First Quarter 2024 Highlights
- Revenue of
$634 million for the first quarter of fiscal 2024, an increase of 10% compared with$575 million for the same quarter of fiscal 2023 - Operating income of
$58.0 million for the first quarter of fiscal 2024, an increase of 43% compared with$40.7 million for the same quarter of fiscal 2023; operating income for the first quarter of fiscal 2023 included a pretax gain of$13.0 million from the sale ofSTR Mechanical inOctober 2022 - Net income attributable to IES of
$41.0 million for the first quarter of fiscal 2024, an increase of 55% compared with$26.4 million for the same quarter of fiscal 2023, and diluted earnings per share attributable to common stockholders of$1.87 for the first quarter of fiscal 2024, compared with$1.14 for the same quarter of fiscal 2023; net income attributable to IES and diluted earnings per share attributable to common stockholders for the first quarter of fiscal 2023 included an after tax gain of$9.6 million and$0.47 , respectively, from the sale ofSTR Mechanical - Adjusted net income attributable to IES (a non-GAAP financial measure, as defined below) of
$41 .0 million for the first quarter of fiscal 2024, an increase of 106% compared with$19 .9 million for the same quarter of fiscal 2023, and diluted adjusted earnings per share attributable to common stockholders of$1.87 for the first quarter of fiscal 2024, compared with$0.82 for the same quarter of fiscal 2023 - Remaining performance obligations, a GAAP measure of future revenue to be recognized from current contracts with customers, of approximately
$1.1 billion as ofDecember 31, 2023 - Backlog (a non-GAAP financial measure, as defined below) of approximately
$1 .5 billion as ofDecember 31, 2023
Overview of Results
"We are pleased with our financial performance in the first quarter of fiscal 2024, as we continued to build on the progress we saw in fiscal 2023," said
"We remain optimistic as we look to the balance of fiscal 2024, although we continue to be cautious about demand in both the single-family and multi-family housing markets served by our Residential segment, due to elevated interest rates and a general decrease in housing affordability. The outlook for our other business segments, which are less directly affected by these factors, remains solid, supported by long-term secular growth trends. In addition, we believe the operating process improvements we have implemented over the past year have positioned us well to adapt to changing market conditions across all our segments, and to take advantage of opportunities to grow our business organically or through strategic acquisitions."
Our Communications segment’s revenue was
Our Residential segment’s revenue was
Our Infrastructure Solutions segment’s revenue was
Our Commercial & Industrial segment’s revenue was
"We delivered strong year-over-year revenue and profitability growth, generating operating cash flow of
Stock Buyback Plan
In
Non-GAAP Financial Measures and Other Adjustments
This press release includes adjusted net income attributable to IES, adjusted diluted earnings per share attributable to common stockholders, and backlog, and, in the non-GAAP reconciliation tables included herein, adjusted net income attributable to common stockholders, 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
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
About
IES designs and installs integrated electrical and technology systems and provides infrastructure products and services to a variety of end markets, including data centers, residential housing, and commercial and industrial facilities. Our more than 8,000 employees serve clients in
Company Contact:
Chief Financial Officer
(713) 860-1500
Investor Relations Contact:
312-445-2870
IESC@alpha-ir.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 pandemics on our business, including the potential for job site closures or work stoppages, supply chain disruptions, delays in awarding new projects, construction delays, reduced demand for our services, delays in our ability to collect from our customers, the impact of third party vaccine mandates on employee recruiting and retention, or illness of management or other employees; the ability of our controlling shareholder to take action not aligned with other shareholders; 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; the possibility of inaccurate estimates used when entering into fixed-price contracts 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
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
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 634.4 | $ | 574.9 | ||||
Cost of services | 490.6 | 479.4 | ||||||
Gross profit | 143.8 | 95.4 | ||||||
Selling, general and administrative expenses | 85.9 | 67.8 | ||||||
Contingent consideration | — | 0.1 | ||||||
Gain on sale of assets | (0.1 | ) | (13.1 | ) | ||||
Operating income | 58.0 | 40.7 | ||||||
Interest expense | 0.4 | 1.2 | ||||||
Other (income) expense, net | (1.4 | ) | 0.7 | |||||
Income from operations before income taxes | 59.0 | 38.8 | ||||||
Provision for income taxes | 15.4 | 10.0 | ||||||
Net income | 43.6 | 28.8 | ||||||
Net income attributable to noncontrolling interest | (2.6 | ) | (2.4 | ) | ||||
Net income attributable to | $ | 41.0 | $ | 26.4 | ||||
Computation of earnings per share: | ||||||||
Net income attributable to | $ | 41.0 | $ | 26.4 | ||||
Increase in noncontrolling interest | (2.8 | ) | (3.1 | ) | ||||
Net income attributable to common stockholders of | $ | 38.2 | $ | 23.3 | ||||
Earnings per share attributable to common stockholders: | ||||||||
Basic | $ | 1.89 | $ | 1.15 | ||||
Diluted | $ | 1.87 | $ | 1.14 | ||||
Shares used in the computation of earnings per share: | ||||||||
Basic (in thousands) | 20,200 | 20,242 | ||||||
Diluted (in thousands) | 20,435 | 20,449 | ||||||
NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO ATTRIBUTABLE TO COMMON STOCKHOLDERS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Net income attributable to | $ | 41.0 | $ | 26.4 | ||||
Gain on sale of | — | (13.0 | ) | |||||
Provision for income taxes | 15.4 | 10.0 | ||||||
Adjusted net income before taxes | 56.4 | 23.5 | ||||||
Adjusted tax expense (1) | (15.4 | ) | (3.6 | ) | ||||
Adjusted net income attributable to | 41.0 | 19.9 | ||||||
Adjustments for computation of earnings per share: | ||||||||
Increase in noncontrolling interest | (2.8 | ) | (3.1 | ) | ||||
Adjusted net income attributable to common stockholders | $ | 38.2 | $ | 16.8 | ||||
Adjusted earnings per share attributable to common stockholders: | ||||||||
Basic | $ | 1.89 | $ | 0.83 | ||||
Diluted | $ | 1.87 | $ | 0.82 | ||||
Shares used in the computation of earnings per share: | ||||||||
Basic (in thousands) | 20,200 | 20,242 | ||||||
Diluted (in thousands) | 20,435 | 20,449 | ||||||
(1) Adjusted to reflect the utilization of tax net operating loss carryforwards to offset the cash impact of income tax expense for the quarter ended | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS) (UNAUDITED) | ||||||||||
2023 | 2023 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 87.5 | $ | 75.8 | ||||||
Accounts receivable: | ||||||||||
Trade, net of allowance | 388.6 | 363.8 | ||||||||
Retainage | 80.8 | 76.9 | ||||||||
Inventories | 113.8 | 95.7 | ||||||||
Costs and estimated earnings in excess of billings | 40.6 | 48.6 | ||||||||
Prepaid expenses and other current assets | 16.4 | 10.4 | ||||||||
Total current assets | 727.6 | 671.3 | ||||||||
Property and equipment, net | 65.4 | 63.4 | ||||||||
92.4 | 92.4 | |||||||||
Intangible assets, net | 53.1 | 56.2 | ||||||||
Deferred tax assets | 20.3 | 20.4 | ||||||||
Operating right of use assets | 62.6 | 61.8 | ||||||||
Other non-current assets | 20.6 | 16.1 | ||||||||
Total assets | $ | 1,042.0 | $ | 981.6 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable and accrued expenses | $ | 294.9 | $ | 296.8 | ||||||
Billings in excess of costs and estimated earnings | 127.0 | 103.8 | ||||||||
Total current liabilities | 421.9 | 400.6 | ||||||||
Long-term debt | — | — | ||||||||
Operating long-term lease liabilities | 42.3 | 42.1 | ||||||||
Other tax liabilities | 22.3 | 22.0 | ||||||||
Other non-current liabilities | 11.8 | 17.0 | ||||||||
Total liabilities | 498.4 | 481.7 | ||||||||
Noncontrolling interest | 55.0 | 50.0 | ||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||
Preferred stock | — | — | ||||||||
Common stock | 0.2 | 0.2 | ||||||||
(49.5 | ) | (49.5 | ) | |||||||
Additional paid-in capital | 204.0 | 203.4 | ||||||||
Retained earnings | 334.0 | 295.8 | ||||||||
Total stockholders’ equity | 488.6 | 450.0 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,042.0 | $ | 981.6 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN MILLIONS) (UNAUDITED) | |||||||||
Three Months Ended | |||||||||
2023 | 2022 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ | 43.6 | $ | 28.8 | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||
Bad debt expense | 0.2 | 0.1 | |||||||
Deferred financing cost amortization | 0.1 | 0.1 | |||||||
Depreciation and amortization | 7.6 | 6.4 | |||||||
Gain on sale of assets | (0.1 | ) | (13.1 | ) | |||||
Non-cash compensation expense | 1.4 | 0.9 | |||||||
Deferred income taxes | 1.0 | 0.5 | |||||||
Unrealized loss on trading securities | (0.1 | ) | — | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (24.9 | ) | 18.1 | ||||||
Inventories | (18.1 | ) | (5.1 | ) | |||||
Costs and estimated earnings in excess of billings | 8.0 | 7.6 | |||||||
Prepaid expenses and other current assets | (9.8 | ) | (11.8 | ) | |||||
Other non-current assets | (4.4 | ) | 0.1 | ||||||
Accounts payable and accrued expenses | (2.6 | ) | (29.8 | ) | |||||
Billings in excess of costs and estimated earnings | 23.2 | 10.7 | |||||||
Other non-current liabilities | (0.1 | ) | 0.8 | ||||||
Net cash provided by operating activities | 25.0 | 14.3 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Purchases of property and equipment | (6.5 | ) | (2.7 | ) | |||||
Proceeds from sale of assets | 0.6 | 19.2 | |||||||
Cash paid in conjunction with equity investments | (0.1 | ) | (0.2 | ) | |||||
Net cash provided by (used in) investing activities | (6.0 | ) | 16.3 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Borrowings of debt | 654.0 | 608.0 | |||||||
Repayments of debt | (654.0 | ) | (647.6 | ) | |||||
Cash paid for finance leases | (1.0 | ) | (0.8 | ) | |||||
Settlement of contingent consideration liability | (4.1 | ) | — | ||||||
Distribution to noncontrolling interest | (1.3 | ) | (2.3 | ) | |||||
Purchase of treasury stock | (0.9 | ) | (7.5 | ) | |||||
Net cash used in financing activities | (7.3 | ) | (50.3 | ) | |||||
11.7 | (19.6 | ) | |||||||
CASH and CASH EQUIVALENTS, beginning of period | 75.8 | 24.8 | |||||||
CASH and CASH EQUIVALENTS, end of period | $ | 87.5 | $ | 5.2 | |||||
OPERATING SEGMENT STATEMENT OF OPERATIONS (DOLLARS IN MILLIONS) (UNAUDITED) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Revenues | ||||||||
Communications | $ | 170.7 | $ | 147.2 | ||||
Residential | 315.9 | 318.1 | ||||||
Infrastructure Solutions | 62.9 | 49.3 | ||||||
Commercial & Industrial | 85.0 | 60.3 | ||||||
Total revenue | $ | 634.4 | $ | 574.9 | ||||
Operating income (loss) | ||||||||
Communications | $ | 21.4 | $ | 9.4 | ||||
Residential | 24.1 | 20.5 | ||||||
Infrastructure Solution | 10.9 | 4.7 | ||||||
Commercial & Industrial (1) | 7.0 | 11.0 | ||||||
Corporate | (5.4 | ) | (5.0 | ) | ||||
Total operating income | $ | 58.0 | $ | 40.7 | ||||
(1) Commercial & Industrial's operating income for the three months ended | ||||||||
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA (DOLLARS IN MILLIONS) (UNAUDITED) | ||||||||
Three Months Ended | ||||||||
2023 | 2022 | |||||||
Net income attributable to | $ | 41.0 | $ | 26.4 | ||||
Provision for income taxes | 15.4 | 10.0 | ||||||
Interest & other (income) expense, net | (1.0 | ) | 1.9 | |||||
Depreciation and amortization | 7.6 | 6.4 | ||||||
EBITDA | $ | 63.0 | $ | 44.7 | ||||
Gain on sale of | — | (13.0 | ) | |||||
Non-cash equity compensation expense | 1.4 | 0.9 | ||||||
Adjusted EBITDA | $ | 64.4 | $ | 32.6 | ||||
SUPPLEMENTAL REMAINING PERFORMANCE OBLIGATIONS AND NON-GAAP RECONCILIATION OF BACKLOG DATA (DOLLARS IN MILLIONS) (UNAUDITED) | |||||||||
2023 | 2023 | 2022 | |||||||
Remaining performance obligations | $ | 1,073 | $ | 1,143 | $ | 1,011 | |||
Agreements without an enforceable obligation (1) | 379 | 415 | 316 | ||||||
Backlog | $ | 1,452 | $ | 1,558 | $ | 1,327 | |||
(1) Our backlog contains 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. |
Source:
2024 GlobeNewswire, Inc., source