EMCOR Group, Inc. Reports Third Quarter 2009 Results

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(R) 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          86,764             105,441
contracts
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          613,046            601,834
contracts
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

SOURCE: EMCOR Group, Inc.

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