Encompass Announces Third Quarter 2000 Results
Quarter Marked by Growth in Data/Telecom Business, National Accounts And
Record Backlog
HOUSTON, Nov. 6 /PRNewswire/ -- Encompass Services Corporation (NYSE: ESR), the premier facilities services company in the United States, today reported strong third-quarter growth in its data/telecommunications business, robust national accounts activity and a record backlog of $1.9 billion.
As previously announced, third-quarter results also reflected the impact of 11 business units which are being eliminated, a temporary sales slowdown in the southeast United States and the Electrical Group's shortfall in attaining aggressive budget targets.
Revenues for the quarter reached $1.17 billion, a 20-percent increase from pro forma revenues of $970 million in the prior-year period. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $72.7 million, compared to a pro forma $95.4 million in the prior-year quarter. Net income available to common shareholders was $10.2 million, or $.16 per diluted share, compared to a pro forma $26.2 million, or $.38 per diluted share, in the prior-year period. Cash earnings per share were $.28, compared to $.48 a year ago.
The 11 units account for less than 3 percent of the company's annual revenues, and their elimination is expected to increase annual operating income by approximately $30 million. Excluding their impact, Encompass would have reported third-quarter revenues of $1.14 billion, EBITDA of $90.4 million, net income available to common shareholders of $22.0 million, or $.32 per diluted share, and cash earnings of $.42 per share.
"During the third quarter, we continued to deliver on the key elements of our growth strategy," said Joe Ivey, Encompass president and chief executive officer. "We effectively capitalized on profitable end markets, grew our national accounts business and increased cross selling activity between business units. The soundness of our underlying business is not diminished by the extraordinary events of the quarter."
For the nine-month period ended September 30, excluding the impact of the business units to be eliminated, Encompass reported pro forma revenues of $3.1 billion, compared to a pro forma $2.6 billion in the prior-year period; EBITDA of $251.4 million, compared to $244.3 million and net income to common shareholders of $58.4 million, compared to $58.1 million.
Encompass Secures Data/Telecommunications Contracts
The company's ability to fast track data infrastructure projects attracted a host of blue-chip data and telecommunications customers during the quarter. Encompass was awarded approximately $30 million of work from one of the world's largest Web-hosting companies to design and install the technology infrastructure at data centers in Denver, Dallas, San Jose and Seattle. Work on the sites should be completed within the next six months.
The company also is designing and installing fiber optic cabling and other low-voltage wiring at 11 data centers nationwide for a global telecommunications giant. The work is worth approximately $40 million and includes sites in Arizona, California, Florida, Georgia, Illinois, New Jersey, Texas, Virginia and Washington.
Encompass realized third-quarter revenue of more than $100 million from national accounts customers.
Outlook
For the fourth quarter, Encompass estimates it will report earnings of $.25 - $.30 per diluted share. Excluding the results of the locations to be eliminated, the company estimates it would have fourth-quarter earnings between $.30 - $.35 per diluted share and EBITDA of $87 - $95 million.
Encompass is currently in the process of budgeting for the next year and expects to provide an outlook for 2001 by mid- to late December.
Conference Call/Webcast Information
The company will host a conference call to discuss third-quarter results on Tuesday, November 7 at 10 a.m. Eastern Time. To participate in the call, dial 1-800-811-8830 five to ten minutes before the call begins and ask for the Encompass Services conference.
A replay will be available from Tuesday, November 7 until Tuesday, November 14. To access the replay, dial 1-888-203-1112 and use passcode number 422889.
The company will also broadcast the conference call over the Internet from the investor relations section of the company's website at encompserv.com. To participate, log onto the site at least 10 minutes prior to the webcast to pre-register, test connections and download any necessary software. For those unable to listen to the webcast live, it will be archived on the site. |
