EMCOR (EME) 28 Jul 222022 Q2 Earnings call transcript

Good morning. My name is Andrea, and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Second Quarter 2022 Earnings Call. [Operator Instructions] Note this event is being recorded.

Mr. Brad Newman with FTI Consulting, you may begin.

good and Andrea, you, morning, everyone. Thank the to EMCOR Group Call. Conference Welcome

here Vice Kevin, President We which the company's to were introduce to XXXX discuss go this who over Kevin are Executive call I management. turn of Shared today will morning. ahead. second the like would Matz, to reported please quarter Services, results,

Thanks, Brad, and good morning, everyone.

second in our earnings As to quarter. always, welcome thanks EMCOR, for and your for the interest [indiscernible]

detail X we our are quarter remarks conjunction non-GAAP accompanying Guzzi, our slides. On website, financial President disclosures both statements those beginning forward-looking the information X. and via our Officer; and and information. For statements that This forward-looking Tony you the Executive Counsel, hope President certain Chief in X, Vice we accessing our who the disclosures. review our Pompa, Mauricio. contain and discussion in results. of presentation I non-GAAP the financial months as call contains discussion the welcome our you Slide the of discuss are slide [indiscernible] may the of and Maxine Page Executive we'll Officer; to and and presentation and today. We at X me Mark They President to everyone General Chairman, Vice have executives with and encourage [indiscernible] well, Slide and with describes presentation Internet Chief and arrived our Financial who are

find that the Presentations, let and turn be over call our under section in can the Relations via Tony? please Internet, always the of Tony. For the this presentation the accessing archived way, us slides out will participants to not me call emcorgroup.com. With conference website call of at you Investor

period overall which a everybody, will on of had to morning delivered EMCOR. the second We of with initial flow and with $X.XX. revenues the generated your the headwinds when we diluted X quarterly My XXXX. We quarter RPOs thanks remain margins share cash in ago the committed our from year strong to in quarter record XX.X%, with of comments and in with of presentation. especially per exited chain $XX a million EMCOR volatile shareholders Pages remaining through XXXX, performance earnings environment. quarterly June focus $X.X organic or million supply We our XX% very year-end X.X% revenue issues. We of strong revenue strategy, allocation at and Good for operating XX% is operating of X of capital nearly interest which We billion, income Thanks. of billion from X.X%. $XXX operating growth to strong XX, considering growth growth through faced had obligations and returning represent Yes. $X.X cash a

for we continue customers business. flexibility as resilience and has team drive successful Our our and our results to

Our key forward was quarter momentum this factors. driven by these

strong our commercial Services water specialty for can Construction a differentiate which care, we seeing are and variety of and We demand where across sectors health waste, ourselves, industrial/manufacturing. is Contracting and

high-tech manufacturing and see services. demand construction center We for our also to continue forward data strong

quarter. Our income a of reported in Construction X.X% segments the margin combined operating

deliveries. Performance to the to our Mechanical and operating better emergence and workforce as which it Every our was supply the us ongoing we impacted versus as margins by scheduling projects position and of supply to equipment ago income impacted Construction planning and to over navigate Our income strong first a X are be to challenges. a issues to margins remains issues much these most in that chain quarter segment and difficult And chain improved X.X% years from to Electrical quarter. day, we Construction prior to lead rebounded supply first inflationary operating making of booked were times volatile were environment, performance. X improvements chain [indiscernible] margins continues segment related both X.X% segments in

useful project [indiscernible] chain [indiscernible] the the issues work record now suppliers segment States where XX% [indiscernible] with supply growths we RPOs as [indiscernible] respect in to faced as we keep Building to we where delivery proving the with Services is the the moving our segment, possible. In year-over-year work, basis. more than in our ongoing United Our most and is and projects a have comprehensive obtain RPOs, on

because repair service, driven segment. replace very agent This execute some in the U.S. results our strong replacement product equipment, it and them. large for for a line times HVAC for to repair our lead equipment equipment. to being are fix very of strong service If makes they the efficient able sense not extended are Building cannot our work we Our as growth customers Services extent, highest-margin HVAC growth [indiscernible]

on performed and excellent execution how very account site-based a We also basis. commercial our provide in through We smart continues Services which to expected stable well business, segment is year-to-date about operating performance to performing is we and as improve what margins. utilization. Demand are execute our high [indiscernible] to pressure turnaround continue their opportunities anticipated extraordinarily keep see services facilities at is considerable to customers but operating under selection. Industrial

the segment Kingdom and deliver important U.K. steady performance Services United most the continues continues sophisticated and and some of customers to sectors Our to Building serve in

will balance strength. With RPOs customers, win the turn that just the results. a our most testament complex a of second to that, the but Mark over Record executing a not financial execution, to left now presentation some $X.X to billion and emphasize I catalyst sophisticated with discussion This want an balance to return our turn work of to shareholders. detailed our cash for We from only following our I [indiscernible] a sheet projects. of important sheet. is serves strong quarter strong Before over I large record Mark, of also financial to

participating Tony, the you, to good Thank in today. call and everyone morning

on For those on webcast, presentation X. Slide now accessing this

morning. provide next consolidated commentary morning earnings on our a our Tony from earlier Exchange as this filed results information quarter the financial will well our derived with is As and both second in update Securities announcement statements financial opening this slides, brief as several indicated, the release over Form XX-Q year-to-date and EMCOR's Tony's Commission I supplement All [indiscernible]. through on performance referenced

and revisit X revenues quarter or review $X.XX are of quarter of $XXX.X let's performance. XX.X% billion over expand EMCOR's million Consolidated So up XXXX. our second

quarter the results such positively United million $XX.X segment second our not last Our acquired, [indiscernible] revenues in year's owned EMCOR revenues of quarter. businesses Acquisition were include businesses Construction impacted to attributable States second within second to by quarter. pertaining

results a [indiscernible] segment due of was Kingdom in of increased quarterly exchange segment our largely Building foreign record segments follows: Services new States revenues United specifics or revenues are segments, movements. The which despite revenue unfavorable highlight million $XX to rate XX.X% would Electrical that million to XXXX's Construction to Before billion the United our reportable company the $X.XX the reviewing from comparable the $XXX.X operating revenues quarterly represents all-time I of individual of like our for each quarter. as

increases. X Revenue Excluding telecommunication $XX.X this organically well each States commercial or drivers Construction high-tech the Mechanical growth incremental the [indiscernible] during substantial The wastewater the the and million $X.XXX XXXX projects the of improvement. Partially market submarket from strictly the health care, quarter in market institutional the majority activities was decline increases most manufacturing, of the completion market is increased activity revenues period-over-period quarter within institutional XX.X% wastewater a period-over-period manufacturing, these segment inclusive grew from the derived of water serve, due certain market offsetting from organic and significant billion sectors sectors the acquisition experiencing and sectors of water of segment's revenues to revenues, or sector were as we XXXX. completion performed project corresponding the sector in period. United growth was the revenues sector, and quarter-over-quarter. Increased within of as market the in primary

continue growth by within and industries. customers sector, market We sciences within see to the revenue also commercial life the from semiconductor demand driven

businesses increase [indiscernible] that construction when revenues the site-based need the to Revenue increase divisions. within of service from scope Notably, quarterly of volumes continuation an the in or partially in Mechanical combined useful Mechanical revenues in for revenues. Within $XXX.X a commercial we with trends experienced seen of States as of XX.X%. in and X increased site extend customers readily With have billion or maintenance expansion million we and and X. have increased respect lives resulted million activity, drivers EMCOR's was $XX repair is quarter not quarter the instances existed XX.X% have available. the Second, million Services were in supply the segment's existing Services, quarterly commercial equipment additions growth new delays to chain of $X.XX equipment generated HVAC United or site-based Services XXXX. United $XXX.X States

segment as the improving consumption revenues with for building million comparison demand In the services. some in services headwinds are with midstream is some capital [indiscernible] in service and activity. This well to be X high and grown or segment for building certain air the addition, $XXX.X quality. Industrial maintenance has demand within as impacting in indoor Revenue and comparable growth greater Services continues lines. year emphasis energy sectors, in for our increased turnarounds of to an million we there upstream have focused field energy the spring last each prior downstream which XX%. This efficiency, on quarters stabilization expecting an $XX.X one in of project [indiscernible], for our the increase is led of as period a despite

pull-through market of shop of decreased months services repair movements This million condition predominantly new attributable we last revenues segment's equipment, resulting revenue this Building $XX.X in quarter. revenue the hopeful from With seen utilization the ongoing that well also in We million remain refinery provide $XXX.X results. United projects excess of $XX.X have XXXX levels that exchange as trend unfavorable as recent an to turnarounds. will was Kingdom to contraction of of XX%, can in Services increase perpetuate improved million. X

of $XXX.X expenses by in contract the contracts successfully impact turn obtained activity rebid. Please growth of of project of the reduction at to million the segment foreign Excluding than represent X Selling, due to offset increase administrative within not a revenues exchange, was in quarter from $X.X Slide general X. certain of X.X% loss more and the million service XXXX.

of to acquired of for amortization, companies an million, on declined $X.X expenses asset attributable slightly inclusive quarter expenses organic EMCOR's incremental SG&A the intangible For basis.

XXXX loss Industrial segment Services a related a second U.S. [indiscernible] within credit a for million to our bankruptcy. customer As provision reminder, quarter $X.X

period-over-period the SG&A less, to year to as growth to a credit second [indiscernible]. higher Our support travel organic personnel activity current loss substantially trend entertainment adding resumes the strong expenses decline. Despite and and organic travel is business quarter continuing contributing revenue in

from our in growth. Reported of margin. operating $XXX.X with future investment we'll income points XXXX largely to as $XXX.X million scale leverage quarter disciplined and million segment I reduction U.S. margins successfully operating revenue drive structure, Quarter revenue operating within favorable and seek will income cover we of [indiscernible] X.X% is second been less quarter. basis a a main have in mix favorably resulting economies quarter We X which down We second to compares my the is operations, efficiencies of and can due our overhead in commentary. construction cost for our SG&A [indiscernible]

Reported X from XXXX million X.X% and quarter year comparable favorable margin a in market by operating operating As operating our The to mix X.X% a of as transportation reminder, record. operating segment of margin period. commercial, the segment a $XX.X to a quarter represents year's Electrical operation sectors Specific $X.X prior consolidated is quarter. of Services second when both follows: quarterly second the Construction last decreased less X.X% is XXXX income period. compared institutional income our decrease from due represented within the project the operating U.S. of reporting million and performance in reduction

chain did in we from margin by productivity experience quarter addition, X, by XXX experience and operating Construction income segment's These we project In this to project X continue reduced resulting Further, labor to basis which challenges that equipment delays, impacted supply due points. write-downs timelines. quarter [indiscernible] [indiscernible]. delivery has certain losses operating discrete efficiency negatively Electrical this quarter difficulties

performance, dollars continues reporting quarter this to when XXXX compared and improvement income sequential first are to this Although the margin year. substantial lag operating segment we of both in

flat essentially a income XX U.S. Mechanical reduction of period. X.X% earned was represents year from Second, segment basis Construction XXXX operating the ago. a of $XX.X Reported comparable with point operating the margin X.X% of our million

has income or operating revenues, performance are where market segment U.S. in dollars and manager with in acting a basis the referenced reported of typical operating year. quarterly than or income quarter favorable our increased income a operating have profile. segment's operating adjustments additionally the As X [indiscernible] the the Construction [indiscernible] projects active key which margin and of we our in billing self-performed general both both percentage construction and labor Mechanical larger resulting of points. Consistent water Operating in division, X.X% increases margin. Operating segment's million $XX.X Services less gross Mechanical increase income improved, aligning certain write-downs of within of as project Construction and Construction is represents last Electrical this during during within a from $X.X thereby is in well the point execution we Mechanical and by wastewater the operating certain Services price Building construction margin number of [indiscernible], experienced better segment project, costs drivers this margin This aimed experienced improvement at with the the impact X were rates basis operating our as margin. as mechanical operating either project the sectors negatively quarters, a contractor performance, our XX quarter, manufacturing impacted our sequentially a which

U.S. improvement continue are second a revenues at expectations. U.K. Industrial we from $X.X X.X% [indiscernible] sterling competitive loss the operating the initial represents the income the anticipated On since XXXX $X.X and due Services rates battle quarter. higher cost either in our profit historical the XXXX, slight decrease Our for or segment a a exchange planning of States lower remained operating levels million operating as headwinds. pound pricing consecutive Building versus Industrial or environment to margin in This of United of reporting segment's operating remainder projects a is third inflationary million than million pandemic, operating albeit periods the to prior dollar. from reported positive of quarter Services [indiscernible] with to unfavorable line scheduled during our XXXX represents the note, occurring $X.X

of demand is to this year. programs, advance as within points to experience per expansion base operating XX which project basis the contributing margin We our capital continue segment strong customer investment

are X. We now on Slide

higher than slides the XXXX for [indiscernible] million comparable million in or diluted significance Diluted of in due represents combination hindering $X.XX $X.X X%, by quarter of quarter construction our macroeconomic gross second a EPS a to quarter ability lower profit achieve Slide chain revenues project new the profit to year's to performance than us due of reduction items profit earnings as last $XXX expense to however, share per a of XX. reasons difficulties quarter financial quarter during is turn shares mix, is project share covered quarterly Additional year including per average period. gross and follows: net earnings second compared share prevailing but gross second previous per prior operating XX.X% write-downs. Incremental supply common margin are are share second to helped maximize my X under income commentary, our just new is the [indiscernible] the and record greater activity. Please conversion. weighted in as for the record, headwinds quarter the of This given the XXXX $X.XX

with reduction X. $XXX and for in represent of the $X.XX diluted X.X% X results to first income start on commentary or respect XXXX that quarter increase of complete, enough our of months for today, organically. prior XX.X% billion million generated slow to to earnings activity shares in from will EMCOR's not share reduction quarterly was XXXX corresponding the the $X.XX. was per of increased [indiscernible] X of repurchase an quarter our XXXX. first Revenues Operating months is the revenues improved as With share year $XXX.X X.X% outstanding, highlights second of performance equips $X.X of million offset represents the of touch the a With or I results

business, in the a vision Slide our against our strength and sheet, shareholders XX. of balance objectives. remains to capital Headed EMCOR strategic our by invest to return Turning to

$XX.X first has inflationary equity year-end [indiscernible]. The Our continued market declined cash XXXX during have repurchase midpoint this was rate XXXX. our the common we months stock on $XXX.X our interest the capital capital quarterly hand volatility levels strong this to our during period addition as investments. of as million sustain of [indiscernible] our [indiscernible] shareholders $XXX.X amounted the in our to to of quarter share as when from future for our Approximately opportunities million both evaluating to and growth has second towards well the investment dividend, doubled of year-to-date cash previous organic [indiscernible] which necessary [indiscernible] then high repurchases, year calendar working for due as allocated revenue strategic amount the and million to during been

reported decline activity, expenditures. period-over-period cash factors our include million In additional addition share dividend in repurchase million balance in $XX.X and our for the in to capital and acquisitions payments $XX.X for

equity of capital earlier June from Board are by decreased more Tony? December cash, since an consistent year-end XXXX in activity of portion December, the XX%. With as our and of our in intangible EMCOR's million an by has nearly growth in during months. To acquisitions I recognized marginally to has date our now remains Net an just $XXX was have authorization note as debt well shareholders' the in by of additional the addition connection has to strategy, net cash increased of the as $XX capital to increase as committed of given decrease assets X under XXXX, referenced accounts in dividend approximately with the than that million XXXX position year-to-date repurchase Directors decreased Tony. increased to balance resulting us our liability increase ratio during and my to our in in amortization far our my The slide from Working share reduction additional up with follows: EMCOR call liabilities partially approximately program, intangible the as our increase an both year, with Tony [indiscernible] XXXX. share identifiable complete, activity. Total from comments, this repurchase other thus given capitalization remains operating period. that sheet last the XX.X% back contract activity at has XX.X% by today's morning's revenue our receivable XX, at approved presentation offset acquisition completed given is million. assets coupled our fairly $XXX In pick exclusive debt, offset movements share in return during will by has Goodwill both of repurchase allocation announcement to expense

Page the XX, to the strong like segment last Mark. quarter on another sector. quarter was second Thanks, And quarter, project by obligations bookings going I'm remaining performance and the Much be company. market for

to our all end demand continue sectors. We market [indiscernible] the Total experience $X.X [indiscernible] end across core company Measuring or RPO RPOs quarter or $X.X at our XX, XXXX, thus XXXX, the of year this far was and $XXX XX.X%. [indiscernible] over strong June segments of billion. of from million, total million second many a the of

RPOs project year's $XXX Additionally, from were organic. Growth broad-based, second an of first and strong X the XXXX this of from bookings quarter the all of growing both quarter. ago increase of segments the RPO RPO was each million periods. by Almost year likely increase was totals this with quarter

active strong total in continued see our market highlighted both call nonresidential first in where in positioned revenue sectors we we growth X-X are growth. and experienced We our this and quarter, punch business. The RPO continue to velocity quarter

year-over-year, increased and million. U.S. RPO and Mechanical challenges. despite current be strong segment June billion see environment segment million domestic our while the levels $XXX [indiscernible]. [indiscernible] could growth RPOs project or bidding $XXX saw or over XX%. $X nearly disruptions XX% $X or XX% construction thus is Electrical Since an Together, increasing billion increased an 'XX, RPOs over we quality or service active segments far year attributable and or Construction [indiscernible] have quarter The increase Construction million Services from to Building inflation over due ago costs to the now RPOs increased in outside XX% by RPO projects supply $XXX September domestic While our segments factors, XXXX. growth from continue some experienced of

a equipment. asking mentioned in is and I combined with for extended building As push retrofit continued HVAC customers us earlier, improving and to efficiency our for times resulting equipment, energy their repair lead wellness

equipment strained do [indiscernible] EMCOR. is availability which repair grow our service, we is Additionally, work that driving at margin

XXXX. RPOs Moving to based pharma to $XXX semiconductor of by projects the page, the which show market the of for was sectors first in billion as booked arena across within the RPO Continuing broken increase center, was businesses. side trend, moving $X.X of segment. Also, down this high-tech with to hyperscale in market billion. the increasing sciences [indiscernible] almost quarter right the data in projects second growth as million $X.X half we well RPOs and

now, nonresidential well for working we market talk well positioned interest. in EMCOR mechanical On Data as strength and is each demand RPOs. We And those EMCOR's end news in of there well project favorite are HVAC why semiconductors. And page, industrial and growth see and continue semiconductor which strong a of up and balance markets. Finishing -- I We'll was that from projects, and manufacturing. is with the all as big benefit those benefit. electrical, in these much because and EMCOR year-over-year, protection have positioned about both like this From work our fabrication. decreases centers in the the to all in transportation XX. you RPOs and specifically optimistic today going RPOs wastewater my perspective, that shows of across Partially in semiconductor offsetting will get mechanically. short-duration slides, [indiscernible] up turn. this turn market we front of are opportunities sector and of Arizona, I'd remain All which RPO one includes and and customers about institutional to segment will water health breadth of see diversity reduction a to fire to EMCOR this and go are in growing And And XX%, care the can minor the talk XX%. we and Page future. business we like about our to my I'm you retrofit

be some protection it's burgeoning fire projects at well better centers, and [indiscernible] where on Ohio sector capability there'll electrical front. Data positioned in I within are none and done tried than entire geography construction data say, companies. across centers there [indiscernible] and the own believe our to We Arizona are with the mechanical

have positions high-tail some markets, using data to in can we level center from an leading [indiscernible] XX and We hour. enterprise build geographical a core megawatts

terrific. Portland teams Lake, Gibson, side. in Forest. Dine people the except D.C., electrical builders those and And are Salt These data are center folks Our on

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are also in market fabrication. food leaders We

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in our pleased of We done are I across our our these our all most operating our and a strong position. in sectors of for segments. and job we environment. services this [indiscernible] challenges with in remain about talked great think teams important most have reporting market current demand

results Where our per that provide improved range expect map are guidance only of And year. How execution, to XXXX, we X% challenges. to what will experience achieved we similar expect that due If drive revenue. that the of you least the half back or We update in chain road we I the in to depend operating to ups diluted share, and in supply now also billion continue at income but we down. will end range. from to equipment we $XX.X remainder do favorable to range, in expect up convert of going up could the sort to to we're that half always stronger in supply result, approve of [indiscernible]. backers a the the not execution our Where what margins even we chain we could productivity, that? as will We achieve that We compared you As of on the first see what we continue a anticipate achieve $X.XX material in and end there? earnings We and give get of for do $X.XX better XXXX. believe margins year. and SG&A to leverage

We care commercial, industrial, expect to and health and see data across manufacturing, projects. demand key center like sectors semiconductor which market strong both includes project

project Services fall our to season We start service energy normalized and continue range should turnaround expect projects availability. The a and renewable and and seeing customers. Industrial HVAC We we'll segment petrochemical see some delayed material trends more strong to refining this be are that customers gas observed oil the executing third because helps believe demand of in repair strong our our very us. [indiscernible] heat across demand with we quarter. through continue we summer quarter as scopes. a of sizes are We

pleased are delivery into we keep that safe, we and we in optimistic While be issues that continue COVID headwinds the This with all of current balance we challenges navigate estimation in the Further systems of supply through our and our expect [indiscernible] will about will challenges. XXXX. in exist the And we its XXXX disrupted. and will with sites to some workforce mitigate continue trajectory and availability, is place my still year, pricing near while face here. project term. chain the aware to believe have also we are balance the

energy [indiscernible] ignore in our in issues. the cause interest Finally, strong certain to exacerated with resilient Rising believe Ukraine as we by and RPOs, by policy To and market our to environment. evidenced operate conflict cannot challenges, scarcity, [indiscernible] respect lending matters in. macro we other rates, will date, growth in have we the

will record the billion. the We of all likely conditions, strong despite of that, that year-to-date realize our leaders [indiscernible] major as we by when However, RPOs we market cost believe [indiscernible]. our $X.X outlook it performance institutions and projected and is evidenced financial

our increase Our we confidence to our an million XX% $XXX June in We business repurchases. capital talked shareholders, Board and in for or in announced of a dividend up record an through as additional returned $X.XX provided, share $XXX per XX, share strategy allocation reflected has amount million to announcement as authorization is by have our today, XXXX. per approximately Mark annum, our cash

well. customer we historically of We the for maintaining to for will organic including served have approach funds, especially our acquisitions This our strength. in a expectations pipeline our has considering growth, our allocation support capital sheet and our growth, in in sureties, and and across balance cash been We uncertainty. investment organic of maintaining financial our decent strong us economic continue periods to cash which invest to take [indiscernible] segments. acquisitions our a our strong, balanced deploying all management, for quite to and approach has implications a

to their floor in Andrea our I'd that, EMCOR continued execution EMCOR. for interest I for team of the and open would always, members to And you I thank like our customers. As thank dedication, work the hard questions. your to for your will like And for with ask especially all

of first come our will Capital Instructions] And Sean Markets. [Operator from question KeyBanc Eastman

update Great [indiscernible] here. Tim. Hi, update.

First one, kind of more clarification of a question.

you of that So what course, shows XXXX. piece think markets disclosures, of commercial. it you is would rapidly of say, is really per bigger over in mix of we're lot like But a sort talking I was RPOs. growing are the and how XX% end in, the of mentioned XXXX, None it about is than and the diversity the as commercial

piece we is? really just that on get clarity So can what some

growth it Many, driving you It's enterprise data think I it have that in why and many years manufacturing business, pointed our systems. up is wasn't right? we it historically -- a out to go What's it of growing, commentary. the there, part major ago, back and [indiscernible] ended was light

commercial that in those business. something, for HVAC And commercial there and building is that we along why Now, were to driving general talk now doing driving typical section and more our but life that pharma work, out the And drives Mark? bigger work, growth, you're driving but it's the projects, are of just most high-tech about manufacturing. talked other as that we what's time all part. it's pointing part demand sciences, as services, of increase, commercial. But about a bigger growing still what bigger the in doing it's It's demand we're pretty that's RPO in a retrofit data we centers the manufacturing backlog growth, most now strong we build-out in and of Sean, took business, of and of types is have that. kind

Yes. said. Tony just I to just mean reamplify what

just included it's midpoint community, than profitability reasons the I to in categorizing major to transparency provide for the internally things just our those that a written guess, transparency have what we the RPO but Tony providing forward or with those our as over in reticent at highlighted Tony major but mentioned, contributors that we're we're that to areas several go been something we forward to as already evaluate more and analytical not how need go that a change to year, represent. we're actually regards all last disclosure commercial to again, -- For growth years,

Okay.

I think that's really important.

margins, built X% I with guidance the of you kind I'm clarify, midpoint Tony, operating So I in of to for appreciate said I that. guys have that the think, the just second a get And then struggling to half. you margin also think number. to on the

So to the continue that opportunity in terms the margins, tailwind that construction thinking of to and XQ also Maybe have maybe, I'm in stages, about from into terms some wrong. And we -- second lot half, work the getting would a maybe to a sequential just of been assuming talk later I bridge of thought improvement of to this remains supply sort XQ. the saw really broadly chain that there [indiscernible]. just nice improve if about heard we're I of progression have of would even driving new

Yes.

of I is But that. saying our that the basis So can in of the move XX number hard said missing right your and for caution Lead this it's of to and is all that It's times us. I'm going implications or But kick chain. today broadly, clear around to Mark to are for terrible a lead And minute. tell supply and that most fixed those you chain -- XX around points, Sean, environment terrible. routinely macro selling. times. are supply OEMs me has the

our from actually that And delayed. could in They're be we're that customers larger of ordering when should start we means equipment. irresponsible, that not think. And where those most I concert then have starting And when that's up up month It And can projects, so we of with that can to weeks time. start that weeks is on ahead you equipment that's will project A secondarily, I is. can exactly they and to large favorable now X along deliveries. for X start work sit a equipment it be here from there to of mix. our a now. be not it start further X And us, lot would our than caution that's going sort be buying now, and it caution now, from weeks think And start sure. Mark, is. we're

is is indicated. Tony X% range. obviously, And something mean the it low X% Can in Yes. around as

half in back So clearly, I'm math, as the or X.X% year. X.X% operating of sure you came you did of the with margins out the

the significantly were and they they X-month the and in quarter a higher So cumulative clearly, worse at X than second quarter no in on basis. point than were

So the number. once revenue is there, the again, variable

X.X% for guided of creeping we of that So at get It's revenues months. a billion up ends level the point at $XX.X margin the X quite last X% possible same up. or

over helpful. guys. there. really turn All it stuff, Good I'll Okay.

Davis. Thompson of Thalhimer Adam from comes question next The

Congrats well-timed on and a quarter strong the buyback.

Adam. Thanks,

RPOs. to they so a they're because in starting Tony, confidence talk they are you to XXXX? give -- some Are where, going level I'm about strong, at they're

XX go And Do happen will But our up forward-looking to back back reality presentation don't. of and I the to go X be into don't guidance. in our Page trends. new average about what I will of is months. on right. somewhere sectors them No, project most We clearly, know give know XX length talk But X I I is in the I the longer-term don't. and to specifically I work? -- No, what awards Do small project those

into and And they we start are they of guidance then give up Some term. don't finish. forward longer we'll 'XX. when Again, see these

back And more in half? we about talk back and electrical Or specific hit the those just that you then any QX projects? the those bit a in little there took that the can write-downs half? QX and does slip go risk Is and to away margin for

year a But write-downs any in away. are go We've mean we're chain. prior being the in on especially the to we cautious took run with losses. hell our significant of to always times, there's say I folks and had to supply But said, our inflation cycle. moving we had first respect projects without the unprecedented a business, write-downs half in a were working that pieces. lot most the chain of And supply of of

supply would question works. -- So we this around just taken on the lot our favorable That's our ability will mix on back to we to of business we absolutely X would work. have it, actually anything margin be margin. would dependent of expect a I work that don't has And see a related we or previous X% right? the all But don't -- you refer business it, it. we some how taken be chain. have electrical to good to that start progression And mix of

going quickly. to I'm interject Adam, just

mechanical headwind is sure the recognizing a profile can't revenues profit margin knows. at because the the lower down, XXX% segment The we've I'm to over identified, So Tony's necessity aspect projects write-down. a XXX% the electric both complete, written complete. negative We've the That's projects, segment the to periods Tony's they thing that taken of margin extent additional to They're take add quarter, in to active -- as to and create I'll even are little still it second that all point, going in than that obviously, everyone were some we defer fact in only is well of to of but it. them XX% the that [indiscernible]. these are on be of over production well we're construction. commentary in they're to bit The so regard what the projects call remaining fast traditionally a with closer later

are months in of So preponderance the through these they are revenues that XXXX. as work clearly be not the segments of recognized we going last X to

I last almost too, a time led about we project. with think the talked -- was I XXXX since problem that, been because it's X years

alternative. -- So

these had X term partial the entitlement. very to the magnitude a what in wouldn't -- will ways, on putting these project. more This we of said, job and like is specific in the think giant write-downs. team we're way, a offer happens either business what same Because these are the reassemble As our for happens. of the end the also I back a are started right, pretty guys the we're through when what mean, on them mean, choppy what look, But getting win chain. period of we we'll where supply right? That's good -- an other years is we're in project stopped disruption our were get finish customer on never but not pandemic, these what specifically known a go Mark because we the only [indiscernible], ago not together what you Adam, I for Two big aren't is to you some of EMCOR But the for in hasn't a all to fairness, then as environment have known you get site. again. And and contractor, going work. is job. I case, the made in write-downs, ability we're and will have reflected see

from specifically to it but disruption, we all, One it had over carry was We working to the we're the [indiscernible] we the workforce thought finished job. get COVID at of first specifically on And further right? workforce-related, on our of them one time. -- carry and related them ability quarter, more on was right

great will We reputation. that on. And goes have back to I a point. tie Life the earlier

we execute field fill reasons And this put the sheet. also, best in that work work, to can in and And thoughtful complex know this assemble work. [indiscernible] people. of we best balance people the our got people hey, on are win this big One is, that we we the technical the

business. good done mean manage But we and the to I about cycles. our understand we So we're see, today. have we XX get work think managing and in. we growth I I will don't have GDP are pretty feel which that right now, we for where there the look, feel through work this -- cycle. that XX right? up, are and a that RPOs through know negative print really this I was what Page we just means with RPOs good about lined And will we markets again, business on

I Great agree. color.

comes of question Brent from D.A. Davidson. next Thielman The

in market what We in great. vertical. any there really the of market active. Tony, keeping in it commentary data out you like terms hear work, seeing on I the out be seems some there rumblings it's that that might back would things that mean, you're center pull

we don't talk that. a study, we We short-term there disruption? be don't pullback. that. see see anything we to Could see don't But a major builders, We these anything

around chain. I generators. that. by for either weeks. around frustration or are is you're these generators for All data supply the natural just gas hearing up pullback I to part, up anything diesel amplification the on XX most backed their think mean now That's centers,

through try XX-megawatt data to a in substation for to of as two they center are take these these think on, them they come build sequence that in, how almost facilities. they're So their every [indiscernible] outside a planning. The come to to going have substation one There's one.

about perspective, in X,XXX [indiscernible]. to is, megawatts power XX X,XXX what put XX megawatts to Just of

here. gear Which this right weeks is XX that do in now. put perspective, happening what's to us Let

to to square imagine feeling [indiscernible], supply you footage-wise, we people get I get delivery? And It make So the is, chain to a the that anywhere UPS can take a then are think system. can floors center of a XX,XXX until X room commercial the feet. somewhere X generator between that kicks minutes on. office typical battery minute square run building, and commercial data X.X the That's

So to electrical the difficult I systems in more that's these caused acquire now. And that's what of -- the delay what's right kind that think our are causing business. are and

as So we We in get us. start And what's good should news are year, favorable without the for deliveries into through be and a for us is those next our year mix pretty that half the going to had back of good mix. coming. that performance then

Okay. Really helpful, Appreciate Tony. that.

a segment. -- Is the to maybe a the that that then unusually building services sounds like just mean, maybe getting -- And you're you seasonal fair sounds some out it factors? in of guys characterization big seeing I that's sort second equipment, like there? side, the for it maybe delays pretty on drive Or stronger half going everything think

fulfillment going not right at They blunt. be with game are equipment results. very understanding deliveries. We best commitments. should, service XXX% terrible all are that of now. the and with with respect their to sure and performing those are the every are repair team terribly. language Me, day team open very manufacturers to that was am in right top stay interpreting and are sleep team It the terrible back are X one look, and all ago. from [indiscernible] work them and Mike the communicating Not OEMs They demand. fortunate all I of with coupled to now in these deliveries the eye XX their this they I'll good this meet I now. XX, on those But those right business, of of years equipment deliveries deliveries. got

you. Tony. it, Thank Appreciate Okay.

from Stifel. Dilts question Noelle Next of

quarter. Congrats on the

you're So priorities, little bit the with share [indiscernible] discussed you market, you're what [indiscernible] for about terms about the a you're in in maybe how of the potential on how in seeing repurchase M&A? M&A thinking announcement

our us invest allocators And for talked at philosophy. We on general, nothing the about given capital quite balanced Tony We've more spent a in like you while in any in been EMCOR. frankly, growth capital. crazy have. In situation, AR. we organic a And have. [indiscernible] tell Mark I think you when in growth little here

a of And middle characteristics think we project a the win an large project. what we one is considerations big of cash the of that the flow in that know about we One somewhere of of project. always large contract it reasons sometimes conservative but some projects. the on look is it I way you and investment the And those mean, people first should the run a figure technical at is also run that capability, you that's contractor. And balance we said, done. or can for sheet guys

the is second we're The our and conscious very talk them. thing with relationship with about authorities

sheet. about worry now? look we go relationship Mark, right have think to out run have not to has with and and people companies, a they and them surety point billion for where that period our that long allows $X.X balance appreciate We keep leading how I confidence jobs at of great about with surety. And with there and the this relationships done we trust-based we have out time of that Mark the there

A more. bit little

that we And get we but have around care we and us people, And strong data semiconductor alongside large hyperscale people, a says to care Credit sheet. say facilities, it, conversations whether can General the allocation where with work and around and corporate we our all our Surety be that they that. and in they'll a work, projects -- they'll Counsel, have health that capital back thoughtfulness say, these balance put with centers, ties

$X.X the been we we is, we year he So through I balance reality over were last organic and they with it, we've ton think commitment The big how And and XXXX, now year And a then fairly cash then that, growth think always we think shareholders with time. between would give it. And returning since through then share been is after how allocation about feel billion for and to a of I to share repurchases. the billion, CFO has execute come a that. cash thinks increased then shareholders credit we that especially, repurchases have capital good clearly $X.X I the team exiting acquisitions. returned dividend position. which 'XX, first. And our we his just

that X this of in year. Now, we're to pandemic. with of over repurchase multiple shares that business big one the step the generators then not of the from from going our continuing is we could from work any a 'XX the and thought we because EMCOR, of time cash reality cash built best dislocation, the the also was [indiscernible] right, when year, because and months have dislocation, [indiscernible] through it to we operations. excess saw position this to EMCOR buyback. at threw up put with cash. to in first were for 'XX knew just put our on first But stock, had we shrunk in work X the would business, we to either [indiscernible] say versus buy -- we get us this in market And in revenue acquisition we the onetime but was we a What the positions made the to in had a going And mark get lot was best of I months comp we company could going

think then a in Quibi their years about Several our terrific all selling happen acquirers place best order So with time. are about good $XXX out Ohio, And it deals the and a Comunale, the Southeast in we've this, the way between ago, a have in that the are best we people leading at probably down Quibi some future the really that acquisitions, that build-out, life's people B&K taught together. people presence we back lot. Shambaugh our together. million Buck We all coupled worked in year. Dennis out and Holdings. there of portfolio over part team Comunale lot. going think They future. And to on a that and the work in did feel to We've Atlanta a of whole with the And us going good million been and the organic a about somewhere we [indiscernible] company, and been build of have them Shambaugh are in edge And team. all to And industry. group protection around platform. fire prefabrication taught us the be the and reputation. BIM great Ross great recently, $XXX It's great and to

maybe story the a new leading mean, serve And and time of company $XXX-plus somebody capabilities a and the been but of acquisition in happen. X capacity haven't then in controls Ohio, of to after HVAC have that our And Part the X out. And the application small, the where capital, HVAC contractor geographic can we've and a a roll over mechanical successful one platform contractors running to [indiscernible] Charlie X organization West. never capital the and on competition pretty with by go that the -- and on pipe unless the on Florida years, fabrication not opportunities think we of a of We're a buy strategy mostly Arizona. within big of organic a And they organization from equity we I've in in happen services else's to got like the across to been to of over now. the those never period us [indiscernible]. really pushing thoughtful only Wayne, a is These or been I've -- I it's Bob capability, ups. California. and expansions when been states in organic, market, but County-focused out that been basically, down us of small of operators. producers the right we always it's the We're see said in build with that Alabama, -- would geography, get who's up Fletcher gain long only in in team good million And market our team private access that buying go say, know Orange to and Lake local service presence. And in in capital out you buy good through I with and then and to it to years, that's there not shops, capital down roll investments And operations. allow terrific in job, an us. of -- done [indiscernible]. Fort application in it consolidation much deals remarkable Mesa me, also The that, they're top we on customers we we all not Comunale choice. geographically understand acquisition Akron, fan are always then are Indiana, but you [indiscernible] last made big We -- I fit visibility a the market. we front And helped it's

from stayed And so of we're what to day, we're it. And end the buy we've going look, sort at away good of the at.

We trade are good at contracting.

something the helping we -- -- We it. it with us run, at And that make really segments. and a are all that's it we are very growing and we a unites very we buy people, technical service that's taking and highly and are theme are run that's those well better once then very good little

way the changed, So just we'll nothing's keep I we've and been executing executing. really think

Thank you.

on and And because spent little don't us long think to FADs react time. of good the the we nature We Yes. execute. I over a important always to operator? just which period time a Again, that really made that's to we of it's I continue do. Anybody work reiterate, else,

to concludes This the remarks. Tony for turn our closing conference would session. I Guzzi to like any back question-and-answer over

Yes.

you really and So get careful with and listened in that always you care on the would the your period going I'm values all set and I'd people carefully, we're have really, just continue Be us excuse everything time. love supported And to rarely off thank to talk finish made that, growth and execute mission fixed, way do over And you what's air we like been we us your leadership thank folks of a it, to execution to our successful period story and And I of of continue if support be to long to our they've -- segment for we'll that. We'll I to you I that over their going website. started. people, like and quarter. a and our been and [indiscernible] great local But very to customers run that, to people of to and conditioner big let I'll we these the look our go X [indiscernible] makers, have years, their last time. that. And third It's first can't with and track. for of think in think take tough, field a heat, corporate long And by through continue staff. the go. our is right?

The Thank for you may attending you and now conference today's disconnect. concluded. presentation, has now