Good morning. My name is Adam and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Second Quarter 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will a question-and-answer session. [Operator Instructions] Thank you. I will now turn the conference over toe Mr. Bradley Vitou with FTI Consulting. Sir, you may begin.

Thank you, Adam, and good morning everyone. Welcome to the EMCOR Group conference call. We are here today to discuss the Company’s 2017 second quarter results, which were reported this morning. I would like to turn the call over to Kevin Matz, Executive Vice President of Shared Services, who will introduce the management. Kevin, please go ahead.

Thank you, Brad, and good morning, everyone. Welcome to EMCOR Group’s earnings conference call for the second quarter of 2017, wow, the year has started to fly by. For those of you, who are accessing the call via the Internet and our website, welcome and we hope you have arrived at the beginning of our slide presentation that will accompany our remarks today. You should be on slide 2. Slide 2 has the executives who are with me to discuss the quarter and six months results. They are Tony Guzzi, President and Chief Executive Officer; Mark Pompa, our Executive Vice President and Chief Financial Officer; Maxine Mauricio, our Senior Vice President and General Counsel; and our Vice President, Marketing and Communications, Mava Heffler. For call participants not accessing the conference call via the Internet, this presentation, including the slides will be archived in the Investor Relations section of our website under presentations. You can find this at emcorgroup.com. Before we begin, I want to remind you that this discussion may contain certain forward-looking statements. Any such statements are based upon information available to EMCOR management’s perception as of this date, and EMCOR assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. Such risks and uncertainties include, but are not limited to, adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for EMCOR Services, adverse business conditions, increased competition, mix of business, and risks associated with foreign operations. Certain of the risks and factors associated with EMCOR’s business are also discussed in the Company’s 2016 Form 10-K and in other reports filed from time-to-time with the Securities and Exchange Commission. With all that said, please let me turn the call over to Tony. Tony?

Thank you, Kevin and good morning and welcome to EMCOR Group’s second quarter 2017 conference call. Initially, I’ll be covering pages three to five in my opening commentary. I am going to speak to our quarterly results. Then Mark will cover in detail both the quarter and year-to-date results. You know we had a very good quarter that again really highlights the strength and diversity of EMCOR services and the end markets we serve. We are $0.95 per diluted share from continuing operations, on revenues of $1.9 billion. We had strong operating income margins of 4.9%. Overall, our electrical and mechanical construction segments had excellent quarters. And fill the gap created by the tough comparison we knew that we had and previously discussed in our industrial services segment. Resulting from their excellent second quarter 2016 performance. Our results again are bolstered by very strong operating cash flow in the quarter of $108 million. Our folks can execute and are focused and disciplined. I now want to provide some operating detail by segments for the quarter. Our electrical construction segment had excellent performance with revenue growth of 6.8% and that was mostly organic. Very strong operating income margin of 7.1%, which drove a 39.6% improvement in operating income versus a year ago period. We had excellent execution and really benefit from an absence of badness in the segment. We have strength across our end market customers and markets. Our electrical construction segment continues to perform well in a good market and can execute some of the most complex and sophisticated projects well and we do deliver for our customers. Our mechanical construction segment also had actual performance with 18.6% revenue growth and again most of that revenue growth was organic. We had strong operating income margins of 7.2%. We raised in…

Thank you, Tony and good morning to everyone participating on the call today. For those accessing this presentation via the webcast we are now on slide 6. Over the next five slides I will supplement Tony's opening commentary on EMCOR’s second quarter performance as well as provide a synopsis of our year-to-date results through June 30th. All financial information referenced is derived from our consolidated financial statements included in both our earnings release announcement and Form 10-Q filed with the Securities and Exchange Commission earlier this morning. So, let's review our second quarter performance. Consolidated revenues of $1.9 billion are down $37.5 million or 1.9% quarter-over-quarter to 2016. Revenue distributable to businesses acquired pertaining to the period of time that such businesses were not owned by EMCOR in last year's second quarter impacted the current year's quarter by $44 million and positively impacted our U.S. mechanical construction, U.S. building services and our U.S. electrical construction segments. Excluding the impact of businesses acquired, second quarter revenues declined organically $81.5 million. U.S. electrical construction revenues of $449.2 million, increased $28.6 million or 6.8% from quarter two 2016. Excluding acquisition revenues, this segment grew $22.1 million or 5.2% organically. Revenue growth was largely driven within the commercial and healthcare market sectors inclusive of numerous telecommunication projects, partially offset by quarter-over-quarter revenue declines within the hospitality and institutional market sectors due to certain project completions that occurred in late 2016. U. S. mechanical construction second quarter revenues are $741.8 million, increased $116.3 million or 18.6%. Excluding acquisition revenues of $21 million, this segment’s revenues grew $95.3 million or 15.2% organically quarter-over-quarter. This segment’s revenue growth was primarily driven by higher project activity within the healthcare, commercial, industrial and hospitality market sectors. EMCOR’s total domestic construction business second quarter revenues of $1.19 billion increased, $144.9…

Thanks, Mark, we look forward with the growing backlog put into working capital. I’m on page 11 and I’ll be talking to page 11 and 12 as I talk about backlog. In summary, our backlog continues to grow despite strong underlying revenue growth in our electrical and mechanical construction segments. Total backlog at the end of the second quarter is $4.1 billion, up $291 million or 7.6% from 2016. It is also up from year-end by $199 million or 5.1%. Another quarter of strong project bookings on top of strong top line revenue. Book-to-bill for the quarter was a strong 1.06. We're halfway through the year now. Our markets continue to give us solid opportunities to win work across most sectors and our electrical and mechanical construction segments are executing well. Really with the work we have, all our businesses are executing well with the work they have. When you focus on the market sectors, we continue to win commercial projects and that's evidenced by our commercial backlog logging in almost $1.5 billion, up $250 million from the year ago period and up $163 million from December 2016. Commercial backlog is up 20% year-over-year, which correlates with recent census nonresidential spending there for the sector. We realize the census data is a rear view mirror look, but it also can be with the momentum in it, our future indicator. It doesn't look that right now the demand is slowing much at this time. Backlog in institutional healthcare and hospitality sector is up year-over-year and for the first six months of 2017. While backlog of the transportation and industrial sectors are down as we work down some large projects in [indiscernible] especially in the food processing and transportation infrastructure areas. Bottom line that productivity is fairly widespread across most sectors and…

[Operator Instructions] And your first question comes from the line of Tahira Afzal with KeyBanc Capital Markets.

This is Sean on for Tahira today. Congrats on a great quarter. First question for me is just you know just looking at the construction segments, given the broader market outlook mid-single digits for this year, you guys are obviously tracking way ahead of that. So, I'm just wondering how we should be thinking about sort of a sustainable growth rate for those segments as we look out to 2018. Also if you could tie in maybe how that dispute might have helped the 15% organic growth we saw in mechanical this quarter that would also be helpful.

Let me break apart the question. We’ve had good background growth in our construction segments. A lot of this work is fast paced, some will go into 2018. I think you know we don't give 2018 guidance at this point. On the second point, I'm going to turn it over to Mark, the reality is, most of that just happens on the income line as far as the growth rate that Mark will walk through the dispute resolution and the characteristics around that.

Yeah, thank you Tony. With regards to the dispute resolution, it was a recovery of cost. So as Tony indicated, it actually did go through the gross profit line and not through revenue, so it did not impact the 15% quarter-over-quarter organic revenue growth. Again, clearly both of our domestic construction segments continue to perform at a very strong level. For the most part a lot of the work that we’re currently executing, project timelines tend to be kind of in our sweet spot, which are on the low end anywhere from 4 months to 5 months to 9 months to 12 months. We continue to have some longer burn work that we've had over a long number of years. So, when we sit down and get to our planning process for 2018 we’ll certainly be a lot smarter and be able to respond to that question as Tony indicated.

Then second, I just wanted to move over to Ardent where we're pretty much a year in here. I was hoping you guys could discuss what they're seeing in there. Particularly in their energy end markets and maybe how their contribution is shaping up versus your initial expectations?

They were a little weaker than we expected initially, really driven by the market. We expect the rigs that have come on are basically returning to places have already been set up from an infrastructure standpoint. Of course electrical equipment doesn't wear out the way mechanical equipment does. Secondarily, they continue to get very good penetration in downstream. They were very successful there. Especially, their Corpus Christi operations, which is Rabalais. It is very successful on some of the infrastructure work down there around the energy infrastructure. But as the pipeline work materializes, we think in the latter part of 2017 going through the latter part of 2018, would be at the later stages of that versus the developers that have been awarded the work for the mainline contractors that we think then we'll see the improvement. Here is a long play for us. We think they're very good management team and we’re bullish on the prospects of long term with the energy recovery.

Thanks a lot, Tony. Helpful guys. I’ll pass it along.

Thank you.

And your next question comes from the line of Noelle Dilts with Stifel.

Good morning, Noelle.

Hi, good morning. Congrats on a nice quarter. So, my first question just looking at your $7.6 billion revenue guidance, you know looking at that consensus right now and already estimates are a little bit ahead of that. So, I'm kind of just trying to better understand maybe where we as analysts are maybe a little bit maybe ahead of what you're thinking. So, if you could give us some thoughts on kind of what you're expecting in terms of annual growth out of the key segments that would be helpful.

Well, I mean construction will be up with electrical and mechanical. Building services are likely to be down despite the strong underlying mechanical services growth. Like we foreshadowed over the last 14 months, we expect industrial will be down and I think we've seen that year-to-date. Put all that together, absent some specialty services in industrial, absent faster implementation on some of these new contract awards in building services. We think we got the revenue guidance about right.

Okay. Then on just kind of shifting to the high level thoughts on the non-res market. Some of the concerns we’re hearing or the things we're hearing are that we might see some growth shift from some of the larger tier one markets like say, New York into some of the medium sized cities, given your strong New York presence. I wanted to know your view on that and how you're thinking about and some of this growth as we head into the back half of 2017 and into 2018.

So, if you think about some of the growth in New York. Now in New Jersey we do some residential high rise and we’ve been very successful at it on the [indiscernible] we see that continuing. We've never been big players in New York residential high rise, which is where you see a lot of the cranes. We are significant players in infrastructure and we are in building reset retrofit. So, the work that’s already been done in places like Hudson Yards and some of the other developments around there, now is in our sweet spot to go in and do some of the work. And then some of the infrastructure work, the bridges and tunnels we’re doing very well. As more work becomes available around that we will be there to participate. That’s one of the beauties of EMCOR is we're not dependent on any given market and all of New York is important to us. We have the ability to shift other markets and we have shown that, right, you see the balance between industrial last year and now mechanical and electrical this year, it’s very similar to graphic basis for us.

Great. And then one last question on the downstream services side. We've seen a number of participants in this space kind of struggle with some delays and push-outs of work, which you attributed to some extent to crack spreads being up again. Can you just give us some thoughts on what in your opinion is sort of the ideal environment for refiners to start spending in a major way again? What kind of stopped some of these deferrals that we've been seeing over the past couple of years?

Unfortunately, we had our first, other than the strike, we had our first experience with deferrals, right, over the last three [indiscernible] talk about. No, I think a lot of this is very customer specific. And you know integrated behave different than refining only companies. A lot of it has to do with what's going on in their fleet and the kind of crew they're taking in. I think broadly speaking, it is poised to be a healthier sector. I think from account to this market, Mark and I were talking about this. The reality is if you're an integrated oil company sometimes you delay things because the refining operation is where you’re actually making money now. As oil prices come back even though that’s upstream driven, that on the integrated side has a positive impact on the refining maintenance spend. On the non-integrated side, it’s all about fleet management for them and crude slate management. One of the things I think that's a little different is overall, I think some of it is, its apples and oranges for some of the companies that are reporting. They were highly dependent some of these companies are made in [ph] upstream and they're blaming downstream for some their problems. The reality is made in [ph] upstream is getting better, but it's nowhere near what it was.

Great. Thank you.

And your next question comes from the line of Adam Thalhimer with Thompson Davis.

Good morning guys. Nice quarter.

Thanks.

Hey, first quarter just can you give us a little more color around the industrial services margin in the quarter. Was that down just on lower utilization?

Yeah, lower label utilization, so we have a fixed cost in there, it guarantees some of your key people, especially to all people certain hours. We've been able to utilize them over the last in 2015/2016 in the second quarter, which is unusual by the way. The more normal practice obviously is a little worse than it can be. Usually, it’d 4% or 5% margins. So, with the push out at the last minute of this turnaround we ate more cost than we typically would and we didn’t get the margin to go with it. Yeah, it’s fixed of utilization of your labor force for the people that are actually going to run the turnarounds, the more senior guys.

So you would expect this to go back to –

Yeah, fall turnaround season gets better is what we plan. Then we should see improved margins as we go at the back half of the year.

Okay. And then, along that same lines, if you get a strong fall turnaround season, do you think you could have growth year-over-year in industrial services revenue now.

No.

Okay. So you won’t get back to revenue growth in that segment until you go up against this Q2 2017 comp –

Yes.

Okay. And then I didn’t understand you said you were bidding or you had won something in building services that could be significant?

We were in the pilot stages of three new contracts. They’re pilots. We’re doing very well in the pilots. We expect them to grow over the next 12 months to 18 months. Our implementation can look like a very slow and steady implementation or sometimes it really accelerates as the customer sees how much money they're really saving because we bring, people this is what we do everyday versus on the customers side a lot of times, people as part of what they do.

Okay. So, that’s energy retrofit work done, that’s governmental –

No. It’s around technician work and site based work for the most part. Now we do energy retrofit work on top of that. But that'll be post 12 months to 18 months as we get into building another customer account.

And its additive to base contracts?

Yeah, its additive, it’s all part of the contract.

Okay. And then lastly, Mark, are there any more, dispute resolutions outstanding or does this kind of clear everything up?

Well, there is always dispute resolutions outstanding. Relative to order of magnitude of things that we talked about in the past. We’re very thankful that this particular matter resolved itself as quickly as it did because it relates to the issue that we had in the fourth quarter with the large write down that we had. Typically, they don't resolve themselves within six months after something like that happening. But I don't see anything in the near term that even is remotely close to what we had experienced over quarter one and quarter two this year on the favorable side. Clearly as Tony mentioned, a number of times in his commentary, we're happy that the absence of badness it did impact 2016 and to a lesser extent 2015, seems to be behind us as plough through to the remainder of this year into 2018.

Yeah, I mean like Mark said this was quite unusual and was fairly unique, right. We were working directly for the principal, who also controlled the decision making and the spending authorization, that's not usually the case.

Okay. Perfect thanks.

Thank you.

And your next question comes from the line of John D’Angelo with Macquarie. John D’Angelo: Hey guys, good morning. Thank you for taking my questions.

Sure, shoot. John D’Angelo: So, I mean, it looks like in the Q, can you just confirm that Ardent only did $6.5 million in revenue during the quarter?

John, this is Mark Pompa, that $6.5 million is the incremental revenue because we acquired Ardent in the middle of April of 2016, so that's reflective of this two weeks of activity. John D’Angelo: Okay. Fair enough. And then, my next question is if you look at like sort of the organic margins for the mechanical segment. I’m actually sort of getting that the core operating margins were down versus 2Q of last year, while organic revenues were 15%. So, can you sort of just walkthrough why exactly did that happen? Then backlog continues to grow in that space. Could backlog be getting sold with lower margin work?

No, I think a lot of is just timing. We’ll probably didn’t look front end of some of work right now. Our margins just tend to be lower. The underlying fundamentals are very good in the business. This is not a quarterly margin business, none of them are. You sort of have to go looking at 12 rolling average, even if, the five quarter rolling average. And anytime our mechanical business is in the high fives or low sixes, it’s performing well. The backlog is good, there’s no underlying issues in it. John D’Angelo: Okay. Thanks again.

Thank you.

[Operator Instructions] And your next question comes from the line of Brent Thielman with D.A. Davidson.

Good morning, Brent.

Hey, good morning, great quarter. Maybe sticking to that margin question and Tony, really trying to think about the runway for construction margins from here. So, looking at the backlog, you had a couple of quarters in a row where public sector moving into backlog is outpacing growth in private. Clearly, private stood at next level. I guess, the question is as you’re seeing more cylinders the market is starting to run. Is this the sort of change that allows you to be even more selective about work, you're going after right now?

I think the selective point side is correct from a different reason though. We have to pay attention to the capacity we have. We’re not capacity constraint, but we want to make sure that we have the right people available to do right jobs. And it becomes the sequencing issues especially, so that we can be able to serve some of our better customers when they need us. So selective activity for us et cetera is around availability of the right resources to execute the work. I think there’s other parts of it that matter to us too. We think a lot about who we’re working for. We think about the financial stability of the people we’re working for. Have we worked with them before, have we worked in that geography before? Do we have a labor force that can work in that geography well? Do we have a supervision we can bring to bear on the project and what does the cash flows look like on the project. When you put all that together that's how selectivity works for us, assuming we have a technical capabilities do the work. I think right now the market is in such a position that sometimes the best job you want, sometime a larger work that’s happened in the market, if you can't get it the right price sometimes it’s better to bid that to a level where you’d be comfortable if you wanted. And if you didn’t know that there will be capacity absorbed in that market and you'll be able to compete on the other work that will come and you’re likely to be more successful although smaller, some of the work to be more successful from a margin standpoint.

And Tony to that last point, market where it is right now, do you feel like it was there 12 months ago?

Yes.

Okay. And then maybe a question for Mark on the industrial services side, kind of thinking about the headwind there. Would you happen to know the large project impact on revenues in 3Q last year. Just trying to get a feel for what the base business comps are, was it forecasting out for the second half of this year?

I respect the question, we purposely haven’t disclosed that, because we’re sensitive to our customer and what level of information they want out in the public domain. So, unfortunately, I’m not willing to share that with you at this time.

Okay. Fair enough. Thanks for your time guys.

Thank you. Adam, is that it?

Yes, sir. And now I will turn the call back to management for closing remarks.

Hey, great. Look, thank you all for your interest in EMCOR. We have a decent market right now for a majority of what we do. And we have great people executing that work every day and our primary mission is to execute well for our customers, do well for our shareholders and primarily the first mission is to keep our people safe and productive. So, with that, we’ll go and we’ll see you in October. Bye.

And this concludes today’s conference call. Thank you for your participation. You may now disconnect.