FORM
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10-Q
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(Mark One)
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☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
|
December 31, 2019
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OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission file number
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001-13783
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Delaware
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76-0542208
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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IESC
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NASDAQ Global Market
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Rights to Purchase Preferred Stock
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IESC
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NASDAQ Global Market
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Large accelerated filer
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☐
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Accelerated filer
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☑
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Non-accelerated filer
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☐
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Smaller reporting company
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☑
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Emerging growth company
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☐
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Page
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•
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the ability of our controlling stockholder to take action not aligned with other stockholders;
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•
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the sale or disposition of all or any portion of the shares of our common stock held by our controlling stockholder, which, could trigger change of control provisions in a number of our material agreements, including our financing and surety arrangements and our executive severance plan, as well as exercisability of the purchase rights under our tax benefit protection plan;
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•
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the possibility that certain tax benefits of our net operating losses may be restricted or reduced in a change in ownership or a change in the federal tax rate;
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•
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the potential recognition of valuation allowances or write-downs on deferred tax assets;
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•
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the inability to carry out plans and strategies as expected, including our inability to identify and complete acquisitions that meet our investment criteria in furtherance of our corporate strategy, or the subsequent underperformance of those acquisitions;
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•
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limitations on the availability of sufficient credit or cash flow to fund our working capital needs and capital expenditures and debt service;
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•
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difficulty in fulfilling the covenant terms of our credit facility, including liquidity, and other financial requirements, which could result in a default and acceleration of any indebtedness we may incur under our revolving credit facility;
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•
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the possibility that we issue additional shares of common stock or convertible securities that will dilute the percentage ownership interest of existing stockholders and may dilute the value per share of our common stock;
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•
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the relatively low trading volume of our common stock, as a result of which it could be more difficult for shareholders to sell a substantial number of shares for the same price at which shareholders could sell a smaller number of shares;
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•
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competition in the industries in which we operate, both from third parties and former employees, which could result in the loss of one or more customers or lead to lower margins on new projects;
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•
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future capital expenditures and refurbishment, repair and upgrade costs; and delays in and costs of refurbishment, repair and upgrade projects;
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•
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a general reduction in the demand for our services;
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•
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our ability to enter into, and the terms of, future contracts;
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•
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success in transferring, renewing and obtaining electrical and other licenses;
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•
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challenges integrating new businesses into the Company or new types of work, products or processes into our segments;
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•
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credit and capital market conditions, including changes in interest rates that affect the cost of construction financing and mortgages, and the inability for some of our customers to retain sufficient financing, which could lead to project delays or cancellations;
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•
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backlog that may not be realized or may not result in profits;
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•
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the possibility of errors when estimating revenue and progress to date on percentage-of-completion contracts;
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•
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uncertainties inherent in estimating future operating results, including revenues, operating income or cash flow;
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•
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complications associated with the incorporation of new accounting, control and operating procedures;
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•
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closures or sales of facilities resulting in significant future charges, including potential warranty losses or other unexpected liabilities, or a significant disruption of our operations;
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•
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an increased cost of surety bonds affecting margins on work and the potential for our surety providers to refuse bonding or require additional collateral at their discretion;
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•
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fluctuations in operating activity due to downturns in levels of construction or the housing market, seasonality and differing regional economic conditions;
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•
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our ability to successfully manage projects;
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•
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inaccurate estimates used when entering into fixed-priced contracts;
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•
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the cost and availability of qualified labor and the ability to maintain positive labor relations;
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•
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our ability to pass along increases in the cost of commodities used in our business, in particular, copper, aluminum, steel, fuel and certain plastics;
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•
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a change in the mix of our customers, contracts or business;
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•
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increases in bad debt expense and days sales outstanding due to liquidity problems faced by our customers;
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•
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the recognition of potential goodwill, long-lived assets and other investment impairments;
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•
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potential supply chain disruptions due to credit or liquidity problems faced by our suppliers;
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•
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accidents resulting from the physical hazards associated with our work and the potential for accidents;
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•
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the possibility that our current insurance coverage may not be adequate or that we may not be able to obtain policies at acceptable rates;
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•
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the possibility that our internal controls over financial reporting and our disclosure controls and procedures may not prevent all possible errors that could occur;
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•
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disagreements with taxing authorities with regard to tax positions we have adopted;
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•
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the recognition of tax benefits related to uncertain tax positions;
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•
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the effect of litigation, claims and contingencies, including warranty losses, damages or other latent defect claims in excess of our existing reserves and accruals;
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•
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growth in latent defect litigation in states where we provide residential electrical work for home builders not otherwise covered by insurance;
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•
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interruptions to our information systems and cyber security or data breaches;
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•
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liabilities under laws and regulations protecting the environment; and
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•
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loss of key personnel and effective transition of new management.
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December 31,
|
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September 30,
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||||
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|
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|
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2019
|
|
2019
|
||||
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(Unaudited)
|
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|
||||
ASSETS
|
|
|
|
|
|||||||
CURRENT ASSETS:
|
|
|
|
|
|||||||
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Cash and cash equivalents
|
|
$
|
27,295
|
|
|
$
|
18,934
|
|
|
|
|
Accounts receivable:
|
|
|
|
|
|||||
|
|
|
Trade, net of allowance of $1,009 and $1,184, respectively
|
|
169,559
|
|
|
186,279
|
|
||
|
|
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Retainage
|
|
32,992
|
|
|
29,214
|
|
||
|
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Inventories
|
|
19,861
|
|
|
21,543
|
|
|||
|
|
Costs and estimated earnings in excess of billings
|
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27,941
|
|
|
29,860
|
|
|||
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Prepaid expenses and other current assets
|
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12,088
|
|
|
10,625
|
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|||
Total current assets
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289,736
|
|
|
296,455
|
|
|||||
Property and equipment, net
|
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25,613
|
|
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25,746
|
|
|||||
Goodwill
|
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50,622
|
|
|
50,622
|
|
|||||
Intangible assets, net
|
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25,740
|
|
|
26,623
|
|
|||||
Deferred tax assets
|
|
38,064
|
|
|
40,874
|
|
|||||
Operating right of use assets
|
|
34,940
|
|
|
0
|
|
|||||
Other non-current assets
|
|
5,150
|
|
|
4,938
|
|
|||||
Total assets
|
|
$
|
469,865
|
|
|
$
|
445,258
|
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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|||||||
CURRENT LIABILITIES:
|
|
|
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|
|||||||
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Accounts payable and accrued expenses
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|
140,379
|
|
|
152,909
|
|
|||
|
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Billings in excess of costs and estimated earnings
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45,555
|
|
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40,563
|
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|||
Total current liabilities
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185,934
|
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|
193,472
|
|
|||||
Long-term debt
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319
|
|
|
299
|
|
|||||
Operating long-term lease liabilities
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23,718
|
|
|
0
|
|
|||||
Other non-current liabilities
|
|
2,206
|
|
|
1,945
|
|
|||||
Total liabilities
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|
212,177
|
|
|
195,716
|
|
|||||
Noncontrolling interest
|
|
2,910
|
|
|
3,294
|
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|||||
STOCKHOLDERS’ EQUITY:
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|||||||
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Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued
|
|
|
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|
|||||
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and outstanding
|
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—
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|
|
—
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Common stock, $0.01 par value, 100,000,000 shares authorized; 22,049,529
|
|
|
|
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|||||
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|
issued and 21,223,176 and 21,165,011 outstanding, respectively
|
|
220
|
|
|
220
|
|
||
|
|
Treasury stock, at cost, 826,353 and 884,518 shares, respectively
|
|
(11,998
|
)
|
|
(12,483
|
)
|
|||
|
|
Additional paid-in capital
|
|
192,499
|
|
|
192,911
|
|
|||
|
|
Retained earnings
|
|
74,057
|
|
|
65,600
|
|
|||
Total stockholders’ equity
|
|
254,778
|
|
|
246,248
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
469,865
|
|
|
$
|
445,258
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
||||||
|
|
|
|
|
|
2019
|
|
2018
|
||||
|
|
Revenues
|
|
$
|
276,043
|
|
|
$
|
243,842
|
|
||
|
|
Cost of services
|
|
|
225,828
|
|
|
|
202,241
|
|
||
|
|
|
Gross profit
|
|
|
50,215
|
|
|
|
41,601
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
37,872
|
|
|
|
32,086
|
|
||
|
|
Contingent consideration
|
|
|
0
|
|
|
|
34
|
|
||
|
|
Gain on sale of assets
|
|
|
(36
|
)
|
|
|
(3
|
)
|
||
|
|
|
Operating income
|
|
|
12,379
|
|
|
|
9,484
|
|
|
|
|
Interest and other (income) expense:
|
|
|
|
|
|
|
||||
|
|
Interest expense
|
|
|
239
|
|
|
|
547
|
|
||
|
|
Other (income) expense, net
|
|
|
141
|
|
|
|
47
|
|
||
|
|
Income from operations before income taxes
|
|
|
11,999
|
|
|
|
8,890
|
|
||
|
|
Provision for income taxes
|
|
|
3,469
|
|
|
|
1,907
|
|
||
|
|
Net income
|
|
|
8,530
|
|
|
|
6,983
|
|
||
|
|
Net income attributable to noncontrolling interest
|
|
|
(28
|
)
|
|
|
(99
|
)
|
||
|
|
Comprehensive income attributable to IES Holdings, Inc.
|
|
$
|
8,502
|
|
|
$
|
6,884
|
|
||
|
|
|
|
|
|
|
|
|
||||
|
|
Earnings per share attributable to IES Holdings, Inc.:
|
|
|
|
|
|
|
||||
|
|
|
Basic
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
|
|
|
|
Diluted
|
|
$
|
0.39
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Shares used in the computation of earnings per share:
|
|
|
|
|
|
|||||
|
|
|
Basic
|
|
|
20,883,477
|
|
|
|
21,233,132
|
|
|
|
|
|
Diluted
|
|
|
21,148,312
|
|
|
|
21,261,065
|
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
Retained Earnings
|
|
Total Stockholders' Equity
|
|||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
APIC
|
|
|
||||||||||||||
BALANCE, September 30, 2019
|
22,049,529
|
|
|
$
|
220
|
|
|
(884,518
|
)
|
|
$
|
(12,483
|
)
|
|
$
|
192,911
|
|
|
$
|
65,600
|
|
|
$
|
246,248
|
|
|
|
Issuances under compensation plans
|
—
|
|
|
|
—
|
|
|
95,409
|
|
|
|
1,343
|
|
|
|
(1,343
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Acquisition of treasury stock
|
—
|
|
|
|
—
|
|
|
(37,244
|
)
|
|
|
(858
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(858
|
)
|
|
Non-cash compensation
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
931
|
|
|
|
—
|
|
|
|
931
|
|
|
Increase in noncontrolling interest
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(45
|
)
|
|
|
(45
|
)
|
|
Net income attributable to IES Holdings, Inc.
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,502
|
|
|
|
8,502
|
|
BALANCE, December 31, 2019
|
22,049,529
|
|
|
$
|
220
|
|
|
(826,353
|
)
|
|
$
|
(11,998
|
)
|
|
$
|
192,499
|
|
|
$
|
74,057
|
|
|
$
|
254,778
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
Retained Earnings
|
|
Total Stockholders' Equity
|
|||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
APIC
|
|
|
||||||||||||||
BALANCE, September 30, 2018
|
22,049,529
|
|
|
$
|
220
|
|
|
(843,993
|
)
|
|
$
|
(8,937
|
)
|
|
$
|
196,810
|
|
|
$
|
32,314
|
|
|
$
|
220,407
|
|
|
|
Issuances under compensation plans
|
—
|
|
|
|
—
|
|
|
212,688
|
|
|
|
2,252
|
|
|
|
(2,252
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Cumulative effect adjustment from adoption of ASU 2014-09
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
102
|
|
|
|
102
|
|
|
Acquisition of treasury stock
|
—
|
|
|
|
—
|
|
|
(132,121
|
)
|
|
|
(2,211
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,211
|
)
|
|
Non-cash compensation
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
49
|
|
|
|
—
|
|
|
|
49
|
|
|
Net income attributable to IES Holdings, Inc.
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
6,884
|
|
|
|
6,884
|
|
|
BALANCE, December 31, 2018
|
22,049,529
|
|
|
$
|
220
|
|
|
(763,426
|
)
|
|
$
|
(8,896
|
)
|
|
$
|
194,607
|
|
|
$
|
39,300
|
|
|
$
|
225,231
|
|
|
|
|
|
Three Months Ended December 31,
|
||||||
|
|
|
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||
|
Net income
|
|
$
|
8,530
|
|
|
$
|
6,983
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|||
|
|
Bad debt expense
|
|
|
21
|
|
|
|
38
|
|
|
|
Deferred financing cost amortization
|
|
|
101
|
|
|
|
77
|
|
|
|
Depreciation and amortization
|
|
|
2,362
|
|
|
|
2,372
|
|
|
|
Gain on sale of assets
|
|
|
(36
|
)
|
|
|
(3
|
)
|
|
|
Non-cash compensation expense
|
|
|
931
|
|
|
|
49
|
|
|
|
Deferred income taxes
|
|
|
2,815
|
|
|
|
1,907
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||
|
|
Accounts receivable
|
|
|
16,699
|
|
|
|
(9,750
|
)
|
|
|
Inventories
|
|
|
1,683
|
|
|
|
(2,915
|
)
|
|
|
Costs and estimated earnings in excess of billings
|
|
|
1,918
|
|
|
|
7,015
|
|
|
|
Prepaid expenses and other current assets
|
|
|
(6,291
|
)
|
|
|
(3,012
|
)
|
|
|
Other non-current assets
|
|
|
74
|
|
|
|
(1,449
|
)
|
|
|
Accounts payable and accrued expenses
|
|
|
(22,772
|
)
|
|
|
(3,552
|
)
|
|
|
Billings in excess of costs and estimated earnings
|
|
|
4,992
|
|
|
|
1,478
|
|
|
|
Other non-current liabilities
|
|
|
(6
|
)
|
|
|
(603
|
)
|
Net cash provided by (used in) operating activities
|
|
|
11,021
|
|
|
|
(1,365
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||
|
Purchases of property and equipment
|
|
|
(1,391
|
)
|
|
|
(2,088
|
)
|
|
|
Proceeds from sale of assets
|
|
|
46
|
|
|
|
3
|
|
|
Net cash used in investing activities
|
|
|
(1,345
|
)
|
|
|
(2,085
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||
|
Borrowings of debt
|
|
|
104,189
|
|
|
|
93
|
|
|
|
Repayments of debt
|
|
|
(104,189
|
)
|
|
|
(101
|
)
|
|
|
Distribution to noncontrolling interest
|
|
|
(457
|
)
|
|
|
0
|
|
|
|
Purchase of treasury stock
|
|
|
(858
|
)
|
|
|
(2,211
|
)
|
|
Net cash used in financing activities
|
|
|
(1,315
|
)
|
|
|
(2,219
|
)
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
8,361
|
|
|
|
(5,669
|
)
|
||
CASH, CASH EQUIVALENTS, beginning of period
|
|
|
18,934
|
|
|
|
26,247
|
|
||
CASH, CASH EQUIVALENTS, end of period
|
|
$
|
27,295
|
|
|
$
|
20,578
|
|
||
|
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
||||
|
|
Cash paid for interest
|
|
$
|
273
|
|
|
$
|
524
|
|
|
|
Cash paid for income taxes (net)
|
|
$
|
(707
|
)
|
|
$
|
92
|
|
•
|
Commercial & Industrial – Provider of electrical and mechanical design, construction, and maintenance services to the commercial and industrial markets in various regional markets and nationwide in certain areas of expertise, such as the power infrastructure market.
|
•
|
Communications – Nationwide provider of technology infrastructure services, including the design, build, and maintenance of the communications infrastructure within data centers for co-location and managed hosting customers for both large corporations and independent businesses.
|
•
|
Infrastructure Solutions – Provider of electro-mechanical solutions for industrial operations, including apparatus repair and custom-engineered products such as generator enclosures to be used in data centers and other industrial applications.
|
•
|
Residential – Regional provider of electrical installation services for single-family housing and multi-family apartment complexes.
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Commercial & Industrial
|
|
$
|
67,743
|
|
|
$
|
72,583
|
|
Communications
|
|
84,289
|
|
|
69,325
|
|
||
Infrastructure Solutions
|
|
|
|
|
||||
Industrial Services
|
|
11,111
|
|
|
12,223
|
|
||
Custom Power Solutions
|
|
20,172
|
|
|
17,256
|
|
||
Total
|
|
31,283
|
|
|
29,479
|
|
||
Residential
|
|
|
|
|
||||
Single-family
|
|
54,874
|
|
|
50,476
|
|
||
Multi-family and Other
|
|
37,854
|
|
|
21,979
|
|
||
Total
|
|
92,728
|
|
|
72,455
|
|
||
Total Revenue
|
|
$
|
276,043
|
|
|
$
|
243,842
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2019
|
|||||||||||||||||||
|
|
|
Commercial & Industrial
|
|
Communications
|
|
Infrastructure Solutions
|
|
Residential
|
|
Total
|
||||||||||
Fixed-price
|
|
$
|
63,835
|
|
|
$
|
62,027
|
|
|
$
|
29,491
|
|
|
$
|
92,728
|
|
|
$
|
248,081
|
|
|
Time-and-material
|
|
|
3,908
|
|
|
|
22,262
|
|
|
|
1,792
|
|
|
|
—
|
|
|
|
27,962
|
|
|
Total revenue
|
|
$
|
67,743
|
|
|
$
|
84,289
|
|
|
$
|
31,283
|
|
|
$
|
92,728
|
|
|
$
|
276,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended December 31, 2018
|
|||||||||||||||||||
|
|
|
Commercial & Industrial
|
|
Communications
|
|
Infrastructure Solutions
|
|
Residential
|
|
Total
|
||||||||||
Fixed-price
|
|
$
|
65,830
|
|
|
$
|
48,829
|
|
|
$
|
27,511
|
|
|
$
|
72,455
|
|
|
$
|
214,625
|
|
|
Time-and-material
|
|
|
6,753
|
|
|
|
20,496
|
|
|
|
1,968
|
|
|
|
—
|
|
|
|
29,217
|
|
|
Total revenue
|
|
$
|
72,583
|
|
|
$
|
69,325
|
|
|
$
|
29,479
|
|
|
$
|
72,455
|
|
|
$
|
243,842
|
|
|
|
December 31,
|
|
September 30,
|
||||
|
|
2019
|
|
2019
|
||||
Costs and estimated earnings on uncompleted contracts
|
|
$
|
750,341
|
|
|
$
|
761,401
|
|
Less: Billings to date and unbilled accounts receivable
|
|
|
(767,955
|
)
|
|
|
(772,104
|
)
|
|
|
$
|
(17,614
|
)
|
|
$
|
(10,703
|
)
|
|
|
December 31,
|
|
September 30,
|
||||
|
|
2019
|
|
2019
|
||||
Costs and estimated earnings in excess of billings
|
|
$
|
27,941
|
|
|
$
|
29,860
|
|
Billings in excess of costs and estimated earnings
|
|
|
(45,555
|
)
|
|
|
(40,563
|
)
|
|
|
$
|
(17,614
|
)
|
|
$
|
(10,703
|
)
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
|
|
||
Net income attributable to common stockholders of IES Holdings, Inc.
|
|
$
|
8,337
|
|
|
$
|
6,884
|
|
Increase (decrease) in noncontrolling interest
|
|
|
45
|
|
|
|
—
|
|
Net income attributable to restricted stockholders of IES Holdings, Inc.
|
|
|
120
|
|
|
|
—
|
|
Net income attributable to IES Holdings, Inc.
|
|
$
|
8,502
|
|
|
$
|
6,884
|
|
|
|
|
|
|
|
|
||
Denominator:
|
|
|
|
|
|
|
||
Weighted average common shares outstanding — basic
|
|
|
20,883,477
|
|
|
|
21,233,132
|
|
Effect of dilutive stock options and non-vested restricted stock
|
|
|
264,835
|
|
|
|
27,933
|
|
Weighted average common and common equivalent shares outstanding — diluted
|
|
|
21,148,312
|
|
|
|
21,261,065
|
|
|
|
|
|
|
|
|
||
Earnings per share attributable to IES Holdings, Inc.:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
Diluted
|
|
$
|
0.39
|
|
|
$
|
0.32
|
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||||||||||
|
|
Commercial & Industrial
|
|
Communications
|
|
Infrastructure Solutions
|
|
Residential
|
|
Corporate
|
|
Total
|
||||||||||||
Revenues
|
$
|
67,743
|
|
|
$
|
84,289
|
|
|
$
|
31,283
|
|
|
$
|
92,728
|
|
|
$
|
—
|
|
|
$
|
276,043
|
|
|
Cost of services
|
61,008
|
|
|
68,722
|
|
|
23,513
|
|
|
72,585
|
|
|
—
|
|
|
225,828
|
|
|||||||
Gross profit
|
6,735
|
|
|
15,567
|
|
|
7,770
|
|
|
20,143
|
|
|
—
|
|
|
50,215
|
|
|||||||
Selling, general and administrative
|
7,288
|
|
|
8,569
|
|
|
4,493
|
|
|
13,720
|
|
|
3,802
|
|
|
37,872
|
|
|||||||
Loss (gain) on sale of assets
|
(27
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|||||||
Operating income (loss)
|
(526
|
)
|
|
7,007
|
|
|
3,277
|
|
|
6,423
|
|
|
(3,802
|
)
|
|
12,379
|
|
|||||||
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Depreciation and amortization expense
|
$
|
676
|
|
|
$
|
337
|
|
|
$
|
1,120
|
|
|
$
|
210
|
|
|
$
|
19
|
|
|
$
|
2,362
|
|
|
Capital expenditures
|
$
|
460
|
|
|
$
|
282
|
|
|
$
|
437
|
|
|
$
|
212
|
|
|
$
|
—
|
|
|
$
|
1,391
|
|
|
Total assets
|
$
|
80,612
|
|
|
$
|
113,574
|
|
|
$
|
112,413
|
|
|
$
|
77,109
|
|
|
$
|
86,157
|
|
|
$
|
469,865
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||||
|
|
Commercial & Industrial
|
|
Communications
|
|
Infrastructure Solutions
|
|
Residential
|
|
Corporate
|
|
Total
|
||||||||||||
Revenues
|
$
|
72,583
|
|
|
$
|
69,325
|
|
|
$
|
29,479
|
|
|
$
|
72,455
|
|
|
$
|
—
|
|
|
$
|
243,842
|
|
|
Cost of services
|
63,908
|
|
|
57,359
|
|
|
23,552
|
|
|
57,422
|
|
|
—
|
|
|
202,241
|
|
|||||||
Gross profit
|
8,675
|
|
|
11,966
|
|
|
5,927
|
|
|
15,033
|
|
|
—
|
|
|
41,601
|
|
|||||||
Selling, general and administrative
|
6,716
|
|
|
6,934
|
|
|
4,481
|
|
|
11,137
|
|
|
2,818
|
|
|
32,086
|
|
|||||||
Contingent consideration
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|||||||
Loss (gain) on sale of assets
|
(3
|
)
|
|
—
|
|
|
0
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Operating income (loss)
|
1,962
|
|
|
5,032
|
|
|
1,412
|
|
|
3,896
|
|
|
(2,818
|
)
|
|
9,484
|
|
|||||||
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Depreciation and amortization expense
|
$
|
626
|
|
|
$
|
415
|
|
|
$
|
1,094
|
|
|
$
|
209
|
|
|
$
|
28
|
|
|
$
|
2,372
|
|
|
Capital expenditures
|
$
|
852
|
|
|
$
|
500
|
|
|
$
|
187
|
|
|
$
|
447
|
|
|
$
|
102
|
|
|
$
|
2,088
|
|
|
Total assets
|
$
|
78,924
|
|
|
$
|
88,534
|
|
|
$
|
114,475
|
|
|
$
|
55,352
|
|
|
$
|
85,852
|
|
|
$
|
423,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|||||||||||
|
|
|
Total Fair Value
|
|
|
Quoted Prices (Level 1)
|
|
|
Significant Unobservable Inputs (Level 3)
|
|||
Executive savings plan assets
|
|
$
|
812
|
|
|
$
|
812
|
|
|
$
|
—
|
|
Executive savings plan liabilities
|
|
|
(693
|
)
|
|
|
(693
|
)
|
|
|
—
|
|
Contingent consideration
|
|
|
(11
|
)
|
|
|
—
|
|
|
|
(11
|
)
|
Total
|
|
$
|
108
|
|
|
$
|
119
|
|
|
$
|
(11
|
)
|
|
September 30, 2019
|
|||||||||||
|
|
|
Total Fair Value
|
|
|
Quoted Prices (Level 1)
|
|
|
Significant Unobservable Inputs (Level 3)
|
|||
Executive savings plan assets
|
|
$
|
763
|
|
|
$
|
763
|
|
|
$
|
—
|
|
Executive savings plan liabilities
|
|
|
(646
|
)
|
|
|
(646
|
)
|
|
|
—
|
|
Contingent consideration
|
|
|
(11
|
)
|
|
|
—
|
|
|
|
(11
|
)
|
Total
|
|
$
|
106
|
|
|
$
|
117
|
|
|
$
|
(11
|
)
|
|
|
|
Contingent Consideration Agreements
|
|
Fair value at September 30, 2019
|
|
$
|
11
|
|
Settlements
|
|
|
—
|
|
Net adjustments to fair value
|
|
|
—
|
|
Fair value at December 31, 2019
|
|
$
|
11
|
|
|
|
December 31,
|
|
September 30,
|
||||
|
|
2019
|
|
2019
|
||||
Raw materials
|
$
|
3,863
|
|
|
$
|
4,104
|
|
|
Work in process
|
|
5,431
|
|
|
|
6,301
|
|
|
Finished goods
|
|
1,358
|
|
|
|
1,861
|
|
|
Parts and supplies
|
|
9,209
|
|
|
|
9,277
|
|
|
Total inventories
|
$
|
19,861
|
|
|
$
|
21,543
|
|
|
|
Commercial & Industrial
|
|
|
Communications
|
|
Infrastructure Solutions
|
|
|
Residential
|
|
Total
|
||||||||||
Goodwill at September 30, 2019
|
|
$
|
6,976
|
|
|
|
$
|
2,816
|
|
|
$
|
30,812
|
|
|
|
$
|
10,018
|
|
|
$
|
50,622
|
|
Divestitures
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
Adjustments
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
Goodwill at December 31, 2019
|
|
$
|
6,976
|
|
|
|
$
|
2,816
|
|
|
$
|
30,812
|
|
|
|
$
|
10,018
|
|
|
$
|
50,622
|
|
|
|
|
Estimated Useful Lives (in Years)
|
|
December 31, 2019
|
||||||||||
|
|
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Amortization
|
|
Net
|
|||||
Trademarks/trade names
|
|
5-20
|
|
$
|
5,044
|
|
|
$
|
(1,328
|
)
|
|
$
|
3,716
|
|
|
Technical library
|
|
20
|
|
|
400
|
|
|
|
(126
|
)
|
|
|
274
|
|
|
Customer relationships
|
|
6-15
|
|
|
33,539
|
|
|
|
(11,825
|
)
|
|
|
21,714
|
|
|
Non-competition arrangements
|
|
5
|
|
|
40
|
|
|
|
(11
|
)
|
|
|
29
|
|
|
Backlog and construction contracts
|
|
1
|
|
|
251
|
|
|
|
(244
|
)
|
|
|
7
|
|
|
Total intangible assets
|
|
|
|
$
|
39,274
|
|
|
$
|
(13,534
|
)
|
|
$
|
25,740
|
|
|
|
|
Estimated Useful Lives (in Years)
|
|
September 30, 2019
|
||||||||||
|
|
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Amortization
|
|
Net
|
|||||
Trademarks/trade names
|
|
5-20
|
|
$
|
5,084
|
|
|
$
|
(1,267
|
)
|
|
$
|
3,817
|
|
|
Technical library
|
|
20
|
|
|
400
|
|
|
|
(121
|
)
|
|
|
279
|
|
|
Customer relationships
|
|
6-15
|
|
|
33,539
|
|
|
|
(11,051
|
)
|
|
|
22,488
|
|
|
Non-competition arrangements
|
|
5
|
|
|
40
|
|
|
|
(9
|
)
|
|
|
31
|
|
|
Backlog and construction contracts
|
|
1
|
|
|
599
|
|
|
|
(591
|
)
|
|
|
8
|
|
|
Total intangible assets
|
|
|
|
$
|
39,662
|
|
|
$
|
(13,039
|
)
|
|
$
|
26,623
|
|
|
Operating Leases
|
||
Remainder of 2020
|
$
|
8,750
|
|
2021
|
9,273
|
|
|
2022
|
7,268
|
|
|
2023
|
4,966
|
|
|
2024
|
3,123
|
|
|
Thereafter
|
5,134
|
|
|
Total undiscounted lease payments
|
$
|
38,523
|
|
Less: imputed interest
|
3,765
|
|
|
Present value of lease liabilities
|
$
|
34,758
|
|
|
December 31, 2019
|
||
Operating cash flows used for operating leases
|
$
|
3,052
|
|
Right-of-use assets obtained in exchange for new lease liabilities
|
$
|
5,150
|
|
Weighted-average remaining lease term - operating leases
|
4.8 years
|
|
|
Weighted-average discount rate - operating leases
|
4.1
|
%
|
|
|
|
|
Three Months Ended December 31,
|
||||||||||||
|
|
|
|
2019
|
|
2018
|
||||||||||
|
|
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
|
|
|
|
(Dollars in thousands, Percentage of revenues)
|
||||||||||||
|
|
|
Revenues
|
$
|
276,043
|
|
|
100.0
|
%
|
|
$
|
243,842
|
|
|
100.0
|
%
|
|
|
|
Cost of services
|
225,828
|
|
|
81.8
|
%
|
|
202,241
|
|
|
82.9
|
%
|
||
|
|
Gross profit
|
50,215
|
|
|
18.2
|
%
|
|
41,601
|
|
|
17.1
|
%
|
|||
|
|
|
Selling, general and administrative expenses
|
37,872
|
|
|
13.7
|
%
|
|
32,086
|
|
|
13.2
|
%
|
||
|
|
|
Contingent consideration
|
—
|
|
|
—
|
%
|
|
34
|
|
|
—
|
%
|
||
|
|
|
Gain on sale of assets
|
(36
|
)
|
|
—
|
%
|
|
(3
|
)
|
|
—
|
%
|
||
|
|
Operating income
|
12,379
|
|
|
4.5
|
%
|
|
9,484
|
|
|
3.9
|
%
|
|||
|
|
|
Interest and other (income) expense, net
|
380
|
|
|
0.1
|
%
|
|
594
|
|
|
0.2
|
%
|
||
|
|
Income from operations before income taxes
|
11,999
|
|
|
4.3
|
%
|
|
8,890
|
|
|
3.6
|
%
|
|||
|
|
|
Provision for income taxes
|
3,469
|
|
|
1.3
|
%
|
|
1,907
|
|
|
0.8
|
%
|
||
|
|
Net income
|
8,530
|
|
|
3.1
|
%
|
|
6,983
|
|
|
2.9
|
%
|
|||
|
|
|
Net income attributable to noncontrolling interest
|
(28
|
)
|
|
—
|
%
|
|
(99
|
)
|
|
—
|
%
|
||
|
|
Net income attributable to IES Holdings, Inc.
|
$
|
8,502
|
|
|
3.1
|
%
|
|
$
|
6,884
|
|
|
2.8
|
%
|
|
|
Three Months Ended December 31,
|
|||||||||||||
|
|
2019
|
|
2018
|
|||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||
|
|
(Dollars in thousands, Percentage of revenues)
|
|||||||||||||
Revenues
|
|
$
|
67,743
|
|
|
100.0
|
|
%
|
|
$
|
72,583
|
|
|
100.0
|
%
|
Cost of services
|
|
|
61,008
|
|
|
90.1
|
|
%
|
|
|
63,908
|
|
|
88.0
|
%
|
Gross profit
|
|
|
6,735
|
|
|
9.9
|
|
%
|
|
|
8,675
|
|
|
12.0
|
%
|
Selling, general and administrative expenses
|
|
|
7,288
|
|
|
10.8
|
|
%
|
|
|
6,716
|
|
|
9.3
|
%
|
Gain on sale of assets
|
|
|
(27
|
)
|
|
—
|
|
%
|
|
|
(3
|
)
|
|
—
|
%
|
Operating income
|
|
|
(526
|
)
|
|
(0.8
|
)
|
%
|
|
|
1,962
|
|
|
2.7
|
%
|
|
|
Three Months Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
|
|
(Dollars in thousands, Percentage of revenues)
|
||||||||||||
Revenues
|
|
$
|
84,289
|
|
|
100.0
|
%
|
|
$
|
69,325
|
|
|
100.0
|
%
|
Cost of services
|
|
|
68,722
|
|
|
81.5
|
%
|
|
|
57,359
|
|
|
82.7
|
%
|
Gross profit
|
|
|
15,567
|
|
|
18.5
|
%
|
|
|
11,966
|
|
|
17.3
|
%
|
Selling, general and administrative expenses
|
|
|
8,569
|
|
|
10.2
|
%
|
|
|
6,934
|
|
|
10.0
|
%
|
Gain on sale of assets
|
|
|
(9
|
)
|
|
—
|
%
|
|
|
—
|
|
|
—
|
%
|
Operating income
|
|
|
7,007
|
|
|
8.3
|
%
|
|
|
5,032
|
|
|
7.3
|
%
|
|
|
Three Months Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
|
|
(Dollars in thousands, Percentage of revenues)
|
|
|||||||||||
Revenues
|
|
$
|
31,283
|
|
|
100.0
|
%
|
|
$
|
29,479
|
|
|
100.0
|
%
|
Cost of services
|
|
|
23,513
|
|
|
75.2
|
%
|
|
|
23,552
|
|
|
79.9
|
%
|
Gross profit
|
|
|
7,770
|
|
|
24.8
|
%
|
|
|
5,927
|
|
|
20.1
|
%
|
Selling, general and administrative expenses
|
|
|
4,493
|
|
|
14.4
|
%
|
|
|
4,481
|
|
|
15.2
|
%
|
Contingent consideration
|
|
|
—
|
|
|
—
|
%
|
|
|
34
|
|
|
0.1
|
%
|
Operating income
|
|
|
3,277
|
|
|
10.5
|
%
|
|
|
1,412
|
|
|
4.8
|
%
|
|
|
Three Months Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
|
|
(Dollars in thousands, Percentage of revenues)
|
||||||||||||
Revenues
|
|
$
|
92,728
|
|
|
100.0
|
%
|
|
$
|
72,455
|
|
|
100.0
|
%
|
Cost of services
|
|
72,585
|
|
|
78.3
|
%
|
|
57,422
|
|
|
79.3
|
%
|
||
Gross profit
|
|
20,143
|
|
|
21.7
|
%
|
|
15,033
|
|
|
20.7
|
%
|
||
Selling, general and administrative expenses
|
|
13,720
|
|
|
14.8
|
%
|
|
11,137
|
|
|
15.4
|
%
|
||
Operating income
|
|
6,423
|
|
|
6.9
|
%
|
|
3,896
|
|
|
5.4
|
%
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Interest expense
|
|
$
|
138
|
|
|
$
|
470
|
|
Deferred financing charges
|
|
|
101
|
|
|
|
77
|
|
Total interest expense
|
|
|
239
|
|
|
|
547
|
|
Other (income) expense, net
|
|
|
141
|
|
|
|
47
|
|
Total interest and other expense, net
|
|
$
|
380
|
|
|
$
|
594
|
|
•
|
a Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement), measured quarterly on a trailing four-quarter basis at the end of each quarter, of at least 1.1 to 1.0; and
|
•
|
minimum Liquidity (as defined in the Amended Credit Agreement) of at least twenty percent (20%) of the Maximum Revolver Amount (as defined in the Amended Credit Agreement), or $20 million; with, for purposes of this covenant,
|
Date
|
Total Number of Shares Purchased (1)
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of a Publicly Announced Plan
|
Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plan as of December 31, 2019 (2)
|
||
October 1, 2019 – October 31, 2019
|
1,759
|
|
$19.69
|
|
1,759
|
1,255,226
|
November 1, 2019 – November 30, 2019
|
6,805
|
|
$19.64
|
|
6,805
|
1,248,421
|
December 1, 2019 – December 31, 2019
|
28,680
|
|
$24.04
|
|
11,253
|
1,237,168
|
Total
|
37,244
|
|
$23.03
|
|
19,817
|
1,237,168
|
(1)
|
The total number of shares purchased includes shares purchased pursuant to the plan described in footnote (2) below.
|
(2)
|
In 2015, our Board of Directors authorized a stock repurchase program for the purchase of up to 1.5 million shares of the Company’s common stock from time to time, and on May 2, 2019, authorized the repurchase from time to time of up to an additional 1.0 million shares of the Company’s common stock under the stock repurchase program.
|
Exhibit
No. |
Description
|
3.1 —
|
|
3.2 —
|
|
3.3 —
|
|
4.1 —
|
|
4.2 —
|
|
10.1 —
|
|
10.2 —
|
|
10.3 —
|
|
31.1 —
|
|
31.2 —
|
|
32.1 —
|
|
32.2 —
|
|
101.INS
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (1)
|
101.SCH
|
XBRL Schema Document (1)
|
101.LAB
|
XBRL Label Linkbase Document (1)
|
101.PRE
|
XBRL Presentation Linkbase Document (1)
|
101.DEF
|
XBRL Definition Linkbase Document (1)
|
101.CAL
|
XBRL Calculation Linkbase Document (1)
|
104
|
Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
(1)
|
Filed herewith.
|
(2)
|
Furnished herewith.
|
*
|
Management contract or compensatory plan or arrangement.
|
|
IES HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ TRACY A. MCLAUCHLIN
|
|
|
Tracy A. McLauchlin
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer and Authorized Signatory)
|
(a)
|
Stock Certificates. The Company either shall cause to be issued a certificate or certificates for the Cumulative Income Shares, registered in the Participant’s name, or cause a book entry to be made with the Company’s transfer agent evidencing the Cumulative Income Shares registered in the Participant’s name. The Company shall appropriately legend any certificate related to the Cumulative Income Shares to reference the restrictions thereon as set forth in this Agreement.
|
(b)
|
Stockholder Rights. The Participant shall have all the rights of a stockholder (including, without limitation, voting, dividend and liquidation rights) with respect to the Cumulative Income Shares, subject, however, to the restrictions of this Agreement.
|
(c)
|
Form of Issuance and Escrow. For so long as the Cumulative Income Shares are not vested, the Company shall cause such certificate or certificates to be deposited in escrow if certificates are issued. If evidenced by book entry at the transfer agent the entry shall denote the Shares are restricted as to transfer. The Participant shall deliver to the Company a duly-executed blank Stock Power (in the form attached hereto as Schedule B).
|
Percentage of Target Cumulative Income Earned
|
Percentage of Shares of Target Cumulative Income Shares Vested (“Vesting Percentage”)
|
75%
|
50%
|
87.5%
|
75%
|
100%
|
100%
|
Percentage of Target Cumulative Income Earned
|
Vesting Percentage
|
75%
|
50%
|
87.5%
|
75%
|
100%
|
100%
|
105%
|
110%
|
110%
|
120%
|
|
|
|
|
|
/s/ GARY S. MATTHEWS
|
|
Gary S. Matthews
|
|
Chief Executive Officer as Principal Executive Officer
|
|
|
|
|
|
/s/ TRACY A. MCLAUCHLIN
|
|
Tracy A. McLauchlin
|
|
Senior Vice President, Chief Financial Officer and Treasurer
as Principal Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 4, 2020
|
By:
|
/s/ GARY S. MATTHEWS
|
||
|
|
Gary S. Matthews
|
||
|
|
Chief Executive Officer as Principal Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 4, 2020
|
By:
|
/s/ TRACY A. MCLAUCHLIN
|
||||
|
|
Tracy A. McLauchlin
|
||||
|
|
Senior Vice President, Chief Financial Officer and Treasurer
as Principal Financial Officer
|