NORWALK, CONNECTICUT, January 18, 2008 - EMCOR Group, Inc. (NYSE: EME), a Fortune 500® leader in mechanical and electrical construction, energy infrastructure and facilities services for a diverse range of businesses globally, announced today a series of comments from its Chairman and CEO, Frank T. MacInnis on current and expected market conditions in the Company's specialty construction and facilities services markets.
"EMCOR just completed an extremely successful 2007 that sustained significant momentum through the end of the year. Although our year-end audit is still in process, I can confidently predict that EMCOR's 2007 earnings per share will be within the guidance range of $1.75 to $1.80 from continuing operations, and may well exceed the upper end of the range – all-time record earnings performance for EMCOR and at least a 30% increase over 2006."
Mr. MacInnis continued, "We have substantial visibility into 2008 operating conditions, as EMCOR's 2007 year end contract backlog stood at approximately $4.5 billion, another all-time record and a 29% increase over 2006 year-end backlog. This portfolio of backlog contracts is not only the most valuable in our history but due to discipline in our contract bidding, growth in our facilities services business and strategic actions such as the Ohmstede acquisition, it is better balanced than ever before among high margin customers and reliable, long-term business sectors. Nearly 50% of EMCOR's contract backlog is in market sectors that are stable, growing or countercyclical, such as healthcare, water and wastewater treatment, refinery maintenance and transportation. The balance is represented by a reliable portfolio of contracts with blue chip customers in the commercial, gaming and hospitality sectors of the private construction market. Furthermore, I expect at least 35% of our 2008 revenues to be derived from the facilities services business, which has actually performed countercyclically to the market during the last two macroeconomic downturns."
Commenting on recent uncertainties about trends in the commercial and gaming construction markets, Mr. MacInnis said, "Over the 14 years of my leadership of EMCOR, the cancellation or significant delay of projects in backlog has been extremely rare. This is because of EMCOR's conservative policies concerning project and customer selection and the fact that significant costs have already been expended on a typical large project before EMCOR commences work on the electrical and mechanical systems. I have a high level of confidence that we will experience little or no cancellation related reduction in the record level of backlog which we carried into 2008 based on current or foreseeable business conditions, and I expect another strong year for EMCOR in both earnings and cash flow terms."
EMCOR will provide detailed 2008 revenue and EPS guidance in conjunction with its announcement of audited 2007 financial results in late February.
EMCOR Group, Inc. is a Fortune 500® worldwide leader in mechanical and electrical construction services, energy infrastructure and facilities services.
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 2006 Form 10-K, its Form 10-Q for the third quarter ended September 30, 2007, 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.
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