EMCOR Group Inc. (NYSE:EME) Q4 2014 Earnings Conference Call - Final Transcript

Feb 26, 2015 • 11:00 am ET

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EMCOR Group Inc. (NYSE:EME) Q4 2014 Earnings Conference Call - Final Transcript

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Executive
Tony Guzzi

high and again that leading us to believe is it non-res will have growth this year and this contribution in the first quarter, when they had backlog growth start to see velocity building in that business.

And again it's mainly commercial work, the drop again in building services from the two government JV's. Our backlog is well balanced and we continue to see solid bidding opportunities in front of us. The target remain disciplined like we always are. We are confident in our ability to execute, as a non-residential market slowly improves.

Now I'll be on Page 12 and 13. And it's really what everybody is been waiting for in this whole call, what do we think about the rest of the year. Now we're going to leave guidance unchanged, the revenues of $6.6 billion and with the range of diluted EPS from continuing operations of $2.65 to $2.95.

Here's what we expect as the year progresses, we expect revenue growth and that is afforded by our strong book-to-bill and backlog growth. The stronger the revenue growth, the higher we're likely to get into our guidance range. We expect revenue momentum to build in our construction business, coincident with our backlog growth and we expect margins improved in our construction business overall and especially in our long time and well performing electrical business.

We expect margins to improve throughout the year and SG&A we expect to moderate and Mark and I both went through the reasons why. We don't have a fix cost issue here. You think about it, our headcount is up other than what we had in the industrial spike less than 2% and our increases in salary and everything less than 2%. Partly the image of spend-thrifts in our business.

We do not know, how much of the deferred turnaround work will happen in 2015 or how much it will be delayed in to 2016 at this point. Now some of this facilities are still on strike and not settled. We expect to have some unsold opportunities present themselves to us as the refineries are running at near record levels of utilization and that drives demand for our services in not only industrial services broadly, but also our shop services, not only field but also shop.

We are in a very fluid situation with our customers in refinery and petrochemical space right now. We are working with our strike customers especially on a daily basis to understand how that work will be scheduled on a go forward basis. We do expect a strong fall turnaround at the season at this point. We expect building services performance to continue to improve through year end.

Mechanical services performing well and we expect that to continue. Site-based services had a better quarter absent to snow in the first quarter and then executed terrific on the snow that we did have. We remain optimistic in our opportunities as we performed okay in Q1, despite significant external headwinds. And now we reiterate