EME
#Yes.
We're pleased with it.
The way we think of the business, T, is about 80% of that business is in the field; 20% of that business is in the shops; half of that shop business is with the new build heat exchanger capital work.
Half of that shop business.
So, 8% to 10%, depending on the year.
Yes.
It's ---+ well, it's ---+ I like I say, for every $1 we lose in our shops with absorption and everything else, we have to go make $2 somewhere else in EMCOR in revenue.
All that being said, we had an pretty good fall turnaround season.
We had an exceptional fall turnaround season in 2014.
And we didn't think we were going to repeat that, and we have said that.
Yes.
And T, this is <UNK>.
Clearly, we never recouped the lost revenues from the first quarter that didn't get executed pursuant to the refinery operator strike.
Yes.
We're building it in with a measure of confidence ---+ I mean, conservatism; and confidence, I guess, because it is in the conservatism, right.
I look at it the other way.
We never had a maintenance downturn, if you look at the last 2 years, in our refinery maintenance business in the field.
We've grown ---+ if you take all that together ---+ up 40% in Q4 last year; up this year, high teens; up the year before, low 20s.
I mean, we have had very strong underlying growth.
But for this refinery operator strike, we would have had growing earnings in ---+
Industrial.
Industrial.
Despite what happened in ---+ but we lost about $30 million of revenue, give or take.
And that's not even taking any pull-through revenue.
That's stuff we pretty much knew we were going to do.
And we estimated then, I think, $0.06 or $0.08 a share.
The reality was probably higher than that, because we got no pull-through work either in the shops out of those turnarounds.
So, we had a pretty good 2- to 3-year run in refinery maintenance.
We see no reason, with the utilization rates, that that's not going to continue on the maintenance side.
The question is, how does drive ---+ driven miles today ---+ there's an article that it's up; that the refinery profitability in the Midwest is down.
That'll all wash itself out.
It's cyclical.
I would always remind people, though, it depends on what your customers are doing during that time period.
And ---+ less than what's actually going on in the overall market.
Some people want to draw big conclusions because one company's up, one company's down.
Big-picture, the market grows about 3% to 7% a year, depending on the year, on the maintenance side.
That's what it's been doing.
We took a lot of share here over the last couple of years.
It shows the strength of the RepconStrickland acquisition and how, after the first 4 or 5 months, we were again able to hit the ground running.
We feel really good about that.
And quite frankly, it might be an opportunity now to be okay to look for assets in that business long-term.
Because we're bullish on the petrochemical and the refinery business in the US for as far as we can see.
There'll be hiccups along the way, but it's a good business.
Yes.
Look, the places where we had, [quote], execution issues here in the third and fourth quarter, are the same places that have executed some of the best projects that we've ever executed.
Sometimes you get in a situation on these larger projects where schedule ---+ we're a subcontractor.
And when designs start changing and conditions start changing on the job, and schedules get elongated, what really happens on some of these jobs are, you have a set of general conditions you're operating in.
You're paying for all that infrastructure in those general conditions on those jobs.
You're going to be entitled to a chunk of that money after.
It's going to be a fight to get it.
But it's pretty clear that if the job expands 9 months, and you're spending $500,000 a month to have people at the job site doing the administration and the project management and everything else, that you're going to recoup that.
We tend to be ---+ some people aren't ---+ we tend to be very conservative in our estimate of that recovery, because we like people to see where we stand today versus the execution of those jobs.
So, we don't build big unbilled sections.
We don't build big claim portfolios.
And so, we may be a little different than other people, as you can see with the recovery in the mechanical.
I'll take our execution in the transportation sector over time, against anybody's in the industry.
There's a couple of things going on there.
One is just flat mix of work.
When we were doing the fast-turn hospitality work, where every day you can get it open is worth millions of dollars to the operator, it means a lot to get it done in prices.
And when you're able to take your whole company and dedicate it to a separate large ---+ those large jobs, and get 100% absorption on your SG&A almost, because everybody is leaning forward and out into the field, focused on those projects, you tend to get better pricing.
I think you've got a mix issue right now.
And I think, also, it's just ---+ it's just a tougher market.
This has been a very slow recovery.
And in a very slow recovery, I guess we're all learning.
Non-residential construction, I think, through history, tends to snap back a lot quicker.
With this slow recovery, it's had a long time to absorb the work.
And as a result, labor's been able to come on.
Are there spot labor shortages.
Sure; but nothing like you would have experienced in 2007 or 2008.
So, how you get better pricing is, your resources become more valuable.
Your resources, which is ---+ ours is labor ---+ becomes more valuable.
You're able to get an upsell on the price.
We have spots in the country where we can do that, but not ---+ it's not wholesale.
Yes.
I just think in general, when you look at labor, it's still very competitive in the Gulf Coast for the right kinds of labor.
As one of the other analysts pointed out, we're having a 25% capacity increase in our petrochemical base.
That's (inaudible) [but] upstream guys aren't downstream guys ---+ aren't builders; they're different kinds of people.
That's not an easy migration to make for most of the skilled trades.
You have very busy markets in parts of the country like Boston, and New York, and California, right now, on the trade side.
But at EMCOR we don't ---+ we like labor tightness and shortage.
We're one of the biggest in the country.
And I always go back to what I think really skilled people and supervision care about.
The first thing is, are you going to work for a company that's going to make sure you get paid every week.
We're check, check on that.
Are you going to work for a company where the supervision's competent.
Forget about the five people around the table here today, or the six people around the table here today.
Is the supervision in the field competent.
We get triple checks on that.
Maybe the most important thing, then, is, are you going to keep us safe.
And we have ---+ every day we wake up and knock on wood, and thank ---+ and are very thankful that we have the focus on safety and the supervision that focuses on safety that we do.
And so, we can resoundingly answer yes to that.
And are you going to provide me the equipment I need to be safe.
And we can resoundingly say yes to that.
So, we tend to attract the best tradespeople and supervision in the industry.
So, we wish labor would even get tighter.
So, thanks.
Yes.
Thanks for your interest in EMCOR.
We're coming off a very good 2015, and have cautious optimism as we look to 2016.
Thank you.
