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Quarter Two 2010 July 29, 2010. EMCOR Participants. Frank MacInnis Chairman & Chief Executive Officer Tony Guzzi President & Chief Operating Officer Mark Pompa EVP & Chief Financial Officer Sheldon Cammaker EVP & General Counsel Kevin Matz EVP, Shared Services. 2.
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Quarter Two 2010 July 29, 2010
EMCOR Participants • Frank MacInnis Chairman & Chief Executive Officer • Tony Guzzi President & Chief Operating Officer • Mark Pompa EVP & Chief Financial Officer • Sheldon Cammaker EVP & General Counsel • Kevin Matz EVP, Shared Services 2
2010 – Qtr. 2 Executive Summary • Excellent execution despite recessionary pressures • Disciplined project selection produced profits in all operating segments • Revenues and profits declined year over year as expected, but adjusted operating margin encouraging • Quarterly GAAP EPS of $0.40 includes gains and charges of net ($0.06) 3
2010 – Qtr. 2 Executive Summary • Service call volume positively influenced by weather; service backlog grows • Backlog of $3.15 billion level with 2009 year-end, reflecting stabilization of markets • Balance sheet continues strong and liquid, including $600 million cash • 60th consecutive profitable quarter 4
2010 – Qtr. 2 Financial Highlights • Revenues down 10.3% year over year to $1.28 billion • Weakness in U.S. construction activity in commercial, hospitality and industrial markets • U.S. facilities services down 1.7% • International operations down 3.2% • $19.9 million non-cash impairment loss on identifiable intangible assets related to trade names • $7.9 million gain on sale of Middle East equity investment • Qtr. 2 income tax rate 30.5%, inclusive of discrete items • Expect full year 2010 rate to be approximately 38% • YTD cash flows from operations ($80.3) million vs. $138.3 million • Contributed supplemental one-time $25.9 million to U.K. pension plan 5
Key Financial Data – Income Statement ($ Thousands, except per share information) (Unaudited) • Amount is shown net of tax effect of $8.0 million related to the impairment loss and zero for the gain on sale due to the release of a • valuation allowance related to capital loss carryforwards 6
Key Financial Data – Income Statement ($ Thousands, except per share information) (Unaudited) • Amount is shown net of tax effect of $8.0 million related to the impairment loss and zero for the gain on sale due to the release of a • valuation allowance related to capital loss carryforwards 7
Key Financial Data – Balance Sheet ($ Thousands) 8
Operational Overview • Excellent execution across all business segments • ECS bid activity remains selective and disciplined • Mechanical Services benefiting from very good seasonal weather • International continues to perform well • Margins steady through cost reduction and productivity • Industrial business mixed picture • Demand from utility and process plant customers • Refinery market remains challenged • Service contract customer retention at 90%+ • Backlog continues to reflect uncertain economic environment 9
Commercial Hospitality Industrial Healthcare Institutional Transportation Water & Wastewater Backlog ($ Millions) 10
Recent Awards • Naval District Washington – Washington, D.C. Area • Major U.S. Auto Manufacturer – Oshawa, Ontario • Retail Mall – Trumbull, CT • Enterprise Products Company – Houston, TX • FAA Control Tower – Palm Springs, CA • U.S. Federal Courthouse – Los Angeles, CA • Automated Traffic Surveillance and Control – Los Angeles, CA • NY State Traffic Signals – Suffolk and Nassau Counties, NY 11
2010 Outlook • Commercial and hospitality markets to remain under pressure until private sector confidence and normal credit relationships return • Maximize position • High level execution • Rigid cost and risk controls • Leverage resources • Labor productivity • Balance sheet strong and liquid • Investment and acquisition opportunities 12