FORM10-Q
FORM 10-Q |
(Mark One) | |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended June 30, 2018
OR
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
For the transition period fromto
Commission File Number
Commission file number 1-13783 |
IES Holdings, Inc.
Delaware | 76-0542208 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) |
Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common Stock, par value $0.01 per share | IESC | NASDAQ Global Market | ||
Rights to Purchase Preferred Stock | IESC | NASDAQ Global Market |
Large accelerated filer | Accelerated filer | |||||
þ | ||||||
Non-accelerated filer | Smaller reporting company | |||||
þ | ||||||
Emerging growth company |
Page | ||||||
backlog that may not be realized or may not result in profits;
loss of key personnel and effective transition of new management.
June 30, | September 30, | |||||||
2018 | 2017 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 21,692 | $ | 28,290 | ||||
Accounts receivable: | ||||||||
Trade, net of allowance of $738 and $650, respectively | 139,182 | 142,946 | ||||||
Retainage | 23,019 | 21,360 | ||||||
Inventories | 18,717 | 16,923 | ||||||
Costs and estimated earnings in excess of billings | 22,595 | 13,438 | ||||||
Prepaid expenses and other current assets | 8,824 | 8,795 | ||||||
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Total current assets | 234,029 | 231,752 | ||||||
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Property and equipment, net | 25,217 | 24,643 | ||||||
Goodwill | 49,299 | 46,693 | ||||||
Intangible assets, net | 31,736 | 31,413 | ||||||
Deferred tax assets | 49,597 | 86,211 | ||||||
Othernon-current assets | 6,085 | 3,782 | ||||||
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Total assets | $ | 395,963 | $ | 424,494 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued expenses | 117,385 | 120,710 | ||||||
Billings in excess of costs and estimated earnings | 25,812 | 29,918 | ||||||
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Total current liabilities | 143,197 | 150,628 | ||||||
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Long-term debt | 29,634 | 29,434 | ||||||
Othernon-current liabilities | 4,412 | 4,457 | ||||||
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Total liabilities | 177,243 | 184,519 | ||||||
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Noncontrolling interest | 3,247 | 3,271 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued and outstanding | — | — | ||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; 22,049,529 issued and 21,205,536 and 21,336,975 outstanding, respectively | 220 | 220 | ||||||
Treasury stock, at cost, 843,993 and 712,554 shares, respectively | (8,937 | ) | (6,898 | ) | ||||
Additionalpaid-in capital | 196,551 | 196,955 | ||||||
Retained earnings | 27,639 | 46,427 | ||||||
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Total stockholders’ equity | 215,473 | 236,704 | ||||||
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Total liabilities and stockholders’ equity | $ | 395,963 | $ | 424,494 | ||||
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June 30, | September 30, | ||||||||||
2019 | 2018 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 13,104 | $ | 26,247 | |||||||
Accounts receivable: | |||||||||||
Trade, net of allowance of $949 and $868, respectively | 176,527 | 151,578 | |||||||||
Retainage | 27,358 | 24,312 | |||||||||
Inventories | 24,350 | 20,966 | |||||||||
Costs and estimated earnings in excess of billings | 34,807 | 31,446 | |||||||||
Prepaid expenses and other current assets | 8,876 | 8,144 | |||||||||
Total current assets | 285,022 | 262,693 | |||||||||
Property and equipment, net | 26,410 | 25,364 | |||||||||
Goodwill | 50,622 | 50,702 | |||||||||
Intangible assets, net | 27,535 | 30,590 | |||||||||
Deferred tax assets | 43,424 | 46,580 | |||||||||
Other non-current assets | 5,351 | 6,065 | |||||||||
Total assets | $ | 438,364 | $ | 421,994 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable and accrued expenses | 150,406 | 130,591 | |||||||||
Billings in excess of costs and estimated earnings | 35,859 | 33,826 | |||||||||
Total current liabilities | 186,265 | 164,417 | |||||||||
Long-term debt | 9,915 | 29,564 | |||||||||
Other non-current liabilities | 1,926 | 4,374 | |||||||||
Total liabilities | 198,106 | 198,355 | |||||||||
Noncontrolling interest | 3,245 | 3,232 | |||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued | |||||||||||
and outstanding | — | — | |||||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; 22,049,529 | |||||||||||
issued and 21,218,854 and 21,205,536 outstanding, respectively | 220 | 220 | |||||||||
Treasury stock, at cost, 830,675 and 843,993 shares, respectively | (11,357 | ) | (8,937 | ) | |||||||
Additional paid-in capital | 192,389 | 196,810 | |||||||||
Retained earnings | 55,761 | 32,314 | |||||||||
Total stockholders’ equity | 237,013 | 220,407 | |||||||||
Total liabilities and stockholders’ equity | $ | 438,364 | $ | 421,994 |
Three Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Revenues | $ | 232,576 | $ | 208,323 | ||||
Cost of services | 190,039 | 172,925 | ||||||
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Gross profit | 42,537 | 35,398 | ||||||
Selling, general and administrative expenses | 32,372 | 30,771 | ||||||
Contingent consideration | 81 | (33 | ) | |||||
Gain on sale of assets | (5 | ) | (55 | ) | ||||
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Operating income | 10,089 | 4,715 | ||||||
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Interest and other (income) expense: | ||||||||
Interest expense | 513 | 407 | ||||||
Other income, net | (111 | ) | (46 | ) | ||||
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Income from operations before income taxes | 9,687 | 4,354 | ||||||
Provision (Benefit) for income taxes | 1,038 | (1,519 | ) | |||||
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Net income | 8,649 | 5,873 | ||||||
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Net income attributable to noncontrolling interest | (133 | ) | (5 | ) | ||||
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Comprehensive income attributable to IES Holdings, Inc. | $ | 8,516 | $ | 5,868 | ||||
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Earnings per share attributable to IES Holdings, Inc.: | ||||||||
Basic | $ | 0.40 | $ | 0.27 | ||||
Diluted | $ | 0.40 | $ | 0.27 | ||||
Shares used in the computation of earnings per share: | ||||||||
Basic | 21,200,635 | 21,300,716 | ||||||
Diluted | 21,331,883 | 21,556,118 |
Three Months Ended June 30, | ||||||||||||
2019 | 2018 | |||||||||||
Revenues | $ | 282,633 | $ | 232,576 | ||||||||
Cost of services | 236,236 | 190,039 | ||||||||||
Gross profit | 46,397 | 42,537 | ||||||||||
Selling, general and administrative expenses | 36,333 | 32,372 | ||||||||||
Contingent consideration | (163 | ) | 81 | |||||||||
Gain on sale of assets | (8 | ) | (5 | ) | ||||||||
Operating income | 10,235 | 10,089 | ||||||||||
Interest and other (income) expense: | ||||||||||||
Interest expense | 451 | 513 | ||||||||||
Other (income) expense, net | (64 | ) | (111 | ) | ||||||||
Income from operations before income taxes | 9,848 | 9,687 | ||||||||||
Provision for (benefit from) income taxes | (1,207 | ) | 1,038 | |||||||||
Net income | 11,055 | 8,649 | ||||||||||
Net income attributable to noncontrolling interest | (83 | ) | (133 | ) | ||||||||
Comprehensive income attributable to IES Holdings, Inc. | $ | 10,972 | $ | 8,516 | ||||||||
Earnings per share attributable to IES Holdings, Inc.: | ||||||||||||
Basic | $ | 0.52 | $ | 0.40 | ||||||||
Diluted | $ | 0.52 | $ | 0.40 | ||||||||
Shares used in the computation of earnings per share: | ||||||||||||
Basic | 21,043,425 | 21,200,635 | ||||||||||
Diluted | 21,301,235 | 21,331,883 |
Nine Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Revenues | $ | 636,553 | $ | 604,163 | ||||
Cost of services | 527,112 | 501,769 | ||||||
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Gross profit | 109,441 | 102,394 | ||||||
Selling, general and administrative expenses | 92,108 | 89,085 | ||||||
Contingent consideration | 152 | 50 | ||||||
Gain on sale of assets | (39 | ) | (68 | ) | ||||
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Operating income | 17,220 | 13,327 | ||||||
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Interest and other (income) expense: | ||||||||
Interest expense | 1,427 | 1,281 | ||||||
Other income, net | (252 | ) | (94 | ) | ||||
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Income from operations before income taxes | 16,045 | 12,140 | ||||||
Provision for income taxes | 34,622 | 1,792 | ||||||
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Net income (loss) | (18,577 | ) | 10,348 | |||||
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Net income attributable to noncontrolling interest | (255 | ) | (72 | ) | ||||
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Comprehensive income (loss) attributable to IES Holdings, Inc. | $ | (18,832 | ) | $ | 10,276 | |||
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Earnings (loss) per share attributable to IES Holdings, Inc.: | ||||||||
Basic | $ | (0.89 | ) | $ | 0.48 | |||
Diluted | $ | (0.89 | ) | $ | 0.48 | |||
Shares used in the computation of earnings per share: | ||||||||
Basic | 21,193,306 | 21,295,254 | ||||||
Diluted | 21,193,306 | 21,550,804 |
Nine Months Ended June 30, | ||||||||||||
2019 | 2018 | |||||||||||
Revenues | $ | 783,389 | $ | 636,553 | ||||||||
Cost of services | 652,156 | 527,112 | ||||||||||
Gross profit | 131,233 | 109,441 | ||||||||||
Selling, general and administrative expenses | 103,489 | 92,108 | ||||||||||
Contingent consideration | (278 | ) | 152 | |||||||||
Loss (gain) on sale of assets | 87 | (39 | ) | |||||||||
Operating income | 27,935 | 17,220 | ||||||||||
Interest and other (income) expense: | ||||||||||||
Interest expense | 1,533 | 1,427 | ||||||||||
Other (income) expense, net | (129 | ) | (252 | ) | ||||||||
Income from operations before income taxes | 26,531 | 16,045 | ||||||||||
Provision for income taxes | 3,036 | 34,622 | ||||||||||
Net income (loss) | 23,495 | (18,577 | ) | |||||||||
Net income attributable to noncontrolling interest | (150 | ) | (255 | ) | ||||||||
Comprehensive income (loss) attributable to IES Holdings, Inc. | $ | 23,345 | $ | (18,832 | ) | |||||||
Earnings (loss) per share attributable to IES Holdings, Inc.: | ||||||||||||
Basic | $ | 1.10 | $ | (0.89) | ||||||||
Diluted | $ | 1.09 | $ | (0.89) | ||||||||
Shares used in the computation of earnings (loss) per share: | ||||||||||||
Basic | 21,139,697 | 21,193,306 | ||||||||||
Diluted | 21,382,178 | 21,193,306 |
Stockholders’ Equity (unaudited)
(Unaudited)
Nine Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ | (18,577 | ) | $ | 10,348 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Bad debt expense | 250 | 31 | ||||||
Deferred financing cost amortization | 214 | 229 | ||||||
Depreciation and amortization | 6,706 | 6,884 | ||||||
Gain on sale of assets | (39 | ) | (68 | ) | ||||
Deferred income taxes | 34,622 | 494 | ||||||
Non-cash compensation | (395 | ) | 1,329 | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||
Accounts receivable | 4,992 | (1,593 | ) | |||||
Inventories | (1,721 | ) | (3,919 | ) | ||||
Costs and estimated earnings in excess of billings | (8,990 | ) | (3,151 | ) | ||||
Prepaid expenses and other current assets | (1,645 | ) | (9,082 | ) | ||||
Othernon-current assets | 270 | 350 | ||||||
Accounts payable and accrued expenses | (6,862 | ) | 600 | |||||
Billings in excess of costs and estimated earnings | (4,019 | ) | 6,438 | |||||
Othernon-current liabilities | 172 | 1,312 | ||||||
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Net cash provided by operating activities | 4,978 | 10,202 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (3,383 | ) | (3,796 | ) | ||||
Proceeds from sale of property and equipment | 107 | 237 | ||||||
Cash paid for acquisitions | (5,981 | ) | (14,659 | ) | ||||
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Net cash used in investing activities | (9,257 | ) | (18,218 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings of debt | 99 | 5,313 | ||||||
Repayments of debt | (136 | ) | (5,328 | ) | ||||
Contingent consideration payment | — | (448 | ) | |||||
Distribution to noncontrolling interest | (235 | ) | (153 | ) | ||||
Options exercised | 11 | 207 | ||||||
Purchase of treasury stock | (2,058 | ) | (891 | ) | ||||
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Net cash used in financing activities | (2,319 | ) | (1,300 | ) | ||||
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NET DECREASE IN CASH AND CASH EQUIVALENTS | (6,598 | ) | (9,316 | ) | ||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of period | 28,290 | 33,221 | ||||||
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CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 21,692 | $ | 23,905 | ||||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for interest | $ | 1,227 | $ | 1,108 | ||||
Cash paid for income taxes | $ | 2,313 | $ | 2,285 |
Thousands, Except Share Information)
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||
Common Stock | Treasury Stock | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | APIC | ||||||||||||||||||||||
BALANCE, March 31, 2019 | 22,049,529 | $ | 220 | (667,682 | ) | $ | (8,443 | ) | $ | 191,579 | $ | 44,789 | $ | 228,145 | ||||||||||||
Acquisition of treasury stock | — | — | (162,993 | ) | (2,914 | ) | — | — | (2,914 | ) | ||||||||||||||||
Non-cash compensation | — | — | — | — | 810 | — | 810 | |||||||||||||||||||
Net income attributable to IES Holdings, Inc. | — | — | — | — | — | 10,972 | 10,972 | |||||||||||||||||||
BALANCE, June 30, 2019 | 22,049,529 | $ | 220 | (830,675 | ) | $ | (11,357 | ) | $ | 192,389 | $ | 55,761 | $ | 237,013 |
Three Months Ended June 30, 2018 | ||||||||||||||||||||||||||
Common Stock | Treasury Stock | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | APIC | ||||||||||||||||||||||
BALANCE, March 31, 2018 | 22,049,529 | $ | 220 | (790,351 | ) | $ | (8,108 | ) | $ | 196,835 | $ | 19,123 | $ | 208,070 | ||||||||||||
Acquisition of treasury stock | — | — | (53,642 | ) | (829 | ) | — | — | (829 | ) | ||||||||||||||||
Non-cash compensation | — | — | — | — | (284 | ) | — | (284 | ) | |||||||||||||||||
Net income attributable to IES Holdings, Inc. | — | — | — | — | 8,516 | 8,516 | ||||||||||||||||||||
BALANCE, June 30, 2018 | 22,049,529 | $ | 220 | (843,993 | ) | $ | (8,937 | ) | $ | 196,551 | $ | 27,639 | $ | 215,473 |
Nine Months Ended June 30, 2019 | ||||||||||||||||||||||||||
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 | — | — | 216,679 | 2,323 | (2,323 | ) | — | — | ||||||||||||||||||
Grants under compensation plan | — | — | 283,195 | 3,582 | (3,582 | ) | — | — | ||||||||||||||||||
Cumulative effect adjustment from adoption of new accounting standard | — | — | — | — | — | 102 | 102 | |||||||||||||||||||
Acquisition of treasury stock | — | — | (486,556 | ) | (8,325 | ) | — | — | (8,325 | ) | ||||||||||||||||
Non-cash compensation | — | — | — | 1,484 | — | 1,484 | ||||||||||||||||||||
Net income attributable to IES Holdings, Inc. | — | — | — | — | — | 23,345 | 23,345 | |||||||||||||||||||
BALANCE, June 30, 2019 | 22,049,529 | $ | 220 | (830,675 | ) | $ | (11,357 | ) | $ | 192,389 | $ | 55,761 | $ | 237,013 |
Nine Months Ended June 30, 2018 | ||||||||||||||||||||||||||
Common Stock | Treasury Stock | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | APIC | ||||||||||||||||||||||
BALANCE, September 30, 2017 | 22,049,529 | $ | 220 | (712,554 | ) | $ | (6,898 | ) | $ | 196,955 | $ | 46,427 | $ | 236,704 | ||||||||||||
Grants under compensation plans | — | — | 520 | 5 | (5 | ) | — | — | ||||||||||||||||||
Acquisition of treasury stock | — | — | (133,459 | ) | (2,059 | ) | — | — | (2,059 | ) | ||||||||||||||||
Options exercised | — | — | 1,500 | 15 | (4 | ) | — | 11 | ||||||||||||||||||
Non-cash compensation | — | — | — | — | (395 | ) | — | (395 | ) | |||||||||||||||||
Decrease in noncontrolling interest | — | — | — | — | — | 44 | 44 | |||||||||||||||||||
Net loss attributable to IES Holdings, Inc. | — | — | — | — | — | (18,832 | ) | (18,832 | ) | |||||||||||||||||
BALANCE, June 30, 2018 | 22,049,529 | $ | 220 | (843,993 | ) | $ | (8,937 | ) | $ | 196,551 | $ | 27,639 | $ | 215,473 |
AND SUBSIDIARIES
Nine Months Ended June 30, | ||||||||||
2019 | 2018 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net income (loss) | $ | 23,495 | $ | (18,577 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||
Bad debt expense | 209 | 250 | ||||||||
Deferred financing cost amortization | 236 | 214 | ||||||||
Depreciation and amortization | 7,200 | 6,706 | ||||||||
Loss (gain) on sale of assets | 87 | (39 | ) | |||||||
Non-cash compensation expense | 1,484 | (395 | ) | |||||||
Deferred income taxes | 3,036 | 34,622 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (25,158 | ) | 4,992 | |||||||
Inventories | (3,491 | ) | (1,721 | ) | ||||||
Costs and estimated earnings in excess of billings | (3,362 | ) | (8,990 | ) | ||||||
Prepaid expenses and other current assets | (3,567 | ) | (1,645 | ) | ||||||
Other non-current assets | (869 | ) | 270 | |||||||
Accounts payable and accrued expenses | 20,132 | (6,862 | ) | |||||||
Billings in excess of costs and estimated earnings | 1,979 | (4,019 | ) | |||||||
Other non-current liabilities | (1,114 | ) | 172 | |||||||
Net cash provided by operating activities | 20,297 | 4,978 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Purchases of property and equipment | (5,172 | ) | (3,383 | ) | ||||||
Proceeds from sale of assets | 68 | 107 | ||||||||
Cash paid in conjunction with business combinations | — | (5,981 | ) | |||||||
Net cash used in investing activities | (5,104 | ) | (9,257 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Borrowings of debt | 22,468 | 99 | ||||||||
Repayments of debt | (42,342 | ) | (136 | ) | ||||||
Distribution to noncontrolling interest | (137 | ) | (235 | ) | ||||||
Purchase of treasury stock | (8,325 | ) | (2,058 | ) | ||||||
Options exercised | — | 11 | ||||||||
Net cash used in financing activities | (28,336 | ) | (2,319 | ) | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (13,143 | ) | (6,598 | ) | ||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of period | 26,247 | 28,290 | ||||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 13,104 | $ | 21,692 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||
Cash paid for interest | $ | 1,405 | $ | 1,227 | ||||||
Cash paid for income taxes (net) | $ | 1,321 | $ | 2,313 |
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IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
a multiple of earnings as defined in the operating agreements. Therefore, this noncontrolling interest is carried at the greater of the balance determined under ASCAccounting Standards Codification (“ASC”) 810 and the redemption amounts assuming the noncontrolling interests were redeemable at
2018.
expanded disclosures.
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
In February 2016, the FASB issued ASUNo. 2016-02, Leases (“ASU2016-02”). Under ASU2016-02, lessees will need to recognize aright-of-use asset and a lease liability for all of their leases, other than those that meet the definition of a short-term lease. For income statement purposes, leases must be classified as either operating or finance. Operating leases will result in straight-line expense, similar to current operating leases, while finance leases will result in a front-loaded pattern, similar to current capital leases. ASU2016-02 becomes effective for the fiscal year ended September 30, 2020. We are currently evaluating thethis standard on October 1, 2018 had no impact it will have on our Condensed Consolidated Financial Statements.
had no impact on our Condensed Consolidated Financial Statements.
We do not expect ASU2016-01, ASU2017-01 or ASU2017-09 to have a material effecthad no impact on our Condensed Consolidated Financial Statements.
In June 2018, the FASB issued ASUNo. 2018-07, Compensation—Stock Compensation, to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments for employees, with certain exceptions. Under the new guidance, the cost for nonemployee awards may be lower and less volatile than under current US GAAP because the measurement generally will occur earlier and will be fixed at the grant date. This update is effective for annual financial reporting periods, and interim periods within those annual periods, beginning after December 15, 2018, although early adoption is permitted. We are currently evaluating the impact it will have on our Condensed Consolidated Financial Statements.
At June 30, 2018, STOCKHOLDER
stockholders.
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
our Board of Directors since February 2012, and who previously served as Interim Director of Operations of the Company sincefrom November 2017 and who
previously servedto January 2019, asnon-executive Vice Chairman of the Board from November 2016 to November 2017 and asnon-executive Chairman of the Board from January 2015 to November 2016. David B. Gendell was an employee of Tontine from 2004 until December 31, 2017.
REVENUE RECOGNITION
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Commercial & Industrial | $ | 75,370 | $ | 78,156 | $ | 227,928 | $ | 196,747 | ||||||||
Communications | 90,438 | 54,368 | 230,200 | 159,071 | ||||||||||||
Infrastructure Solutions | ||||||||||||||||
Industrial Services | 12,339 | 11,417 | 36,707 | 32,874 | ||||||||||||
Custom Power Solutions | 23,770 | 13,439 | 63,331 | 37,533 | ||||||||||||
Total | 36,109 | 24,856 | 100,038 | 70,407 | ||||||||||||
Residential | ||||||||||||||||
Single-family | 54,200 | 51,028 | 156,168 | 139,235 | ||||||||||||
Multi-family and Other | 26,516 | 24,168 | 69,055 | 71,093 | ||||||||||||
Total | 80,716 | 75,196 | 225,223 | 210,328 | ||||||||||||
Total Revenue | $ | 282,633 | $ | 232,576 | $ | 783,389 | $ | 636,553 | ||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Total | |||||||||||||||||
Fixed-price | $ | 70,917 | $ | 65,219 | $ | 29,925 | $ | 80,716 | $ | 246,777 | |||||||||||
Time-and-material | 4,453 | 25,219 | 6,184 | — | 35,856 | ||||||||||||||||
Total revenue | $ | 75,370 | $ | 90,438 | $ | 36,109 | $ | 80,716 | $ | 282,633 | |||||||||||
Three Months Ended June 30, 2018 | |||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Total | |||||||||||||||||
Fixed-price | $ | 68,762 | $ | 42,927 | $ | 19,865 | $ | 75,196 | $ | 206,750 | |||||||||||
Time-and-material | 9,394 | 11,441 | 4,991 | — | 25,826 | ||||||||||||||||
Total revenue | $ | 78,156 | $ | 54,368 | $ | 24,856 | $ | 75,196 | $ | 232,576 | |||||||||||
Nine Months Ended June 30, 2019 | |||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Total | |||||||||||||||||
Fixed-price | $ | 213,214 | $ | 162,650 | $ | 87,566 | $ | 225,223 | $ | 688,653 | |||||||||||
Time-and-material | 14,714 | 67,550 | 12,472 | — | 94,736 | ||||||||||||||||
Total revenue | $ | 227,928 | $ | 230,200 | $ | 100,038 | $ | 225,223 | $ | 783,389 | |||||||||||
Nine Months Ended June 30, 2018 | |||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Total | |||||||||||||||||
Fixed-price | $ | 175,866 | $ | 124,428 | $ | 60,172 | $ | 210,328 | $ | 570,794 | |||||||||||
Time-and-material | 20,881 | 34,643 | 10,235 | — | 65,759 | ||||||||||||||||
Total revenue | $ | 196,747 | $ | 159,071 | $ | 70,407 | $ | 210,328 | $ | 636,553 |
June 30, | September 30, | |||||||
2019 | 2018 | |||||||
Costs and estimated earnings on uncompleted contracts | $ | 720,469 | $ | 539,226 | ||||
Less: Billings to date and unbilled accounts receivable | (721,521 | ) | (541,606 | ) | ||||
$ | (1,052 | ) | $ | (2,380 | ) |
June 30, | September 30, | |||||||
2019 | 2018 | |||||||
Costs and estimated earnings in excess of billings | $ | 34,807 | $ | 31,446 | ||||
Billings in excess of costs and estimated earnings | (35,859 | ) | (33,826 | ) | ||||
$ | (1,052 | ) | $ | (2,380 | ) |
On July 23, 2018, we entered into the Third Amendment (the “Amendment”)
Pursuant, the Company is subject to the financial or other covenants disclosed in Item 7 of our Annual Report on Form 10-K for the year ended September 30, 2018.
previous share repurchase authorization) not to exceed $25,000. There have been no other changes to the financial or other covenants disclosed in Item 7 of our Annual Report on Form10-K for the year ended September 30, 2017.2018. The Company was in compliance with the financial covenants as of June 30, 2018.
2019.
4.
Three Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Numerator: | ||||||||
Net income attributable to common shareholders of IES Holdings, Inc. | $ | 8,513 | $ | 5,824 | ||||
Net income attributable to restricted shareholders of IES Holdings, Inc. | 3 | 44 | ||||||
|
|
|
| |||||
Net income attributable to IES Holdings, Inc. | $ | 8,516 | $ | 5,868 | ||||
|
|
|
| |||||
Denominator: | ||||||||
Weighted average common shares outstanding — basic | 21,200,635 | 21,300,716 | ||||||
Effect of dilutive stock options andnon-vested restricted stock | 131,248 | 255,402 | ||||||
|
|
|
| |||||
Weighted average common and common equivalent shares outstanding — diluted | 21,331,883 | 21,556,118 | ||||||
|
|
|
| |||||
Earnings per share attributable to IES Holdings, Inc.: | ||||||||
Basic | $ | 0.40 | $ | 0.27 | ||||
Diluted | $ | 0.40 | $ | 0.27 |
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
Nine Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Numerator: | ||||||||
Net income (loss) attributable to common shareholders of IES Holdings, Inc. | $ | (18,788 | ) | $ | 10,195 | |||
Decrease in noncontrolling interest | (44 | ) | — | |||||
Net income attributable to restricted shareholders of IES Holdings, Inc. | — | 81 | ||||||
|
|
|
| |||||
Net income (loss) attributable to IES Holdings, Inc. | $ | (18,832 | ) | $ | 10,276 | |||
|
|
|
| |||||
Denominator: | ||||||||
Weighted average common shares outstanding — basic | 21,193,306 | 21,295,254 | ||||||
Effect of dilutive stock options andnon-vested restricted stock | — | 255,550 | ||||||
|
|
|
| |||||
Weighted average common and common equivalent shares outstanding — diluted | 21,193,306 | 21,550,804 | ||||||
|
|
|
| |||||
Earnings (loss) per share attributable to IES Holdings, Inc.: | ||||||||
Basic | $ | (0.89 | ) | $ | 0.48 | |||
Diluted | $ | (0.89 | ) | $ | 0.48 |
Three Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Numerator: | ||||||||
Net income attributable to common stockholders of IES Holdings, Inc. | $ | 10,826 | $ | 8,513 | ||||
Net income attributable to restricted stockholders of IES Holdings, Inc. | 146 | 3 | ||||||
Net income attributable to IES Holdings, Inc. | $ | 10,972 | $ | 8,516 | ||||
Denominator: | ||||||||
Weighted average common shares outstanding — basic | 21,043,425 | 21,200,635 | ||||||
Effect of dilutive stock options and non-vested restricted stock | 257,810 | 131,248 | ||||||
Weighted average common and common equivalent shares outstanding — diluted | 21,301,235 | 21,331,883 | ||||||
Earnings per share attributable to IES Holdings, Inc.: | ||||||||
Basic | $ | 0.52 | $ | 0.40 | ||||
Diluted | $ | 0.52 | $ | 0.40 | ||||
Nine Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Numerator: | ||||||||
Net income (loss) attributable to common stockholders of IES Holdings, Inc. | $ | 23,210 | $ | (18,788 | ) | |||
Decrease in noncontrolling interest | — | (44 | ) | |||||
Net income (loss) attributable to restricted stockholders of IES Holdings, Inc. | 135 | — | ||||||
Net income (loss) attributable to IES Holdings, Inc. | $ | 23,345 | $ | (18,832 | ) | |||
Denominator: | ||||||||
Weighted average common shares outstanding — basic | 21,139,697 | 21,193,306 | ||||||
Effect of dilutive stock options and non-vested restricted stock | 242,481 | — | ||||||
Weighted average common and common equivalent shares outstanding — diluted | 21,382,178 | 21,193,306 | ||||||
Earnings (loss) per share attributable to IES Holdings, Inc.: | ||||||||
Basic | $ | 1.10 | $ | (0.89) | ||||
Diluted | $ | 1.09 | $ | (0.89) |
5.
These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purpose of allocating resources and assessing performance. The Company’s CODM is its Chief Executive Officer.
Three Months Ended June 30, 2018 | ||||||||||||||||||||||||
Commercial & | Infrastructure | |||||||||||||||||||||||
Industrial | Communications | Solutions | Residential | Corporate | Total | |||||||||||||||||||
Revenues | $ | 78,156 | $ | 54,368 | $ | 24,856 | $ | 75,196 | $ | — | $ | 232,576 | ||||||||||||
Cost of services | 67,839 | 43,436 | 18,701 | 60,063 | — | 190,039 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross profit | 10,317 | 10,932 | 6,155 | 15,133 | — | 42,537 | ||||||||||||||||||
Selling, general and administrative | 6,980 | 7,193 | 4,568 | 10,941 | 2,690 | 32,372 | ||||||||||||||||||
Contingent consideration | — | — | 81 | — | — | 81 | ||||||||||||||||||
Loss (gain) on sale of assets | (6 | ) | — | 1 | — | — | (5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating income (loss) | $ | 3,343 | $ | 3,739 | $ | 1,505 | $ | 4,192 | $ | (2,690 | ) | $ | 10,089 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other data: | ||||||||||||||||||||||||
Depreciation and amortization expense | $ | 548 | $ | 595 | $ | 1,120 | $ | 156 | $ | 18 | $ | 2,437 | ||||||||||||
Capital expenditures | $ | 715 | $ | 119 | $ | 112 | $ | 110 | $ | — | $ | 1,056 | ||||||||||||
Total assets | $ | 86,012 | $ | 67,270 | $ | 102,233 | $ | 52,500 | $ | 87,948 | $ | 395,963 |
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
Three Months Ended June 30, 2017 | ||||||||||||||||||||||||
Commercial & | Infrastructure | |||||||||||||||||||||||
Industrial | Communications | Solutions | Residential | Corporate | Total | |||||||||||||||||||
Revenues | $ | 58,778 | $ | 57,081 | $ | 22,302 | $ | 70,162 | $ | — | $ | 208,323 | ||||||||||||
Cost of services | 54,174 | 46,958 | 17,486 | 54,307 | — | 172,925 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross profit | 4,604 | 10,123 | 4,816 | 15,855 | — | 35,398 | ||||||||||||||||||
Selling, general and administrative | 4,849 | 6,252 | 4,958 | 11,003 | 3,709 | 30,771 | ||||||||||||||||||
Contingent consideration | — | — | (33 | ) | — | — | (33 | ) | ||||||||||||||||
Loss (gain) on sale of assets | (4 | ) | — | (88 | ) | 37 | — | (55 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating income (loss) | $ | (241 | ) | $ | 3,871 | $ | (21 | ) | $ | 4,815 | $ | (3,709 | ) | $ | 4,715 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other data: | ||||||||||||||||||||||||
Depreciation and amortization expense | $ | 329 | $ | 187 | $ | 1,785 | $ | 135 | $ | 70 | $ | 2,506 | ||||||||||||
Capital expenditures | $ | 283 | $ | 328 | $ | 124 | $ | 170 | $ | — | $ | 905 | ||||||||||||
Total assets | $ | 66,190 | $ | 70,427 | $ | 103,323 | $ | 51,995 | $ | 125,222 | $ | 417,157 |
Nine Months Ended June 30, 2018 | ||||||||||||||||||||||||
Commercial & | Infrastructure | |||||||||||||||||||||||
Industrial | Communications | Solutions | Residential | Corporate | Total | |||||||||||||||||||
Revenues | $ | 196,747 | $ | 159,071 | $ | 70,407 | $ | 210,328 | $ | — | $ | 636,553 | ||||||||||||
Cost of services | 175,066 | 129,667 | 54,543 | 167,836 | — | 527,112 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross profit | 21,681 | 29,404 | 15,864 | 42,492 | — | 109,441 | ||||||||||||||||||
Selling, general and administrative | 19,624 | 19,478 | 13,762 | 30,995 | 8,249 | 92,108 | ||||||||||||||||||
Contingent consideration | — | — | 152 | — | — | 152 | ||||||||||||||||||
Loss (gain) on sale of assets | (35 | ) | (9 | ) | 6 | (1 | ) | — | (39 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating income (loss) | $ | 2,092 | $ | 9,935 | $ | 1,944 | $ | 11,498 | $ | (8,249 | ) | $ | 17,220 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other data: | ||||||||||||||||||||||||
Depreciation and amortization expense | $ | 1,632 | $ | 1,030 | $ | 3,503 | $ | 452 | $ | 89 | $ | 6,706 | ||||||||||||
Capital expenditures | $ | 1,638 | $ | 592 | $ | 457 | $ | 696 | $ | — | $ | 3,383 | ||||||||||||
Total assets | $ | 86,012 | $ | 67,270 | $ | 102,233 | $ | 52,500 | $ | 87,948 | $ | 395,963 |
Nine Months Ended June 30, 2017 | ||||||||||||||||||||||||
Commercial & | Infrastructure | |||||||||||||||||||||||
Industrial | Communications | Solutions | Residential | Corporate | Total | |||||||||||||||||||
Revenues | $ | 168,006 | $ | 172,058 | $ | 59,572 | $ | 204,527 | $ | — | $ | 604,163 | ||||||||||||
Cost of services | 154,628 | 144,668 | 45,103 | 157,370 | — | 501,769 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross profit | 13,378 | 27,390 | 14,469 | 47,157 | — | 102,394 | ||||||||||||||||||
Selling, general and administrative | 14,434 | 18,086 | 13,280 | 32,488 | 10,797 | 89,085 | ||||||||||||||||||
Contingent consideration | — | — | 50 | — | — | 50 | ||||||||||||||||||
Gain on sale of assets | (11 | ) | (1 | ) | (90 | ) | 34 | — | (68 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating income (loss) | $ | (1,045 | ) | $ | 9,305 | $ | 1,229 | $ | 14,635 | $ | (10,797 | ) | $ | 13,327 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other data: | ||||||||||||||||||||||||
Depreciation and amortization expense | $ | 983 | $ | 532 | $ | 4,730 | $ | 436 | $ | 203 | $ | 6,884 | ||||||||||||
Capital expenditures | $ | 927 | $ | 1,888 | $ | 261 | $ | 517 | $ | 203 | $ | 3,796 | ||||||||||||
Total assets | $ | 66,190 | $ | 70,427 | $ | 103,323 | $ | 51,995 | $ | 125,222 | $ | 417,157 |
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
6.
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Corporate | Total | |||||||||||||||||||
Revenues | $ | 75,370 | $ | 90,438 | $ | 36,109 | $ | 80,716 | $ | — | $ | 282,633 | ||||||||||||
Cost of services | 69,171 | 75,044 | 27,671 | 64,350 | — | 236,236 | ||||||||||||||||||
Gross profit | 6,199 | 15,394 | 8,438 | 16,366 | — | 46,397 | ||||||||||||||||||
Selling, general and administrative | 6,827 | 8,406 | 4,937 | 11,812 | 4,351 | 36,333 | ||||||||||||||||||
Contingent consideration | — | — | (163 | ) | — | — | (163 | ) | ||||||||||||||||
Loss (gain) on sale of assets | (4 | ) | — | (4 | ) | — | — | (8 | ) | |||||||||||||||
Operating income (loss) | (624 | ) | 6,988 | 3,668 | 4,554 | (4,351 | ) | 10,235 | ||||||||||||||||
Other data: | ||||||||||||||||||||||||
Depreciation and amortization expense | $ | 652 | $ | 339 | $ | 1,122 | $ | 218 | $ | 23 | $ | 2,354 | ||||||||||||
Capital expenditures | $ | 507 | $ | 74 | $ | 311 | $ | 329 | $ | 22 | $ | 1,243 | ||||||||||||
Total assets | $ | 81,693 | $ | 111,270 | $ | 118,143 | $ | 57,866 | $ | 69,392 | $ | 438,364 |
Three Months Ended June 30, 2018 | ||||||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Corporate | Total | |||||||||||||||||||
Revenues | $ | 78,156 | $ | 54,368 | $ | 24,856 | $ | 75,196 | $ | — | $ | 232,576 | ||||||||||||
Cost of services | 67,839 | 43,436 | 18,701 | 60,063 | — | 190,039 | ||||||||||||||||||
Gross profit | 10,317 | 10,932 | 6,155 | 15,133 | — | 42,537 | ||||||||||||||||||
Selling, general and administrative | 6,980 | 7,193 | 4,568 | 10,941 | 2,690 | 32,372 | ||||||||||||||||||
Contingent consideration | — | — | 81 | — | — | 81 | ||||||||||||||||||
Loss (gain) on sale of assets | (6 | ) | — | 1 | — | — | (5 | ) | ||||||||||||||||
Operating income (loss) | 3,343 | 3,739 | 1,505 | 4,192 | (2,690 | ) | 10,089 | |||||||||||||||||
Other data: | ||||||||||||||||||||||||
Depreciation and amortization expense | $ | 548 | $ | 595 | $ | 1,120 | $ | 156 | $ | 18 | $ | 2,437 | ||||||||||||
Capital expenditures | $ | 715 | $ | 119 | $ | 112 | $ | 110 | $ | — | $ | 1,056 | ||||||||||||
Total assets | $ | 86,012 | $ | 67,270 | $ | 102,233 | $ | 52,500 | $ | 87,948 | $ | 395,963 |
Nine Months Ended June 30, 2019 | |||||||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Corporate | Total | ||||||||||||||||||||
Revenues | $ | 227,928 | $ | 230,200 | $ | 100,038 | $ | 225,223 | $ | — | $ | 783,389 | |||||||||||||
Cost of services | 204,263 | 190,895 | 78,227 | 178,771 | — | 652,156 | |||||||||||||||||||
Gross profit | 23,665 | 39,305 | 21,811 | 46,452 | — | 131,233 | |||||||||||||||||||
Selling, general and administrative | 20,906 | 23,006 | 14,103 | 34,136 | 11,338 | 103,489 | |||||||||||||||||||
Contingent consideration | — | — | (278 | ) | — | — | (278 | ) | |||||||||||||||||
Loss (gain) on sale of assets | (8 | ) | — | 97 | (2 | ) | — | 87 | |||||||||||||||||
Operating income (loss) | 2,767 | 16,299 | 7,889 | 12,318 | (11,338 | ) | 27,935 | ||||||||||||||||||
Other data: | |||||||||||||||||||||||||
Depreciation and amortization expense | $ | 1,907 | $ | 1,180 | $ | 3,391 | $ | 644 | $ | 78 | $ | 7,200 | |||||||||||||
Capital expenditures | $ | 1,974 | $ | 767 | $ | 1,133 | $ | 1,174 | $ | 124 | $ | 5,172 | |||||||||||||
Total assets | $ | 81,693 | $ | 111,270 | $ | 118,143 | $ | 57,866 | $ | 69,392 | $ | 438,364 |
Nine Months Ended June 30, 2018 | |||||||||||||||||||||||||
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Corporate | Total | ||||||||||||||||||||
Revenues | $ | 196,747 | $ | 159,071 | $ | 70,407 | $ | 210,328 | $ | — | $ | 636,553 | |||||||||||||
Cost of services | 175,066 | 129,667 | 54,543 | 167,836 | — | 527,112 | |||||||||||||||||||
Gross profit | 21,681 | 29,404 | 15,864 | 42,492 | — | 109,441 | |||||||||||||||||||
Selling, general and administrative | 19,624 | 19,478 | 13,762 | 30,995 | 8,249 | 92,108 | |||||||||||||||||||
Contingent consideration | — | — | 152 | — | — | 152 | |||||||||||||||||||
Loss (gain) on sale of assets | (35 | ) | (9 | ) | 6 | (1 | ) | — | (39 | ) | |||||||||||||||
Operating income (loss) | 2,092 | 9,935 | 1,944 | 11,498 | (8,249 | ) | 17,220 | ||||||||||||||||||
Other data: | |||||||||||||||||||||||||
Depreciation and amortization expense | $ | 1,632 | $ | 1,030 | $ | 3,503 | $ | 452 | $ | 89 | $ | 6,706 | |||||||||||||
Capital expenditures | $ | 1,638 | $ | 592 | $ | 457 | $ | 696 | $ | — | $ | 3,383 | |||||||||||||
Total assets | $ | 86,012 | $ | 67,270 | $ | 102,233 | $ | 52,500 | $ | 87,948 | $ | 395,963 |
2019.
Our
Treasury Stock
treasury stock as payment for outstanding phantom stock units that vested upon the departure of the Company’s President and issued 283,195 shares out of treasury stock for restricted shares granted upon the appointment of the Company’s Chief Executive Officer (“CEO”) in March 2019.
options for employees.
Restricted Stock
During the three months ended June 30, 2018, and 2017,2019, we recognized $11$333 and $133,$443, respectively, in compensation expense related to ourthese restricted stock awards. During the three and nine months ended June 30, 2018, and 2017, we recognized $256$11 and $406,$256, respectively, in compensation expense related to our restricted stock awards.awards granted in prior years. At June 30, 2018,2019, the unamortized compensation cost related to outstanding unvested restricted stock was zero.
Performance Based Phantom Cash Units
Performance based phantom cash units (“PPCUs”) are a contractual right to a cash payment of $20 per PPCU. The PPCUs will generally become vested, if at all, upon achievement of certain specified performance objectives. During the three months ended June 30, 2018, and 2017, we recognized compensation expense of zero and $59, respectively, related to these units. During the nine months ended June 30, 2018, and 2017, we recognized compensation expense of zero and $252, respectively, related to these units.
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
Phantom
7.
Investmentmonth subsequent to completing sixty days of service and attaining age twenty-one. Participants become vested in EnerTech
Theour matching contributions following table presents the reconciliationthree years of the carrying value to the fair value of the investment in EnerTech as of June 30, 2018, and September 30, 2017:
June 30, 2018 | September 30, 2017 | |||||||
Carrying value | $ | 558 | $ | 558 | ||||
Unrealized gains | 170 | 171 | ||||||
|
|
|
| |||||
Fair value | $ | 728 | $ | 729 | ||||
|
|
|
|
At each reporting date, the Company performs an evaluation of impairment for securities to determine if any unrealized losses are other-than temporary. Based on the results of this evaluation, we believe the unrealized gain at June 30, 2018, and September 30, 2017, indicated our investment was not impaired.
8. EMPLOYEE BENEFIT PLANS
401(k) Plan
The Company offers employees the opportunity to participate in its 401(k)service. We also maintain several subsidiary retirement savings plans. During the three months ended June 30, 20182019, and 2017,2018, we recognized $466$538 and $312,$466, respectively, in matching expense. During the nine months ended June 30, 20182019, and 2017,2018, we recognized $1,380$1,561 and $771,$1,380, respectively, in matching expense.
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
9.
June 30, 2018 | ||||||||||||
Total Fair Value | Quoted Prices (Level 1) | Significant Unobservable Inputs (Level 3) | ||||||||||
Executive savings plan assets | $ | 713 | $ | 713 | $ | — | ||||||
Executive savings plan liabilities | (599 | ) | (599 | ) | — | |||||||
Contingent consideration | (795 | ) | — | (795 | ) | |||||||
|
|
|
|
|
| |||||||
Total | $ | (681 | ) | $ | 114 | $ | (795 | ) | ||||
|
|
|
|
|
|
September 30, 2017 | ||||||||||||
Total Fair Value | Quoted Prices (Level 1) | Significant Unobservable Inputs (Level 3) | ||||||||||
Executive savings plan assets | $ | 641 | $ | 641 | $ | — | ||||||
Executive savings plan liabilities | (529 | ) | (529 | ) | — | |||||||
Contingent consideration | (786 | ) | — | (786 | ) | |||||||
|
|
|
|
|
| |||||||
Total | $ | (674 | ) | $ | 112 | $ | (786 | ) | ||||
|
|
|
|
|
|
June 30, 2019 | ||||||||||||
Total Fair Value | Quoted Prices (Level 1) | Significant Unobservable Inputs (Level 3) | ||||||||||
Executive savings plan assets | $ | 773 | $ | 773 | $ | — | ||||||
Executive savings plan liabilities | (656 | ) | (656 | ) | — | |||||||
Contingent consideration | (108 | ) | — | (108 | ) | |||||||
Total | $ | 9 | $ | 117 | $ | (108 | ) |
September 30, 2018 | ||||||||||||
Total Fair Value | Quoted Prices (Level 1) | Significant Unobservable Inputs (Level 3) | ||||||||||
Executive savings plan assets | $ | 747 | $ | 747 | $ | — | ||||||
Executive savings plan liabilities | (631 | ) | (631 | ) | — | |||||||
Contingent consideration | (680 | ) | — | (680 | ) | |||||||
Total | $ | (564 | ) | $ | 116 | $ | (680 | ) |
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
Contingent Consideration Agreements | ||||
Fair value at September 30, 2017 | $ | 786 | ||
Issuances | 248 | |||
Settlements | (391 | ) | ||
Net adjustments to fair value | 152 | |||
|
| |||
Fair value at June 30, 2018 | $ | 795 | ||
|
|
10.
Contingent Consideration Agreements | ||||
Fair value at September 30, 2018 | $ | 680 | ||
Settlements | (295 | ) | ||
Net adjustments to fair value | (277 | ) | ||
Fair value at June 30, 2019 | $ | 108 |
June 30, 2018 | September 30, 2017 | |||||||
Raw materials | $ | 4,175 | $ | 4,104 | ||||
Work in process | 4,396 | 3,731 | ||||||
Finished goods | 1,608 | 1,692 | ||||||
Parts and supplies | 8,538 | 7,396 | ||||||
|
|
|
| |||||
Total inventories | $ | 18,717 | $ | 16,923 | ||||
|
|
|
|
11.
June 30, | September 30, | |||||||
2019 | 2018 | |||||||
Raw materials | $ | 4,447 | $ | 4,453 | ||||
Work in process | 6,171 | 5,168 | ||||||
Finished goods | 1,726 | 1,746 | ||||||
Parts and supplies | 12,006 | 9,599 | ||||||
Total inventories | $ | 24,350 | $ | 20,966 |
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Total | ||||||||||||||||
Goodwill at September 30, 2017 | $ | 7,176 | $ | — | $ | 30,886 | $ | 8,631 | $ | 46,693 | ||||||||||
Acquisitions (See Note 13) | — | 2,561 | — | — | 2,561 | |||||||||||||||
Adjustments | — | — | 45 | — | 45 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Goodwill at June 30, 2018 | $ | 7,176 | $ | 2,561 | $ | 30,931 | $ | 8,631 | $ | 49,299 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2019:
Commercial & Industrial | Communications | Infrastructure Solutions | Residential | Total | ||||||||||||||||||
Goodwill at September 30, 2018 | $ | 6,976 | $ | 2,816 | $ | 30,931 | $ | 9,979 | $ | 50,702 | ||||||||||||
Divestitures (See Note 14) | — | — | (119 | ) | — | (119 | ) | |||||||||||||||
Adjustments | — | — | — | 39 | 39 | |||||||||||||||||
Goodwill at June 30, 2019 | $ | 6,976 | $ | 2,816 | $ | 30,812 | $ | 10,018 | $ | 50,622 |
June 30, 2018 | ||||||||||||||||
Estimated Useful Lives (in Years) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||
Trademarks/trade names | 5 - 20 | $ | 5,044 | $ | 723 | $ | 4,321 | |||||||||
Technical library | 20 | 400 | 96 | 304 | ||||||||||||
Customer relationships | 6 -15 | 33,469 | 7,027 | 26,442 | ||||||||||||
Backlog | 1 | 3,026 | 2,565 | 461 | ||||||||||||
Construction contracts | 1 | 2,583 | 2,375 | 208 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total intangible assets | $ | 44,522 | $ | 12,786 | $ | 31,736 | ||||||||||
|
|
|
|
|
|
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
September 30, 2017 | ||||||||||||||||
Estimated Useful Lives (in Years) | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||
Trademarks/trade names | 5 - 20 | $ | 4,643 | $ | 440 | $ | 4,203 | |||||||||
Technical library | 20 | 400 | 81 | 319 | ||||||||||||
Customer relationships | 6 - 15 | 31,115 | 4,741 | 26,374 | ||||||||||||
Backlog | 1 | 2,412 | 2,130 | 282 | ||||||||||||
Construction contracts | 1 | 2,399 | 2,164 | 235 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total intangible assets | $ | 40,969 | $ | 9,556 | $ | 31,413 | ||||||||||
|
|
|
|
|
|
12.
Estimated Useful Lives (in Years) | June 30, 2019 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||
Trademarks/trade names | 5-20 | $ | 5,084 | $ | (1,163 | ) | $ | 3,921 | |||||||
Technical library | 20 | 400 | (116 | ) | 284 | ||||||||||
Customer relationships | 6-15 | 33,539 | (10,256 | ) | 23,283 | ||||||||||
Non-competition arrangements | 5 | 40 | (7 | ) | 33 | ||||||||||
Backlog | 1 | 378 | (362 | ) | 16 | ||||||||||
Construction contracts | 1 | 221 | (223 | ) | (2 | ) | |||||||||
Total intangible assets | $ | 39,662 | $ | (12,127 | ) | $ | 27,535 |
Estimated Useful Lives (in Years) | September 30, 2018 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||
Trademarks/trade names | 5-20 | $ | 5,084 | $ | (831 | ) | $ | 4,253 | |||||||
Technical library | 20 | 400 | (101 | ) | 299 | ||||||||||
Customer relationships | 6-15 | 33,539 | (7,870 | ) | 25,669 | ||||||||||
Non-competition arrangements | 5 | 40 | (1 | ) | 39 | ||||||||||
Backlog | 1 | 378 | (176 | ) | 202 | ||||||||||
Construction contracts | 1 | 2,184 | (2,056 | ) | 128 | ||||||||||
Total intangible assets | $ | 41,625 | $ | (11,035 | ) | $ | 30,590 |
The following is a discussion of our significant legal matters:
Capstone Construction Claims
From 2003 to 2005, two of our former subsidiaries performed HVAC and electrical work under contract with Capstone Building Corporation (“Capstone”) on a university student housing project in Texas. In 2005, our subsidiaries filed for arbitration against Capstone, seeking payment for work performed, change orders and other impacts. The parties settled those claims, and the release included a waiver of warranties associated with any of the HVAC work. Several years later, the subsidiaries discontinued operations, and the Company sold their assets.
On October 24, 2013, Capstone filed a petition in the 12th Judicial District Court of Walker County, Texas against these subsidiaries, among other subcontractors, seeking contribution, defense, indemnity and damages for breach of contract in connection with alleged construction defect claims brought against Capstone by the owner of the student housing project. The owner claimed $10,406 in damages, plus attorneys’ fees and costs against Capstone, which Capstone sought to recover from the subcontractors. The claims against the Company were based on alleged defects in the mechanical design, construction and installation of the HVAC and electrical systems performed by our former subsidiaries.
Following mediation in June and November 2017, the Company reached an agreement in late December 2017 to settle all claims brought against it. In the nine months ended June 30, 2018, a mutual settlement and release agreement was executed by the plaintiffs and the Company resulting in a charge and payment by the Company of $200.
USAMRIID Claim
On December 6, 2017, IES Commercial, Inc. filed suit in the United States District Court of Maryland in the matterUSA for the use and benefit of IES Commercial, Inc. and IES Commercial, Inc. v. Manhattan Construction Co., Torcon, Inc., Manhattan Torcon A Joint Venture, Federal Ins. Co., Fidelity & Deposit Co. of Maryland, Zurich American Ins. Co., and Travelers Casualty & Surety Co. This suit relates to a large project which has been ongoing since 2009 and was scheduled for completion in early 2013. As the Company has previously disclosed, the Company entered into a subcontract in 2009 with Manhattan Torcon A Joint Venture to perform subcontracting services at the U.S. Army Medical Research Institute for Infectious Diseases (“USAMRIID”) replacement facility project for a contract value of approximately $61,146, subject to additions or deductions. Because of delays on the project and additional work the Company performed, the Company has sought approximately $21,000 for claims incurred as of August 31, 2017, and expects to seek an additional approximate $4,500 for claims the Company expects to incur from August 31, 2017, through completion of the project. On January 22, 2018, the defendants in this matter filed a motion to dismiss the suit, and on February 2, 2018, we filed our response. We are awaiting a decision on this matter.
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
Given the uncertainty litigation poses, the Company has not recorded any recovery in connection with this claim. There can be no assurance that the Company will prevail in this litigation matter or that, if the Company does prevail, it will not receive a significantly lower award.
13.
2018
The Company completed AND DIVESTITURES
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
2017
The Company completed three acquisitions in the year ended September 30, 2017, for a total aggregate consideration of $20,979. See Note 18, “Business Combinations and Divestitures” in our Annual Report on Form10-K for the year ended September 30, 2017, for
further information.
The total purchase consideration for the Freeman, Technical Services and Azimuth acquisitions included contingent consideration payments based on the acquired company’s earnings, as defined in the applicable purchase and sale agreement. The fair value of the total contingent consideration liability for all acquisitions, including Freeman and Technical Services, was estimated at $795 at June 30, 2018, and is included in other current liabilities and othernon-current liabilities on our Condensed Consolidated Balance Sheets.
The Company accounted for the transactions under the acquisition method of accounting, which requires recording assets and liabilities at fair value (Level 3). The valuations derived from estimated fair value assessments and assumptions used by management are preliminary pending finalization of certain tangible and intangible asset valuations and assessment of deferred taxes. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different values being assigned to individual assets acquired and liabilities assumed. This may result in adjustments to the preliminary amounts recorded. The preliminary estimates for Freeman, Technical Services and NEXT Electric were finalized during the nine months ended June 30, 2018. The preliminary valuation of the assets and liabilities assumed as of the acquisition of Azimuth is as follows:
Current assets | $ | 1,765 | ||
Property and equipment | 355 | |||
Intangible assets (primarily customer relationships) | 3,439 | |||
Goodwill | 2,561 | |||
Current liabilities | (1,154 | ) | ||
Long term liabilities | (14 | ) | ||
Deferred tax liability | (773 | ) | ||
|
| |||
Net assets acquired | $ | 6,179 | ||
|
|
With regard to goodwill, the balance is attributable to the workforce of the acquired business and other intangibles that do not qualify for separate recognition. In connection with the Azimuth acquisition, we acquired goodwill of $2,561, of which $59 is tax deductible.
IES HOLDINGS, INC.
Notes to the Condensed Consolidated Financial Statements
(All Amounts in Thousands Except Share Amounts)
(Unaudited)
The Azimuth acquisition contributed $2,474 in additional revenue and $284 in operating loss during the three and nine months ended June 30, 2018.
Unaudited Pro Forma Information
The following unaudited supplemental pro forma results of operations, calculated as if each acquisition occurred as of October 1 of the fiscal year prior to consummation, for the three and nine months ended June 30, 2018, and 2017, are as follows:
Unaudited | ||||||||
Three Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Revenues | $ | 232,576 | $ | 220,088 | ||||
Net income attributable to IES Holdings, Inc. | $ | 8,577 | $ | 5,252 |
Unaudited | ||||||||
Nine Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Revenues | $ | 642,167 | $ | 654,251 | ||||
Net income (loss) attributable to IES Holdings, Inc. | $ | (19,452 | ) | $ | 8,498 |
14. SUBSEQUENT EVENTS
On July 23, 2018, we entered into the Third Amendment to our Second Amended and Restated Credit and Security Agreement (as amended, the “Credit Agreement”). See Note 3, “Debt” for further discussion.
|
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and the notes thereto, set forth in Part II, Item 8.“Financial Statements and Supplementary Data” as set forth in our Annual Report on Form10-K for the year ended September 30, 2017,2018, and the Condensed Consolidated Financial Statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q10-Q.. The following discussion may contain forward looking statements. For additional information, see“Disclosure Regarding Forward Looking Statements” in Part I of this Quarterly Report on Form10-Q.
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenues | $ | 232,576 | 100.0 | % | $ | 208,323 | 100.0 | % | ||||||||
Cost of services | 190,039 | 81.7 | % | 172,925 | 83.0 | % | ||||||||||
|
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|
|
|
|
|
| |||||||||
Gross profit | 42,537 | 18.3 | % | 35,398 | 17.0 | % | ||||||||||
Selling, general and administrative expenses | 32,372 | 13.9 | % | 30,771 | 14.8 | % | ||||||||||
Contingent consideration | 81 | 0.0 | % | (33 | ) | 0.0 | % | |||||||||
Gain on sale of assets | (5 | ) | 0.0 | % | (55 | ) | 0.0 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 10,089 | 4.3 | % | 4,715 | 2.2 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Interest and other (income) expense, net | 402 | 0.2 | % | 361 | 0.1 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Income from operations before income taxes | 9,687 | 4.2 | % | 4,354 | 2.1 | % | ||||||||||
Provision for income taxes | 1,038 | 0.4 | % | (1,519 | ) | (0.7 | )% | |||||||||
|
|
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|
|
| |||||||||
Net income | 8,649 | 3.7 | % | 5,873 | 2.8 | % | ||||||||||
|
|
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|
| |||||||||
Net income attributable to noncontrolling interest | (133 | ) | (0.1 | )% | (5 | ) | 0.0 | % | ||||||||
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| |||||||||
Comprehensive income attributable to IES Holdings, Inc. | $ | 8,516 | 3.7 | % | $ | 5,868 | 2.8 | % | ||||||||
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Three Months Ended June 30, | ||||||||||||||||||
2019 | 2018 | |||||||||||||||||
$ | % | $ | % | |||||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||||
Revenues | $ | 282,633 | 100.0 | % | $ | 232,576 | 100.0 | % | ||||||||||
Cost of services | 236,236 | 83.6 | % | 190,039 | 81.7 | % | ||||||||||||
Gross profit | 46,397 | 16.4 | % | 42,537 | 18.3 | % | ||||||||||||
Selling, general and administrative expenses | 36,333 | 12.9 | % | 32,372 | 13.9 | % | ||||||||||||
Contingent consideration | (163 | ) | (0.1 | ) | % | 81 | — | % | ||||||||||
Gain on sale of assets | (8 | ) | — | % | (5 | ) | — | % | ||||||||||
Operating income | 10,235 | 3.6 | % | 10,089 | 4.3 | % | ||||||||||||
Interest and other (income) expense, net | 387 | 0.1 | % | 402 | 0.2 | % | ||||||||||||
Income from operations before income taxes | 9,848 | 3.5 | % | 9,687 | 4.2 | % | ||||||||||||
Provision for income taxes | (1,207 | ) | (0.4 | ) | % | 1,038 | 0.4 | % | ||||||||||
Net income | 11,055 | 3.9 | % | 8,649 | 3.7 | % | ||||||||||||
Net income attributable to noncontrolling interest | (83 | ) | — | % | (133 | ) | (0.1 | ) | % | |||||||||
Net income attributable to IES Holdings, Inc. | $ | 10,972 | 3.9 | % | $ | 8,516 | 3.7 | % |
our markets remain highly competitive.
compensation), occupancy and utilities, training, professional services, information technology costs, consulting fees, travel and certain types of depreciation and amortization. We allocate certain corporate selling, general and administrative costs across our segments as we believe this more accurately reflects the costs associated with operating each segment.
Nine Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenues | $ | 636,553 | 100.0 | % | $ | 604,163 | 100.0 | % | ||||||||
Cost of services | 527,112 | 82.8 | % | 501,769 | 83.1 | % | ||||||||||
|
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|
|
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| |||||||||
Gross profit | 109,441 | 17.2 | % | 102,394 | 16.9 | % | ||||||||||
Selling, general and administrative expenses | 92,108 | 14.5 | % | 89,085 | 14.7 | % | ||||||||||
Contingent consideration | 152 | 0.0 | % | 50 | 0.0 | % | ||||||||||
Gain on sale of assets | (39 | ) | 0.0 | % | (68 | ) | 0.0 | % | ||||||||
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| |||||||||
Operating income | 17,220 | 2.7 | % | 13,327 | 2.2 | % | ||||||||||
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| |||||||||
Interest and other (income) expense, net | 1,175 | 0.2 | % | 1,187 | 0.2 | % | ||||||||||
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| |||||||||
Income from operations before income taxes | 16,045 | 2.5 | % | 12,140 | 2.0 | % | ||||||||||
Provision for income taxes(1) | 34,622 | 5.4 | % | 1,792 | 0.3 | % | ||||||||||
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|
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| |||||||||
Net income (loss) | (18,577 | ) | (2.9 | )% | 10,348 | 1.7 | % | |||||||||
|
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| |||||||||
Net income attributable to noncontrolling interest | (255 | ) | 0.0 | % | (72 | ) | 0.0 | % | ||||||||
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| |||||||||
Comprehensive income (loss) attributable to IES Holdings, Inc. | $ | (18,832 | ) | (3.0 | )% | $ | 10,276 | 1.7 | % | |||||||
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2019, as we benefited from the increased scale of our operations.
Nine Months Ended June 30, | ||||||||||||||||||
2019 | 2018 | |||||||||||||||||
$ | % | $ | % | |||||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||||
Revenues | $ | 783,389 | 100.0 | % | $ | 636,553 | 100.0 | % | ||||||||||
Cost of services | 652,156 | 83.2 | % | 527,112 | 82.8 | % | ||||||||||||
Gross profit | 131,233 | 16.8 | % | 109,441 | 17.2 | % | ||||||||||||
Selling, general and administrative expenses | 103,489 | 13.2 | % | 92,108 | 14.5 | % | ||||||||||||
Contingent consideration | (278 | ) | — | % | 152 | — | % | |||||||||||
Loss (gain) on sale of assets | 87 | — | % | (39 | ) | — | % | |||||||||||
Operating income | 27,935 | 3.6 | % | 17,220 | 2.7 | % | ||||||||||||
Interest and other (income) expense, net | 1,404 | 0.2 | % | 1,175 | 0.2 | % | ||||||||||||
Income from operations before income taxes | 26,531 | 3.4 | % | 16,045 | 2.5 | % | ||||||||||||
Provision for income taxes (1) | 3,036 | 0.4 | % | 34,622 | 5.4 | % | ||||||||||||
Net income (loss) | 23,495 | 3.0 | % | (18,577 | ) | (2.9 | ) | % | ||||||||||
Net income attributable to noncontrolling interest | (150 | ) | — | % | (255 | ) | — | % | ||||||||||
Net income (loss) attributable to IES Holdings, Inc. | $ | 23,345 | 3.0 | % | $ | (18,832 | ) | (3.0 | ) | % | ||||||||
(1) 2018 includes a charge of $31.5 million to re-measure our net deferred tax assets in connection with the Tax Cuts and Jobs Act. |
Our overall gross profit percentage increased2019, as compared to 17.2% during the nine months ended June 30, 2018,2018. Gross profit as compared to 16.9% duringa percentage of revenue increased at our Residential segment, but decreased slightly at each of our other segments. See further discussion below of changes in gross margin for our individual segments.
During the nine months ended June 30, 2018, our selling, general and administrative expenses were $92.1 million, an increase of $3.0 million, or 3.4%, over the nine months ended June 30, 2017. This increase was primarily attributable to expense incurred at businesses acquired during fiscal 2017 and 2018, which contributed $4.9 million of the increase13.2% for the nine months ended June 30, 2018. This increase was partly offset by a reduction in variable compensation expense.
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 78,156 | 100.0 | % | $ | 58,778 | 100.0 | % | ||||||||
Cost of services | 67,839 | 86.8 | % | 54,174 | 92.2 | % | ||||||||||
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| |||||||||
Gross profit | 10,317 | 13.2 | % | 4,604 | 7.8 | % | ||||||||||
Selling, general and administrative expenses | 6,980 | 8.9 | % | 4,849 | 8.2 | % | ||||||||||
Gain on sale of assets | (6 | ) | 0.0 | % | (2 | ) | 0.0 | % | ||||||||
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|
|
|
|
| |||||||||
Operating income | 3,343 | 4.3 | % | (243 | ) | -0.4 | % |
Three Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
$ | % | $ | % | ||||||||||||
(Dollars in thousands, Percentage of revenues) | |||||||||||||||
Revenues | $ | 75,370 | 100.0 | % | $ | 78,156 | 100.0 | % | |||||||
Cost of services | 69,171 | 91.8 | % | 67,839 | 86.8 | % | |||||||||
Gross profit | 6,199 | 8.2 | % | 10,317 | 13.2 | % | |||||||||
Selling, general and administrative expenses | 6,827 | 9.1 | % | 6,980 | 8.9 | % | |||||||||
Gain on sale of assets | (4 | ) | — | % | (6 | ) | — | % | |||||||
Operating income | (624 | ) | (0.8 | ) | % | 3,343 | 4.3 | % |
reduction in volumes resulting in a higher rate of fixed overhead costs as a percentage of revenue.
The following table summarizes the results of our Denver and Roanoke branches, which are in the process of winding down operations. These results are included in the consolidated Commercial & Industrial results shown above:
Denver and Roanoke branches | Three Months Ended June 30, | |||||||
2018 | 2017 | |||||||
(In thousands) | ||||||||
Revenues | $ | 1,261 | $ | 7,575 | ||||
Cost of services | 1,792 | 9,548 | ||||||
Selling, general and administrative expenses | 379 | 635 | ||||||
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| |||||
Operating loss | $ | (910 | ) | $ | (2,608 | ) | ||
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Nine Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 196,747 | 100.0 | % | $ | 168,006 | 100.0 | % | ||||||||
Cost of services | 175,066 | 89.0 | % | 154,628 | 92.0 | % | ||||||||||
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|
|
|
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| |||||||||
Gross profit | 21,681 | 11.0 | % | 13,378 | 8.0 | % | ||||||||||
Selling, general and administrative expenses | 19,624 | 10.0 | % | 14,434 | 8.6 | % | ||||||||||
Gain on sale of assets | (35 | ) | 0.0 | % | (11 | ) | 0.0 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 2,092 | 1.1 | % | (1,045 | ) | -0.6 | % |
Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
$ | % | $ | % | |||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||
Revenues | $ | 227,928 | 100.0 | % | $ | 196,747 | 100.0 | % | ||||||
Cost of services | 204,263 | 89.6 | % | 175,066 | 89.0 | % | ||||||||
Gross profit | 23,665 | 10.4 | % | 21,681 | 11.0 | % | ||||||||
Selling, general and administrative expenses | 20,906 | 9.2 | % | 19,624 | 10.0 | % | ||||||||
Gain on sale of assets | (8 | ) | — | % | (35 | ) | — | % | ||||||
Operating income | 2,767 | 1.2 | % | 2,092 | 1.1 | % |
some project inefficiencies.
The following table summarizes the resultsscale of our Denver and Roanoke branches, which are in the process of winding down operations. These results are included in the consolidated Commercial & Industrial segment results shown above:
Denver and Roanoke branches | Nine Months Ended June 30, | |||||||
2018 | 2017 | |||||||
(In thousands) | ||||||||
Revenues | $ | 8,371 | $ | 27,376 | ||||
Cost of services | 9,096 | 31,633 | ||||||
Selling, general and administrative expenses | 1,322 | 2,098 | ||||||
|
|
|
| |||||
Operating loss | $ | (2,047 | ) | $ | (6,355 | ) | ||
|
|
|
|
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 54,368 | 100.0 | % | $ | 57,081 | 100.0 | % | ||||||||
Cost of services | 43,436 | 79.9 | % | 46,958 | 82.3 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 10,932 | 20.1 | % | 10,123 | 17.7 | % | ||||||||||
Selling, general and administrative expenses | 7,193 | 13.2 | % | 6,252 | 11.0 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 3,739 | 6.9 | % | 3,871 | 6.8 | % |
Three Months Ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
$ | % | $ | % | |||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||
Revenues | $ | 90,438 | 100.0 | % | $ | 54,368 | 100.0 | % | ||||||
Cost of services | 75,044 | 83.0 | % | 43,436 | 79.9 | % | ||||||||
Gross profit | 15,394 | 17.0 | % | 10,932 | 20.1 | % | ||||||||
Selling, general and administrative expenses | 8,406 | 9.3 | % | 7,193 | 13.2 | % | ||||||||
Operating income | 6,988 | 7.7 | % | 3,739 | 6.9 | % |
by $0.9$1.2 million, or 15.0%16.9%, during the three months ended June 30, 2018,2019, compared to the three months ended June 30, 2017.2018. The increase is a result of higher personnel cost, particularly related to continuing investment to support the growth of the business, along with higher incentive compensation expense in connection with improved profitability and cash flows. Selling, general and administrative expenses as a percentage of revenues in the Communications segment increased 2.2%decreased 3.9% to 13.2%9.3% of segment revenue during the three months ended June 30, 2018,2019, compared to the three months ended June 30, 2017. The increase is a result2018, as we benefited from the increased scale of higher personnel cost, particularly related to higher incentive compensation expense in connection with improved profitability and cash flows, as well as continuing investment to support anticipated growth.
Nine Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 159,071 | 100.0 | % | $ | 172,058 | 100.0 | % | ||||||||
Cost of services | 129,667 | 81.5 | % | 144,668 | 84.1 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 29,404 | 18.5 | % | 27,390 | 15.9 | % | ||||||||||
Selling, general and administrative expenses | 19,478 | 12.2 | % | 18,086 | 10.5 | % | ||||||||||
Gain on sale of assets | (9 | ) | 0.0 | % | (1 | ) | 0.0 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 9,935 | 6.2 | % | 9,305 | 5.4 | % |
our operations.
Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
$ | % | $ | % | |||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||
Revenues | $ | 230,200 | 100.0 | % | $ | 159,071 | 100.0 | % | ||||||
Cost of services | 190,895 | 82.9 | % | 129,667 | 81.5 | % | ||||||||
Gross profit | 39,305 | 17.1 | % | 29,404 | 18.5 | % | ||||||||
Selling, general and administrative expenses | 23,006 | 10.0 | % | 19,478 | 12.2 | % | ||||||||
Gain on sale of assets | — | — | % | (9 | ) | — | % | |||||||
Operating income | 16,299 | 7.1 | % | 9,935 | 6.2 | % |
Selling, Generalprofitability and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased $1.4 million, or 7.7%, during the nine months ended June 30, 2018, compared to the nine months ended June 30, 2017.cash flows. Selling, general and administrative expenses as a percentage of revenues in the Communications segment increaseddecreased by 1.7%2.2% to 12.2%10.0% of segment revenue during the nine months ended June 30, 2018,2019, compared to the nine months ended June 30, 2017,2018, as a resultwe benefited from the increased scale of the decrease in revenue, as well as continuing investment to support anticipated growth.
our operations.
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 24,856 | 100.0 | % | $ | 22,302 | 100.0 | % | ||||||||
Cost of services | 18,701 | 75.2 | % | 17,486 | 78.4 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 6,155 | 24.8 | % | 4,816 | 21.6 | % | ||||||||||
Selling, general and administrative expenses | 4,568 | 18.4 | % | 4,958 | 22.2 | % | ||||||||||
Contingent consideration | 81 | 0.3 | % | (33 | ) | -0.1 | % | |||||||||
Loss (gain) on sale of assets | 1 | 0.0 | % | (88 | ) | -0.4 | % | |||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income (loss) | 1,505 | 6.1 | % | (21 | ) | -0.1 | % |
Three Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
$ | % | $ | % | ||||||||||||
(Dollars in thousands, Percentage of revenues) | |||||||||||||||
Revenues | $ | 36,109 | 100.0 | % | $ | 24,856 | 100.0 | % | |||||||
Cost of services | 27,671 | 76.6 | % | 18,701 | 75.2 | % | |||||||||
Gross profit | 8,438 | 23.4 | % | 6,155 | 24.8 | % | |||||||||
Selling, general and administrative expenses | 4,937 | 13.7 | % | 4,568 | 18.4 | % | |||||||||
Contingent consideration | (163 | ) | (0.5 | ) | % | 81 | 0.3 | % | |||||||
Loss on sale of assets | (4 | ) | — | % | 1 | — | % | ||||||||
Operating income | 3,668 | 10.2 | % | 1,505 | 6.1 | % |
by the impact of the amortization of contract intangibles associated with the acquisition of this business in 2016. Margins are also affected by the mix of work performed.
motor repair business.
Nine Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 70,407 | 100.0 | % | $ | 59,572 | 100.0 | % | ||||||||
Cost of services | 54,543 | 77.5 | % | 45,103 | 75.7 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 15,864 | 22.5 | % | 14,469 | 24.3 | % | ||||||||||
Selling, general and administrative expenses | 13,762 | 19.5 | % | 13,280 | 22.3 | % | ||||||||||
Contingent consideration | 152 | 0.2 | % | 50 | 0.1 | % | ||||||||||
Loss (gain) on sale of assets | 6 | 0.0 | % | (90 | ) | -0.2 | % | |||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 1,944 | 2.8 | % | 1,229 | 2.1 | % |
administrative expense.
Nine Months Ended June 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
$ | % | $ | % | ||||||||||||
(Dollars in thousands, Percentage of revenues) | |||||||||||||||
Revenues | $ | 100,038 | 100.0 | % | $ | 70,407 | 100.0 | % | |||||||
Cost of services | 78,227 | 78.2 | % | 54,543 | 77.5 | % | |||||||||
Gross profit | 21,811 | 21.8 | % | 15,864 | 22.5 | % | |||||||||
Selling, general and administrative expenses | 14,103 | 14.1 | % | 13,762 | 19.5 | % | |||||||||
Contingent consideration | (278 | ) | (0.3 | ) | % | 152 | 0.2 | % | |||||||
Loss on sale of assets | 97 | 0.1 | % | 6 | — | % | |||||||||
Operating income | 7,889 | 7.9 | % | 1,944 | 2.8 | % |
business.
revenue as compared with the prior year.
expense.
Three Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
$ | % | $ | % | |||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 75,196 | 100.0 | % | $ | 70,162 | 100.0 | % | ||||||||
Cost of services | 60,063 | 79.9 | % | 54,307 | 77.4 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 15,133 | 20.1 | % | 15,855 | 22.6 | % | ||||||||||
Selling, general and administrative expenses | 10,941 | 14.5 | % | 11,003 | 15.7 | % | ||||||||||
Gain on sale of assets | 0 | 0.0 | % | 37 | 0.1 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 4,192 | 5.6 | % | 4,815 | 6.9 | % |
Three Months Ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
$ | % | $ | % | |||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||
Revenues | $ | 80,716 | 100.0 | % | $ | 75,196 | 100.0 | % | ||||||
Cost of services | 64,350 | 79.7 | % | 60,063 | 79.9 | % | ||||||||
Gross profit | 16,366 | 20.3 | % | 15,133 | 20.1 | % | ||||||||
Selling, general and administrative expenses | 11,812 | 14.6 | % | 10,941 | 14.5 | % | ||||||||
Operating income | 4,554 | 5.6 | % | 4,192 | 5.6 | % |
2018, as we benefited from the increased scale of our operations.
Nine Months Ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
�� | $ | % | $ | % | ||||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||||
Revenue | $ | 210,328 | 100.0 | % | $ | 204,527 | 100.0 | % | ||||||||
Cost of services | 167,836 | 79.8 | % | 157,370 | 76.9 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 42,492 | 20.2 | % | 47,157 | 23.1 | % | ||||||||||
Selling, general and administrative expenses | 30,995 | 14.7 | % | 32,488 | 15.9 | % | ||||||||||
Gain on sale of assets | (1 | ) | 0.0 | % | 34 | 0.0 | % | |||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 11,498 | 5.5 | % | 14,635 | 7.2 | % |
2018.
Nine Months Ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
$ | % | $ | % | |||||||||||
(Dollars in thousands, Percentage of revenues) | ||||||||||||||
Revenues | $ | 225,223 | 100.0 | % | $ | 210,328 | 100.0 | % | ||||||
Cost of services | 178,771 | 79.4 | % | 167,836 | 79.8 | % | ||||||||
Gross profit | 46,452 | 20.6 | % | 42,492 | 20.2 | % | ||||||||
Selling, general and administrative expenses | 34,136 | 15.2 | % | 30,995 | 14.7 | % | ||||||||
Gain on sale of assets | (2 | ) | — | % | (1 | ) | — | % | ||||||
Operating income | 12,318 | 5.5 | % | 11,498 | 5.5 | % |
Selling, General and Administrative Expenses. Our Residential segment experienced a $1.5 million, or 4.6%, decrease in selling, general and administrative expenses20.6% during the nine months ended June 30, 2019, as compared with the nine months ended June 30, 2018, as we benefited from improved commodity prices and the increased scale of our operations.
Three Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
(In thousands) | ||||||||
Interest expense | $ | 441 | $ | 351 | ||||
Deferred financing charges | 72 | 56 | ||||||
|
|
|
| |||||
Total interest expense | 513 | 407 | ||||||
Other (income) expense, net | (111 | ) | (46 | ) | ||||
|
|
|
| |||||
Total interest and other expense, net | $ | 402 | $ | 361 | ||||
|
|
|
|
Three Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Interest expense | $ | 371 | $ | 441 | ||||
Deferred financing charges | 80 | 72 | ||||||
Total interest expense | 451 | 513 | ||||||
Other (income) expense, net | (64 | ) | (111 | ) | ||||
Total interest and other expense, net | $ | 387 | $ | 402 |
Nine Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
(In thousands) | ||||||||
Interest expense | $ | 1,213 | $ | 1,052 | ||||
Deferred financing charges | 214 | 229 | ||||||
|
|
|
| |||||
Total interest expense | 1,427 | 1,281 | ||||||
Other (income) expense, net | (252 | ) | (94 | ) | ||||
|
|
|
| |||||
Total interest and other expense, net | $ | 1,175 | $ | 1,187 | ||||
|
|
|
|
facility.
Nine Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
(In thousands) | ||||||||
Interest expense | $ | 1,297 | $ | 1,213 | ||||
Deferred financing charges | 236 | 214 | ||||||
Total interest expense | 1,533 | 1,427 | ||||||
Other (income) expense, net | (129 | ) | (252 | ) | ||||
Total interest and other expense, net | $ | 1,404 | $ | 1,175 |
$63.2 million under our revolving credit facility.
benefits.
benefits.
beliefs and assumptions derived from information available at the same time such judgments and estimates are made. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements. There can be no assurance that actual results will not differ from those estimates.
June 30, | March 31, | December 31, | September 30, | |||||||||||||
2019 | 2019 | 2018 | 2018 | |||||||||||||
Remaining performance obligations | $ | 487 | $ | 424 | $ | 407 | $ | 326 | ||||||||
Agreements without an enforceable obligation (1) | 59 | 149 | 131 | 156 | ||||||||||||
Backlog | $ | 546 | $ | 573 | $ | 538 | $ | 482 | ||||||||
(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. |
2019.
period, reflecting a continued investment in growing our business.
our business.
Pursuant The Fourth Amendment to the July 23, 2018 amendment, we are required to comply with the minimum EBITDA financial covenant of theSecond Amended and Restated Credit and Security Agreement, in a given quarter only if our Excess Availability (as defined in the Credit Agreement) in the immediately following quarter, as tested monthly during that quarter, falls below $30 million. If, in a subsequent quarter, Excess Availability levels return to or exceed the contractual threshold, thenwhich was entered into on May 20, 2019, permits the Company will no longer be required to comply withrepurchase up to 1.0 million additional shares of common stock pursuant to its previously authorized stock repurchase program for an aggregate purchase price (including for any remaining shares under the minimum EBITDA financial covenant, so long as Excess Availability remains above the threshold.
The Amended Credit FacilityAgreement contains customary affirmative, negative and financial covenants as well as events of default.
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 thirty percent (30%) of the Maximum Revolver Amount (as defined in the Amended Credit Agreement), or $30 million; with, for purposes of this covenant, at least fifty percent (50%) of our Liquidity comprised of Excess Availability (as defined in the Amended Credit Agreement).
country; however a seasonal decline in working capital may be offset by needs associated with higher growth or acquisitions.
our growth.
Financing Activities
Net cash used in financing activities for the nine months ended June 30, 2018 was $2.3 million, compared with $1.3 million in the nine months ended June 30, 2017.our stock repurchase plan. For the nine months ended June 30, 2018, we used $2.1 million in conjunction withto repurchase our shares to satisfy statutory withholding requirements upon the vesting of employee stock compensation, as well as market repurchases under our stock repurchase plan. During the nine months ended June 30, 2017, we used $0.9 million in connection with our stock repurchase plan, and $0.4 million to make contingent consideration payments.
Our
negotiated transactions or otherwise. The timing and amount of purchases under the program are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. All or part of the repurchases may be implemented under a Rule10b5-1 trading plan, which allows repurchases underpre-set terms at times when the Company might otherwise be prevented from purchasing under insider trading laws or because of self-imposed blackout periods. The program does not require the Company to purchase any specific number of shares and may be modified, suspended or reinstated at any time at the Company’s discretion and without notice. We purchased 100,627repurchased 398,947 shares pursuant to this program during the nine months ended June 30, 2018.
2019.
2018.
|
Date | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plan (2) | Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plan as of June 30, 2018 | ||||||||||||
April 1, 2018 - April 30, 2018 | 49,262 | $ | 15.28 | 20,810 | 716,091 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
May 1, 2018 – May 31, 2018 | 4,380 | $ | 17.50 | — | 716,091 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
June 1, 2018 – June 30, 2018 | — | — | — | 716,091 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 53,642 | $ | 15.46 | 20,810 | 716,091 | |||||||||||
|
|
|
|
|
|
|
|
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 June 30, 2019 (2) | ||
April 1, 2019 – April 30, 2019 | 7,548 | $17.50 | 7,548 | 481,302 | ||
May 1, 2019 – May 31, 2019 | 44,104 | $18.11 | 44,104 | 1,437,198 | ||
June 1, 2019 – June 30, 2019 | 111,341 | $17.82 | 111,341 | 1,325,857 | ||
Total | 162,993 | $17.88 | 162,993 | 1,325,857 |
(1) | The total number of shares purchased includes shares purchased pursuant to the plan described in footnote (2) below. |
(2) |
|
|
None.
|
None.
|
None.
|
| ||
Exhibit No. | ||
3.1 — | ||
3.2 — | ||
3.3 — | ||
4.1 — |
4.2 — | ||
10.1 — | ||
| ||
31.1 — | ||
| ||
| ||
| ||
| ||
101.INS | ||
| XBRL Instance 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) | |
(1) | Filed herewith. | |
(2) | Furnished herewith. |
2, 2019.
By: | /s/ TRACY A. MCLAUCHLIN | |
Tracy A. McLauchlin | ||
Senior Vice President, Chief Financial Officer and Treasurer | ||
(Principal Financial Officer and Authorized Signatory) |
39