FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 - ------------------------------------------------------------------------------ [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from __________ to __________ - -------------------------------------------------------------------------- Commission file number 0-2315 EMCOR Group, Inc. --------------------------------------- (Exact name of registrant as specified in its charter) Delaware 11-2125338 - ------------------------------------ ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 101 Merritt Seven Corporate Park 06851-1060 ---------------------- Norwalk, Connecticut (Zip Code) - ------------------------------------ (Address of principal executive offices) (203) 849-7800 - ------------------------------------ (Registrant's telephone number) N/A - -------------------------------------------------------------------------------- (Former name,former address and former fiscal year,if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes X No __ Applicable Only To Issuers Involved In Bankruptcy Proceedings During The Previous Five Years -------------------------------------------------------------------- Indicate by check mark whether the registrant has filed all documents required to be filed by Section 12, 13 or 15(d) of the Securities and Exchange Act of 1934, subsequent to the distribution of securities under a plan confirmed by a court. Yes X No __ Applicable Only To Corporate Issuers ------------------------------------ Number of shares of Common Stock outstanding as of the close of business on May 1, 1998: 10,722,829 shares.
EMCOR GROUP, INC. INDEX Page No. PART I - Financial Information Item 1 Financial Statements Condensed consolidated balance sheets - as of March 31, 1998 and December 31, 1997 1 Condensed consolidated statements of operations - three months ended March 31, 1998 and 1997 3 Condensed consolidated statements of cash flows - three months ended March 31, 1998 and 1997 4 Condensed consolidated statement of stockholders' equity and comprehensive income (loss) - three months ended March 31, 1998 and 1997 5 Notes to condensed consolidated financial statements 6 Item 2 Management's discussion and analysis of financial condition and results of operations 11 PART II - Other Information Item 1 Legal Proceedings 13 Item 4 Submission of Matters to a Vote of Security Holders 13 Item 6 Exhibits and Reports on Form 8-K 13
PART I - FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS EMCOR Group, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) - ------------------------------------------------------------ March 31, December 31, 1998 1997 (Unaudited) - ------------------------------------------------------------ ASSETS Current Assets: Cash and cash equivalents $123,888 $49,376 Accounts receivable, net 494,628 480,997 Costs and estimated earnings in excess of billings on uncompletedcontracts 75,825 73,974 Inventories 6,735 7,363 Prepaid expenses and other 9,999 10,951 ----------------------------- Total Current Assets 711,075 622,661 ----------------------------- Investments, Notes and Other Long-Term Receivables 6,726 5,901 Property, Plant and Equipment, Net 27,568 27,164 Other Assets 7,248 4,928 ----------------------------- Total Assets $752,617 $660,654 ============================= See notes to condensed consolidated financial statements.
EMCOR Group, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Amounts) - ------------------------------------------------------------ March 31, December 1998 31, (Unaudited) 1997 - ------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Borrowings under working capital $-- $9,497 credit lines Current maturities of long-term debt 6,339 927 Accounts payable 237,257 239,117 Billings in excess of costs and estimated earnings on uncompleted contracts 127,352 112,833 Accrued payroll and benefits 58,809 49,058 Other accrued expenses and liabilities 47,069 45,163 ----------------------- Total Current Liabilities 476,826 456,595 ----------------------- Long-Term Debt 117,091 63,212 Other Long-Term Obligations 46,733 45,524 Stockholders' Equity: Common stock, $.01 par value, 30,000,000 shares authorized, 10,700,493 shares and 9,590,827 shares issued and outstanding or issuable at March 31, 1998 and December 31, 1997, respectively 107 96 Warrants 2,154 2,154 Capital surplus 107,473 87,107 Accumulated Other Comprehensive Income 47 (195) Retained earnings 2,186 6,161 ----------------------- Total Stockholders' Equity 111,967 95,323 ----------------------- Total Liabilities and Stockholders' Equity $752,617 $660,654 ======================= See notes to condensed consolidated financial statements.
EMCOR Group, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) (Unaudited) - ------------------------------------------------------------ Three months ended March 31, 1998 1997 - ------------------------------------------------------------ Revenues $493,923 $433,770 Costs and Expenses: Cost of sales 449,683 394,705 Selling, general and administrative 40,305 35,623 ------------------------- 489,988 430,328 ------------------------- Operating Income 3,935 3,442 Interest Expense, Net 2,406 3,008 ------------------------- Income Before Income Taxes 1,529 434 Provision For Income Taxes 727 178 ------------------------- Income Before Extraordinary Item 802 256 Extraordinary Item - Loss on Early Extinguishment of Debt, Net of Income Taxes (4,777) -- ------------------------- Net (Loss) Income $(3,975) $256 ========================= Per Share Information: Basic Earnings (Loss) Per Share: Income Before Extraordinary Item $0.08 $0.03 Extraordinary Item - Loss on Early Extinguishment of Debt, Net of Income Taxes (0.49) -- ------------------------- Basic (Loss) Earnings Per Share $(0.41) $0.03 ========================= Diluted Earnings (Loss) Per Share: Income Before Extraordinary Item $0.08 $0.03 Extraordinary Item - Loss on Early Extinguishment of Debt, Net of Income Taxes (0.49) -- ------------------------- Diluted (Loss) Earnings Per Share $(0.41) $0.03 ========================= See notes to condensed consolidated financial statements.
EMCOR Group, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) - --------------------------------------------------------------- Three months ended March 31, 1998 1997 - --------------------------------------------------------------- CASH FLOWS FROM OPERATIONS: Net income $(3,975) $256 Extraordinary Item - Loss on Early Extinguishment of Debt, Net of Income Taxes 4,777 -- Non-cash expenses 3,322 2,363 Changes in operating assets and liabilities 15,430 4,216 -------------------- NET CASH PROVIDED BY OPERATIONS 19,554 6,835 -------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of Convertible Subordinated Notes 115,000 -- Net proceeds from sale of common stock 22,485 -- Debt issuance costs (4,074) -- Payment of Series C Notes (61,854) -- Premiums paid on early extinguishment of debt (2,437) -- Payment of working capital credit lines (9,497) -- Borrowings under working capital credit lines -- 5,100 Payments of long-term debt and capital lease obligation (150) (62) Exercise of stock options 56 -- -------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 59,529 5,038 -------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment, net (2,348) (2,317) Proceeds from sale of businesses and other assets -- 14 Acquisition of businesses (1,398) -- Decrease in investments, notes and other long-term receivables (825) 797 -------------------- NET CASH USED IN INVESTING ACTIVITIES (4,571) (1,506) -------------------- INCREASE IN CASH AND CASH EQUIVALENTS 74,512 10,367 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 49,376 50,705 -------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $123,888 $61,072 ==================== SUPPLEMENTAL CASH FLOW INFORMATION Cash Paid For: Interest $1,697 $2,074 Income Taxes $159 $15 See notes to condensed consolidated financial statements.
EMCOR Group, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS) (In Thousands) (Unaudited) <TABLE> - ------------------------------------------------------------------------------------------------------------ Accumulated Retained Other Earnings/ Common Capital Comprehensive Acquisition Comprehensive Total Stock Warrants Surplus Income (1) Deficit Income (Loss) - ------------------------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> <C> Balance, $95,323 $96 $2,154 $87,107 $(195) $6,161 January 1, 1998 Comprehensive income(loss): Net loss (3,975) -- -- -- -- (3,975) $(3,975) Foreign currentcy translation adjustments 242 -- -- -- 242 -- 242 ---------- Comprehensive loss -- -- -- -- -- -- $(3,733) ========== NOL utilization 551 -- -- 551 -- -- Issuance of common stock 22,485 11 -- 22,474 -- -- Tax effect of extraordinary item (2,715) -- -- (2,715) -- -- Common stock issued under stock option plans 56 -- -- 56 -- -- -------- ------- ------ ------ ----------- ------- Balance, March 31, 1998 $111,967 $107 $2,154 $107,473 $47 $2,186 ======== ======= ====== ======== =========== ======= Balance, January 1, 1997 $83,883 $95 $2,154 $81,672 $1,378 $(1,416) Comprehensive income (loss) - --------------------------- Net income 256 -- -- -- -- 256 $256 Foreign currency translation adjustments (316) -- -- -- (316) -- (316) ---------- Comprehensive income -- -- -- -- -- -- $(60) ========== NOL utilization 148 -- -- 148 -- -- ------ ------- ------ -------- ----------- -------- Balance, March 31, 1997 $83,971 $95 $2,154 $81,820 $1,062 $(1,160) ======== ======= ====== ======= =========== ========= </TABLE> (1) Represents foreign currency translation adjustments. See notes to condensed consolidated financial statements.
EMCOR Group, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE A Nature Of Operations EMCOR Group, Inc. ("EMCOR" or the "Company") is a multinational corporation involved in mechanical and electrical construction services and facilities services. EMCOR's subsidiaries specialize in the design, integration, installation, start-up, testing, operation and maintenance of: (i) distribution systems for electrical power (including power cables, conduits, distribution panels, transformers, generators, uninterruptible power supply systems and related switch gear and control); (ii) lighting systems, including fixtures and controls; (iii) low-voltage systems, including fire alarm, security, communications and process control systems; (iv) heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems; and (v) plumbing, process and high-purity piping systems. EMCOR's subsidiaries provide mechanical and electrical construction and facilities services directly to end-users (including corporations, municipalities and other governmental entities, owners/developers, and tenants of buildings) and, indirectly, by acting as a subcontractor for construction managers, general contractors, systems suppliers and other subcontractors. Mechanical and electrical construction services are principally either large installation projects, with contracts generally in the multi-million dollar range; smaller system installation projects involving fit-out, renovation and retrofit work; and maintenance and service. In addition, certain of its subsidiaries operate and maintain mechanical and/or electrical systems for customers under contracts and provide other services commonly referred to as facilities services including the management of facilities and the provision of support services to customers at the customer's facilities. Mechanical and electrical construction and facilities services are provided to a broad range of commercial, industrial and institutional customers through offices located in major markets throughout the United States, Canada and the United Kingdom and through its joint ventures in the United Arab Emirates, Saudi Arabia, South Africa, Hong Kong and Macau. NOTE B Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to the interim period reporting requirements of Form 10-Q. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Readers of this report should refer to the consolidated financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of a normal recurring nature) necessary to present fairly the financial position of the Company and the results of its operations. The results of operations for the three month period ended March 31, 1998 are not necessarily indicative of the results to be expected for the year ending December 31, 1998.
NOTE C Long-Term Debt Long-Term Debt in the accompanying condensed consolidated balance sheets consists of the following amounts at March 31, 1998 and December 31, 1997 (in thousands): March 31, December 1998 31, 1997 ------------ ------------ Convertible Subordinated Notes, at 5.75%, due 2005 $115,000 $-- Series C Notes, outstanding face value of approximately $61.9 million at December 31, 1997, at 11.0%, discounted to a 14.0% effective rate, due 2001 -- 56,290 Other 8,430 7,849 ------------ ------------ 123,430 64,139 Less current maturities (6,339) (927) ------------ ------------ $117,091 $63,212 ============ ============ On March 18, 1998, the Company called for the redemption of approximately $61.9 million principal amount of Series C Notes and irrevocably funded such amounts with the trustee of the Series C Notes. In accordance with the Indenture governing the Series C Notes, the redemption price of the Series C Notes was 104% of the principal amount redeemed. Accordingly, the Company recorded an extraordinary loss related to the early retirement of debt. The extraordinary loss consisted primarily of the write-off of the associated debt discount plus the redemption premium and costs associated with the redemption, net of income tax benefits. The Company has given notification that it will prepay the Supplemental SellCo Note during May 1998 and, accordingly, the Supplemental SellCo Note is included in the accompanying condensed consolidated balance sheet as of March 31, 1998 as a current liability under the caption "Current maturities of long-term debt." On March 18, 1998, the Company sold, pursuant to an underwritten public offering, $100.0 million principal amount of 5.75% Convertible Subordinated Notes (the "Notes"). Interest on the Notes is payable semi-annually commencing October 1, 1998. The Notes are unsecured indebtedness of the Company and are convertible into Common Stock of the Company at a conversion price of $27.34 per share at any time. On March 24, 1998, the underwriter of the Notes offering exercised in full its over-allotment option to purchase an additional $15.0 million of Notes and accordingly an additional $15.0 million principal amount of such notes were issued. NOTE D Income Taxes The Company files a consolidated federal income tax return including all U.S. subsidiaries. At March 31, 1998, the Company had net operating loss carryforwards ("NOLs") for U.S. income tax purposes of approximately $170.0 million, which expire in the years 2007 through 2010. The NOLs are subject to review by the Internal Revenue Service. Future changes in ownership of the Company, as defined by Section 382 of the Internal Revenue Code, could limit the amount of NOLs available for use in any one year. As a result of the adoption of Fresh-Start Accounting, the tax benefit of any net operating loss carryforwards or net deductible temporary differences which existed as of the date of the Company's emergence from Chapter 11 in December 1994 will result in a charge to the tax provision (provision in lieu of income taxes) and be allocated to capital surplus.
The Company has provided a valuation allowance as of March 31, 1998 for the full amount of the tax benefit of its remaining NOLs and other deferred tax assets. Income tax expense recorded for the three months ended March 31, 1998 and 1997 represent a provision primarily for federal, foreign and state and local income taxes. The Company's utilization of NOLs and other deferred tax assets for the three months ended March 31, 1998 and 1997 of approximately $0.6 million and $0.1 million, respectively, have been applied to capital surplus. NOTE E Legal Proceedings The Company is currently defending a lawsuit that was commenced against the Dynalectric Company ("Dynalectric"), a subsidiary of the Company, in Superior Court of New Jersey, Bergen County, arising out of Dynalectric's participation in a joint venture with the plaintiff, Computran. In the action, which was instituted in 1988, Computran, a participant in, and a subcontractor to, the joint venture alleges that Dynalectric wrongfully terminated its subcontract, fraudulently diverted funds due it, misappropriated its trade secrets and proprietary information, fraudulently induced it to enter into the joint venture and conspired with other defendants to commit certain acts in violation of the New Jersey Racketeering Influence and Corrupt Organization Act. Dynalectric believes that Computran's claims are without merit and intends to defend this matter vigorously. Dynalectric has filed counterclaims against Computran. As a result of a motion made by Dynalectric, the Superior Court of New Jersey ordered during 1997 that the matters in dispute between Dynalectric and Computran be resolved by binding arbitration in accordance with an original agreement between the parties. In February 1995 as part of an investigation by the New York County District Attorney's office into the business affairs of Herbert Construction Company ("Herbert"), a general contractor that did business with the Company's subsidiary, Forest Electric Corporation ("Forest"), a search warrant was executed at Forest's executive offices. At that time, the Company was informed that Forest and certain of its officers are targets of the continuing investigation. Neither the Company nor Forest has been advised of the precise nature of any suspected violation of law by Forest or its officers. On April 7, 1997, Ted Kohl, a principal of Herbert, pled guilty to one count of money laundering, one count of offering a false instrument for filing and one count of filing a false New York State Resident Income Tax Return. DPL Interiors, Inc., a Company allegedly owned by Mr. Kohl, also pled guilty to one count of failing to file New York City General Income Tax Returns. Mr. Kohl and DPL Interiors, Inc. have not yet been sentenced. Substantial settlements or damage judgements against a subsidiary of the Company arising out of either of these matters could have a material adverse effect on the Company's business, operating results and financial condition. In addition to the above, the Company is involved in other legal proceedings and claims, asserted by and against the Company, which have arisen in the ordinary course of business. The Company believes it has a number of valid defenses to these actions and the Company intends to vigorously defend or assert these claims and does not believe that a significant liability will result. However, the Company cannot predict the outcome thereof or the impact that an adverse result of the matters discussed above will have upon the Company's financial position or results of operations. NOTE F Earnings Per Share Effective December 31, 1997 the Company adopted Statement of Financial Accounting Standards No. 128 ("SFAS No. 128" or the "Statement"), "Earnings Per Share" ("EPS"), which established standards for computing and presenting EPS. The Statement replaced the presentation of Primary EPS with a presentation of Basic EPS, as defined, and Fully Diluted EPS with Diluted EPS, as defined.
The following tables summarize the Company's calculation of Basic EPS and Diluted EPS for the three month periods ended March 31, 1998 and 1997: 1998 ----------- ----------- Income Shares Per Share (Numerator) (Denominator) Amount ----------- ------------------------------------- Basic EPS Income before extraordinary item available to common stockholders $802,000 9,765,012 $0.08 =========== Effect of Dilutive Securities: Options -- 363,007 Warrants -- 253,071 ----------- ----------- Diluted EPS $802,000 10,381,090 $0.08 =========== =========== =========== 1997 ----------- Income Shares Per Share (Numerator) (Denominator) Amount ---------- ----------- ------------- Basic EPS Income before extraordinary item available to common stockholders $256,000 9,514,636 $0.03 =========== Effect of Dilutive Securities: Options -- 427,420 Warrants -- 104,931 ---------- ----------- Diluted EPS $256,000 10,046,987 $0.03 ========== =========== =========== For the three month period ended March 31, 1998, the "if converted" amount of Notes and related after-tax interest expense were excluded from the denominator and numerator, respectively, in the calculation of Diluted EPS as the effect would be antidilutive. For the three months ended March 31, 1998, 5,000 options were excluded from the denominator in the calculation of Diluted EPS as the effect would be antidilutive. NOTE G Common Stock Issuance On March 18, 1998 the Company sold, pursuant to an underwritten public offering, 1,100,000 of its Common Stock at a price of $21.875 per share. Proceeds received from the sale of the Common Stock along with proceeds received from the sale of the Notes were used to redeem the Series C Notes and repay outstanding borrowings under the Company's working capital credit lines and will be used to prepay the Supplemental SellCo Note and accrued interest thereon, for possible acquisitions and for other general corporate purposes.
NOTE H Other The Company has adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), which requires companies to report all changes in equity during a period, except those resulting from investment by owners and distribution to owners, in a financial statement for the period in which they are recognized. The Company has chosen to disclose Comprehensive Income, which encompasses net income and foreign currency translation adjustments, in the condensed consolidated statements of stockholders' equity and comprehensive income (loss). Prior year financial information has been restated to conform with the reporting requirements of SFAS No. 130.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Revenues for the first quarter of 1998 were $493.9 million compared to $433.8 million in the first quarter of 1997. In the first quarter of 1998, the Company had a net loss of $4.0 million, or a $0.41 loss per basic share and diluted share, compared to net income of $0.3 million, or $0.03 per basic share and diluted share, in the first quarter of 1997. The net loss for the first quarter of 1998 was due primarily to an after-tax charge associated with the early retirement of approximately $61.9 million of the Company's Series C, which is reflected in the accompanying condensed consolidated statements of operations under the caption "Extraordinary Item - Loss on Early Extinguishment of Debt, Net of Income Taxes." The Company generated operating income of $3.9 million for the three months ended March 31, 1998 compared to operating income of $3.4 million in the same period of the prior year. The $0.5 million improvement in operating income for the three months ended March 31, 1998 was principally attributable to the increase in operating volume in the first quarter of 1998 as compared to the same period in 1997. SG&A for the quarters ended March 31, 1998 and 1997 were $40.3 million, or 8.2% of revenues, and $35.6 million, or 8.2% of revenues, respectively. The dollar increase in SG&A for the three month period ended March 31, 1998 compared to the same period in 1997 is attributable to the increase in operating volume. On March 18, 1998, the Company called for the redemption of approximately $61.9 million principal amount of Series C Notes and irrevocably funded such amounts with the trustee of the SellCo Notes. In accordance with the Indenture governing the Series C Notes, the redemption price of the Series C Notes was 104% of the principal amount redeemed. Accordingly, the Company recorded an extraordinary loss related to the early retirement of debt. The extraordinary loss consisted primarily of the write-off of the associated debt discount plus the redemption premium and costs associated with the redemption, net of income tax benefits. The Company has given notification that it will prepay the Supplemental SellCo Note during May 1998 and, accordingly, the Supplemental SellCo Note is included in the accompanying condensed consolidated balance sheet as of March 31, 1998 as a current liability under the caption "Current maturities of long-term debt." The Company's backlog was $1,120.7 million at March 31, 1998 and $996.4 million at December 31, 1997. Between December 31, 1997 and March 31, 1998, the Company's backlog in Canada increased by $0.3 million, its backlog in the United Kingdom increased by $43.7 million and its backlog in the United States increased by $80.3 million. Liquidity and Capital Resources On March 18, 1998, the Company sold pursuant to underwritten public offerings, $100.0 million principal amount of 5.75% Convertible Subordinated Notes (the "Notes") and 1,100,000 shares of its Common Stock. Interest on the Notes is payable semi-annually commencing October 1, 1998. The Notes are unsecured indebtedness of the Company and are convertible into Common Stock of the Company at a conversion price of $27.34 per share at any time. On March 24, 1998, the underwriter of the Notes offering exercised in full its over-allotment option to purchase an additional $15.0 million of Notes and accordingly an additional $15.0 million principal amount of such notes were issued. Proceeds received from the sale of the Notes along with proceeds from the sale of the Common Stock were used to redeem the Series C Notes and repay outstanding borrowings under the Company's working capital credit lines and will be used to prepay the Supplemental SellCo Note and accrued interest thereon, for possible acquisitions and for other general corporate purposes. The Company's consolidated cash balance increased by $74.5 million from $49.4 million at December 31, 1997 to $123.9 million at March 31, 1998, primarily as a result of the net proceeds received from the sale of Common Stock and Notes offset by the repayment of debt noted above. The March 31, 1998 cash balance included approximately $5.8 million in a foreign subsidiary's bank account which is available only to support its operations. The Company generated positive operating cash flow for the three months ended March 31, 1998 due to improvements in working capital which were used, along with proceeds from the sale of Common Stock and Notes, to fund capital expenditures and redeem approximately $61.9 million of Series C Notes. As of March 31, 1998 the Company's total borrowing capacity under its revolving credit facility was $100.0 million. The Company had approximately $27.2 million of letters of credit outstanding as of that date. There were no revolving loans outstanding as of March 31, 1998. This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements involve risks and uncertainties, that could cause actual results to differ materially from those in any such forward-looking statements. Such factors include, but are not limited to, adverse changes in general economic conditions, including changes in the specific markets for the Company's services, adverse business conditions, decreased or lack of growth in the mechanical and electrical construction and facilities services industries, increased competition, pricing pressures, risks associated with foreign operations and other factors.
PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS The information in Note E to the Company's March 31, 1998 Notes to Condensed Consolidated Financial Statements (unaudited) regarding legal proceedings is hereby incorporated herein by reference thereto. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) On February 12, 1998 the Company held a special meeting of the stockholders. (b) At the special meeting the stockholders voted on a proposal to amend the Restated Certificate of Incorporation that would amend Article Fourth thereof to increase the number of authorized shares of Common Stock from 13,700,000 shares to 30,000,000 shares. 7,736,744 shares were voted in favor of adoption of the amendment, 373,892 shares were voted against adoption of the amendment and no shares abstained from voting thereon. There were no broker non-votes. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 4(a) Seventh Amendment dated as of April 14, 1998 to Credit Agreement dated as of June 19, 1996 among EMCOR Group, Inc., certain of its subsidiaries and Harris Trust and Savings Bank, individually and as agent, and the lenders, which are or become parties thereto. Exhibit 4(b) Subordinated Indenture dated as of March 18, 1998 ("Indenture") between EMCOR Group, Inc. and State Street Bank and Trust Company, as Trustee. Exhibit 4(c) First Supplemental Indenture dated as of March 18, 1998, to Indenture between EMCOR Group, Inc. and State Street Bank and Trust Company, as Trustee. Exhibit 10(a) Employment Agreement made as of January 1, 1998 between Frank T. MacInnis and EMCOR Group, Inc. Exhibit 10(b) Employment Agreement made as of January 1, 1998 between Jeffrey M. Levy and EMCOR Group, Inc. Exhibit 10(c) Employment Agreement made as of January 1, 1998 between Leicle E. Chesser and EMCOR Group, Inc. Exhibit 10(d) Employment Agreement made as of January 1, 1998 between Thomas D. Cunningham and EMCOR Group, Inc. Exhibit 10(e) Employment Agreement made as of January 1, 1998 between R. Kevin Matz and EMCOR Group, Inc. Exhibit 10(f) Employment Agreement made as of January 1, 1998 between Mark A. Pompa and EMCOR Group, Inc. Exhibit 10(g) Letter Agreement made as of January 1, 1998 between Sheldon I. Cammaker and EMCOR Group, Inc. Exhibit No. 11. Computation of Earnings Per Common Share and Common Equivalent Share for the three month period ended March 31, 1998. Exhibit No. 27. Financial Data Schedule. (b) No reports on Form 8-K were filed during the quarter ended March 31, 1998.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EMCOR GROUP, INC. ---------------------------- (Registrant) Date: May 4, 1998 By: /s/FRANK T. MacINNIS ---------------------------- Frank T. MacInnis Chairman of the Board of Directors and Chief Executive Officer Date: May 4, 1998 By: /s/LEICLE E. CHESSER ---------------------------- Leicle E. Chesser Executive Vice President and Chief Financial Officer