EMCOR (EME) 25 Jul 242024 Q2 Earnings call transcript

Good morning. My name is Danielle, and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this call is being recorded. I would now like to turn the call over to Andy Backman, Vice President of Investor Relations. Mr. begin. may you Backman,

and XXXX everyone, Earnings Danielle, EMCOR's welcome Second Quarter Conference good you, and morning, to Thank Call.

will Executive our For by those archived website presentation in of of Relations will webcast, us remarks that slide our President President we Vice are the and This of Officer; Jason Executive at emcorgroup.com. With today the me Chief Officer; be you Officer Administrative are at Chief presentation accompany Financial Senior President, our joining section today. Tony and Vice and and Maxine Chief Guzzi, Mauricio, Investor our Chairman, beginning Counsel. EMCOR's Nalbandian, General

For today's it Tony up RPOs guidance as second on the quarter open second call, numbers our before well in we as to quarter. discuss reviewing turning comments revised to our Jason detail XXXX for will back review will Tony then before Q&A. provide it

Before financial I our conjunction we forward-looking statements discussion reminder, to may certain our a these disclosures. detail non-GAAP and contain and both disclosures presentation review slides. Slide everyone with contain and discussion forward-looking the information. financial this and begin, accompanying describes in as information certain encourage X non-GAAP statements in presentation of

let during reminder, with the our financial Securities and this a information turn our Commission. And our filed call XX-Q me issued that, in the Tony. Form press Tony? call all as this in financial release statements is included Finally, earnings over morning's both discussed consolidated within morning to with and Exchange

X. an first field. year and second for the to XXXX for my I our going quarter the Andy, excellent in and begin had at illustrate joining thanks, continued good exceptional Page our on results execution Thanks, our morning, momentum call. of further EMCOR, the everyone, and Yes. and of half discussion am We

of we a earnings XX.X% X.X% and quarter, margin grew operating billion, consolidated set to $X.XX achieved operating share. for revenues, per share. per $X.XX records by new diluted diluted income, operating the quarterly and We earned Within margin revenues

levels, While million $X X.X% XX.X% the of versus record $XXX increasing organically, near at revenues or increased period. RPOs billion remained year-ago

Electrical in record revenue Our XX% our Construction Construction XX% the growth periods over our and Mechanical Electrical are with Construction driving and quarter Mechanical performance and in of in segment segment. organic segments year-to-date both our

continue the geographies well be We to right market positioned and in sectors.

mix contingency, and We of with precision negotiating appropriate the care, are XX.X% executing opportunities with and for winning Construction the right XX.X% operating year-to-date discipline estimating work, with our margins Construction. and of contracts for Electrical with work planning our our with innovation Mechanical

in anchored care well sectors large traditional markets growing and strong manufacturing; which institutional that from centers, perform to secular benefiting and are and trends. includes health with data continue long-term which demand and for market communications, We that network includes in high-tech favorable

aided incredibly planning, virtual These and these XX% that talk BIM, also sophisticated we the executing supply me prefabrication, to fast-paced with excellent with time. of as Our full and impressive our plans. When on and teams sites, fill as building that information tools, we call range design precision includes about, discipline modeling, which heard well of teams are construction the by VDC. for And delivering and on sophisticated chain target typically continue results management projects customers negotiation. building to XX% we multiyear win focus contract large you've

be from decline of to potentially phases increments initial subsequent first on phases remember, of may partially cumulative many is our released award RPOs reflected However, the we had this even these smaller revenue X% in in in from affect project equivalent it previously initial that the is quarter and if in timing RPOs. the we recognize XXXX. I said the RPOs future This the to calls, is always award, important had within the these amount and after

Services Building U.S. we expected. our segments, Construction our is as Beyond segment executing

operating single-digit high in low operating is business digits. is margins growing and double at revenues Services Mechanical Our

We building repair upgrades. are projects installations service, including agreements, service our and retrofit Service and HVAC strength experiencing controls, in Mechanical lines, all

Services as despite delivery. Despite nearly about commercial discussed scores facilities, year-to-date business revenues loss However, the our million these we on annual headwinds contracts an strong had $XXX X% margins quarterly operating headwinds, maintenance delivered U.S. have in the our site-based rebid in revenue grew our of X.X% we due customer in year-to-date. to by year-end expected as service on of still basis, and in and X% we And XXXX certain Building are segment. call,

its year-to-date both second pandemic. on shop quarter post our demand and quarterly we both Industrial Our field reported Services and basis. segment the for services best And saw improved

Our well, continue traditional increased within to as renewable demand, certain upstream and experienced for has as customers segment this perform midstream projects. from business shops and well Electrical fuels the both

U.K. cash period. segment operating on continues a had had expected basis. We $XXX as million year-ago some almost building its X.X% year-to-date in quarter the a Our margins basis, on business business solid efforts. strong This had retooling perform flow and and development from the success at year-to-date X.X% pipeline in and to its of has double operating

said, that over discuss in at later, detail bolster cash Services and more turn levels of -- and opening, at acquisitions upfront our prospects our of and in the quarter our near-record segment. With closed purchase billion, RPOs aggregate I'll acquisitions million strong. We our for price that to As Industrial acquired. Services I Mechanical have X remain $XXX our $X.X remain I successfully it Jason, Building These an will you. Construction, net

and Thank good everyone. you, Tony, morning,

quarter X for I with to compared start revenues. going financial operating each Slide on will the the the quarter next to of of second slides, several our performance second of as as XXXX. I'm well the review segments XXXX as key Over of of the data some

revenue billion, organic an growth achieved Each year-over-year of mentioned, market reportable for to sectors majority increase we demand the consolidated of or million services were our of increases across serve. and $X.XX Tony as strong revenues be As XX.X% segments $XXX.X revenues, of continues XX%. nearly our the in we experienced

once $XXX our This XX%. revenue increase of a and Construction to again each the segment data is from U.S. network growth which, segments. an benefit with million, at many coming market predominantly projects. continues across increased of demand center reminder, Looking as most Revenues from our were Electrical of communications, significant sectors

segment Mechanical Mechanical in for the we increases this industrial market were and transportation, the growth semiconductors services growth sectors. Revenues service of $X.X of by from billion, which electric levels of and saw revenues Construction across benefited U.S. and customers largely or production manufacturing and fire experienced the manufacturing nearly duration the in within by This our development manufacturing and projects market and batteries. within addition, revenue driven operate vehicles strongest the greater was seen for high-tech and high-tech majority work. The In segment market continued Construction protection demand in design, lithium engaged sectors sector increasing XX%. short

broad-based. manufacturing, segment wastewater. Demand increases within be we continues saw to communications, within high-tech care also network institutional, water and and industrial, this Beyond manufacturing notable and and health

an or generated As expected, due partially the products, demand our domestic either of across both from distribution Construction industry XX%. the year commercial the Together, $X.X Construction completion of a over reduced various warehousing decrease segments offsetting commercial estate a of market real growth ago. of segments just sector was increase revenues billion, to active which revenues and for the our in were

continues XX%, service retrofits. modest were strong $XXX.X within HVAC with revenues its Services. our growth this to Services segment benefit significant With the U.S. demand year-over-year. to division a projects million, million Building Mechanical increasing across most coming representing Moving and from Revenues or from lines increase $XX.X

contracts within commercial However, impacted the were offset within largely as our nonrenewal anticipated certain of of prior maintenance by Services. and and of calls, contracts businesses. discussed loss site-based revenues on as The growth the Mechanical facilities the segment these government

income million, Industrial with the field sales greater U.S. revenues for by within new of Services, X.X% be favorable Once operating to the prior to of division coupled compares shop investments of business. And more and design line year in again, turn or improved performance. of that key delivered with X.X% favorably of revenues quarter, $XXX revenues continue U.K. at under million, construction period. If driven increasing Building million build enhanced Looking $XXX.X heat to a ago. XX% in and our demand in This improved we drivers virtual revenues. project million mix execution exceptional its due part reported or services a services were of Services productivity year of we the prefabrication to across lastly, Slide segment's of X, work, just income $XXX.X exchanger our $XXX.X operating

is reported XX% were of the Looking a this income drivers at our of basis gross XX.X%, operating XXX U.S. point margin margin operating a $XX.X Electrical profit segments. profit quarter's performance. improvement. Increased and represents Construction which increase which of million, and gross primary nearly

points. headwinds of increase segment experienced manufacturing Together, U.S. profit Consistent margin million operate the and with benefited within generated was on U.S. manufacturing, reductions over an the the just and commercial. high-tech and period. of experienced within with market network Building communications operating largely the An being discussed. and XXX XX.X% Construction $XXX.X we of transportation, network Mechanical notable Services line previously increases we high-tech this gross market XX%. margin expanded manufacturing income institutional, and government due with the was our the and profit or commercial most was XX.X%. Operating profit to greater basis were income the from from division which sectors. Operating gross in operating segment This our within site-based of increased gross Construction $XX.X revenues, an projects gross for majority profit and X% the the of for margin While of segment, increases in million, largest segments Services reported revenue performance by industrial from Mechanical sectors greater additionally communications, offset year-ago by within

a or operating improvement representing income XXX point Industrial to margin. increase was Operating income and revenues, Services. operating million a of nearly XX% X.X% basis in $XX.X in Moving

to benefited the absorption. And operating services gross and within division or income of primarily pricing period. In the revenues, greater cost of greater X.X% to indirect revenues, is shop this consistent U.K. impact Building the year-ago reported of profit Services segment relatively operating from million of favorable lastly, income margin with due which $X.X addition higher

slide increase to Due by highlights our we basis discussed to of a my gross gross just combination in Let's well million XX%. now point as with profit. by gross $XXX margin, commentary, on turn revenue previous increased Slide A growth few this of covered X. profit has starting a the nearly not XXX as

performance margin compared quarter with $X.XX, to to consistent continue for our that months increased to slide, wanted has for for later of customers finally, for than reference. number And of EMCOR's highlight the SG&A share our SG&A XXXX. we year-to-date was X updated Rather of our slide updated of I to been had has mention period. our earnings of go guidance. that per deliver a remains this setting company X. year, is And which the our and to X.X% through the first diluted This that our tremendous earnings and year-over-year, here turning year-ago While a we've $X.XX results Slide included your increase shareholders. In an detail, start simply outlines XX%. Briefly records for it a new in I guidance the will Tony frames performance as outline now as XXXX

we strength have data market. as point within to as Further, continues As our record achieved of you leaves organic the us cash with positioned operating to on such a differentiator capital remains and liquid date. And line a full our the M&A This generation, see sheet operating of we've growth, as balance in our coupled and on earned strategic and the us finally, what strong for page, margin our margin stated, X, year-to-date guidance be we margin pursue balance well midpoint X.X%. key shareholders. have size serves the range can to reflects sheet, year a return fund to Slide with significant and a in of previously

million In thus by have and evidenced far, growth on we acquisitions the is utilized part addition $XXX organic spent we have in we for $XXX repurchases million share to this generated the year-to-date. have

of income. I'll the operating million, this basis, represents on that, generated a turn shown the XX% And have cash operating a year-to-date call of Tony XX% RPOs. $XXX approximately for back cash, was operating income. With operating discussion equivalent $XXX not to which of to on slide, we on quarter Although over million flow for

no a overview corporate ways, is really launched Pages you it's seeing we in slide, the presentation to take start chart see new them Jason. and we different, of were you, and would speaking side. discussion Page highlights organic I slide ease. many as you'll the market I it's going drive how put Slides referenced business with then as I'm will up same some key and our These been trends reality, these sectors this follow if we that here. informs where can allocate side I I see seeing on the growth. you to this how Page discussed last in the slide I And we've over And RPOs, XX, the quarter. This quarters, are by And and XX, and as least format XX. earth-shattering to The little at the before. we've more RPOs, resources Thanks, And succeed. XX there's growth. And are And have to set to XX, the I'm a going discuss X be news on XX

on rather RPOs of top I'm talked in what as we've continuation slide to X trends this relate is the outlined So of a this detail they to chart. than review it our discuss because the about, going key

data demand the at the we center report that $X.X And market X% communications and a sector year-over-year data network centers connectivity, of or XX% were work. million in hyperscale end nearly the quarter, They're look you see if up for and and continue sequentially. in record the sector. At $XXX strong RPOs to we So billion.

million of from RPOs at overall are in high-tech fundamentals that end markets the presence across this to sector key coupled billion the that's industrial of And we electric only the manufacturing And we the manufacturing $XX innings the second life long-term the that really XXXX. Reshoring biotech, where had pharma, have In we manufacturing successfully chain. RPOs year-ago expansion, these the sector, we semiconductors, of includes but We the positioned the ourselves sciences our that And expanded in solid. center not sector the geographies. near-shoring, since $X.X work data manufacturing and period. or believe value continue the quarter. and to sector, high-tech in sector. vehicle believe are center and were with high-tech we X% in up continue our cuts both in data early

we we this will work amounts site project on in and And result, certain As in have and has become times structures you different award. project multiyear and areas flows contract stated before, program. you're the ebbs a a happen awards that and of the expect many a working as once multiphase site, as building different within sector on

quarter traditional to sustainability, $XXX totaled healthy industrial base In a have market of little and that's high-tech addition ties And end. And to manufacturing, bit. ours projects, turn to energy and into in also the sector. we continue a they manufacturing which efficiency million in at short-duration I'll cover

and almost work, work just division classroom enhanced was work up and We And the and are of just especially the and awards what $XXX with HVAC RPOs projects the demand XX% which building it's electrical an institutional at increase energy spread The us, Wi-Fi experienced is the RPOs enhancements, upgrades research of this in exposure commercial. make types lastly, schools, technology and And office $X.X the care in $XXX and now technology upgrades, within building on Services consumption. and and which XX% year-over-year RPOs of award local across they this about implementing end that demand are space, only towards bring gains over that $X increase, my a and $XXX of typically in is upgrade of the largely with and up upgrades up an XX% energy total project million, billion, our this from cleaner with RPO of we as continue performed go around is coupled aged with the and that's sector, offsetting year-over-year. of projects federal over record see U.S. sector continued significant nearly spending health quarter work lot new up that RPO quarter a X%. projects with saw we year-over-year. company HVAC for of building retrofits our air spending campus is nature partially this Florida. The of comments, more efficiency most Services which $X.X gaining quality improved for but and or reminder, back not for totals to equipment. And excel more And They're expect million to our in focused sector. Transportation is new a automation my high-rise Much to earlier, short construction office in I market end scope very but year-over-year. efficient, state the year-ago grew this new these the on where this -- in of on? $X.X to sector total And driving within conclude commentary, Water the area gaining reduce infrastructure more page, said predominantly the due includes controls efficiency billion. in facilities, are you towards were upgrades, weighted they're we where of projects, And duration buildings. projects. To retrofit on and work efficiency a billion, decrease less much smarter, to focused airports. and the equipment projects Building is to as Mechanical at retrofit project These fit-off then of of million, approximately billion, again, X.X% size XX% distribution-type and tenant RPOs work, upgrades same. wastewater, productive. And second is period. now up episodic universities segment, renovation

in had our And what which for our the our remains a robust. second you're RPO. considering performance worried demand most RPOs, the strong about, pipeline our especially pleased we've in growth mix strong very We with with pleased reflects revenue services. We're are the in quarter,

to and going Page So I'm go we'll to now conclude. XX,

we strong to going going $XX. increase we guidance the first going With to guidance our billion raise $XX $XX.XX from half And to billion. to guidance. our diluted to raise to We're $XX revenue we're performance are share per to had, $XX.XX $XX.X to earnings

Construction in incredible expected year. in past of field, in seeing experienced the margins execution the resilient higher our segments the the beginning at and the are operating or have We we more and than are

data traditional energy We executing and with winning in to centers, continue that continue U.K. sectors to respect bidding, U.S. we high-tech I've we outlined industrial. Further, as expect perform and as to to level segments manufacturing, and market these perform such network outlined and our previous Industrial health and Building at manufacturing work the favorable expect care include highest in segment success trends its efficiency work, pandemic. Services expect communications our and to in calls, Services post

to We markets, done we their global as presidential commercial will private challenges decision-making, the equity impact we past, which interest us. price continue can challenges. Also, real higher continue and we to such customers our site-based in in these have can and execute But we chain disruptions for election energy in the scarcity challenges post overcome business remain in estate rates and to our rates, conflicts capital interest and face we serve U.K. Macro in as as how will best and diligent and to plan continue of as services high businesses. a may will factors especially supply U.S. slow

customers work Finally, and safe their and as our do, serving and teammates to I way. of our all to in a I hard always for productive EMCOR thank want dedication leaders

keeping by focused Danielle, shareholders I values work EMCOR EMCOR take great will We of First, we'll for our to be People guided and that, customers continue employees. With very for our place questions? team to Mission executing mission while here a at EMCOR our talented our Always. on a And have

question comes Brent [Operator from Davidson. Instructions] D.A. first Thielman from The

here. on quarter huge Congrats a

Brent. Thanks,

timing you're to seeing pipeline is you you're opportunities sort think RPOs maybe in and maybe for start, any still I just other think reduction sequential about more talk ultimately of Tony, the related high-tech just as and here. suggesting I likely looking this in manufacturing evidence, temporary of can and potential industrial,

big think right, XX if are I that XX to Yes. be years. over picture, mean, are to you going developed these look, sites

the the before U.S., chips need expanded changed, of it for true the has so from AI. there's fabs last that quarter, quarter nothing And There's Taiwan today before did The right? quarter are that, moving remains near-shoring. so back And all just before rate the that thing. that. We at to we because and on spot the as fairly scope, the that's those major burn a hit on and at sweet a high one sites of executed one good We're peak hit peak sites. right? quarter we And of manpower, like

You get you execution flow, cash could see in when the business, see can focused our in on in that high especially our and that mechanical you tech. and the drop-through

go the the sites So if on. to sector, semiconductor bullish you we're on we're

We're line the multiyear We're team. But of sight good they come chunks. contracting sometimes working. We're the come before, form they'll in a I've like have part or projects. there said in sum. in, developing to sometimes then now multiyear We different back site. And in projects We're lump of the now. different come will

well big happens have or Our of and X X we not they of the fabs and jump to phase. And X next one like X just on they're it's the literally. build. from commission other, finish stay or make these to get And sure everything the more we're to ones going as job execute sites, to most the a part move work that well, is team, well,

these feel really long-term back you we keep really is where we're on. lot again, go run the hit the up So in We're mechanism. which And either. and Research near-shoring, and at rate outlook contracting again, programs, are the with no places, change. and our to to good revenue RPOs and a now, will in building show where reshoring about hard on then in changed New we especially pharma biopharma Jersey. A semiconductors. And right Park And Triangle nothing's in Indiana going in

they're the how be very That difficult we be has get to getting fire, before, equipment finally, continue life part the their that you near-shoring, continue part as customer, site. The It XX%, was XX% it look things been and long-term as never accelerated but said we to has The It placement. biggest That or it going we it, a been. And a it's are a what actually to I doesn't structures as XX% our to to of and slowed because There As down. supply personal we careful. And I've big go the you it of EVs, manufacturing in said or what And very be out did really of EV space, COVID COVID. a It's and in quite quarter, phase were to is careful we be will reshore was in how as this was as led they matter and somewhere business. We of this. build part be more built to XX%. will what that They're other sector far consolidation people safety. and we we'll penetration, to look, then next be built. before a very trend exposure chains. will with did, there like biggest built. automotive high-tech be always really and the trend. careful happening have very doing. a were see Jason episodic-type going second serve continues then whether of view. have careful. We've frankly, expand That was never

bullish there, yet still industrial. So manufacturing to that's what what's a are we in and high-tech long-winded seeing but manufacturing very on happening we're answer

highs you Tony, the and compare of to -- your profitability cover contrast in margins, continue of -- what pay customers you be It That's helpful, versus helpful Tony. in overall, attain mean, terms there. just company new willing sort to bring bid field. execution is could to just I simple that. then effective get the to what are I the would appreciate and of in And just

hard the really to are their driving are way on inside solutions is to things budget. come able working work in to that times, collaborative with with because budget separate what's be fit really and customer projects, which up a bigger their margins, with Those most these our we

about to really So it gets pricing. hard talk

be necessarily, construct begin the to design it's And then from ability management our enter to these too will right as chain the get with And work from our design from gut, and on or that large is time not think and to could to we there's engineering with and of a linked much X/X collisions and changed my model do, methods with. and work X/X and and can plan take and then are planning. develop the build drawings in going in these site because too to assist, far means productivity prefabrication and on as and a productivity let's customers to competition run things this site. supply build customers sophisticated I into do thoughtful think good and priced. the competition. productivity. And and virtual think -- it do And on be coming it phase and And suppliers, drive drive of work and the coming and earlier upstream be work know we're that and compress price which very builders that do Nothing's to clear. business able I how anything not all and you less BIM design -- the a we it's plan in to to then this but do there's or

in think really Yes. how massive of rest half mean drivers provided I to with for accomplishment. of can just this just company incredible I appreciate Tony, years. through work end is perspectives off a sustain these of And subsequent an the just perspective. build you have know I the question, XXXX. year -- guess considering respect my on market earnings your this potential kind sort to last year, the second I of you from outlook the kind of a

always of success had cautious by we've difficult in right? why And things, I a about we're what in very this general, you that's and record right, mean think pretty think conservative, know, long-term I is think I nature. I business.

right things customers be got I allow to sense and put in place in the you about right the a think maybe a place. in got differently, to the positioned growth, enablers little you of with to right,

continuing up the so you question to serve can things the we of to that opened you is do? An look to sites can can you you the we're And of serve? the geography geographies continue expand and are you types example Have is, for opportunities in. expand the

capability this of number this in a people over that do has acquisition this the we to capability of have to of part they a the subsidiary. that. But the upfront? learn it's come learning? do means last that are and of similar I geography about, methods? and coming forever the got in project do on the we them do program Can projects focus year to a then lot kind people teach with planning to okay, can Our other do been their that, this they project think to peer and have really years how Are geography, built that you first Can and there

how build that's how and and do can to treat following you leaders I and been think capability ourselves you for we've know right you think what people And you term, markets But lead while. to you within how to things serve. And do position then capability of don't to workforce, ever continue markets train way the you if are demand success. you your build know if build long right, a continue end number to and So right? can you I those try your playbook be, plan I continue We will in we on growing. the you the

we you ago that a a across get these think it's couple our ideas and allows obviously, I X, what for years. share that you But we're that made with strong always in position results. and and lot period workforce company. And discipline a they that then as focus workforce key build for accelerated X well of and they're think then and good that on execution safety with them expand you you yourself of to grow past you that And the culture planning customers, now can doing. that, over allows your keep with allows investments your in that paramount, disciplined to we is for that have transparency, continue years teamwork, respect build XX I think I

from The next question comes from Thompson, Adam Davis. Thalhimer

about on Tony, you is coming talked a headwind any different anticipated? is congrats that quarter. the than commercial, in you great within Also

we -- would high-tech in projects, on strong and fire was because this No, safety quite this to especially traditional put of is projects, some say would And which it's it, context we'd larger market had resources we we manufacturing even decline have more on side. and the if pivoted where have thought maybe the might longer-term, I anyway you exactly it's be. our elaborate our right difficult manufacturing and Jason, life commercial can because frankly, and wheelhouse, think it on the some

workforce that got... we So a you some but that pivoted have have would would Jason, more of workforce, we have -- to not we market shortage of a lucrative anyway.

would with I that. agree Tony,

pivoted are commercial Tony the Construction is and we the the on right we there, be, seeing quarter on basis, commercial where the in said think And exactly exactly end a what the right, revenue at on It's ourselves if on being expected, as exactly at headwinds the where contracts there growth it's December. The a we've it that X%. the thought Building site operating spoke anticipated. about we've I it segment only is collectively Services decline to year-to-date where the side, specific based is market on before, mechanically. And and quarter-to-date X% basis commercial, And is electrically where talked a side. what right growth. we as the we elsewhere question about both then we of would down sector we are

running pretty fully you Okay. And out. you're guys are I assume engaged. flat presumably, then

turning having You're managing have if I you Or backlog? been guys work? labor have issues, away some been availability you how anything. mean probably

deploy massive think a We general, as to and ours aren't resources. business on company in running have how as markets subsidiary the the you're These level, and -- right? opportunities the even best are let's going I it about look, they have, you those at am run the focused in what's when you're market I now. When for are I times always bullish like capabilities

blessed X to routine also you're more those deploy horizon projects short you and it team, of say, in segment the of ways, you market. And how at think different CEOs, our duration you I at or about the keep with opportunities. a And folks, resource X-year that on alive running deployment here possible. most and a projects, at But stuff, You are you take over do guidance right? that the the and the set we're is way in keep would EMCOR our thinking masters subsidiary X-year about going the a effective

kind been believe this we're of actually that" what never say, to turning or away all I've -- because "Oh, we that's one doing work, I don't say we're do. always You'd

playing time with can think work we more to we we're the is some do or capability This over more This can team "This the say, we capability." we're workforce a going run of that opportunity and have. longer the I is build ways. bigger size superintendent period. cases, to projects because that and grow projects how what Either X And building multiyear we're with. person up going that in foreman we is and

great think don't for always We're I labor we're labor. So short. looking

have labor. We great

if that not those metering, labor, and though, actual and apprentices have the the think, I a the folks. journeyman, you it's wireman the around

The to always the be foreman, the labor executives managers, any, would project over those. your estimating have, workforce and you're if time the going development the we're resources and project shortages, developing it's you have skilled in about

how So the mix how in a the to across it to going much is geography manage going EMCOR. local mix and very you're we're your manage

about margins at been generating. productivity as grow I've you are guys And and you your long looking do for the here? about Tony, to then, how think you've amazing mean the EMCOR margins as And from just been it's potential CEO. I

got has of and stuff together. Yes. has coming lot come to A been it together,

workforce those things well management. I you're investments means way with to echoes technology, management, sharing. the that's really estimating, You got you practice across have we've and BIM, in mix to all then chain mean construct, that your one company, and start supply take virtual talked best spread to It through doing and what -- from about: development, and design methods, get margin.

we're tough a The in second thing business. is

And so deal. badness is of big absence a

to the contract and then trained respond strongly we've negotiation, invested so And and we may working be to customer is alongside have pretty enhanced able you in to more difficult think and have And our good capability to good when years get a I thoughtful. get gotten be then legal X And we've ago. And on absorption the you obviously, got negotiations. our it's folks so from And facts a you're run contract here? believe result. time, result into when prepared as and -- like other markets same thing mean, not where for rest better problem, everything is the the right, we to good adherence margins we do they're that of go we than go to where we're Jason? a X, I perfect year, the for a about the do the get can dispute with all you

Yes.

the the we last assuming through at low first midpoint, achieve to midpoint that of the if there, record we're at If at look guidance, look we year where end at margins And can essentially above the X really you you guidance, believe back of the points high we've saying half half we're months look is at basis the the done repeat in we're low the the the what those, of end, guidance, XX assumed you we what can year. we're achieved on that the XX and year. When essentially end, of of today. the back I at the look in right, our we've which we touched if you saying

The Markets. from next question Capital KeyBanc Alex Dwyer from comes

which geographies about out growth in other weaker now? versus stronger talk And are you like seeing the the you being as any right right now? geographies would country call highest there you'd Can that be

It's we're in fairly broad-based that the markets in.

I you'd specifically from, centers. to the data and manufacturing have real Texas, you but So to where -- high-tech go if growth around say think is coming

the Midwest strong just for things across construction us, centers and and auto, has and that. think some fairly the like that's even by Midwest general driven still and been I storage data cold

I has us. think you'd very us, Arizona strong as been has been expect. The Mid-Atlantic for for very strong

New City New York an we're mainly City, sort Again, now, company. aftermarket [indiscernible] of York company flattish. in

mean I yet facilities around some little concept strong. it's R&D bit. I they bit. more was were have lab building of sort California has X been retrofit has has of space. were ago, They where from okay, but slowed flat, but the slowed. energy hotel a work up think it's in slowed been certainly a Boston and slowed. California little It's that years it That pretty doing

especially continues as Arizona as strong around work up. care California up, other strong. health the Oregon, of data Salt in been centers. has maybe not Some but pretty I Washington places, be Lake's strong, to and still mean,

again, well. is of say going rest would is the So sort it's back. Jason? Northeast I the pretty flattish, think, of The pretty of I broad-based. doing sort country,

I it on think all, hit Tony. you

They're us I'd North add Georgia and right strong now. Carolina. for very

is the all? the at Got debt, Like it. And half more M&A and to just the program That's M&A no $XXX there center cash be pipeline thinking and concentrated we after we those end markets? lastly, high-tech we year? the the of M&A then should should super looking about data manufacturing helpful. any on of as balance second expect And change in be the million go with to repurchases then how sheet, versus

Yes.

deal. pipeline. at billion happen looking what a good I billion $X the mean, $X.X we're of we're would I the Deals the afraid But happen. did of with. in is now, pleased obviously, when first of have we're now, of what not doing they here right We or expect which same very half more year, we right

years over I difficult. M&A the those M&A has who a execution Our last me known very period been is And of think have over superb. long X time,

we've lot I size student But so up, the harder. deal a The while executed well. think A- of the far, gets here. for B+, execution risk we've goes good been a a

pipeline. good I'd We over have to you. a turn Jason, it

we're cash growth. to organic and continue shareholders, M&A think going company the continue to through and grow we're return to I to to going

Yes.

overall, think real I right, here. change strategy in no

be balanced to allocators. capital continue we'll think I

our updated from said, we're that's we've back acquisitions generated right? We capital dividends. And we think what our I the remain million, $XXX operating historical allocation the end cash of the first cash, repurchases And of deck, XXXX. of pleased Tony our in As and year, XX, half largely with it's Slide the at $XXX million, share the million balances did unchanged at but of our slide our the $XXX here. CapEx through

we're far so you closer to if And over XX% business are continue year, to we where this to XX-XX, time, return shareholder for time. weighted look and and XX% you over If it's strive we'll to look reinvestment. that

half say should long-winded to think first half. the the a very look way I So the back of similar to year

I mean I you think force proponent I've always M&A. been don't a

half the of I those people talking year, -- we the for things in first X the we've here of years. you some been think did to

And for from year are We'll we've so our we the talking they guys. well If a as a can do fit. well, well, X, What we'll making get fits for X -- talking cultural businesses operating right? That promise right, -- maybe and we good got -- value. the something especially and say, is we now, usually that won't the and right, good whatever company we we multiple right? we're game, do something to to been doesn't there them is PE sure we're a out really on buy cultural We're fit. can well out work company works focused out have values. and you therefore, things the numbers that own to can works to of it's never adds do because out and for not creating play the But mean XX, grow. us. What trying the shares we at forever, an much culturally X it's to to and a we Some won't that we to it them there also got we're I years. I we've capability out believe build

company And all we we XX, ago. create don't the you management even the work has aren't numbers our us. think with that from company, can if paid management. we for you those the XX, the for more today And that believe So because won't problems us. We XX, the fruits really bleeds haven't that nothing we character and dividends start else. and focused in management, that from made than anything If see years XX evident in buy competency our company entire has deals things wavered if skill that important, much and all M&A and the replace on things the we significant we're of through the is can but

it. Got

how in? squeeze data X with Okay. possible coming the the coming centers? traditional build, AI-type parse new of center the much cloud? center just past on you're center data Can one working over these type like through to the data data years I is it builds from from seen For more how builds is is we've Or much

there, visibility. We of the We'll the we're using maintenance owners center. thought Even thing headed you the data up you do going kind we we people don't what building day, developers and data maybe build just there, going have work. it. day racking. if anyway. Ultimately, that X the there's power building the would X X energize we through a the for. once actually is have build requirements really for them, have that be to where are the people on What's We'll wouldn't of the or on of don't those no up, build post gone that a X We X we'll of in of versus to the know there, have lot parse visibility centers. expanded. right? or customers some it's them In I but only could the end The a doing difference, they are lot visibility were

closing like it for Mr. I no Guzzi, we would to further back you to remarks. questions. turn have

going safe. to that, us tell to it you. turn over I'll here. you, I EMCOR. be close Andy I'm And With just off interest in Sure. appreciate to thank your

Maxine, Jason you Thanks, for all to joining of thanks Tony. Thanks, us and and today.

If Thank please close please not hesitate do Danielle, you would should day. out questions, to call? great reach follow-up a any and again, have you all have you directly. the

now has conference today's concluded. The attending you. Thank presentation. for you Thank

disconnect. now may You