partially offset by declines in backlog in the commercial and healthcare sectors. backlog within the institutional and transportation sectors remained flat year-over-year. our uk backlog decreased slightly as a result of unfavorable exchange rate fluctuations. tony guzzi, president and chief executive officer of emcor group, commented, “organic revenue growth across all of our segments highlights our record third quarter revenue performance. our business continues to improve as we remain focused on consistent operational execution and discipline in winning new business.” mr. guzzi added, “our u.s. industrial services segment had an especially strong quarter, reflecting substantial revenue improvement from the prior year’s third quarter and nearly doubling operating income despite encountering volume pressure from our refining customers as they recalibrate capital spending for new heat exchangers due to reduced oil prices. our u.s. electrical construction segment also posted strong results reflecting topline growth and increased profitability. our u.s. mechanical construction segment delivered organic growth and grew backlog in the quarter. our u.s. building services segment also performed well against a difficult comparison to a strong 2014 third quarter. in the uk, we delivered healthy organic revenue growth and operating income even with significant foreign exchange headwinds as we continued our progress after the restructuring of this business.” mr. guzzi concluded, “we continue to be pleased with our performance thus far in 2015 after a challenging start to the year. we have grown revenue, delivered strong cash flow and maintained our balance sheet flexibility. we will continue to pursue opportunities to invest in our businesses and deliver value to our shareholders. our diverse and growing backlog remains a source of strength as we look forward to a solid fall turnaround season, participating in a strengthened recovery in non-residential construction, and a strong close to 2015.” revenues for the first nine months of 2015 totaled $4.94 billion, an increase of 4.9% compared to $4.71 billion for the first nine months of 2014. net income from continuing operations attributable to emcor for the first nine months of 2015 was $122.0 million, or $1.92 per diluted share, compared to $130.3 million, or $1.92 per diluted share, for the first nine months of 2014. included in net income from continuing operations attributable to emcor for the first nine months of 2014 was an after-tax gain of $7.1 million, or $0.11 per diluted share, associated with the aforementioned sale of a building. operating income for the first nine months of 2015 was $203.0 million, or 4.1% of revenues, compared to $215.4 million, or 4.6% of revenues, for the first nine months of 2014. included in operating income for the first nine months of 2014 was a pre-tax gain of $11.7 million from the aforementioned building sale. excluding this gain, non-gaap operating income for the first nine months of 2014 was $203.6 million, or 4.3% of revenues. for the first nine months of 2015, selling, general and administrative expenses totaled $488.1 million, or 9.9% of revenues, compared to $454.2 million, or 9.6% of revenues, in the first nine months of 2014. based on the current size and mix of its backlog and assuming continued improvement in market conditions, emcor now expects full year 2015 revenues to be between $6.6 billion and $6.7 billion. the company also narrowed its full year 2015 guidance for diluted earnings per share from continuing operations to between $2.65 and $2.75 per share. additional share repurchase program the company also announced today that its board of directors has authorized a new share repurchase program for the company to repurchase up to an additional $200 million of its outstanding common stock. tony guzzi, president and chief executive officer of emcor group, said, “reflecting confidence in our financial strength and prospects for 2016 and beyond, i am pleased to announce that our board has authorized an incremental repurchase program. we continue to maintain a disciplined approach to capital allocation and remain committed to returning capital to shareholders. our strong cash flow and healthy balance sheet provide us with the flexibility to both return capital to shareholders and pursue strategic investments, including acquisitions, in order to support the long-term growth of the company.” as of september 30, 2015, the company has already repurchased $106.5 million of its outstanding common stock of its current $250 million share repurchase program launched in october 2014. the new share repurchase program will be funded from the company’s operations. the shares will be repurchased from time to time in the open market or through privately negotiated transactions at the company’s discretion, subject to market conditions, and in accordance with applicable regulatory requirements. the repurchase program does not obligate the company to acquire any particular amount of common stock and may be suspended, recommenced or discontinued at any time or from time to time without prior notice. emcor group's third quarter conference call will be available live via internet broadcast today, thursday, october 29, at 10:30 am eastern daylight savings time. you can access the live call through the company's web site at www.emcorgroup.com. please see the attached tables for a reconciliation of non-gaap operating income, non-gaap net income and non-gaap diluted earnings per share to the comparable gaap figures. 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 web site at www.emcorgroup.com. 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 2014 form 10-k 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 emcor group, inc. condensed consolidated balance sheets (in thousands) september 30,2015 (unaudited) december 31,2014 emcor group, inc. condensed consolidated statements of cash flows for the nine months ended september 30, 2015 and 2014 (in thousands) (unaudited) emcor group, inc. segment information (in thousands) (unaudited) for the three months endedseptember 30, for the nine months endedseptember 30, emcor group, inc. segment information (in thousands) (unaudited) for the three months endedseptember 30, for the nine months endedseptember 30, emcor group, inc. reconciliation of 2015 and 2014 operating income (in thousands) (unaudited) in our press release, we provide actual 2015 and 2014 third quarter and year-to-date september 30, 2015 and 2014 operating income. the following table provides a reconciliation between 2015 and 2014 operating income based on non-gaap measures to the most direct comparable gaap measures. emcor group, inc. reconciliation of 2015 and 2014 net income (in thousands) (unaudited) in our press release, we provide actual 2015 and 2014 third quarter and year-to-date september 30, 2015 and 2014 net income from continuing operations attributable to emcor group, inc. the following table provides a reconciliation between 2015 and 2014 net income from continuing operations attributable to emcor group, inc. based on non-gaap measures to the most direct comparable gaap measures. for the three monthsended september 30, for the nine monthsended september 30, emcor group, inc. reconciliation of 2015 and 2014 diluted earnings per share figures (unaudited) in our press release, we provide actual 2015 and 2014 third quarter and year-to-date september 30, 2015 and 2014 diluted earnings per share from continuing operations. the following table provides a reconciliation between 2015 and 2014 diluted eps based on non-gaap measures to the most direct comparable gaap measures.
