Emcor group, inc. reports third quarter 2014 results
Norwalk, conn.--(business wire)--emcor group, inc. (nyse: eme) today reported results for the third quarter ended september 30, 2014. for the third quarter of 2014, net income attributable to emcor was $45.0 million, or $0.68 per diluted share from continuing operations, compared to net income of $26.7 million, or $0.43 per diluted share from continuing operations, in the third quarter of 2013. included in net income 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. included in net income for the third quarter of 2013 are after-tax transaction expenses of $2.9 million, or $0.04 per diluted share, associated with the company’s acquisition of repconstrickland, inc. revenues in the third quarter of 2014 totaled $1.57 billion compared to revenues of $1.61 billion in the year ago period. operating income for the third quarter of 2014 was $73.6 million, or 4.7% of revenues. included in operating income for the third quarter of 2014 was a pre-tax $11.7 million gain 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. for the third quarter of 2013, operating income was $58.0 million, or 3.6% of revenues, which included $4.7 million of pre-tax transaction expenses associated with the repconstrickland, inc. acquisition. excluding the aforementioned 2013 expenses, the company’s non-gaap operating income for the third quarter of 2013 was $62.7 million, or 3.9% of revenues. 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. selling, general and administrative expenses were $160.0 million, or 10.2% of revenues, in the third quarter of 2014 compared to $147.9 million, or 9.2% of revenues, in the year ago period. the company's income tax rate for the 2014 third quarter was 34.5%, compared to an income tax rate of 44.7% in the year ago period. backlog as of september 30, 2014 was $3.70 billion, an increase of 9.8% from $3.36 billion at the end of the 2013 third quarter and an increase of 10.5% from $3.34 billion as of december 31, 2013. compared to backlog as of september 30, 2013, domestic backlog grew by $331 million, fueled by backlog growth in our u.s. electrical and mechanical construction segments, while our u.s. building services segment backlog decreased by $11 million. from a market sector perspective, commercial backlog increased $317 million to $1.3 billion and combined with an increase in transportation backlog more than offset declines in institutional and industrial backlog. tony guzzi, president and chief executive officer of emcor group commented, “our overall performance in the third quarter highlights our strong operational execution. while the pace of non-residential construction continues to be uneven, we are seeing an accelerating recovery evidenced by the growth of our backlog and the breadth of opportunities currently in our pipeline. we have maintained a disciplined and measured approach to winning new business that positions emcor for sustained success as the market continues to improve.” mr. guzzi added, “our u.s. electrical construction segment continued to perform at a high level while our u.s. mechanical construction segment improved as expected. our u.s. building services segment, despite comparison to its exceptionally strong 2013 third quarter, performed very well led by mechanical services and improved business at our government services operations. our u.s. industrial services segment showed substantial improvement from the year ago quarter in both revenue and operating margins, and we foresee a good fall turnaround season. in addition, during the third quarter we ceased construction operations in the uk; therefore, the results of the construction operations of our uk segment for all periods are now presented as a discontinued operation.” mr. guzzi concluded, “we are pleased with our performance thus far in 2014, which has produced strong cash flow and has allowed us to maintain balance sheet flexibility. as we’ve stated in our previous communications, we believe in a balanced approach to capital allocation, which was highlighted by our recently announced $250 million share repurchase program. while we continue to operate in a choppy market environment, we are optimistic that the non-residential market will continue to improve and in turn will drive earnings growth and profitability in 2015 and beyond.” revenues for the first nine months of 2014 totaled $4.71 billion, slightly higher compared to $4.68 billion for the first nine months of 2013. net income attributable to emcor for the first nine months of 2014 was $126.2 million, or $1.92 per diluted share from continuing operations, compared to net income of $77.9 million, or $1.40 per diluted share from continuing operations, for the first nine months of 2013. included in net income from continuing operations 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 sale of a building. included in net income from continuing operations for the year ago period are after-tax transaction expenses of $4.3 million, or $0.06 per share, associated with the 2013 acquisition of repconstrickland, inc. operating income in the first nine months of 2014 was $215.4 million, or 4.6% of revenues. included in operating income for the first nine months of 2014 was a pre-tax gain of $11.7 million from the 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 2013, operating income of $164.4 million, or 3.5% of revenues, which included pre-tax transaction expenses of $6.1 million associated with the company’s acquisition of repconstrickland, inc. excluding the aforementioned 2013 expenses, the company’s non-gaap operating income for the first nine months of 2013 was $170.5 million, or 3.6% of revenues. 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. for the first nine months of 2014, sg&a totaled $454.2 million, or 9.6% of revenues, compared to $419.7 million, or 9.0% of revenues, in the first nine months of 2013. the company noted that, based on the continuation of uncertain market conditions, it now expects to generate revenues in 2014 of approximately $6.4 billion, and continues to expect non-gaap diluted earnings per share from continuing operations for 2014 of $2.50 to $2.70 excluding the gain on the building sale in july 2014. 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, tuesday, october 28, 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. 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 2013 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. for the three months ended september 30, for the nine months ended september 30, 2014 (unaudited) 2013 for the three months ended september 30, for the nine months ended september 30, for the three months ended september 30, for the nine months ended september 30, emcor group, inc. reconciliation of 2014 and 2013 operating income for the three months ended september 30, for the nine months ended september 30, emcor group, inc. in our press release, we provide actual 2014 and 2013 third quarter and year-to-date september 30, 2014 and 2013 net income attributable to emcor group, inc. the following table provides a reconciliation between 2014 and 2013 net income attributable to emcor group, inc. based on non-gaap measures to the most direct comparable gaap measures. for the three months ended september 30, for the nine months ended september 30, (1) amount is net of tax effect of $1.8 million in the 2013 quarter and in the 2013 nine-month period. (2) amount is net of tax effect of $4.6 million in the 2014 quarter and in the 2014 nine-month period. emcor group, inc. in our press release, we provide actual 2014 and 2013 third quarter and year-to-date september 30, 2014 and 2013 diluted earnings per share. the following table provides a reconciliation between 2014 and 2013 diluted eps based on non-gaap measures to the most direct comparable gaap measures. for the three months ended september 30, for the nine months ended september 30, (1) amount is net of tax effect of $1.8 million in the 2013 quarter and in the 2013 nine-month period. (2) amount is net of tax effect of $4.6 million in the 2014 quarter and in the 2014 nine-month period.