EMCOR Named Fortune's Most Admired Construction/Engineering Firm
Fortune’s Most Admired list is the definitive report card on corporate reputations. The annual ranking was compiled for 2010 starting with approximately 1,400 companies and was completed after sorting and surveying 663 companies in 57 industries from 32 countries. The Hay Group, Fortune’s survey partner, asked 4,100 executives, directors and securities analysts to rate companies in their industry on nine criteria, from investment value to social responsibility.
This year, a company’s score must rank in the top half of its industry survey to appear in the March 21, 2011, edition of Fortune; all of the companies are currently available for review at www.fortune.com.
EMCOR received a strong overall score for 2010, ranking it No. 1 in the engineering and construction industry, compiled from survey scores based on key attributes, including: innovation; people management; use of corporate assets; social responsibility; quality of management; long-term investment; and quality of service.
“This is a tremendous honor that recognizes the dedication and hard work of our more than 24,000 employees over many years,” stated Tony Guzzi, president and CEO of EMCOR Group. “We commit each day to enhancing the quality of service we provide to our valued clients, whose business we truly appreciate.”
Active in its social responsibility efforts, EMCOR’s “Touching Lives” corporate responsibility program is robust and includes its “Taking KidSafety to the Street” program, which leverages EMCOR’s fleet of approximately 6,000 service vehicles to display posters of missing children from the National Center for Missing and Exploited Children. EMCOR’s efforts have aided in the recovery of more than 200 missing children since EMCOR’s inception of the program in 2005.
Also, the “EMCOR Pink Hard Hat Program,” supporting breast cancer awareness, involves thousands of EMCOR employees across its subsidiaries in the United States and United Kingdom wearing EMCOR Pink Hard Hats throughout the month of October as part of EMCOR’s “Protect Yourself” campaign.
Over the past year, EMCOR continued its leadership in delivering innovative mechanical and electrical construction, energy infrastructure and facilities service solutions with a diverse range of projects for companies and organizations, including government entities (e.g., Naval District Washington, D.C.; U.S. Federal Courthouses in San Diego and Los Angeles); many of the country’s top health-care providers (e.g., Oregon State Hospital; Wheeling Hospital, W.V.; The Kaiser Permanente San Leandro Medical Center, Calif.); critical water and water treatment projects (e.g., South District Wastewater Treatment Plant, Fla.; U.S. Army Corps of Engineers Picayune Strand Restoration Project, Fla.); and highly sophisticated infrastructure projects (e.g., New York State Department Of Transportation; Los Angeles Department of Transportation, Los Angeles Airport; New York’s LaGuardia Airport).
Slight Decline In 2010 Revenues, Backlog IncreaseIn other news, EMCOR Group recorded 2010 revenues of $5.12 billion, compared to $5.55 billion in 2009. The company reported a net loss of $86.7 million, or $(1.31) per diluted share, compared to net income of $160.8 million, or $2.38 per diluted share, a year ago. The 2010 net loss includes a pretax, noncash impairment charge of $246.1 million, or $3.25 per diluted share after tax.
For the fourth quarter of 2010, the company reported revenues totaling $1.36 billion, level with fourth quarter of 2009. Net income was $40 million, or $0.59 per diluted share, compared to net income of $39.2 million, or $0.58 per diluted share, in the fourth quarter of 2009.
During the 2010 fourth quarter, the EMCOR’s U.S. mechanical segment reported unusually strong operating profitability as a result of solid execution of work obtained during the pre-recessionary period and the favorable settlement of a long outstanding claim on a health-care project. In addition, the company’s Canadian construction subsidiary recorded an operating loss of $2 million primarily due to a significant write-down on a construction project.
“2010 was a good year for EMCOR Group in the face of challenging market conditions,” Guzzi said. “Our focus on selective bidding and diligent project management resulted in strong profitability and solid cash generation. Our liquid balance sheet, leading competitive position and the diversity of our skills and capabilities have enabled us to win business and replace the commercial and hospitality work with new projects in the institutional, water/wastewater and healthcare sectors. While in many cases, the profitability of these new projects won during the economic downturn is lower than private sector projects, they provide us with a stable, growing base of business which we can build going forward.”
Contract backlog as of December 31, 2010, was $3.42 billion, compared to backlog of $3.14 billion at the end of the third quarter of 2010 and $3.15 billion a year ago. The company’s backlog reflects the contributions of acquired companies, as well as continued growth in the health-care, industrial and institutional sectors, which offset declines in the commercial, hospitality/gaming and transportation markets. The company finished the 2010 fourth quarter with record backlog in the health-care sector.
The company noted that, based on the current size and mix of its contract backlog and assuming a continuation of existing market conditions, it expects to generate revenues in 2011 of approximately $5.3 billion to $5.5 billion, and diluted earnings per share for 2011 of $1.45 to $1.85. Assuming a normalized recovery of market conditions, EMCOR expects to see its financial performance improve consistently throughout the year, reflecting improved opportunities for growth in the second half of the year and into 2012.
“As we enter 2011, conditions in our markets remain largely stable, and the majority of economic indicators point to better times ahead,” Guzzi noted. “Beyond organic growth, we are seeing more acquisition opportunities. … We will continue to look for opportunities to deploy our strong cash flows and liquid balance sheet to add value through both internal and external investments. Overall, we believe we have the right strategy, and, assuming a normal cyclical recovery in our markets, we expect to be able to leverage increasingly robust opportunities for growth as we progress into the second half of 2011 and beyond.”