| Company: | Emcor Group, Inc. |
| Ticker Symbol: | NYSE: EME |
| Class Period: | April 9, 2003 to October 2, 2003 |
| Court: | District, CT |
| Date Filed: | Apr-09-04 |
| Lead Plaintiff Deadline: | Jun-07-04 |
| Allegations: |
A securities class action lawsuit has been filed on behalf of shareholders who purchased the common stock and other securities of Emcor Group, Inc. ("EMCOR" or the "Company") (NYSE:EME), between April 9, 2003 and October 2, 2003, inclusive (the "Class Period"). The class action lawsuit was filed in the United States District Court of Connecticut
The complaint charges EMCOR, Leicle E. Chesser, Frank T. Macinnis, and Mark Pompa with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that, throughout the Class Period, defendants issued numerous statements to the market concerning the Company's financial results, which failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company's newly acquired contact backlog from the Consolidated Engineering Services, Inc. acquisition contained a high proportion of public sector work and quasi-public sector construction projects, which tended to less profitable than private sector work; (2) that this material change in mix of work materially impaired the Company's ability to generate profits because such work typically generated higher gross margins; (3) that the Company's Selling General and Administrative expenses, related to its facilities management business, would not earn the same level of revenues as it did in its construction business; and (4) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections.
On October 2, 2003, EMCOR provided financial guidance for the second half of 2003 and updated its financial guidance for the 2003 full-year period. Based on current market conditions, the Company expected revenue for the second half of 2003 to be between $2.25 billion and $2.35 billion, and diluted earnings per share to be between $0.90 and $1.01. The Company expected these results to be slightly weighted towards the 2003 fourth quarter. In light of these expectations, the Company's guidance for the 2003 full-year period was for revenue of between $4.4 billion and $4.6 billion, in line with previous estimates, and diluted earnings per share of between $1.65 and $1.75. Contract backlog at September 30th, 2003 was anticipated to be approximately $3.1 billion versus $2.9 billion as of 9/30/02 and 12/31/02. The Company's financial guidance reflected continued solid revenue growth as a result of its leading position in its markets, and profitable results from all the Company's North American operations. However, gross profits continued to be restrained by the high proportion of public sector work within backlog, continued recessionary conditions in most of EMCOR's markets, especially in the Midwestern and Northeastern U.S., and a reduced level of private sector, discretionary, small project work, which typically generated higher gross margins than longer-term work. EMCOR's expected results for the second half of 2003 also reflected the impact of the slower than anticipated return to profitability of the Company's U.K. subsidiary, due to reorganization charges at that subsidiary and to U.K. market conditions.
News of this shocked the market. Shares of EMCOR fell $8.66 per share, or 20%, to close at $34.79 per share.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The complaint charges EMCOR, Leicle E. Chesser, Frank T. Macinnis, and Mark Pompa with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that, throughout the Class Period, defendants issued numerous statements to the market concerning the Company's financial results, which failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company's newly acquired contact backlog from the Consolidated Engineering Services, Inc. acquisition contained a high proportion of public sector work and quasi-public sector construction projects, which tended to less profitable than private sector work; (2) that this material change in mix of work materially impaired the Company's ability to generate profits because such work typically generated higher gross margins; (3) that the Company's Selling General and Administrative expenses, related to its facilities management business, would not earn the same level of revenues as it did in its construction business; and (4) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections.
On October 2, 2003, EMCOR provided financial guidance for the second half of 2003 and updated its financial guidance for the 2003 full-year period. Based on current market conditions, the Company expected revenue for the second half of 2003 to be between $2.25 billion and $2.35 billion, and diluted earnings per share to be between $0.90 and $1.01. The Company expected these results to be slightly weighted towards the 2003 fourth quarter. In light of these expectations, the Company's guidance for the 2003 full-year period was for revenue of between $4.4 billion and $4.6 billion, in line with previous estimates, and diluted earnings per share of between $1.65 and $1.75. Contract backlog at September 30th, 2003 was anticipated to be approximately $3.1 billion versus $2.9 billion as of 9/30/02 and 12/31/02. The Company's financial guidance reflected continued solid revenue growth as a result of its leading position in its markets, and profitable results from all the Company's North American operations. However, gross profits continued to be restrained by the high proportion of public sector work within backlog, continued recessionary conditions in most of EMCOR's markets, especially in the Midwestern and Northeastern U.S., and a reduced level of private sector, discretionary, small project work, which typically generated higher gross margins than longer-term work. EMCOR's expected results for the second half of 2003 also reflected the impact of the slower than anticipated return to profitability of the Company's U.K. subsidiary, due to reorganization charges at that subsidiary and to U.K. market conditions.
News of this shocked the market. Shares of EMCOR fell $8.66 per share, or 20%, to close at $34.79 per share.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
If you feel you qualify for damages or remedies that might be awarded in this class action please fill in our form on the right to submit your complaint.
If your injustice does not match the complaint described above, please use this form to register your complaint. Thank you.
