– Revenue of $291 million, an increase of 13% year-over-year
– Net Income Per Share of $0.29 and Adjusted Net Income Per Share of $0.38HOUSTON, May 05, 2020 (GLOBE NEWSWIRE) — IES Holdings, Inc. (or “IES” or the “Company”) (NASDAQ: IESC) today announced financial results for the quarter ended March 31, 2020. Second Quarter 2020 HighlightsRevenue of $291 million for the second quarter of fiscal 2020, an increase of 13.4% compared with $257 million for the same quarter of fiscal 2019Operating income of $9.2 million for the second quarter of fiscal 2020, an increase of 12.3% compared with $8.2 million for the same quarter of fiscal 2019Net income attributable to IES of $6.2 million, or $0.29 per diluted share, for the second quarter of fiscal 2020, compared with $5.5 million, or $0.26 per diluted share, for the same quarter of fiscal 2019Adjusted net income attributable to IES (a non-GAAP financial measure, as defined below) decreased (2.4)% to $8.0 million, or $0.38 per diluted share, for the second quarter of fiscal 2020, compared with $8.2 million, or $0.38 per diluted share, for the same quarter of fiscal 2019Remaining performance obligations, a GAAP measure of future revenue to be recognized from current contracts with customers, of approximately $469 million as of March 31, 2020Backlog (a non-GAAP financial measure, as defined below) of approximately $587 million as of March 31, 2020Six Months 2020 HighlightsRevenue of $567 million for the first six months of fiscal 2020, an increase of 13.3% compared with $501 million for the same period of fiscal 2019Operating income of $21.6 million for the first six months of fiscal 2020, an increase of 22.0% compared with $17.7 million for the same period of fiscal 2019Net income attributable to IES of $14.7 million, or $0.69 per diluted share, for the first six months of fiscal 2020, compared with $12.4 million, or $0.58 per diluted share, for the same period of fiscal 2019Adjusted net income attributable to IES increased 16.3% to $19.3 million, or $0.91 per diluted share, for the first six months of fiscal 2020, compared with $16.6 million, or $0.77 per diluted share, for the same period of fiscal 2019Management Commentary
Gary Matthews, Chief Executive Officer, stated, “The safety and health of our employees, customers, and communities are our top priority and I am proud of how the entire IES family has adapted and persevered in these unprecedented times. Our second quarter results reflect the commitment of the teams at our operating units, who diligently continued to serve our customers and the critical infrastructure they support, which ranges from data centers to medical facilities to housing. While we anticipate that the challenges arising from COVID-19 will not be over soon, we believe that our resilient portfolio of businesses, sound financial position, and the dedication of the entire IES team will continue to be key assets that help us meet the needs of our customers.Net Operating Loss Carryforwards
The Company estimates that it has available Net Operating Loss Carryforwards (NOLs) for U.S. federal income tax purposes of approximately $306 million at September 30, 2019, including approximately $144 million resulting from net operating losses on which a deferred tax asset is not recorded. The Company’s common stock is subject to a Rights Plan dated November 8, 2016, which is intended to assist in limiting the number of 5% or more owners of the Company’s common stock and thereby reduce the risk of a possible “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended. Any such “ownership change” under these rules would limit or eliminate the ability of the Company to use its existing NOLs for federal income tax purposes. There is no guarantee that the Rights Plan will achieve the objective of preserving the value or realization of the NOLs.Stock Buyback Plan
In 2015, the Company’s Board of Directors authorized and announced a stock repurchase program for purchasing up to 1.5 million shares of our common stock from time to time, and on May 2, 2019, authorized the repurchase of up to an additional 1.0 million shares. During the quarter ended March 31, 2020, the Company repurchased 178,431 shares at an average price of $22.60 per share, and for year-to-date fiscal 2020, the Company repurchased 198,248 shares at an average price of $22.59 per share. The Company had 1,058,737 shares remaining under its stock repurchase authorization at March 31, 2020.Non-GAAP Financial Measures and Other Adjustments
This press release includes adjusted net income attributable to IES, adjusted earnings per share attributable to IES, and backlog, and, in the non-GAAP reconciliation tables included herein, adjusted EBITDA and adjusted net income before taxes, each of which is a financial measure not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). Management believes that these measures provide useful information to our investors by, in the case of adjusted net income attributable to IES, adjusted earnings per share attributable to IES, adjusted EBITDA and adjusted net income before taxes, distinguishing certain nonrecurring events such as litigation settlements or significant expenses associated with leadership changes, or noncash events, such as our valuation allowances release and write-down of our deferred tax assets, or, in the case of backlog, providing a common measurement used in IES’s industry, as described further below, and that these measures, when reconciled to the most directly comparable GAAP measures, help our investors to better identify underlying trends in the operations of our business and facilitate easier comparisons of our financial performance with prior and future periods and to our peers. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial tables included in this press release.
Remaining performance obligations represent the unrecognized revenue value of our contract commitments. While backlog is not a defined term under GAAP, it is a common measurement used in IES’s industry and IES believes this non-GAAP measure enables it to more effectively forecast its future results and better identify future operating trends that may not otherwise be apparent. IES’s remaining performance obligations are a component of IES’s backlog calculation, which also includes signed agreements and letters of intent which we do not have a legal right to enforce prior to work starting. These arrangements are excluded from remaining performance obligations until work begins. IES’s methodology for determining backlog may not be comparable to the methodologies used by other companies.
For further details on the Company’s financial results, please refer to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2020, to be filed with the Securities and Exchange Commission (“SEC”) by May 5, 2020, and any amendments thereto.About IES Holdings, Inc.
IES is a holding company that owns and manages operating subsidiaries that provide electrical contracting and other infrastructure services to a variety of end markets, including data centers, residential housing, and commercial and industrial facilities. Our approximately 5,500 employees serve clients in the United States. For more information about IES, please visit www.ies-co.com.Certain statements in this release may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, all of which are based upon various estimates and assumptions that the Company believes to be reasonable as of the date hereof. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “seek,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” the negative of such terms or other comparable terminology. These statements involve risks and uncertainties that could cause the Company’s actual future outcomes to differ materially from those set forth in such statements. Such risks and uncertainties include, but are not limited to, the impact of the COVID-19 outbreak or future epidemics on our business, including the potential for job site closures or work stoppages, supply chain disruptions, construction delays, reduced demand for our services, or our ability to collect from our customers; the ability of our controlling shareholder to take action not aligned with other shareholders; 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; the potential recognition of valuation allowances or write-downs on deferred tax assets; 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; 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; fluctuations in operating activity due to downturns in levels of construction or the housing market, seasonality and differing regional economic conditions; and our ability to successfully manage projects, as well as other risk factors discussed in this document, in the Company’s annual report on Form 10-K for the year ended September 30, 2019 and in the Company’s other reports on file with the SEC. You should understand that such risk factors could cause future outcomes to differ materially from those experienced previously or those expressed in such forward-looking statements. The Company undertakes no obligation to publicly update or revise any information, including information concerning its controlling shareholder, net operating losses, borrowing availability, or cash position, or any forward-looking statements to reflect events or circumstances that may arise after the date of this release.Forward-looking statements are provided in this press release pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of the estimates, assumptions, uncertainties, and risks described herein.General information about IES Holdings, Inc. can be found at http://www.ies-co.com under “Investor Relations.” The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through the Company’s website as soon as reasonably practicable after they are filed with, or furnished to, the SEC.
IES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
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(UNAUDITED)IES HOLDINGS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE
TO IES HOLDINGS, INC. AND ADJUSTED EARNINGS PER SHARE
ATTRIBUTABLE TO IES HOLDINGS, INC.
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(UNAUDITED)IES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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(UNAUDITED)IES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(UNAUDITED)IES HOLDINGS, INC. AND SUBSIDIARIES
OPERATING SEGMENT STATEMENT OF OPERATIONS
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IES HOLDINGS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA
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Tracy McLauchlin, CFO
IES Holdings, Inc.
713-860-1500 

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