UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

~~FORM10-Q~~

~~(Mark One)~~

☒

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 March 31, 2019~~

☐For the quarterly period ended June 30, 2019
	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 from~~to

~~Commission File Number~~

Commission file number 1-13783

~~1-13783~~

IES Holdings, Inc.

(Exact name of registrant as specified in its charter)



Delaware		76-0542208
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)		~~(I.R.S. Employer~~ Identification No.)

5433 Westheimer Road, Suite 500, Houston, Texas 77056

(Address of principal executive offices and ~~ZIP~~zip code)

Registrant’s telephone number, including area code:(713) 860-1500

Securities registered pursuant to Section 12(b) of the Act:



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 ~~IESC~~	NASDAQ Global Market ~~NASDAQ Global Market~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” inRule 12b-2 of the Exchange Act.



Large accelerated filer	☐o	Accelerated filer		☒
			þ
Non-accelerated filer	☐o	Smaller reporting company		☒
			þ
Emerging growth company	☐o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes ☐ o No ☒

On ~~May 2,~~July 31, 2019, there were ~~21,368,483~~21,216,036 shares of common stock outstanding.

IES HOLDINGS, INC. AND SUBSIDIARIES

INDEX



		~~Page~~
			Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2019 and September 30, 2018	6
		6

Condensed Consolidated Statements of Comprehensive Income for the Three and ~~Six~~Nine Months Ended ~~March 31,~~June 30, 2019 and 2018	7
		7

Condensed Consolidated Statements of Stockholders’ Equity for the Three and ~~Six~~Nine Months Ended ~~March 31,~~June 30, 2019 and 2018	9
		9

Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~March 31,~~June 30, 2019 and 2018	10
		10

Notes to Condensed Consolidated Financial Statements	11
			11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
			26

Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
			36

Item 4. Controls and Procedures			36	35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	35
			36

Item 1A. Risk Factors	36
			37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36
			38

Item 3. Defaults Upon Senior Securities	36
			38

Item 4. Mine Safety Disclosures	36
			38

Item 5. Other Information	36
			38

Item 6. Exhibits	37
			38

Signatures			41	38

PART I. FINANCIAL INFORMATION

DEFINITIONS

In this Quarterly Report onForm 10-Q, the words “IES”, the “Company”, the “Registrant”, “we”, “our”, “ours” and “us” refer to IES Holdings, Inc. and, except as otherwise specified herein, to our subsidiaries.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form10-Q includes certain statements that may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 ability of our controlling stockholder to take action not aligned with other stockholders;

the sale or disposition of the shares of our common stock held by our controlling stockholder, which, under certain circumstances, would trigger change of control provisions in our severance benefit plan or financing and surety arrangements, or any other substantial sale of our common stock, which could depress our stock price;

the possibility that certain tax benefits of our net operating losses may be restricted or reduced in a change in ownership or a further change in the federal tax rate;

the potential recognition of valuation allowances or write-downs on deferred tax assets;

the inability to carry out plans and strategies as expected, including our inability to identify and complete acquisitions that meet our investment criteria in furtherance of our corporate strategy, or the subsequent underperformance of those acquisitions;

limitations on the availability of sufficient credit or cash flow to fund our working capital needs and capital expenditures and debt service;

difficulty in fulfilling the covenant terms of our credit facility, including liquidity, EBITDA and other financial requirements, which could result in a default and acceleration of our indebtedness under our revolving credit facility;

the possibility that we issue additional shares of common stock or convertible securities that will dilute the percentage ownership interest of existing stockholders and may dilute the book value per share of our common stock;

the relatively low trading volume of our common stock, which could depress our stock price;

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;

future capital expenditures and refurbishment, repair and upgrade costs; and delays in and costs of refurbishment, repair and upgrade projects;

a general reduction in the demand for our services;

our ability to enter into, and the terms of, future contracts;

success in transferring, renewing and obtaining electrical and other licenses;

challenges integrating new businesses into the Company or new types of work, products or processes into our segments;

credit and capital market conditions, including changes in interest rates that affect the cost of construction financing and mortgages, and the inability for some of our customers to retain sufficient financing, which could lead to project delays or cancellations;

backlog that may not be realized or may not result in profits;

the possibility of errors when estimating revenue and progress to date onpercentage-of-completion contracts;

uncertainties inherent in estimating future operating results, including revenues, operating income or cash flow;

complications associated with the incorporation of new accounting, control and operating procedures;

closures or sales of facilities resulting in significant future charges, including potential warranty losses or other unexpected liabilities, or a significant disruption of our operations;

an increased cost of surety bonds affecting margins on work and the potential for our surety providers to refuse bonding or require additional collateral at their discretion;

fluctuations in operating activity due to downturns in levels of construction or the housing market, seasonality and differing regional economic conditions;

our ability to successfully manage projects;

inaccurate estimates used when entering into fixed-priced contracts;

the cost and availability of qualified labor and the ability to maintain positive labor relations;

our ability to pass along increases in the cost of commodities used in our business, in particular, copper, aluminum, steel, fuel and certain plastics;

a change in the mix of our customers, contracts or business;

increases in bad debt expense and days sales outstanding due to liquidity problems faced by our customers;

the recognition of potential goodwill, long-lived assets and other investment impairments;

potential supply chain disruptions due to credit or liquidity problems faced by our suppliers;

accidents resulting from the physical hazards associated with our work and the potential for accidents;

the possibility that our current insurance coverage may not be adequate or that we may not be able to obtain a policy at acceptable rates;

the possibility that our internal controls over financial reporting and our disclosure controls and procedures may not prevent all possible errors that could occur;

disagreements with taxing authorities with regard to tax positions we have adopted;

the recognition of tax benefits related to uncertain tax positions;

the effect of litigation, claims and contingencies, including warranty losses, damages or other latent defect claims in excess of our existing reserves and accruals;

growth in latent defect litigation in states where we provide residential electrical work for home builders not otherwise covered by insurance;

interruptions to our information systems and cyber security or data breaches;

liabilities under laws and regulations protecting the environment; and

loss of key personnel and effective transition of new management.

You should understand that the foregoing, as well as other risk factors discussed in this document and those listed in Part I, Item 1A of our Annual Report on Form10-K for the fiscal year ended September 30, 2018, could cause future outcomes to differ materially from those experienced previously or those expressed in such forward-looking statements. We undertake no obligation to publicly update or revise any information, including without limitation information concerning our controlling stockholder, net operating losses, borrowing availability or cash position, or any forward-looking statements to reflect events or circumstances that may arise after the date of this report. Forward-looking statements are provided in this Quarterly Report onForm 10-Q 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.

Item 1.Financial Statements

IES HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In Thousands, Except Share Information)

   March 31,
2019 September 30,
2018
   (Unaudited)
ASSETS
CURRENT ASSETS:

Cash and cash equivalents
   $ 16,158 $ 26,247
Accounts receivable:

Trade, net of allowance of $1,015 and $868, respectively
   160,946 151,578
Retainage
   22,904 24,312
Inventories
   23,729 20,966
Costs and estimated earnings in excess of billings
   28,293 31,446
Prepaid expenses and other current assets
   10,897 8,144


Total current assets
   262,927 262,693


Property and equipment, net
   26,520 25,364
Goodwill
   50,622 50,702
Intangible assets, net
   28,459 30,590
Deferred tax assets
   43,081 46,580
Othernon-current assets
   5,662 6,065


Total assets
   $ 417,271 $ 421,994


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:

Accounts payable and accrued expenses
   129,704 130,591
Billings in excess of costs and estimated earnings
   32,932 33,826


Total current liabilities
   162,636 164,417


Long-term debt
   19,672 29,564
Othernon-current liabilities
   3,655 4,374


Total liabilities
   185,963 198,355


Noncontrolling interest
   3,163 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 21,381,847 and 21,205,536 outstanding, respectively
   220 220
Treasury stock, at cost, 667,682 and 843,993 shares, respectively
   (8,443 ) (8,937 )
Additionalpaid-in capital
   191,579 196,810
Retained earnings
   44,789 32,314


Total stockholders’ equity
   228,145 220,407


Total liabilities and stockholders’ equity
   $ 417,271 $ 421,994



			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

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

IES HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In Thousands, Except Share Information)

(Unaudited)

   Three Months Ended March 31,
   2019 2018
Revenues
   $ 256,914 $ 205,677
Cost of services
   213,679 171,837


Gross profit
   43,235 33,840
Selling, general and administrative expenses
   35,070 29,647
Contingent consideration
   (149 ) 71
Loss (gain) on sale of assets
   98 (20 )


Operating income
   8,216 4,142


Interest and other (income) expense:

Interest expense
   535 473
Other (income) expense, net
   (112 ) (43 )


Income from operations before income taxes
   7,793 3,712
Provision for income taxes
   2,336 1,425


Net income
   5,457 2,287


Net (income) loss attributable to noncontrolling interest
   32 (66 )


Comprehensive income attributable to IES Holdings, Inc.
   $ 5,489 $ 2,221


Earnings per share attributable to IES Holdings, Inc.:

Basic
   $ 0.26 $ 0.11
Diluted
   $ 0.26 $ 0.11
Shares used in the computation of earnings per share:

Basic
   21,139,096 21,182,268
Diluted
   21,379,746 21,440,570



		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

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

IES HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In Thousands, Except Share Information)

(Unaudited)

   Six Months Ended March 31,
   2019 2018
Revenues
   $ 500,756 $ 403,977
Cost of services
   415,920 337,073


Gross profit
   84,836 66,904
Selling, general and administrative expenses
   67,156 59,736
Contingent consideration
   (115 ) 71
Loss (gain) on sale of assets
   95 (34 )


Operating income
   17,700 7,131


Interest and other (income) expense:

Interest expense
   1,082 914
Other (income) expense, net
   (65 ) (141 )


Income from operations before income taxes
   16,683 6,358
Provision for income taxes
   4,243 33,584


Net income (loss)
   12,440 (27,226 )


Net income attributable to noncontrolling interest
   (67 ) (122 )


Comprehensive income (loss) attributable to IES Holdings, Inc.
   $ 12,373 $ (27,348 )


Earnings (loss) per share attributable to IES Holdings, Inc.:

Basic
   $ 0.58 $ (1.29 )
Diluted
   $ 0.58 $ (1.29 )
Shares used in the computation of earnings (loss) per share:

Basic
   21,187,834 21,189,641
Diluted
   21,424,522 21,189,641



		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

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

IES HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (unaudited)

(In Thousands, Except Share Information)

   Three Months Ended March 31, 2019
   Common Stock    Treasury Stock APIC Retained
Earnings    Total
Stockholders’
Equity
   Shares    Amount    Shares Amount
BALANCE, December 31, 2018
   22,049,529    $ 220    (763,426 ) $ (8,896 ) $ 194,607 $ 39,300    $ 225,231
Issuances under compensation plans
   —      —      3,991 71 (71 ) —      —
Grants under compensation plan
   —      —      283,195 3,582 (3,582 ) —      —
Acquisition of treasury stock
   —      —      (191,442 ) (3,200 ) —   —      (3,200 )
Non-cash compensation
   —      —      —   —   625 —      625
Net income attributable to IES Holdings, Inc.
   —      —      —   —   —   5,489    5,489








BALANCE, March 31, 2019
   22,049,529    $ 220    (667,682 ) $ (8,443 ) $ 191,579 $ 44,789    $ 228,145

   Three Months Ended March 31, 2018
   Common Stock    Treasury Stock APIC Retained
Earnings    Total
Stockholders’
Equity
   Shares    Amount    Shares Amount
BALANCE, December 31, 2017
   22,049,529    $ 220    (710,784 ) $ (6,881 ) $ 197,312 $ 16,858    $ 207,509
Grants under compensation plans
   —      —      250 2 (2 ) —      —
Acquisition of treasury stock
   —      —      (79,817 ) (1,229 ) —   —      (1,229 )
Non-cash compensation
   —      —      —   —   (475 ) —      (475 )
Increase in noncontrolling interest
   —      —      —   —   —   44    44
Net income attributable to IES Holdings, Inc.
   —      —      —   —   —   2,221    2,221








BALANCE, March 31, 2018
   22,049,529    $ 220    (790,351 ) $ (8,108 ) $ 196,835 $ 19,123    $ 208,070

   Six Months Ended March 31, 2019
   Common Stock    Treasury Stock APIC Retained
Earnings    Total
Stockholders’
Equity
   Shares    Amount    Shares Amount
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
   —      —      (323,563 ) (5,411 ) —   —      (5,411 )
Non-cash compensation
   —      —      —   —   674 —      674
Net income attributable to IES Holdings, Inc.
   —      —      —   —   —   12,373    12,373








BALANCE, March 31, 2019
   22,049,529    $ 220    (667,682 ) $ (8,443 ) $ 191,579 $ 44,789    $ 228,145

   Six Months Ended March 31, 2018
   Common Stock    Treasury Stock APIC Retained
Earnings Total
Stockholders’
Equity
   Shares    Amount    Shares Amount
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
   —      —      (79,817 ) (1,230 ) —   (1,230 )
Options exercised
   —      —      1,500 15 (4 ) —   11
Non-cash compensation
   —      —      —   —   (111 ) —   (111 )
Increase in noncontrolling interest
   —      —      —   —   —   44 44
Net loss attributable to IES Holdings, Inc.
   —      —      —   —   —   (27,348 ) (27,348 )






BALANCE, March 31, 2018
   22,049,529    $ 220    (790,351 ) $ (8,108 ) $ 196,835 $ 19,123 $ 208,070



		Three Months Ended June 30, 2019
		Common Stock			Treasury Stock							Retained Earnings		Total Stockholders' Equity
		Shares	Amount		Shares		Amount			APIC		Retained Earnings		Total Stockholders' Equity
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			Retained Earnings		Total Stockholders' Equity
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			Retained Earnings		Total Stockholders' Equity
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			Retained Earnings			Total Stockholders' Equity
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

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

IES HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

   Six Months Ended
March 31,
   2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)
   $ 12,440 $ (27,226 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Bad debt expense
   248 96
Deferred financing cost amortization
   156 142
Depreciation and amortization
   4,846 4,269
Loss (gain) on sale of assets
   95 (34 )
Non-cash compensation expense
   674 (111 )
Deferred income taxes
   4,243 33,584
Changes in operating assets and liabilities:

Accounts receivable
   (9,616 ) 14,945
Inventories
   (2,873 ) (665 )
Costs and estimated earnings in excess of billings
   3,152 (1,921 )
Prepaid expenses and other current assets
   (764 ) 97
Othernon-current assets
   (1,370 ) (52 )
Accounts payable and accrued expenses
   (144 ) (10,081 )
Billings in excess of costs and estimated earnings
   (948 ) (2,098 )
Othernon-current liabilities
   (736 ) 214


Net cash provided by operating activities
   9,403 11,159


CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment
   (3,929 ) (2,327 )
Proceeds from sale of assets
   7 94
Cash paid in conjunction with business combinations
   —   (175 )


Net cash used in investing activities
   (3,922 ) (2,408 )


��

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of debt
   122 68
Repayments of debt
   (10,144 ) (109 )
Distribution to noncontrolling interest
   (137 ) (69 )
Purchase of treasury stock
   (5,411 ) (1,229 )
Issuance of shares
   —   11


Net cash used in financing activities
   (15,570 ) (1,328 )


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
   (10,089 ) 7,423
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of period
   26,247 28,290


CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period
   $ 16,158 $ 35,713


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for interest
   $ 1,008 $ 788
Cash paid for income taxes (net)
   $ 523 $ 1,456



			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

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

IES HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements

(All Amounts in Thousands Except Share Amounts)

(Unaudited)

1. BUSINESS AND ACCOUNTING POLICIES

Description of the Business

IES Holdings, Inc. is a holding company that owns and manages operating subsidiaries in business activities across a variety of end markets. Our operations are currently organized into four principal business segments, based upon the nature of our current services:

•

~~Commercial~~ ~~& Industrial~~ – Provider of electrical and mechanical design, construction, and maintenance services to the commercial and industrial markets in various regional markets and nationwide in certain areas of expertise, such as the power infrastructure market.

•

~~Communications~~ ~~– Nationwide provider of technology infrastructure products and services to large corporations and independent businesses.~~

•

~~Infrastructure Solutions– Provider of electro-mechanical solutions for industrial operations, including apparatus repair and custom-engineered products.~~

•

~~Residential~~ ~~– Regional provider of electrical installation services for single-family housing and multi-family apartment complexes.~~

Commercial & Industrial – Provider of electrical and mechanical design, construction, and maintenance services to the commercial and industrial markets in various regional markets and nationwide in certain areas of expertise, such as the power infrastructure market.

Communications – Nationwide provider of technology infrastructure products and services to large corporations and independent businesses.

Infrastructure Solutions – Provider of electro-mechanical solutions for industrial operations, including apparatus repair and custom-engineered products.

Residential – Regional provider of electrical installation services for single-family housing and multi-family apartment complexes.

The words “IES”, the “Company”, “we”, “our”, and “us” refer to IES Holdings, Inc. and, except as otherwise specified herein, to our subsidiaries.

Seasonality and Quarterly Fluctuations

Results of operations from our Residential construction segment are seasonal, depending on weather trends, with typically higher revenues generated during spring and summer and lower revenues generated during fall and winter, with an impact from precipitation in the warmer months. The Commercial & Industrial, Communications and Infrastructure Solutions segments of our business are less subject to seasonal trends, as work in these segments generally is performed inside structures protected from the weather, although weather can still impact these businesses, especially in the early stages of projects. Our service and maintenance business is generally not affected by seasonality. Our volume of business may be adversely affected by declines in construction projects resulting from adverse regional or national economic conditions. Quarterly results may also be materially affected by the timing of new construction projects. Results for our Infrastructure Solutions segment may be affected by the timing of outages at our customers’ facilities. Accordingly, operating results for any fiscal period are not necessarily indicative of results that may be achieved for any subsequent fiscal period.

Basis of Financial Statement Preparation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of IES, our wholly-owned subsidiaries, and entities that we control due to ownership of a majority of voting interest and have been prepared in accordance with the instructions to interim financial reporting as prescribed by the Securities and Exchange Commission (the “SEC”). The results for the interim periods are not necessarily indicative of results for the entire year. These interim financial statements do not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”), and should be read in conjunction with the consolidated financial statements and notes thereto filed with the SEC in our Annual Report on Form10-K for the fiscal year ended September 30, 2018. In the opinion of management, the unaudited Condensed Consolidated Financial Statements contained in this report include all known accruals and adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods reported herein. Any such adjustments are of a normal recurring nature.

Noncontrolling Interest

In connection with our acquisitions of STR Mechanical, LLC (“STR Mechanical”) in fiscal 2016 and NEXT Electric, LLC (“NEXT Electric”) in fiscal 2017, we acquired an 80 percent interest in each of the entities, with the remaining 20 percent interest in each such entity being retained by the respective third party seller. The interests retained by those third party sellers are identified on our Condensed Consolidated Balance Sheets as noncontrolling interest, classified outside of permanent equity. Under the terms of each entity’s operating agreement, after five years from the date of the acquisition, we may elect to purchase, or the third party seller may

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

require us to purchase, part or all of the remaining 20 percent interest in the applicable entity. The purchase price is variable, based on a multiple of earnings as defined in the operating agreements. Therefore, this noncontrolling interest is carried at the greater of the balance determined under Accounting Standards Codification (“ASC”) 810 and the redemption amounts assuming the noncontrolling interests were redeemable at

the balance sheet date. If all of these interests had been redeemable at ~~March 31,~~June 30, 2019, the redemption amount would have been ~~$1,428.~~$2,446. For the ~~six~~nine months ended ~~March 31,~~June 30, 2018, we recorded an increase to retained earnings of $44 to decrease the carrying amount of the noncontrolling interest in STR Mechanical to the balance determined under ASC 810, as, if it had been redeemable at ~~March 31, 2019,~~June 30, 2018, the redemption amount would have been less than the carrying amount.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are primarily used in our revenue recognition of construction in progress, fair value assumptions in accounting for business combinations and analyzing goodwill, investments, intangible assets and long-lived asset impairments and adjustments, allowance for doubtful accounts receivable, stock-based compensation, reserves for legal matters, realizability of deferred tax assets, unrecognized tax benefits and self-insured claims liabilities and related reserves.

Income Taxes

For the nine months ended June 30, 2019, our effective tax rate differed from the statutory rate as a result of a benefit of $4,020 related to the recognition of previously unrecognized tax benefits. In December 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted, which, among other changes, reduced the federal statutory corporate tax rate from 35% to 21%, effective January 1, 2018. As a result of this change, the Company’s statutory tax rate for fiscal 2018 was a blended rate of 24.53% and decreased to 21% in 2019. For the ~~six~~nine months ended ~~March 31,~~June 30, 2018, our effective tax rate differed from the statutory tax rate as a result of a charge of ~~$31,487~~$31,506 tore-measure our deferred tax assets and liabilities to reflect the impact of the new statutory tax ~~rate.~~rate, slightly offset by a benefit of $1,840 related to the reversal of unrecognized tax benefits. The Company completed its accounting for the income tax effects of the Act and fully recorded the impact in the year ended September 30, 2018.

Accounting Standards Not Yet Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard UpdateNo. 2016-02, Leases (“ASU2016-02”). Under ASU2016-02, lessees will need to recognize aright-of-use asset and a lease liability on our Balance Sheet for all 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 be accounted for similar to current capital leases. ASU2016-02 becomes effective for the fiscal year ended September 30, 2020. We are currently evaluating the impact it will have on our Condensed Consolidated Financial Statements.

We anticipate the adoption will result in a significant amount of lease right-of-use assets and corresponding lease liabilities being recorded on our balance sheets. We plan to adopt this standard on October 1, 2019 and will apply the transition method that allows the recognition of a cumulative-effect adjustment to retained earnings on such date.

In June 2016, the FASB issued Accounting Standard UpdateNo. 2016-13, Financial Instruments – Credit Losses (“ASU2016-13”), which requires companies to consider historical experiences, current market conditions and reasonable and supportable forecasts in the measurement of expected credit ~~losses.~~losses, with further clarifications made in April 2019 and May 2019 with the issuances of Accounting Standard Updates No. 2019-04 and 2019-05. This update is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, although early adoption is permitted. We are currently evaluating the impact it will have on our Condensed Consolidated Financial Statements.

We plan to adopt this standard on October 1, 2020.

In June 2018, the FASB issued Accounting Standard UpdateNo. 2018-07, Compensation—Stock Compensation (“ASU2018-07”), 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 GAAP because the measurement generally will occur earlier and will be fixed at the grant date. This update is effective for the fiscal year ended September 30, 2020.

In August 2018, the FASB issued Accounting Standard UpdateNo. 2018-13, Fair Value Measurement Disclosure Framework (“ASU2018-13”), to modify certain disclosure requirements for fair value measurements. Under the new guidance, registrants will need to disclose weighted average information for significant unobservable inputs for all Level 3 fair value measurements. The guidance does not specify how entities should calculate the weighted average, but requires them to explain their calculation. The new guidance also requires disclosing the changes in unrealized gain and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements of instruments held at the end of the reporting period. This guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, although early adoption is permitted for either the entire standard or only the provisions that eliminate or modify the requirements.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

We do not expect ASU2018-07 or ASU2018-13 to have a material effect on our Condensed Consolidated Financial Statements

and

we plan to adopt these standards on October 1, 2019 and October 1, 2020, respectively.

Accounting Standards Recently Adopted

In May 2014, the FASB issued Accounting Standard UpdateNo. 2014-09, which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes prior industry-specific guidance. The new standard requires companies to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the company expects to be entitled. The new model requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time for each obligation. The new standard also expands disclosure requirements regarding revenue and cash flows arising from contracts with customers.

We adopted the new revenue recognition standard on October 1, 2018 (“Adoption Date”), using the modified retrospective method, which provides for a cumulative effect adjustment to beginning fiscal 2019 retained earnings for uncompleted contracts impacted by the adoption. We recorded an adjustment of $102 to beginning fiscal 2019 retained earnings as a result of adoption of the new standard. The changes to the method and/or timing of our revenue recognition associated with the new standard primarily affect revenue recognition within our Infrastructure Solutions segment for which, as of October 1, 2018, certain of our contracts do not qualify for revenue recognition over time. In addition, we have now combined in process contracts that historically had been accounted for as separate contracts in cases where those contracts meet the criteria for combination of contracts under the new standard, and we now capitalize certain commissions which were previously expensed when incurred. The impact on our results for the ~~quarter~~three and ~~year~~nine months ended ~~March 31,~~June 30, 2019, of applying the new standard to our contracts was not material.

Consistent with our adoption method, the comparative prior period information for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2018, continues to be reported using the previous accounting standards in effect for the period presented. We have elected to utilize the modified retrospective transition practical expedient that allows us to evaluate the impact of contract modifications as of the Adoption Date rather than evaluating the impact of the modifications at the time they occurred prior to the Adoption Date.

See Note 3, “Revenue Recognition” for additional discussion of our revenue recognition accounting policies and expanded disclosures.

In January 2016, the FASB issued Accounting Standard UpdateNo. ~~2016-01,~~2016‑01, Financial Instruments. This standard is associated with the recognition and measurement of financial assets and liabilities, with further clarifications made in February 2018 with the issuance of Accounting Standard Update No.2018-03. The amended guidance requires certain equity investments that are not consolidated and not accounted for under the equity method to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). It further states that an entity may choose to measure equity investments that do not have readily determinable fair values using a quantitative approach, or measurement alternative, which is equal to its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Our adoption of this standard on October 1, 2018 had no impact on our Condensed Consolidated Financial Statements.

In January 2017, the FASB issued Accounting Standard UpdateNo. 2017-01, Business Combinations. This standard clarifies the definition of a business to assist entities with evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Our adoption of this standard on October 1, 2018 using the prospective transition method had no impact on our Condensed Consolidated Financial Statements.

In May 2017, the FASB issued Accounting Standard UpdateNo. 2017-09, Compensation—Stock Compensation, to reduce the diversity in practice and the cost and complexity when changing the terms or conditions of a share-based payment award. Our adoption of this standard on October 1, 2018 using the prospective transition method had no impact on our Condensed Consolidated Financial Statements.

2. CONTROLLING STOCKHOLDER

Tontine Associates, L.L.C. and its affiliates (collectively, “Tontine”), is the Company’s controlling stockholder, owning approximately ~~57.5~~57.4 percent of the Company’s outstanding common stock according to a ~~Schedule 13D/A~~Form 4 filed with the SEC by Tontine on ~~January 11,~~July 3, 2019. Accordingly, Tontine has the ability to exercise significant control over our affairs, including the election of directors and most actions requiring the approval of stockholders.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

While Tontine is subject to certain restrictions under federal securities laws on sales of its shares as an affiliate, the Company has filed a shelf registration statement to register all of the shares of IES common stock owned by Tontine at the time of registration. As long as the shelf registration statement remains effective and the Company remains eligible to use it, Tontine has the ability to resell any or all of its registered shares from time to time in one or more offerings, as described in the shelf registration statement and in any prospectus supplement filed in connection with an offering pursuant to the shelf registration statement.

Should Tontine sell or otherwise dispose of all or a portion of its position in IES, a change in ownership of IES could occur. A change in ownership, as defined by Internal Revenue Code Section 382, could reduce the availability of the Company’s net operating losses (“NOLs”) for federal and state income tax purposes. On November 8, 2016, the Company implemented a new tax benefit protection plan (the “NOL Rights Plan”). The NOL Rights Plan was designed to deter an acquisition of the ~~Company’s~~Company's stock in excess of a threshold amount that could trigger a change of control within the meaning of Internal Revenue Code Section 382. There can be no assurance that the NOL Rights Plan will be effective in deterring a change of ownership or protecting the NOLs. Furthermore, a change in control would trigger the change of control provisions in a number of our material agreements, including our credit facility, bonding agreements with our sureties and our severance arrangements.

Jeffrey L. Gendell was appointed as a member of the Board of Directors and as Chairman of the Board in November 2016. He is the managing member and founder of Tontine, and the brother of David B. Gendell, who has served as a member of our Board of Directors since February 2012, and who previously served as Interim Director of Operations from November 2017 to January 2019, as Vice Chairman of the Board from November 2016 to November 2017 and as Chairman of the Board from January 2015 to November 2016. David B. Gendell was an employee of Tontine from 2004 until December 31, 2017.

The Company is party to a sublease agreement with Tontine Associates, L.L.C. for corporate office space in Greenwich, Connecticut. On May 1, 2019, the sublease was extended for a six month term expiring December 31, 2019, with an increase in the monthly rent to $9, reflecting the increase paid by Tontine Associates, L.L.C. to its landlord. The lease has terms at market rates, and payments by the Company are at a rate consistent with that paid by Tontine Associates, L.L.C. to its landlord.

On December 6, 2018, the Company entered into a Board Observer Letter Agreement with Tontine Associates, L.L.C. in order to assist Tontine in managing its investment in the Company. Subject to the terms and conditions set forth in the Letter Agreement, the Company granted Tontine the right, at any time that Tontine holds at least 20% of the outstanding common stock of the Company, to appoint a representative to serve as an observer to the Board (the “Board Observer”). The Board Observer, who must be reasonably acceptable to those members of the Board who are not affiliates of Tontine, shall have no voting rights or other decision making authority. Subject to the terms and conditions set forth in the Letter Agreement, so long as Tontine has the right to appoint a Board Observer, the Board Observer will have the right to attend and participate in meetings of the Board and the committees thereof, subject to confidentiality requirements, and to receive reimbursement for reasonableout-of-pocket expenses incurred in his or her capacity as a Board Observer and such rights to coverage under the Company’s directors’ and officers’ liability insurance policy as are available to the Company’s directors.

3. REVENUE RECOGNITION

Contracts

Our revenue is derived from contracts with customers, and we determine the appropriate accounting treatment for each contract at contract inception. Our contracts primarily relate to electrical and mechanical contracting services, technology infrastructure products and services, and electro-mechanical solutions for industrial operations. Revenue is earned based upon an agreed fixed price or actual costs incurred plus an agreed upon percentage.

We account for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. We consider the start of a project to be when the above criteria have been met and we have written authorization from the customer to proceed.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

We recognize revenue over time for the majority of the services we perform as (i) control continuously transfers to the customer as work progresses at a project location controlled by the customer and (ii) we have the right to bill the customer as costs are incurred. Within our Infrastructure Solutions segment, we often perform work inside our own facilities, where control does not continuously transfer to the customer as work progresses. In such cases, we evaluate whether we have the right to bill the customer as costs are incurred. Such assessment involves an evaluation of contractual termination clauses. Where we have a contractual right to payment for work performed to date, we recognize revenue over time. If we do not have such a right, we recognize revenue upon completion of the contract, when control of the work transfers to the customer.

For fixed price arrangements, we use the percentage of completion method of accounting under which revenue recognized is measured principally by the costs incurred and accrued to date for each contract as a percentage of the estimated total cost for each contract at completion. Contract costs include all direct material, labor and indirect costs related to contract performance. Changes in job performance, job conditions, estimated contract costs and profitability and final contract settlements may result in revisions to costs and income, and

the effects of these revisions are recognized in the period in which the revisions are determined. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments and judgments.

Variable Consideration

The transaction price for our contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the probability weighted value we expect to receive (or the most probable amount we expect to incur in the case of liquidated damages, if any), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages, if any). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulativecatch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue.

Costs of Obtaining a Contract

In certain of our operations, we incur commission costs related to entering into a contract that we only incurred because of that contract. When this occurs, we capitalize that cost and amortize it over the expected term of the contract. At ~~March 31,~~June 30, 2019, we had capitalized commission costs of ~~$100.~~

$96.

We generally do not incur significant incremental costs related to obtaining or fulfilling a contract prior to the start of a project. ~~On rare occasions, when~~When significant~~pre-contract~~ pre‑contract costs are incurred, they will be capitalized and amortized on a percentage of completion basis over the life of the contract.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by activity and contract type, as these categories reflect how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Our consolidated 2019 and 2018 revenue was derived from the following service activities. See details in the following tables:

   Three Months Ended
March 31,    Six Months Ended
March 31,
   2019    2018    2019    2018
Commercial & Industrial
   $ 79,975    65,589    152,558    118,591
Communications
   70,437    50,244    139,762    104,703
Infrastructure Solutions

Industrial Services
   12,145    10,404    24,368    21,457
Custom Power Solutions
   22,305    13,462    39,561    24,094








Total
   34,450    23,866    63,929    45,551
Residential

Single-family
   51,492    43,594    101,968    88,208
Multi-family and Other
   20,560    22,384    42,539    46,924








Total
   72,052    65,978    144,507    135,132








Total Revenue
   $ 256,914    $ 205,677    $ 500,756    $ 403,977

   Three Months Ended March 31, 2019
   Commercial
& Industrial    Communications    Infrastructure
Solutions    Residential    Total
Fixed-price
   $ 76,467    $ 48,602    $ 30,130    $ 72,052    $ 227,251
Time-and-material
   3,508    21,835    4,320    —      29,663










Total revenue
   $ 79,975    $ 70,437    $ 34,450    $ 72,052    $ 256,914










   Three Months Ended March 31, 2018
   Commercial
& Industrial    Communications    Infrastructure
Solutions    Residential    Total
Fixed-price
   $ 58,183    $ 37,344    $ 20,636    $ 65,978    $ 182,141
Time-and-material
   7,406    12,900    3,230    —      23,536










Total revenue
   $ 65,589    $ 50,244    $ 23,866    $ 65,978    $ 205,677










   Six Months Ended March 31, 2019
   Commercial
& Industrial    Communications    Infrastructure
Solutions    Residential    Total
Fixed-price
   $ 142,297    $ 97,431    $ 57,641    $ 144,507    $ 441,876
Time-and-material
   10,261    42,331    6,288    —      58,880










Total revenue
   $ 152,558    $ 139,762    $ 63,929    $ 144,507    $ 500,756










   Six Months Ended March 31, 2018
   Commercial
& Industrial    Communications    Infrastructure
Solutions    Residential    Total
Fixed-price
   $ 107,103    $ 81,500    $ 40,309    $ 135,132    $ 364,044
Time-and-material
   11,488    23,203    5,242    —      39,933










Total revenue
   $ 118,591    $ 104,703    $ 45,551    $ 135,132    $ 403,977

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

Accounts Receivable

Accounts receivable include amounts which we have billed or have an unconditional right to bill our customers. As of ~~March 31,~~June 30, 2019, Accounts receivable included ~~$10,173~~$10,617 of unbilled receivables for which we have an unconditional right to bill.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

Contract Assets and Liabilities

Project contracts typically provide for a schedule of billings on percentage of completion of specific tasks inherent in the fulfillment of our performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in our balance sheet under the caption “Costs and estimated earnings in excess of billings”. To the extent amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized are reflected as a current liability in our balance sheet under the caption “Billings in excess of costs and estimated earnings”.

The net asset (liability) position for contracts in process consisted of the following:

   March 31,
2019    September 30,
2018
Costs and estimated earnings on uncompleted contracts
   $ 586,289    $ 539,226
Less: Billings to date and unbilled accounts receivable
   (590,928 )    (541,606 )




   $ (4,639 )    $ (2,380 )



	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	)

The net asset (liability) position for contracts in process included in the accompanying consolidated balance sheets was as follows:

   March 31,
2019    September 30,
2018
Costs and estimated earnings in excess of billings
   $ 28,293    $ 31,446
Billings in excess of costs and estimated earnings
   (32,932 )    (33,826 )




   $ (4,639 )    $ (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	)

During the three months ended ~~March 31,~~June 30, 2019, and 2018, we recognized revenue of ~~$18,114~~$18,472 and ~~$14,977~~$15,076 related to our contract liabilities at ~~January~~April 1, 2019 and 2018, respectively. During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, and 2018, we recognized revenue of ~~$24,701~~$28,816 and ~~$25,575~~$28,627 related to our contract liabilities at October 1, 2018 and 2017, respectively.

We did not have any impairment losses recognized on our receivables or contract assets for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2019 or 2018.

Remaining Performance Obligations

Remaining performance obligations represent the unrecognized revenue value of our contract commitments. New awards represent the total expected revenue value of new contract commitments undertaken during a given period, as well as additions to the scope of existing contract commitments. Our new performance obligations vary significantly each reporting period based on the timing of our major new contract commitments. At ~~March 31,~~June 30, 2019, we had remaining performance obligations of ~~$423,718.~~$487. The Company expects to recognize revenue on approximately ~~$376,680~~$387 of the remaining performance obligations over the next 12 months, with the remaining recognized thereafter.

For the three and ~~six~~nine months ended ~~March 31,~~June 30, 2019, net revenue recognized from our performance obligations satisfied in previous periods was not material.

4. DEBT

At ~~March 31,~~June 30, 2019, and September 30, 2018, our long-term debt of ~~$19,672~~$9,915 and $29,564, respectively, primarily related to amounts drawn on our revolving credit facility. Our weighted-average annual interest rate on these borrowings was ~~4.52%~~4.48% at ~~March 31,~~June 30, 2019, and 3.86% at September 30, 2018. At ~~March 31,~~June 30, 2019, we also had $6,551 in outstanding letters of credit and total availability of ~~$71,698~~$85,024 under our revolving credit facility without violating our financial covenants.

Pursuant to our Second Amended and Restated Credit and Security Agreement with Wells Fargo Bank, N.A. (as amended, the “Credit Agreement”), the Company is subject to the financial or other covenants disclosed in Item 7 of our Annual Report on Form10-K for the year ended September 30, 2018.

~~IES HOLDINGS, INC.~~

~~Notes~~

Effective May 20, 2019, the Company entered into a Fourth Amendment to the ~~Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

Credit Agreement, which permits the Company to repurchase 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 previous share repurchase authorization) not to exceed $25,000. There have been no other changes to ~~those covenants.~~the financial or other covenants disclosed in Item 7 of our Annual Report on Form 10-K for the year ended September 30, 2018. The Company was in compliance with the financial covenants as of ~~March 31,~~June 30, 2019.

At ~~March 31,~~June 30, 2019, the carrying value of amounts outstanding on our revolving credit facility approximated fair value, as debt incurs interest at a variable rate. The fair value of the debt is classified as a Level 2 measurement.

5. PER SHARE INFORMATION

The following tables reconcile the components of basic and diluted earnings per share for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2019, and 2018:

   Three Months Ended March 31,
   2019    2018
Numerator:

Net income attributable to common stockholders of IES Holdings, Inc.
   $ 5,467    $ 2,250
Decrease in noncontrolling interest
   —      (44 )
Net income attributable to restricted stockholders of IES Holdings, Inc.
   22    15




Net income attributable to IES Holdings, Inc.
   $ 5,489    $ 2,221




Denominator:

Weighted average common shares outstanding — basic
   21,139,096    21,182,268
Effect of dilutive stock options andnon-vested restricted stock
   240,650    258,302




Weighted average common and common equivalent shares outstanding — diluted
   21,379,746    21,440,570




Earnings per share attributable to IES Holdings, Inc.:

Basic
   $ 0.26    $ 0.11
Diluted
   $ 0.26    $ 0.11
   Six Months Ended March 31,
   2019    2018
Numerator:

Net income (loss) attributable to common stockholders of IES Holdings, Inc.
   $ 12,348    $ (27,304 )
Decrease in noncontrolling interest
   —      (44 )
Net income (loss) attributable to restricted stockholders of IES Holdings, Inc.
   25    —




Net income (loss) attributable to IES Holdings, Inc.
   $ 12,373    $ (27,348 )




Denominator:

Weighted average common shares outstanding — basic
   21,187,834    21,189,641
Effect of dilutive stock options andnon-vested restricted stock
   236,688    —




Weighted average common and common equivalent shares outstanding — diluted
   21,424,522    21,189,641




Earnings (loss) per share attributable to IES Holdings, Inc.:

Basic
   $ 0.58    $ (1.29 )
Diluted
   $ 0.58    $ (1.29 )

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~



	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)

When an entity has a net loss, it is prohibited from including potential common shares in the computation of diluted per share amounts. Accordingly, we have utilized basic shares outstanding to calculate both basic and diluted loss per share for the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The number of potential anti-dilutive shares excluded from the calculation was ~~255,146 shares.For~~211,669 shares.For the three months ended ~~March 31,~~June 30, 2018, and the three and ~~six~~nine months ended ~~March 31,~~June 30, 2019, the average price of our common shares exceeded the exercise price of all of our outstanding options; therefore, all of our outstanding stock options were included in the computation of fully diluted earnings per share.

6. OPERATING SEGMENTS

We manage and measure performance of our business in four distinct operating segments: Commercial & Industrial, Communications, Infrastructure Solutions and Residential. 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.

Transactions between segments, if any, are eliminated in consolidation. Our corporate office provides general and administrative, as well as support services, to our four operating segments. Management allocates certain shared costs between segments for selling, general and administrative expenses and depreciation expense.

Segment information for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2019, and 2018 is as follows:

   Three Months Ended March 31, 2019
   Commercial
& Industrial Communications Infrastructure
Solutions Residential Corporate Total
Revenues
   $ 79,975 $ 70,437 $ 34,450 $ 72,052 $ —   $ 256,914
Cost of services
   71,184 58,492 27,004 56,999 —   213,679


Gross profit
   8,791 11,945 7,446 15,053 —   43,235
Selling, general and administrative
   7,363 7,666 4,685 11,187 4,169 35,070
Contingent consideration
   —   —   (149 ) —   —   (149 )
Loss (gain) on sale of assets
   (1 ) —   101 (2 ) —   98


Operating income (loss)
   $ 1,429 $ 4,279 $ 2,809 $ 3,868 $ (4,169 ) $ 8,216


Other data:

Depreciation and amortization expense
   $ 629 $ 426 $ 1,175 $ 217 $ 27 $ 2,474
Capital expenditures
   $ 615 $ 193 $ 635 $ 398 $ —   $ 1,841
Total assets
   $ 77,898 $ 91,960 $ 114,739 $ 55,417 $ 77,257 $ 417,271
   Three Months Ended March 31, 2018
   Commercial
& Industrial Communications Infrastructure
Solutions Residential Corporate Total
Revenues
   $ 65,589 $ 50,244 $ 23,866 $ 65,978 $ —   $ 205,677
Cost of services
   59,068 40,892 18,842 53,035 —   171,837


Gross profit
   6,521 9,352 5,024 12,943 —   33,840
Selling, general and administrative
   6,849 6,201 4,637 9,688 2,272 29,647
Contingent consideration
   —   —   71 —   —   71
Loss (gain) on sale of assets
   (17 ) (8 ) 6 (1 ) —   (20 )


Operating income (loss)
   $ (311 ) $ 3,159 $ 310 $ 3,256 $ (2,272 ) $ 4,142


Other data:

Depreciation and amortization expense
   $ 527 $ 219 $ 1,140 $ 155 $ 20 $ 2,061
Capital expenditures
   $ 413 $ 398 $ 205 $ 108 $ —   $ 1,124
Total assets
   $ 72,559 $ 60,102 $ 100,884 $ 47,695 $ 103,747 $ 384,987

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

   Six Months Ended March 31, 2019
   Commercial
& Industrial Communications Infrastructure
Solutions Residential Corporate Total
Revenues
   $ 152,558 $ 139,762 $ 63,929 $ 144,507 $ —   $ 500,756
Cost of services
   135,092 115,851 50,556 114,421 —   415,920


Gross profit
   17,466 23,911 13,373 30,086 —   84,836
Selling, general and administrative
   14,079 14,600 9,166 22,324 6,987 67,156
Contingent consideration
   —   —   (115 ) —   —   (115 )
Loss (gain) on sale of assets
   (4 ) —   101 (2 ) —   95


Operating income (loss)
   $ 3,391 $ 9,311 $ 4,221 $ 7,764 $ (6,987 ) $ 17,700


Other data:

Depreciation and amortization expense
   $ 1,255 $ 841 $ 2,269 $ 426 $ 55 $ 4,846
Capital expenditures
   $ 1,467 $ 693 $ 822 $ 845 $ 102 $ 3,929
Total assets
   $ 77,898 $ 91,960 $ 114,739 $ 55,417 $ 77,257 $ 417,271
   Six Months Ended March 31, 2018
   Commercial
& Industrial Communications Infrastructure
Solutions Residential Corporate Total
Revenues
   $ 118,591 $ 104,703 $ 45,551 $ 135,132 $ —   $ 403,977
Cost of services
   107,227 86,231 35,842 107,773 —   337,073


Gross profit
   11,364 18,472 9,709 27,359 —   66,904
Selling, general and administrative
   12,644 12,285 9,194 20,054 5,559 59,736
Contingent consideration
   —   —   71 —   —   71
Loss (gain) on sale of assets
   (29 ) (9 ) 5 (1 ) —   (34 )


Operating income (loss)
   $ (1,251 ) $ 6,196 $ 439 $ 7,306 $ (5,559 ) $ 7,131


Other data:

Depreciation and amortization expense
   $ 1,084 $ 435 $ 2,383 $ 296 $ 71 $ 4,269
Capital expenditures
   $ 923 $ 473 $ 345 $ 586 $ —   $ 2,327
Total assets
   $ 72,559 $ 60,102 $ 100,884 $ 47,695 $ 103,747 $ 384,987



		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

7. STOCKHOLDERS’ EQUITY

Equity Incentive Plan

The Company’s 2006 Equity Incentive Plan, as amended and restated (the “Equity Incentive Plan”), provides for grants of stock options as well as grants of stock, including restricted stock.Approximately 3.0 million shares of common stock are authorized for issuance under the Equity Incentive Plan, of which approximately 847,891 shares were available for issuance at ~~March 31,~~June 30, 2019.

Stock Repurchase Program

In 2015, our Board of Directors authorized a stock repurchase program for the purchase from time to time of up to 1.5 million shares of the Company’s common ~~stock.~~stock, and on May 2, 2019, authorized the repurchase of up to an additional 1.0 million shares of our common stock under the stock repurchase program. Share purchases are made for cash in open market transactions at prevailing market prices or in privately 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 repurchased ~~189,821~~162,993 and ~~235,954~~398,947 shares, respectively, of our common stock during the

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

three and ~~six~~nine months ended ~~March 31,~~June 30, 2019, in open market transactions at an average price of ~~$16.70~~$17.88 and ~~$16.58,~~$17.11, respectively, per share. We repurchased ~~79,817~~20,810 and 100,627 shares of our common stock during the three and ~~six~~nine months ended ~~March 31,~~June 30, 2018, in open market transactions at an average price of ~~$15.40~~$15.45 and $15.41 per share. On May 2, 2019, our Board of Directors authorized, subject to consent of the lenders under our credit facility, the repurchase of up to an additional 1.0 million shares of our common stock under the stock repurchase program.

Treasury Stock

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, we issued 212,688 shares of common stock from treasury stock to employees and repurchased 87,609 shares of common stock from our employees to satisfy statutory tax withholding requirements upon the vesting of certain performance phantom stock units under the Equity Incentive Plan. We also repurchased ~~235,954~~398,947 shares of common stock on the open market pursuant to our stock repurchase program. We issued 3,991 shares of 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.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2018, we repurchased ~~79,817~~32,832 shares of common stock from our employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock under the Equity Incentive Plan and repurchased 100,627 shares of common stock on the open market pursuant to ~~the~~our stock repurchase program. During the ~~six~~nine months ended ~~March 31,~~June 30, 2018, we issued 520 unrestricted shares of common stock from treasury stock to members of our Board of Directors as part of their overall compensation and 1,500 unrestricted shares of common stock to satisfy the exercise of outstanding options for employees.

Restricted Stock

On March 4, 2019, we granted 283,195 restricted shares, pursuant to four award agreements, in conjunction with the appointment of the Company’s CEO. These awards include restricted shares subject to the achievement of specified levels of cumulative net income before taxes or specified stock price levels, as well as shares that vest based on the passage of time. During the three and nine months ended ~~March 31,~~June 30, 2019, ~~and 2018,~~ we recognized ~~$111~~$333 and ~~$131,~~$443, respectively, in compensation expense related to ~~our~~these restricted stock awards. During the ~~six~~three and nine months ended ~~March 31, 2019, and~~June 30, 2018, we recognized ~~$111~~$11 and ~~$245,~~$256, respectively, in compensation expense related to ~~our~~ restricted stock ~~awards.~~awards granted in prior years. At ~~March 31,~~June 30, 2019, the unamortized compensation cost related to outstanding unvested restricted stock was ~~$3,685.~~

$3,352.

Phantom Stock Units

Director phantom stock units (“Director PSUs”) are primarily granted to the members of the Board of Directors as part of their overall compensation. These Director PSUs are paid via unrestricted stock grants to each director upon their departure from the Board of ~~Directors.~~Directors or upon a change of control. We record compensation expense for the full value of the grant on the date of grant. During the three months ended ~~March 31,~~June 30, 2019, and 2018, we recognized ~~$50~~$100 and $49, respectively, in compensation expense related to these grants. During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, and 2018, we recognized ~~$99~~$200 and ~~$91,~~$140, respectively, in compensation expense related to these grants.

Performance Based Phantom Stock Units

A performance based phantom stock unit (a “PPSU”) is a contractual right to receive one share of the Company’s common stock upon the achievement of certain specified performance objectives and continued performance of services. On February 6, 2019, the Company granted an additional 230,274 PPSUs, of which 59,924 shares were subsequently forfeited in conjunction with the departure of the Company’s President. At ~~March 31,~~June 30, 2019, the Company had outstanding an aggregate of 170,350 PPSUs.

During the three and ~~six~~nine months ended ~~March 31,~~June 30, 2019, we recognized $427 and $892 in compensation expense, ~~of $465~~respectively, related to these grants. During the three and ~~six~~nine months ended ~~March 31,~~June 30, 2018, we recognized a benefit to compensation expense of ~~$652~~$343 and ~~$449,~~$792, respectively, related to these grants. This benefit was the result of a reduction in the estimated number of units deemed probable of vesting based on the projected achievement of specified performance objectives.

8. SECURITIES AND EQUITY INVESTMENTS

Our financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, investments, accounts payable and a loan agreement. We believe that the carrying value of these financial instruments in the accompanying Condensed Consolidated Balance Sheets approximates their fair value due to their short-term nature. At ~~March 31,~~June 30, 2019, and September 30, 2018, we carried a cost method investment at $408 and $558, respectively, which is equal to our cost less impairment.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

9. EMPLOYEE BENEFIT PLANS

401(k) Plan

In November 1998, we established the IES Holdings, Inc. 401(k) Retirement Savings Plan. All full-time IES employees and full-time employees of participating subsidiaries are eligible to participate on the first day of the month subsequent to completing sixty days of service and attaining agetwenty-one. Participants become vested in our matching contributions following three years of service. We also maintain several subsidiary retirement savings plans. During the three months ended ~~March 31,~~June 30, 2019, and 2018, we recognized ~~$600~~$538 and ~~$485,~~$466, respectively, in matching expense. During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, and 2018, we recognized ~~$1,023~~$1,561 and ~~$914,~~$1,380, respectively, in matching expense.

Post Retirement Benefit Plans

Certain individuals at one of the Company’s locations are entitled to receive fixed annual payments pursuant to post retirement benefit plans. We had an unfunded benefit liability of ~~$718~~$710 and $755 recorded as of ~~March 31,~~June 30, 2019, and September 30, 2018, respectively, related to such plans.

10. FAIR VALUE MEASUREMENTS

Fair Value Measurement Accounting

Fair value is considered the price to sell an asset, or transfer a liability, between market participants on the measurement date. Fair value measurements assume that the asset or liability is (1) exchanged in an orderly manner, (2) the exchange is in the principal market for that asset or liability, and (3) the market participants are independent, knowledgeable, able and willing to transact an exchange. Fair value accounting and reporting establishes a framework for measuring fair value by creating a hierarchy for observable independent market inputs and unobservable market assumptions and expands disclosures about fair value measurements. Considerable judgment is required to interpret the market data used to develop fair value estimates. As such, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current exchange. The use of different market assumptions and/or estimation methods could have a material effect on the estimated fair value.

At ~~March 31,~~June 30, 2019, financial assets and liabilities measured at fair value on a recurring basis were limited to our Executive Deferred Compensation Plan, under which certain employees are permitted to defer a portion of their base salary and/or bonus for a Plan Year (as defined in the plan), and contingent consideration liabilities related to certain of our acquisitions.

Financial assets and liabilities measured at fair value on a recurring basis as of ~~March 31,~~June 30, 2019, and September 30, 2018, are summarized in the following tables by the type of inputs applicable to the fair value measurements:

   March 31, 2019
   Total
Fair
Value    Quoted
Prices
(Level 1)    Significant
Unobservable
Inputs
(Level 3)
Executive savings plan assets
   $ 738    $ 738    $ —
Executive savings plan liabilities
   (623 )    (623 )    —
Contingent consideration
   (270 )    —      (270 )






Total
   $ (155 )    $ 115    $ (270 )






   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)~~



	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	)

In fiscal years 2016, 2017 and 2018, we entered into contingent consideration arrangements related to certain acquisitions. At ~~March 31,~~June 30, 2019, we estimated the fair value of these contingent consideration liabilities at ~~$270.~~$108. The table below presents a reconciliation of the fair value of these obligations, which used significant unobservable inputs (Level 3).

   Contingent
Consideration
Agreements
Fair value at September 30, 2018
   $ 680
Settlements
   (295 )
Net adjustments to fair value
   (115 )


Fair value at March 31, 2019
   $ 270



		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

11. INVENTORY

Inventories consist of the following components:

   March 31,
2019    September 30,
2018
Raw materials
   $ 4,368    $ 4,453
Work in process
   5,972    5,168
Finished goods
   2,218    1,746
Parts and supplies
   11,171    9,599




Total inventories
   $ 23,729    $ 20,966



	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

12. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following is a progression of goodwill by segment for the ~~six~~nine months ended ~~March 31,~~June 30, 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 March 31, 2019
   $ 6,976    $ 2,816    $ 30,812 $ 10,018    $ 50,622

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

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

Intangible Assets

Intangible assets consist of the following:

   Estimated
Useful
Lives
(in Years)    March 31, 2019
   Gross
Carrying
Amount    Accumulated
Amortization    Net
Trademarks/trade names
   5 - 20    $ 5,084    $ 1,053    $ 4,031
Technical library
   20    400    111    289
Customer relationships
   6 - 15    33,539    9,460    24,079
Non-competition arrangements
   5    40    5    35
Backlog
   1    378    358    20
Construction contracts
   1    2,184    2,179    5






Total intangible assets
      $ 41,625    $ 13,166    $ 28,459

   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



	Estimated Useful Lives (in Years)	June 30, 2019
	Estimated Useful Lives (in Years)		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
	Estimated Useful Lives (in Years)		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

13. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time we are a party to various claims, lawsuits and other legal proceedings that arise in the ordinary course of business. We maintain various insurance coverages to minimize financial risk associated with these proceedings. None of these proceedings, separately or in the aggregate, are expected to have a material adverse effect on our financial position, results of operations or cash flows. With respect to all such proceedings, we record reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. We expense routine legal costs related to these proceedings as they are incurred.

Risk-Management

We retain the risk for workers’ compensation, employer’s liability, automobile liability, construction defects, general liability and employee group health claims, as well as pollution coverage, resulting from uninsured deductibles per accident or occurrence which are generally subject to annual aggregate limits. Our general liability program provides coverage for bodily injury and property damage. In many cases, we insure third parties, including general contractors, as additional insureds under our insurance policies. Losses are accrued based upon our known claims incurred and an estimate of claims incurred but not reported. As a result, many of our claims are effectively self-insured. Many claims against our insurance are in the form of litigation. At ~~March 31,~~June 30, 2019, and September 30, 2018, we had ~~$6,021~~$6,218 and $6,202, respectively, accrued for self-insurance liabilities. We are also subject to construction defect liabilities, primarily within our Residential segment. As of ~~March 31,~~June 30, 2019, and September 30, 2018, we had ~~$87~~$97 and $171, respectively, reserved for these claims. Because the reserves are based on judgment and estimates and involve variables that are inherently uncertain, such as the outcome of litigation and an assessment of insurance coverage, there can be no assurance that the ultimate liability will not be higher or lower than such estimates or that the timing of payments will not create liquidity issues for the Company.

Some of the underwriters of our casualty insurance program require us to post letters of credit as collateral. This is common in the insurance industry. To date, we have not had a situation where an underwriter has had reasonable cause to effect payment under a letter of credit. At ~~March 31,~~June 30, 2019, and September 30, 2018, $6,351 and $6,101, respectively, of our outstanding letters of credit was utilized to collateralize our insurance program.

~~IES HOLDINGS, INC.~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~(All Amounts in Thousands Except Share Amounts)~~

~~(Unaudited)~~

Surety

As of ~~March 31,~~June 30, 2019, the estimated cost to complete our bonded projects was approximately ~~$77,025.~~$89,753. We evaluate our bonding requirements on a regular basis, including the terms offered by our sureties. We believe the bonding capacity presently provided by our current sureties is adequate for our current operations and will be adequate for our operations for the foreseeable future. ~~Posting letters of credit in favor of our sureties reduces the borrowing availability under our credit facility.~~

Other Commitments and Contingencies

Some of our customers and vendors require us to post letters of credit, or provide intercompany guarantees, as a means of guaranteeing performance under our contracts and ensuring payment by us to subcontractors and vendors. If our customer has reasonable cause to effect payment under a letter of credit, we would be required to reimburse our creditor for the letter of credit. At ~~March 31,~~June 30, 2019, and September 30, 2018, $200 and $508, respectively, of our outstanding letters of credit were to collateralize our vendors.

From time to time, we may enter into firm purchase commitments for materials, such as copper or aluminum wire, which we expect to use in the ordinary course of business. These commitments are typically for terms of less than one year and require us to buy minimum quantities of materials at specific intervals at a fixed price over the term. As of ~~March 31,~~June 30, 2019, we had no such material commitments.

14. BUSINESS COMBINATIONS AND DIVESTITURES

In March 2019, our management committed to a plan for the sale of substantially all of the operating assets at one of our operating facilities within the Infrastructure Solutions segment. In connection with the plan, we allocated $119 of goodwill to the disposal group. In conjunction with the write down of these assets to their net realizable value of $450, we recognized a loss of $101, recorded within “Loss (gain) on sale of assets” within our Condensed Consolidated Statements of Comprehensive Income for the ~~three and six~~nine months ended ~~March 31,~~June 30, 2019. ~~We expect the~~The sale of these assets to a third party ~~to be~~was completed ~~within the fiscal year ended September 30,~~in May 2019.

~~15. SUBSEQUENT EVENTS~~

~~On May 2, 2019, our Board~~

Item 2. Management’s Discussion and Analysis of ~~Directors authorized, subject to consent~~Financial Condition and Results of ~~the lenders under our credit facility, the repurchase of up to an additional 1.0 million shares of our common stock under the stock repurchase program.~~

Operations

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

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, 2018, and the Condensed Consolidated Financial Statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q~~10-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.

OVERVIEW

Executive Overview

Please refer to Part 1,I, Item 1. “Business”of our Annual Report on Form10-K for the year ended September 30, 2018, for a discussion of the Company’s services and corporate strategy. IES Holdings, Inc., a Delaware corporation, is a holding company that owns and manages operating subsidiaries, comprised of providers of industrial products and infrastructure services, to a variety of end markets. Our operations are currently organized into four principal business segments: Commercial & Industrial, Communications, Infrastructure Solutions and Residential.

RESULTS OF OPERATIONS

We report our operating results across our four operating segments: Commercial & Industrial, Communications, Infrastructure Solutions and Residential. Expenses associated with our corporate office are classified separately. The following table presents selected historical results of operations of IES Holdings, Inc., as well as the results of acquired businesses from the dates acquired.

   Three Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 256,914    100.0 % $ 205,677    100.0 %
Cost of services
   213,679    83.2 % 171,837    83.5 %






Gross profit
   43,235    16.8 % 33,840    16.5 %
Selling, general and administrative expenses
   35,070    13.7 % 29,647    14.4 %
Contingent consideration
   (149 )    (0.1 )% 71    0.0 %
Loss (gain) on sale of assets
   98    0.0 % (20 )    0.0 %






Operating income
   8,216    3.2 % 4,142    2.0 %






Interest and other (income) expense, net
   423    0.2 % 430    0.2 %






Income from operations before income taxes
   7,793    3.0 % 3,712    1.8 %
Provision for income taxes
   2,336    0.9 % 1,425    0.7 %






Net income
   5,457    2.1 % 2,287    1.1 %






Net loss (income) attributable to noncontrolling interest
   32    0.0 % (66 )    0.0 %






Net income attributable to IES Holdings, Inc.
   $ 5,489    2.1 % $ 2,221    1.1 %



		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		%

Consolidated revenues for the three months ended ~~March 31,~~June 30, 2019, were ~~$51.2~~$50.1 million higher than for the three months ended ~~March 31,~~June 30, 2018, an increase of ~~24.9%~~21.5%, with increases at ~~all of~~ our Communications, Infrastructure Solutions, and Residential segments, driven by strong demand.

Revenues decreased at our Commercial & Industrial segment, where many of our markets remain highly competitive.

Consolidated gross profit for the three months ended ~~March 31,~~June 30, 2019, increased ~~$9.4~~$3.9 million compared with the three months ended ~~March 31,~~June 30, 2018. Our overall gross profit percentage ~~increased~~decreased to ~~16.8%~~16.4% during the three months ended ~~March 31,~~June 30, 2019, as compared to ~~16.5%~~18.3% during the three months ended ~~March 31,~~June 30, 2018. Gross profit as a percentage of revenue ~~increased~~decreased at ~~all~~each of our segments, with the exception of our ~~Communications~~Residential segment.

See further discussion below of changes in gross margin for our individual segments.

Selling, general and administrative expenses include costs not directly associated with performing work for our customers. These costs consist primarily of compensation and benefits related to corporate, segment and branch management (including incentive-based 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.

During the three months ended ~~March 31,~~June 30, 2019, our selling, general and administrative expenses were ~~$35.1~~$36.3 million, an increase of ~~$5.4~~$4.0 million, or ~~18.3%~~12.2%, over the three months ended ~~March 31,~~June 30, 2018, driven by increased personnel costs at our operating segments in connection with their growth. This increase also includes an increase in stock based compensation expenses at the Corporate level. However, selling, general and administrative expense as a percent of revenue decreased from 13.9% for the three months ended June 30, 2018, to 12.9% for the three months ended June 30, 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.}

Consolidated revenues for the nine months ended June 30, 2019, were $146.8 million higher than for the nine months ended June 30, 2018, an increase of 23.1%, with increases at all of our operating segments, driven by strong demand.

Our overall gross profit percentage decreased to 16.8% during the nine months ended June 30, 2019, as compared to 17.2% during the nine months ended June 30, 2018. Gross profit as a 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, 2019, our selling, general and administrative expenses were $103.5 million, an increase of $11.4 million, or 12.4%, over the nine months ended June 30, 2018, driven by increased personnel costs at our operating segments in connection with their growth. This increase also includes a $1.9 million increase in expenses at the corporate level, related to a severance payment to our outgoing President, as well as an increase in stock based compensation expenses. However, selling, general and administrative expense as a percent of revenue decreased from 14.4% for the three months ended March 31, 2018, to 13.7% for the three months ended March 31, 2019, as we benefitted from the increased scale of our operations.

   Six Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 500,756    100.0 % $ 403,977    100.0 %
Cost of services
   415,920    83.1 % 337,073    83.4 %






Gross profit
   84,836    16.9 % 66,904    16.6 %
Selling, general and administrative expenses
   67,156    13.4 % 59,736    14.8 %
Contingent consideration
   (115 )    0.0 % 71    0.0 %
Loss (gain) on sale of assets
   95    0.0 % (34 )    0.0 %






Operating income
   17,700    3.5 % 7,131    1.8 %






Interest and other (income) expense, net
   1,017    0.2 % 773    0.2 %






Income from operations before income taxes
   16,683    3.3 % 6,358    1.6 %
Provision for income taxes⁽¹⁾
   4,243    0.8 % 33,584    8.3 %






Net income (loss)
   12,440    2.5 % (27,226 )    (6.7 )%






Net income attributable to noncontrolling interest
   (67 )    0.0 % (122 )    0.0 %






Net income (loss) attributable to IES Holdings, Inc.
   $ 12,373    2.5 % $ (27,348 )    (6.8 )%

~~(1)~~

~~2018 includes a charge of $31.5~~ ~~million tore-measure~~ ~~our net deferred tax assets in connection with the Tax Cuts and Jobs Act.~~

Consolidated revenues for the six months ended March 31, 2019, were $96.8 million higher than for the six months ended March 31, 2018, an increase of 24.0%, with increases at all of our operating segments, driven by strong demand.

Our overall gross profit percentage increased to 16.9% during the six months ended March 31, 2019, as compared to 16.6% during the six months ended March 31, 2018. Gross profit as a percentage of revenue increased at our Residential and Commercial & Industrial segments, while decreasing slightly at our Communications and Infrastructure Solutions segments.

During the six months ended March 31, 2019, our selling, general and administrative expenses were $67.2 million, an increase of $7.4 million, or 12.4%, over the six months ended March 31, 2018, driven by increased personnel costs at our operating segments in connection with their growth. This increase also includes a $1.4$3.1 million increase in expenses at the corporate level, related to a severance payment to our outgoing President, as well as an increase in stock-based compensation expense. However, selling, general and administrative expense as a percent of revenue decreased from ~~14.8%~~14.5% for the ~~three~~nine months ended ~~March 31,~~June 30, 2018, to ~~13.4%~~13.2% for the ~~three~~nine months ended ~~March 31,~~June 30, 2019, as we ~~benefitted~~benefited from the increased scale of our operations.

Commercial & Industrial

   Three Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 79,975    100.0 % $ 65,589    100.0 %
Cost of services
   71,184    89.0 % 59,068    90.1 %






Gross profit
   8,791    11.0 % 6,521    9.9 %
Selling, general and administrative expenses
   7,363    9.2 % 6,849    10.4 %
Gain on sale of assets
   (1 )    0.0 % (17 )    0.0 %






Operating income
   1,429    1.8 % (311 )    -0.5 %

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 %

Revenue.Revenues in our Commercial & Industrial segment ~~increased $14.4~~decreased $2.8 million, or ~~21.9%~~3.6%, during the three months ended ~~March 31,~~June 30, 2019, compared to the three months ended ~~March 31,~~June 30, 2018. The ~~increase~~decrease was largely driven by ~~increased bid~~a reduction in time-and-material work, as well as a lower volume ~~at several~~of large, industrial jobs in the Southeastern U.S. Several large projects underway during the three months ended June 30, 2018 have since been completed, and the timing of our ~~branches and improving market conditions~~customers' capital spending needs can cause variations in ~~certain areas. These increases were partly offset by a $3.8 million decrease relating~~revenue from quarter to ~~our decision to exit certain markets.~~quarter. The market for this segment’s services remains highly competitive.

Gross Profit. Our Commercial & Industrial segment’s gross profit during the three months ended ~~March 31,~~June 30, 2019, ~~increased~~decreased by ~~$2.3~~$4.1 million, as compared to the three months ended ~~March 31,~~June 30, 2018. The ~~increase~~decrease is due to ~~improved efficiency across~~ the ~~branches,~~reduction in volumes, as ~~we improved~~well as project ~~execution~~inefficiencies at our Nebraska branch driven by weather and ~~as our ability to absorb fixed costs benefitted from higher volumes.~~other factors. Gross margin as a percent of revenue ~~increased 1.1%~~decreased 5.0% to ~~11.0%~~8.2% during the three months ended ~~March 31,~~June 30, 2019, as compared to the three months ended ~~March 31, 2018.~~

June 30, 2018, as a result of a reduction in efficiency, as well as the reduction in volumes resulting in a higher rate of fixed overhead costs as a percentage of revenue.

Selling, General and Administrative Expenses. Our Commercial & Industrial segment’s selling, general and administrative expenses during the three months ended ~~March 31,~~June 30, 2019, ~~increased $0.5~~decreased $0.2 million, or ~~7.5%~~2.2%, compared to the three months ended ~~March 31,~~June 30, 2018. Selling, general and administrative expenses as a percentage of revenues ~~decreased 1.2%~~increased 0.2% to ~~9.2%~~9.1% during the three months ended ~~March 31,~~June 30, 2019, compared to the three months ended ~~March 31,~~June 30, 2018. ~~The increase relates primarily to costs associated with higher incentive compensation in connection with improved profitability.~~

   Six Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 152,558    100.0 % $ 118,591    100.0 %
Cost of services
   135,092    88.6 % 107,227    90.4 %






Gross profit
   17,466    11.4 % 11,364    9.6 %
Selling, general and administrative expenses
   14,079    9.2 % 12,644    10.7 %
Gain on sale of assets
   (4 )    0.0 % (29 )    0.0 %






Operating income
   3,391    2.2 % (1,251 )    -1.1 %

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 %

Revenue.Revenues in our Commercial & Industrial segment increased ~~$34.0~~$31.2 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, an increase of ~~28.6%~~15.8% compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The increase in revenue over this period was driven by ~~increased bid volume at several of our branches and improving market conditions in certain areas. This~~an increase in ~~revenue was partly offset by a $6.7 million decrease~~large, agricultural and other projects in ~~revenue attributable to our decision to exit~~ the ~~Denver and Roanoke markets.~~Midwest. The market for this segment’s services in many geographic regions remains highly competitive.

Gross Profit. Our Commercial & Industrial segment’s gross profit during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, increased by ~~$6.1~~$2.0 million, or ~~53.7%~~9.2%, as compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. We did benefit from higher volumes; however, these benefits were partly offset by certain project inefficiencies in the quarter ended June 30, 2019. As a percentage of revenue, gross profit ~~increased~~decreased slightly, from ~~9.6%~~11.0% for the ~~six~~nine months ended ~~March 31,~~June 30, 2018, to ~~11.4%~~10.4% for the ~~six~~nine months ended ~~March 31, 2019. The increase is due to improved efficiency across the branches,~~June 30, 2019 as ~~we improved~~a result of some project ~~execution and as our ability to absorb fixed costs benefitted from higher volumes.~~

inefficiencies.

Selling, General and Administrative Expenses.Our Commercial & Industrial segment’s selling, general and administrative expenses during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, increased ~~$1.4~~$1.3 million, or ~~11.3%~~6.5%, compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018, but decreased ~~1.5%~~0.8% as a percentage of ~~revenue. The increase was driven by costs associated with higher incentive compensation in connection with improved profitability.~~

revenue, as we benefited from the increased scale of our operations.

Communications

   Three Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 70,437    100.0 % $ 50,244    100.0 %
Cost of services
   58,492    83.0 % 40,892    81.4 %






Gross profit
   11,945    17.0 % 9,352    18.6 %
Selling, general and administrative expenses
   7,666    10.9 % 6,201    12.3 %
Gain on sale of assets
   —      0.0 % (8 )    0.0 %






Operating income
   4,279    6.1 % 3,159    6.3 %

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 %

Revenue.Our Communications segment’s revenues increased by ~~$20.2~~$36.1 million during the three months ended ~~March 31,~~June 30, 2019, or ~~40.2%~~66.3%, ~~during the three months ended March 31, 2019,~~ compared to the three months ended ~~March 31,~~June 30, 2018. The increase primarily resulted from increased demand driven by several of our large data center customers. Revenues in our Communications segment can vary from quarter to quarter based on the capital spending cycles of our customers.

Gross Profit.Our Communications segment’s gross profit during the three months ended ~~March 31,~~June 30, 2019, increased by ~~$2.6~~$4.5 million compared to the three months ended ~~March 31,~~June 30, 2018. While total gross profit increased in connection with higher volumes, gross profit as a percentage of revenue decreased, as we took on a larger proportion of cost-plus arrangements. These arrangements provide us with a reimbursement for our costs plus a markup, and are typically lower margin, but also lower risk, as compared with our fixed-cost arrangements.

Selling, General and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased by ~~$1.5~~$1.2 million, or ~~23.6%~~16.9%, during the three months ended ~~March 31,~~June 30, 2019, compared to the three months ended ~~March 31,~~June 30, 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 decreased ~~1.4%~~3.9% to ~~10.9%~~9.3% of segment revenue during the three months ended ~~March 31,~~June 30, 2019, compared to the three months ended ~~March 31,~~June 30, 2018, as we ~~benefitted~~benefited from the increased scale of our operations.

   Six Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 139,762    100.0 % $ 104,703    100.0 %
Cost of services
   115,851    82.9 % 86,231    82.4 %






Gross profit
   23,911    17.1 % 18,472    17.6 %
Selling, general and administrative expenses
   14,600    10.4 % 12,285    11.7 %
Gain on sale of assets
   —      0.0 % (9 )    0.0 %






Operating income
   9,311    6.7 % 6,196    5.9 %

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 %

Revenue.Our Communications segment revenues increased by ~~$35.1~~$71.1 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, or ~~33.5%~~44.7% compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The increase primarily resulted from increased demand from several of our data center customers. Revenues in our Communications segment can vary from quarter to quarter based on the capital spending cycles of our customers.

Gross Profit.Our Communications segment’s gross profit during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, increased ~~$5.4~~$9.9 million, or ~~29.4%~~33.7%, as compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. While total gross profit increased in connection with higher volumes, gross profit as a percentage of revenue decreased, as we took on a larger proportion of cost-plus arrangements. These arrangements provide us with a reimbursement for our costs plus a markup, and are typically lower margin, but also lower risk, as compared with our fixed-cost arrangements.

Selling, General and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased ~~$2.3~~$3.5 million, or ~~18.8%~~18.1%, during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared to the ~~six~~nine months ended ~~March 31,~~June 30, 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 decreased by ~~1.3%~~2.2% to ~~10.4%~~10.0% of segment revenue during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018, as we ~~benefitted~~benefited from the increased scale of our operations.

Infrastructure Solutions

   Three Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 34,450    100.0 % $ 23,866    100.0 %
Cost of services
   27,004    78.4 % 18,842    78.9 %






Gross profit
   7,446    21.6 % 5,024    21.1 %
Selling, general and administrative expenses
   4,685    13.6 % 4,637    19.4 %
Contingent consideration
   (149 )    -0.4 % 71    0.3 %
Loss on sale of assets
   101    0.3 % 6    0.0 %






Operating income
   2,809    8.2 % 310    1.3 %

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 %

Revenue.Revenues in our Infrastructure Solutions segment increased ~~$10.6~~$11.3 million during the three months ended ~~March 31,~~June 30, 2019, an increase of ~~44.3%~~45.3% compared to the three months ended ~~March 31,~~June 30, 2018. The increase in revenue was driven primarily by our ~~bus duct and~~generator enclosure business, driven by increased demand for enclosures to be used at data ~~centers, as well as an increase in revenue from our motor repair business.~~

centers.

Gross Profit. Our Infrastructure Solutions segment’s gross profit during the three months ended ~~March 31,~~June 30, 2019, increased ~~$2.4~~$2.3 million as compared to the three months ended ~~March 31, 2018. Gross~~June 30, 2018, primarily as a result of the increase in volume. However, gross profit as a percentage of revenue ~~increased 0.5%~~decreased 1.4% to ~~21.6%. The primary driver~~23.4%, as the manufacture of ~~the improvement~~generator enclosures continues to grow as a proportion of our business. While margins on generation enclosures are improving, they are typically lower than margins in ~~margins was~~ our bus duct facility, which was impacted in the prior year by production inefficiencies and 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.

Selling, General and Administrative Expenses.Our Infrastructure Solutions segment’s selling, general and administrative expenses during the three months ended ~~March 31,~~June 30, 2019, ~~remained flat~~increased by $0.4 million compared to the three months ended ~~March 31,~~June 30, 2018, primarily as a result of increased health care costs. Selling, general and administrative expense as a percent of revenue decreased from 18.4% to 13.7%, as we were able to scale our business effectively without adding significant general and administrative expense.

   Six Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 63,929    100.0 % $ 45,551    100.0 %
Cost of services
   50,556    79.1 % 35,842    78.7 %






Gross profit
   13,373    20.9 % 9,709    21.3 %
Selling, general and administrative expenses
   9,166    14.3 % 9,194    20.2 %
Contingent consideration
   (115 )    -0.2 % 71    0.2 %
Loss on sale of assets
   101    0.2 % 5    0.0 %






Operating income
   4,221    6.6 % 439    1.0 %

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 %

Revenue.Revenues in our Infrastructure Solutions segment increased ~~$18.4~~$29.6 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, an increase of ~~40.3%~~42.1% compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The increase in revenue relates primarily to our bus duct and enclosure business, driven by increased demand for enclosures to be used at data centers, as well as an increase in revenue from our motor repair business.

Gross Profit. Our Infrastructure Solutions segment’s gross profit during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, increased ~~$3.7~~$5.9 million as compared to the ~~six~~nine months ended ~~March 31, 2018. The primary driver~~June 30, 2018, primarily as a result of the improvement in margins was our bus duct facility, which was affected in the prior year by production inefficiencies and by the impact of the amortization of contract intangibles associated with the acquisition of this business in 2016. We also benefitted from higher volumes in our generator enclosure manufacturing facility, as well as increased ~~activity at our motor repair shops.~~volumes. Gross profit as a percentage of revenues decreased ~~0.4%~~0.7% to ~~20.9%~~21.8% for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, largely as the result of a change in the mix of work performed.

Our generator enclosure business generally has lower margins than our motor repair business, and the sale of generator enclosures now makes up a greater proportion of our revenue as compared with the prior year.

Selling, General and Administrative Expenses.Our Infrastructure Solutions segment’s selling, general and administrative expenses during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, ~~remained flat~~increased by $0.3 million compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018, primarily as a result of increased health care costs. However, selling, general and administrative expense as a percent of revenue decreased from 19.5% for the nine months ended June 30, 2018 to 14.1% for the nine months ended June 30, 2019, as we were able to scale our business effectively without adding significant general and administrative expense.

Residential

   Three Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 72,052    100.0 % $ 65,978    100.0 %
Cost of services
   56,999    79.1 % 53,035    80.4 %






Gross profit
   15,053    20.9 % 12,943    19.6 %
Selling, general and administrative expenses
   11,187    15.5 % 9,688    14.7 %
Gain on sale of assets
   (2 )    0.0 % (1 )    0.0 %






Operating income
   3,868    5.4 % 3,256    4.9 %

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 %

Revenue.Our Residential segment’s revenues increased by ~~$6.1~~$5.5 million during the three months ended ~~March 31,~~June 30, 2019, an increase of ~~9.2%~~7.3% as compared to the three months ended ~~March 31,~~June 30, 2018. The increase is driven by both our single-family and multi-family business, where revenues each increased by ~~$7.9~~$3.3 million for the three months ended ~~March 31,~~June 30, 2019, compared with the three months ended ~~March 31,~~June 30, 2018. ~~This was~~These increases were partly offset by ~~an $0.8~~a $1.0 million decrease in ~~our multi-family~~solar and cable service business ~~where many projects have been delayed by weather. Service revenues also decreased by $1.0 million~~ for the three months ended ~~March 31,~~June 30, 2019, compared with the same period in the prior year.

Gross Profit.During the three months ended ~~March 31,~~June 30, 2019, our Residential ~~segment experienced a $2.1~~segment's gross profit increased by $1.2 million, or ~~16.3%~~8.1%, ~~increase in gross profit~~ as compared to the three months ended ~~March 31,~~June 30, 2018. The increase in gross profit was driven primarily by ~~improved commodity prices in the quarter ended March 31, 2019.~~higher volumes. Gross margin as a percentage of revenue increased ~~1.3%~~0.2% to ~~20.9%~~20.3% during the quarter ended ~~March 31,~~June 30, 2019, as compared with the quarter ended ~~March 31, 2018.~~

June 30, 2018, as we benefited from the increased scale of our operations.

Selling, General and Administrative Expenses. Our Residential ~~segment experienced a $1.5 million, or 15.5%, increase in~~segment's selling, general and administrative ~~expenses~~expense increased by $0.9 million, or 8.0%, during the three months ended ~~March 31,~~June 30, 2019, compared to the three months ended ~~March 31,~~June 30, 2018, primarily as a result of higher incentive compensation expense in connection with higher profitability. Selling, general and administrative expenses as a percentage of revenues in the Residential segment increased slightly to ~~15.5%~~14.6% of segment revenue during the three months ended ~~March 31,~~June 30, 2019, compared to ~~14.7%~~14.5% in the three months ended ~~March 31,~~June 30, 2018.

   Six Months Ended March 31,
   2019 2018
   $    % $    %
   (Dollars in thousands, Percentage of revenues)
Revenues
   $ 144,507    100.0 % $ 135,132    100.0 %
Cost of services
   114,421    79.2 % 107,773    79.8 %






Gross profit
   30,086    20.8 % 27,359    20.2 %
Selling, general and administrative expenses
   22,324    15.4 % 20,054    14.8 %
Gain on sale of assets
   (2 )    0.0 % (1 )    0.0 %






Operating income
   7,764    5.4 % 7,306    5.4 %

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 %

Revenue.Our Residential segment revenues increased by ~~$9.4~~$14.9 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, an increase of ~~6.9%~~7.1% as compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The increase is driven by our single-family business, where revenues increased by ~~$13.8~~$17.1 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared with the ~~six~~nine months ended ~~March 31,~~June 30, 2018. This increase was partly offset by a ~~$3.0~~$2.4 million decrease in our ~~multi-family business, where many projects have been delayed by weather. Service~~solar and service revenues ~~also decreased by $1.4 million~~ for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared with the same period in the prior year.

Gross Profit. During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, our Residential segment ~~experienced a $2.7~~gross profit increased by $4.0 million, or ~~10.0%~~9.3%, ~~increase in gross profit~~ as compared to the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The increase in gross profit was driven primarily by higher volumes, but also benefited from improved copper and other commodity prices. Gross margin as a percentage of revenue increased ~~0.6%~~0.4% to ~~20.8%~~20.6% during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, as compared with the ~~six~~nine months ended ~~March 31, 2018.~~

June 30, 2018, as we benefited from improved commodity prices and the increased scale of our operations.

Selling, General and Administrative Expenses. Our Residential ~~segment experienced a $2.3 million, or 11.3%, increase in~~segment's selling, general and administrative expenses increased by $3.1 million, or 10.1%, during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared to the ~~six~~nine months ended ~~March 31, 2018,~~June 30, 2018. This increase was driven by increased compensation ~~expense.~~expense in connection with a growing business, including incentive profit sharing for division management. Selling, general and administrative expenses as a percentage of revenues in the Residential segment increased by ~~0.6%~~0.5% to ~~15.4%~~15.2% of segment revenue during the ~~six~~nine months ended ~~March 31,~~June 30, 2019.

INTEREST AND OTHER EXPENSE, NET

   Three Months
Ended March 31,
   2019    2018
   (In thousands)
Interest expense
   $ 456    $ 402
Deferred financing charges
   79    71




Total interest expense
   535    473
Other (income) expense, net
   (112 )    (43 )




Total interest and other expense, net
   $ 423    $ 430



	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

During the three months ended ~~March 31,~~June 30, 2019, we incurred interest expense of $0.5 million primarily comprised of interest expense from our revolving credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”), an average letter of credit balance of $6.6 million under our revolving credit facility and an average unused line of credit balance of ~~$66.6~~$74.7 million under our revolving credit facility. This compares to interest expense of $0.5 million for the three months ended ~~March 31,~~June 30, 2018, primarily comprised of interest expense from our revolving credit facility, an average letter of credit balance of ~~$6.4~~$6.8 million under our revolving credit facility and an average unused line of credit balance of ~~$63.4~~$62.9 million under our revolving credit facility.

   Six Months Ended
March 31,
   2019    2018
   (In thousands)
Interest expense
   $ 926    $ 772
Deferred financing charges
   156    142




Total interest expense
   1,082    914
Other (income) expense, net
   (65 )    (141 )




Total interest and other expense, net
   $ 1,017    $ 773



	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

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, we incurred interest expense of ~~$1.1~~$1.5 million primarily comprised of interest expense from our revolving credit facility, an average letter of credit balance of ~~$6.7~~$6.6 million under our revolving credit facility and an average unused line of credit balance of ~~$64.8~~$68.1 million under our revolving credit facility. This compares to interest expense of ~~$0.9~~$1.4 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2018, primarily comprised of interest expense from our revolving credit facility, an average letter of credit balance of ~~$6.4~~$6.6 million under our revolving credit facility and an average unused line of credit balance of ~~$63.4~~$63.2 million under our revolving credit facility.

PROVISION FOR INCOME TAXES

We recorded income tax ~~expense~~benefit of ~~$2.3~~$1.2 million for the three months ended ~~March 31,~~June 30, 2019, compared to income tax expense of ~~$1.4~~$1.0 million for the three months ended ~~March 31,~~June 30, 2018. For the three months ended June 30, 2019 and 2018, our income tax expense was offset by benefits of $4.0 million and $1.8 million, respectively, associated with the recognition of previously unrecognized tax benefits.

We recorded income tax expense of ~~$4.2~~$3.0 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared to income tax expense of ~~$33.6~~$34.6 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2018.

For the ~~six~~nine months ended ~~March 31,~~June 30, 2019 and 2018, our income tax expense was offset by benefits of $4.0 million and $1.8 million, respectively, associated with the recognition of previously unrecognized tax benefits.

For the nine months ended June 30, 2018, our income tax expense included a ~~preliminary~~ charge of $31.5 million tore-measure our deferred tax assets and liabilities to reflect the impact of the new statutory tax rate enacted during the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The Company completed its accounting for the income tax effects of the Tax Cuts and Jobs Act and fully recorded the impact in the year ended September 30, 2018.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s discussion and analysis of financial condition and results of operations is based upon our Condensed Consolidated Financial Statements included in this report on Form10-Q, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of our Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist as of the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses recognized during the periods presented. We review all significant estimates affecting our Condensed Consolidated Financial Statements on a recurring basis and record the effect of any necessary adjustments prior to their publication. Judgments and estimates are based on our 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.

BACKLOG

   March 31,
2019    December 31,
2018    September 30,
2018    June 30,
2018
Remaining performance obligations
   $ 424    $ 407    $ 326    $ 289
Agreements without an enforceable obligation⁽¹⁾
   149    131    156    103








Backlog
   $ 573    $ 538    $ 482    $ 392

~~(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.



	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.

Backlog is a measure of revenue that we expect to recognize from work that has yet to be performed on uncompleted contracts and from work that has been contracted but has not started, exclusive of short-term projects. While all of our backlog is supported by documentation from customers, backlog is not a guarantee of future revenues, as contractual commitments may change and our performance may vary. Not all of our work is performed under contracts included in backlog; for example, most of the apparatus repair work that is completed by our Infrastructure Solutions segment is performed under master service agreements on an as needed basis. Additionally, electrical installation services for single-family housing at our Residential segment is completed on a short-term basis and is therefore excluded from backlog. In addition, certain service work is performed under master service agreements on anas-needed basis and is therefore excluded from backlog.Our backlog has increased from $482 million at September 30, 2018, to ~~$573~~ $546
million at ~~March 31,~~June 30, 2019.

WORKING CAPITAL

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, working capital exclusive of cash increased by ~~$12.1~~$13.6 million from September 30, 2018, reflecting a ~~$10.3~~$35.5 million increase in current assets excluding cash and a ~~$1.8~~$21.8 million ~~decrease~~increase in current liabilities during the ~~period.~~

period, reflecting a continued investment in growing our business.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, our current assets exclusive of cash increased to ~~$246.8~~$271.9 million, as compared to $236.4 million as of September 30, 2018. The increase primarily relates to a ~~$9.4~~$24.9 million increase in accounts ~~receivable.~~receivable, in connection with growth in our business. Days sales outstanding decreased to 6061 at ~~March 31,~~June 30, 2019, from 62 at September 30, 2018. While the rate of collections may vary, our typically secured position, resulting from our ability in general to secure liens against our customers’ overdue receivables, offers some protection that collection will occur eventually to the extent that our security retains value.

During the ~~six~~nine months ended ~~March 31,~~June 30, 2019, our total current liabilities ~~decreased~~increased by ~~$1.8~~$21.8 million to ~~$162.6~~$186.3 million, compared to $164.4 million as of September 30, 2018, primarily related to ~~a decrease~~an increase in ~~both~~ accounts payable and accrued liabilities ~~and Billings~~ in ~~excess~~connection with the growth of ~~costs and estimated earnings.~~

our business.

Surety

We believe the bonding capacity presently provided by our sureties is adequate for our current operations and will be adequate for our operations for the foreseeable future. As of ~~March 31,~~June 30, 2019, the estimated cost to complete our bonded projects was approximately ~~$77.0~~$89.8 million.

LIQUIDITY AND CAPITAL RESOURCES

The Revolving Credit Facility

We maintain a $100 million revolving credit facility with Wells ~~Fargo.~~Fargo that matures August 9, 2021, pursuant to a Second Amended and Restated Credit and Security Agreement with Wells Fargo dated as of April 10, 2017, which was amended on July 14, 2017, August 2, 2017, ~~and~~ July 23, 2018 and May 17, 2019 (as amended, the “Amended Credit Agreement”).

The Fourth Amendment to the Second Amended and Restated Credit and Security Agreement, which was entered into on May 20, 2019, permits the Company to repurchase 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 previous share repurchase authorization) not to exceed $25.0 million.

The Amended Credit Agreement contains customary affirmative, negative and financial covenants as well as events of default.

As of ~~March 31,~~June 30, 2019, we were in compliance with the financial covenants under the Amended Credit Agreement, requiring that we maintain:

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).

At ~~March 31,~~June 30, 2019, our Liquidity was ~~$87.9~~$98.1 million, our Excess Availability was ~~$71.7~~$85.0 million (or greater than 50% of minimum Liquidity), and our Fixed Charge Coverage Ratio was ~~6.0:~~4.7:1.0. Because our Excess Availability at ~~March 31,~~June 30, 2019, exceeded $30 million, we were not required to comply with minimum EBITDA financial covenant of the Amended Credit Agreement, which would have required that we

have a minimum EBITDA for the four quarters ended ~~March 31,~~June 30, 2019, of $35 million. Our EBITDA, as defined in the Amended Credit Agreement for the four quarters ended ~~March 31,~~June 30, 2019, was ~~$48.2~~$48.7 million.

If in the future our Liquidity falls below $30 million (or Excess Availability falls below 50% or our minimum Liquidity), our Fixed Charge Coverage Ratio is less than 1.1:1.0, we fail to meet our minimum EBITDA requirement when it is required to be tested, or if we otherwise fail to perform or otherwise comply with certain of our covenants or other agreements under the Amended Credit Agreement, it would result in an event of default under the Amended Credit Agreement, which could result in some or all of our indebtedness becoming immediately due and payable.

At ~~March 31,~~June 30, 2019, we had $6.6 million in outstanding letters of credit with Wells Fargo and outstanding borrowings of ~~$20.2~~$10.4 million.

Operating Activities

Our cash flow from operations is not only influenced by cyclicality, demand for our services, operating margins and the type of services we provide, but can also be influenced by working capital needs such as the timing of our receivable collections. Working capital needs are generally lower during our fiscal first and second quarters due to the seasonality that we experience in many regions of the country; however a seasonal decline in working capital may be offset by needs associated with higher growth or acquisitions.

Operating activities provided net cash of ~~$9.4~~$20.3 million during the ~~six~~nine months ended ~~March 31,~~June 30, 2019, as compared to ~~$11.2~~$5.0 million of net cash provided in the ~~six~~nine months ended ~~March 31,~~June 30, 2018. The ~~decrease~~increase in operating cash flow resulted primarily from an increase in earnings, partly offset by an increase in working capital ~~at our Commercial & Industrial and Infrastructure Solutions segments,~~ in support of ~~growth in these businesses.~~

our growth.

Investing Activities

Net cash used in investing activities was ~~$3.9~~$5.1 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2019, compared with ~~$2.4~~$9.3 million for the ~~six~~nine months ended ~~March 31,~~June 30, 2018. We used cash of ~~$3.9~~$5.2 million for purchases of fixed assets in the ~~six~~nine months ended ~~March 31,~~June 30, 2019. For the ~~six~~nine months ended ~~March 31,~~June 30, 2018, we used ~~$2.3~~$3.4 million of cash for the purchase of fixed ~~assets.~~

assets, and $6.0 in connection with a business combination.

Financing Activities

Net cash used in financing activities for the ~~six~~nine months ended ~~March 31,~~June 30, 2019 was ~~$15.6~~$28.3 million, compared with ~~$1.3~~$2.3 million in the ~~six~~nine months ended ~~March 31,~~June 30, 2018. For the ~~six~~nine months ended ~~March 31,~~June 30, 2019, we used ~~$10.0~~$42.3 million to repay a portion of our revolving credit ~~facility.~~facility, partly offset by $22.5 of additional borrowings. We also used ~~$5.4~~$8.3 million to repurchase our shares to satisfy statutory withholding requirements upon the vesting of employee stock compensation, as well as in conjunction with our stock repurchase plan. For the ~~six~~nine months ended ~~March 31,~~June 30, 2018, we used ~~$1.2~~$2.1 million to repurchase our shares to satisfy statutory withholding requirements upon the vesting of employee stock compensation, as well as ~~in conjunction with~~market repurchases under our stock repurchase plan.

Stock Repurchase Program

~~Our~~

In 2015, our Board of Directors ~~has~~ authorized a stock repurchase program for the purchase from time to time of up to 1.5 million shares of the Company’s common ~~stock.~~stock, and on May 2, 2019 authorized the repurchase of up to an additional 1.0 million shares of our common stock under the stock repurchase program. Share purchases are made for cash in open market transactions at prevailing market prices or in privately 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 repurchased ~~235,954~~398,947 shares pursuant to this program during the ~~six~~nine months ended ~~March 31,~~June 30, 2019. On May 2, 2019, our Board of Directors authorized, subject to consent of the lenders under our credit facility, the repurchase of up to an additional 1.0 million shares of our common stock under the stock repurchase program.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

There have been no material changes in our contractual obligations and commitments from those disclosed in our Annual Report on Form10-K for the fiscal year ended September 30, 2018.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Management is actively involved in monitoring exposure to market risk and continues to develop and utilize appropriate risk management techniques. Our exposure to significant market risks includes fluctuations in labor costs and commodity prices for copper, aluminum, steel and fuel. Commodity price risks may have an impact on our results of operations due to the fixed price nature of many of our contracts. We are also exposed to interest rate risk with respect to our outstanding debt obligations on the Amended Credit Agreement. For additional information see“~~Disclosure~~ “Disclosure Regarding Forward-Looking ~~Statements~~”Statements” in Part I of this Quarterly Report onForm 10-Q and our risk factors in Part I, Item 1A. “Risk ~~Factors~~”Factors” in our Annual Report on Form10-K for the fiscal year ended September 30, 2018.

Commodity Risk

Our exposure to significant market risks includes fluctuations in commodity prices for copper, aluminum, steel and fuel. Commodity price risks may have an impact on our results of operations due to the fixed nature of many of our contracts. Over the long-term, we expect to be able to pass along a portion of these costs to our customers, as market conditions in the construction industry will allow. The Company has not entered into any commodity price risk hedging instruments.

Interest Rate Risk

We are subject to interest rate risk on our floating interest rate borrowings on the Amended Credit Agreement. If LIBOR were to increase, our interest payment obligations on outstanding borrowings would increase, having a negative effect on our cash flow and financial condition. We currently do not maintain any hedging contracts that would limit our exposure to variable rates of interest when we have outstanding borrowings. Floating rate debt, where the interest rate fluctuates periodically, exposes us to short-term changes in market interest rates.

All of the long-term debt outstanding under our revolving credit facility is structured on floating interest rate terms. A one percentage point increase in the interest rates on our long-term debt outstanding under our revolving credit facility as of ~~March 31,~~June 30, 2019, would cause a ~~$0.2~~$0.1 millionpre-tax annual increase in interest expense.

Item 4. Controls and Procedures

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules13a-15 and15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Disclosure Controls and Procedures

In accordance withRules 13a-15 and15d-15 of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2019, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

For information regarding legal proceedings, see Note 13 ~~“Commitments~~, “Commitments and Contingencies – Legal Matters” in the Notes to our Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form10-Q, which is incorporated herein by reference.

Item 1A.Risk Factors

There have been no material changes to the risk factors disclosed under Part 1,I, Item 1A. “Risk Factors”in our Annual Report on Form10-K for the fiscal year ended September 30, 2018.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of common stock of the Company made during the three months ended ~~March 31,~~June 30, 2019:

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 March 31, 2019
January 1, 2019 – January 31, 2019
   147,617    $ 16.61    147,617    531,054
February 1, 2019 – February 28, 2019
   40,103    $ 17.00    40,103    490,951
March 1, 2019 – March 31, 2019
   3,722    $ 17.65    2,101    488,850








Total
   191,442    $ 16.71    189,821    488,850



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. During the quarter ended March 31, 2019, 1,621 shares were surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of performance stock units issued to employees.

(2)

In 2015, our Board of Directors authorized a stock repurchase program for the purchase of up to 1.5 million shares of the Company’s common stock from time to ~~time. On~~time, and on May 2, 2019, ~~our Board of Directors~~ authorized ~~subject to consent of the lenders under our credit facility,~~ the repurchase of up to an additional 1.0 million shares of the Company’s common stock under the stock repurchase program.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

None.

Item 5.Other Information

None.

Item 6.Exhibits


~~Exhibit~~ ~~No.~~		~~Description~~

Exhibit No.	Description
3.1 —		Second Amended and Restated Certificate of Incorporation of IES Holdings, Inc., as amended by the Certificate of Amendment thereto, effective May 24, 2016 (composite). (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form10-Q filed on August 8, 2016)

3.2 —		Certificate of Designation of Series A Junior Participating Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form8-K filed on January 28, 2013)

3.3 —		Amended and Restated Bylaws of IES Holdings, Inc., effective May 24, 2016. (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form8-K filed on May 24, 2016)


~~Exhibit~~ ~~No.~~		~~Description~~

4.1 —		Specimen common stock certificate. (Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report onForm 10-K filed on December 9, 2016)

4.2 —		Tax Benefit Protection Plan Agreement by and between IES Holdings, Inc. and American Stock Transfer & Trust Company, LLC, as Rights Agent, dated as of November 8, 2016, including the form of Rights Certificate and Summary of Stockholder Rights Plan attached thereto as Exhibits A and B, respectively. (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form8-K filed on November 9, 2016)

10.1 —		~~Third~~Second Amendment, dated as of ~~July 23, 2018,~~May 1, 2019, to Sublease Agreement, dated as of March 29, 2012 and amended as of March 31, 2016, between Tontine Associates, L.L.C. and IES Management ROO, L.P. (Incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2019)
10.2 —	Fourth Amendment, dated as of May 20, 2019, to Second Amended and Restated Credit and Security Agreement, dated as of April 10, 2017, by and among IES Holdings, Inc., each of the other Borrowers and Guarantors named therein and Wells Fargo Bank, National Association. ~~(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form8-K~~ ~~filed on July 23, 2018)~~

~~10.2 *—~~		~~Form of Phantom Stock Unit Award under the Company’s Amended and Restated 2006 Equity Incentive Plan (as of February 9, 2016), dated February 6, 2019.~~⁽¹⁾

~~10.3 *—~~		~~IES Holdings, Inc. Short-Term Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed~~ ~~March, 5, 2019)~~

~~10.4 *—~~		~~IES Holdings, Inc. Long-Term Incentive Plan Annual Grant Program. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K filed~~ ~~March, 5, 2019)~~

~~10.5* —~~		~~Form of Cumulative Income Restricted Stock Award Agreement under the Company’s 2006 Equity Incentive Plan (as of February 9, 2016), dated March 4, 2019.~~⁽¹⁾

~~10.6* —~~		Time-Based Restricted Stock Award Agreement, dated as of March 4, 2019, by and between IES Holdings, Inc. and Gary S. Matthews, under the Company’s Amended and Restated 2006 Equity Incentive Plan (as of February 9, 2016).⁽¹⁾

~~10.7* —~~		First Stock Price-Based Restricted Stock Award Agreement, dated as of March 4, 2019, by and between IES Holdings, Inc. and Gary S. Matthews, under the Company’s Amended and Restated 2006 Equity Incentive Plan (as of February 9, 2016).⁽¹⁾

~~10.8* —~~		Second Stock Price-Based Restricted Stock Award Agreement, dated as of March 4, 2019, by and between IES Holdings, Inc. and Gary S. Matthews, under the Company’s Amended and Restated 2006 Equity Incentive Plan (as of February 9, 2016).⁽¹⁾

~~10.9 *—~~		~~Employment Agreement between IES Holdings, Inc. and Gary S. Matthews, dated as of February 28, 2019.~~⁽¹⁾

~~10.10* —~~		~~Transition Agreement and Release between IES Holdings, Inc. and Robert W. Lewey, dated as of March 9, 2019.~~⁽¹⁾

~~10.11* —~~		~~Consulting Fee Agreement between IES Holdings, Inc. and Robert W. Lewey, dated as of March 9, 2019.~~⁽¹⁾

~~10.12 —~~		~~Second Amendment, dated as of May 1, 2019, to Sublease Agreement, dated as of March 29, 2012 and amended as of March 31, 2016, between Tontine Associates, L.L.C. and IES Management ROO, LP.~~⁽¹⁾

31.1 —		Rule13a-14(a)/15d-14(a) Certification of Gary S. Matthews, Chief Executive Officer⁽¹⁾

31.2 —		Rule13a-14(a)/15d-14(a) Certification of Tracy A. McLauchlin, Senior Vice President, Chief Financial Officer and Treasurer⁽¹⁾


~~Exhibit~~ ~~No.~~		~~Description~~

32.1 —		Section 1350 Certification of Gary S. Matthews, Chief Executive Officer⁽²⁾

32.2 —		Section 1350 Certification of Tracy A. McLauchlin, Senior Vice President, Chief Financial Officer and Treasurer⁽²⁾



~~(1)~~101.INS		XBRL Instance Document⁽¹⁾

~~(1)~~101.SCH		XBRL Schema Document⁽¹⁾

~~(1)~~101.LAB		XBRL Label Linkbase Document⁽¹⁾

~~(1)~~101.PRE		XBRL Presentation Linkbase Document⁽¹⁾

~~(1)~~101.DEF		XBRL Definition Linkbase Document⁽¹⁾

~~(1)~~101.CAL		XBRL Calculation Linkbase Document⁽¹⁾


(1)	Filed herewith.

(2)	Furnished herewith.

*	~~Management contract or compensatory plan or arrangement.~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on ~~May 6,~~August 2, 2019.

IES HOLDINGS, INC.



~~By:~~
	By:	/s/ TRACY A. MCLAUCHLIN
		Tracy A. McLauchlin
		Senior Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer and Authorized Signatory)


	March 31, 2019			September 30, 2018
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	16,158		$	26,247
Accounts receivable:
Trade, net of allowance of $1,015 and $868, respectively		160,946			151,578
Retainage		22,904			24,312
Inventories		23,729			20,966
Costs and estimated earnings in excess of billings		28,293			31,446
Prepaid expenses and other current assets		10,897			8,144

Total current assets		262,927			262,693

Property and equipment, net		26,520			25,364
Goodwill		50,622			50,702
Intangible assets, net		28,459			30,590
Deferred tax assets		43,081			46,580
Othernon-current assets		5,662			6,065

Total assets	$	417,271		$	421,994

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses		129,704			130,591
Billings in excess of costs and estimated earnings		32,932			33,826

Total current liabilities		162,636			164,417

Long-term debt		19,672			29,564
Othernon-current liabilities		3,655			4,374

Total liabilities		185,963			198,355

Noncontrolling interest		3,163			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 21,381,847 and 21,205,536 outstanding, respectively		220			220
Treasury stock, at cost, 667,682 and 843,993 shares, respectively		(8,443	)		(8,937	)
Additionalpaid-in capital		191,579			196,810
Retained earnings		44,789			32,314

Total stockholders’ equity		228,145			220,407

Total liabilities and stockholders’ equity	$	417,271		$	421,994


	Three Months Ended March 31,
	2019			2018
Revenues	$	256,914		$	205,677
Cost of services		213,679			171,837

Gross profit		43,235			33,840
Selling, general and administrative expenses		35,070			29,647
Contingent consideration		(149	)		71
Loss (gain) on sale of assets		98			(20	)

Operating income		8,216			4,142

Interest and other (income) expense:
Interest expense		535			473
Other (income) expense, net		(112	)		(43	)

Income from operations before income taxes		7,793			3,712
Provision for income taxes		2,336			1,425

Net income		5,457			2,287

Net (income) loss attributable to noncontrolling interest		32			(66	)

Comprehensive income attributable to IES Holdings, Inc.	$	5,489		$	2,221

Earnings per share attributable to IES Holdings, Inc.:
Basic	$	0.26		$	0.11
Diluted	$	0.26		$	0.11
Shares used in the computation of earnings per share:
Basic		21,139,096			21,182,268
Diluted		21,379,746			21,440,570


	Six Months Ended March 31,
	2019			2018
Revenues	$	500,756		$	403,977
Cost of services		415,920			337,073

Gross profit		84,836			66,904
Selling, general and administrative expenses		67,156			59,736
Contingent consideration		(115	)		71
Loss (gain) on sale of assets		95			(34	)

Operating income		17,700			7,131

Interest and other (income) expense:
Interest expense		1,082			914
Other (income) expense, net		(65	)		(141	)

Income from operations before income taxes		16,683			6,358
Provision for income taxes		4,243			33,584

Net income (loss)		12,440			(27,226	)

Net income attributable to noncontrolling interest		(67	)		(122	)

Comprehensive income (loss) attributable to IES Holdings, Inc.	$	12,373		$	(27,348	)

Earnings (loss) per share attributable to IES Holdings, Inc.:
Basic	$	0.58		$	(1.29	)
Diluted	$	0.58		$	(1.29	)
Shares used in the computation of earnings (loss) per share:
Basic		21,187,834			21,189,641
Diluted		21,424,522			21,189,641


	Three Months Ended March 31, 2019
	Common Stock				Treasury Stock						APIC			Retained Earnings		Total Stockholders’ Equity
	Shares		Amount		Shares			Amount			APIC			Retained Earnings		Total Stockholders’ Equity
BALANCE, December 31, 2018		22,049,529	$	220		(763,426	)	$	(8,896	)	$	194,607		$	39,300	$	225,231
Issuances under compensation plans		—		—		3,991			71			(71	)		—		—
Grants under compensation plan		—		—		283,195			3,582			(3,582	)		—		—
Acquisition of treasury stock		—		—		(191,442	)		(3,200	)		—			—		(3,200	)
Non-cash compensation		—		—		—			—			625			—		625
Net income attributable to IES Holdings, Inc.		—		—		—			—			—			5,489		5,489

BALANCE, March 31, 2019		22,049,529	$	220		(667,682	)	$	(8,443	)	$	191,579		$	44,789	$	228,145


	Three Months Ended March 31, 2018
	Common Stock				Treasury Stock						APIC			Retained Earnings		Total Stockholders’ Equity
	Shares		Amount		Shares			Amount			APIC			Retained Earnings		Total Stockholders’ Equity
BALANCE, December 31, 2017		22,049,529	$	220		(710,784	)	$	(6,881	)	$	197,312		$	16,858	$	207,509
Grants under compensation plans		—		—		250			2			(2	)		—		—
Acquisition of treasury stock		—		—		(79,817	)		(1,229	)		—			—		(1,229	)
Non-cash compensation		—		—		—			—			(475	)		—		(475	)
Increase in noncontrolling interest		—		—		—			—			—			44		44
Net income attributable to IES Holdings, Inc.		—		—		—			—			—			2,221		2,221

BALANCE, March 31, 2018		22,049,529	$	220		(790,351	)	$	(8,108	)	$	196,835		$	19,123	$	208,070


	Six Months Ended March 31, 2019
	Common Stock				Treasury Stock						APIC			Retained Earnings		Total Stockholders’ Equity
	Shares		Amount		Shares			Amount			APIC			Retained Earnings		Total Stockholders’ Equity
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		—		—		(323,563	)		(5,411	)		—			—		(5,411	)
Non-cash compensation		—		—		—			—			674			—		674
Net income attributable to IES Holdings, Inc.		—		—		—			—			—			12,373		12,373

BALANCE, March 31, 2019		22,049,529	$	220		(667,682	)	$	(8,443	)	$	191,579		$	44,789	$	228,145


	Six Months Ended March 31, 2018
	Common Stock				Treasury Stock						APIC			Retained Earnings			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount			APIC			Retained Earnings			Total Stockholders’ Equity
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		—		—		(79,817	)		(1,230	)					—			(1,230	)
Options exercised		—		—		1,500			15			(4	)		—			11
Non-cash compensation		—		—		—			—			(111	)		—			(111	)
Increase in noncontrolling interest		—		—		—			—			—			44			44
Net loss attributable to IES Holdings, Inc.		—		—		—			—			—			(27,348	)		(27,348	)

BALANCE, March 31, 2018		22,049,529	$	220		(790,351	)	$	(8,108	)	$	196,835		$	19,123		$	208,070


	Six Months Ended March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	12,440		$	(27,226	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Bad debt expense		248			96
Deferred financing cost amortization		156			142
Depreciation and amortization		4,846			4,269
Loss (gain) on sale of assets		95			(34	)
Non-cash compensation expense		674			(111	)
Deferred income taxes		4,243			33,584
Changes in operating assets and liabilities:
Accounts receivable		(9,616	)		14,945
Inventories		(2,873	)		(665	)
Costs and estimated earnings in excess of billings		3,152			(1,921	)
Prepaid expenses and other current assets		(764	)		97
Othernon-current assets		(1,370	)		(52	)
Accounts payable and accrued expenses		(144	)		(10,081	)
Billings in excess of costs and estimated earnings		(948	)		(2,098	)
Othernon-current liabilities		(736	)		214

Net cash provided by operating activities		9,403			11,159

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(3,929	)		(2,327	)
Proceeds from sale of assets		7			94
Cash paid in conjunction with business combinations		—			(175	)

Net cash used in investing activities		(3,922	)		(2,408	)
			��
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of debt		122			68
Repayments of debt		(10,144	)		(109	)
Distribution to noncontrolling interest		(137	)		(69	)
Purchase of treasury stock		(5,411	)		(1,229	)
Issuance of shares		—			11

Net cash used in financing activities		(15,570	)		(1,328	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(10,089	)		7,423
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of period		26,247			28,290

CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	$	16,158		$	35,713

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	1,008		$	788
Cash paid for income taxes (net)	$	523		$	1,456


	Three Months Ended March 31,				Six Months Ended March 31,
	2019		2018		2019		2018
Commercial & Industrial	$	79,975		65,589		152,558		118,591
Communications		70,437		50,244		139,762		104,703

Infrastructure Solutions
Industrial Services		12,145		10,404		24,368		21,457
Custom Power Solutions		22,305		13,462		39,561		24,094

Total		34,450		23,866		63,929		45,551

Residential
Single-family		51,492		43,594		101,968		88,208
Multi-family and Other		20,560		22,384		42,539		46,924

Total		72,052		65,978		144,507		135,132

Total Revenue	$	256,914	$	205,677	$	500,756	$	403,977


	Three Months Ended March 31, 2019
	Commercial & Industrial		Communications		Infrastructure Solutions		Residential		Total
Fixed-price	$	76,467	$	48,602	$	30,130	$	72,052	$	227,251
Time-and-material		3,508		21,835		4,320		—		29,663

Total revenue	$	79,975	$	70,437	$	34,450	$	72,052	$	256,914


	Three Months Ended March 31, 2018
	Commercial & Industrial		Communications		Infrastructure Solutions		Residential		Total
Fixed-price	$	58,183	$	37,344	$	20,636	$	65,978	$	182,141
Time-and-material		7,406		12,900		3,230		—		23,536

Total revenue	$	65,589	$	50,244	$	23,866	$	65,978	$	205,677


	Six Months Ended March 31, 2019
	Commercial & Industrial		Communications		Infrastructure Solutions		Residential		Total
Fixed-price	$	142,297	$	97,431	$	57,641	$	144,507	$	441,876
Time-and-material		10,261		42,331		6,288		—		58,880

Total revenue	$	152,558	$	139,762	$	63,929	$	144,507	$	500,756


	Six Months Ended March 31, 2018
	Commercial & Industrial		Communications		Infrastructure Solutions		Residential		Total
Fixed-price	$	107,103	$	81,500	$	40,309	$	135,132	$	364,044
Time-and-material		11,488		23,203		5,242		—		39,933

Total revenue	$	118,591	$	104,703	$	45,551	$	135,132	$	403,977


	March 31, 2019
	Total Fair Value			Quoted Prices (Level 1)			Significant Unobservable Inputs (Level 3)
Executive savings plan assets	$	738		$	738		$	—
Executive savings plan liabilities		(623	)		(623	)		—
Contingent consideration		(270	)		—			(270	)

Total	$	(155	)	$	115		$	(270	)


	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	)


	Contingent Consideration Agreements
Fair value at September 30, 2018	$	680
Settlements		(295	)
Net adjustments to fair value		(115	)

Fair value at March 31, 2019	$	270


	Estimated Useful Lives (in Years)		March 31, 2019
	Estimated Useful Lives (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trademarks/trade names		5 - 20	$	5,084	$	1,053	$	4,031
Technical library		20		400		111		289
Customer relationships		6 - 15		33,539		9,460		24,079
Non-competition arrangements		5		40		5		35
Backlog		1		378		358		20
Construction contracts		1		2,184		2,179		5

Total intangible assets			$	41,625	$	13,166	$	28,459


	Three Months Ended March 31,
	2019			2018
	(In thousands)
Interest expense	$	456		$	402
Deferred financing charges		79			71

Total interest expense		535			473
Other (income) expense, net		(112	)		(43	)

Total interest and other expense, net	$	423		$	430


	March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Remaining performance obligations	$	424	$	407	$	326	$	289
Agreements without an enforceable obligation⁽¹⁾		149		131		156		103

Backlog	$	573	$	538	$	482	$	392


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 March 31, 2019
January 1, 2019 – January 31, 2019		147,617	$	16.61		147,617		531,054
February 1, 2019 – February 28, 2019		40,103	$	17.00		40,103		490,951
March 1, 2019 – March 31, 2019		3,722	$	17.65		2,101		488,850

Total		191,442	$	16.71		189,821		488,850