Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jun. 30, 2017 | Aug. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | IES Holdings, Inc. | |
Entity Central Index Key | 1,048,268 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,434,344 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
TradingSymbol | IESC |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Sep. 30, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 23,905 | $ 32,961 |
Restricted Cash | 0 | 260 |
Accounts receivable: | ||
Trade, net of allowance of $729 and $736, respectively | 132,878 | 124,368 |
Retainage | 24,587 | 20,135 |
Inventories | 18,986 | 13,236 |
Costs and estimated earnings in excess of billings | 18,705 | 15,554 |
Prepaid expenses and other current assets | 4,709 | 3,214 |
Total current assets | 223,770 | 209,728 |
Property and equipment, net | 24,642 | 15,694 |
Goodwill | 45,033 | 39,936 |
Intangible assets, net | 31,500 | 31,723 |
Deferred tax assets | 88,867 | 93,549 |
Other non-current assets | 3,345 | 3,710 |
Total assets | 417,157 | 394,340 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 116,249 | 108,822 |
Billings in excess of costs and estimated earnings | 30,667 | 24,229 |
Total current liabilities | 146,916 | 133,051 |
LONG-TERM DEBT | 29,407 | 29,257 |
OTHER NON-CURRENT LIABILITIES | 4,433 | 6,832 |
Total liabilities | 180,756 | 169,140 |
Noncontrolling interest | 1,713 | 1,795 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 100,000,000 shares authorized; 22,049,529 shares issued and 21,434,086 and 21,456,539 outstanding, respectively | 220 | 220 |
Treasury stock, at cost, 615,443 and 592,990 shares, respectively | (5,399) | (4,781) |
Additional paid-in capital | 196,542 | 195,221 |
Retained earnings | 43,325 | 32,745 |
Total stockholders' equity | 234,688 | 223,405 |
Total liabilities and stockholders' equity | $ 417,157 | $ 394,340 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Sep. 30, 2016 |
Consolidated Balance Sheets [Abstract] | ||
Trade, allowance | $ 729 | $ 736 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 22,049,529 | 22,049,529 |
Common stock, shares outstanding | 21,434,086 | 21,456,539 |
Treasury stock, shares | 615,443 | 592,990 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenues | $ 208,323 | $ 179,599 | $ 604,163 | $ 490,347 |
Cost of services | 172,925 | 145,602 | 501,769 | 400,905 |
Gross profit | 35,398 | 33,997 | 102,394 | 89,442 |
Selling, general and administrative expenses | 30,771 | 25,716 | 89,085 | 72,494 |
Contingent Consideration Expense | (33) | 66 | 50 | 332 |
Loss (gain) on sale of assets | (55) | 34 | (68) | 811 |
Income from operations | 4,715 | 8,181 | 13,327 | 15,805 |
Interest and other (income) expense: | ||||
Interest expense | 407 | 299 | 1,281 | 895 |
Other (income) expense, net | (46) | (17) | (94) | (49) |
Income from operations before income taxes | 4,354 | 7,899 | 12,140 | 14,959 |
Provision (benefit) for income taxes | (1,519) | (2,937) | 1,792 | (3,870) |
Net Income | 5,873 | 10,836 | 10,348 | 18,829 |
Net income attributable to noncontrolling interest | 5 | 31 | 72 | 31 |
Comprehensive income attributable to IES Holdings, Inc. | $ 5,868 | $ 10,805 | $ 10,276 | $ 18,798 |
Earnings per share attributable to IES Holdings, Inc.: | ||||
Earnings Per Share, Basic | $ 0.27 | $ 0.5 | $ 0.48 | $ 0.88 |
Earnings Per Share, Diluted | $ 0.27 | $ 0.5 | $ 0.48 | $ 0.87 |
Shares used in the computation of earnings per share | ||||
Basic | 21,300,716 | 21,297,898 | 21,295,254 | 21,280,469 |
Diluted | 21,556,118 | 21,456,634 | 21,550,804 | 21,412,343 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,348 | $ 18,829 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debt expense | 31 | 274 |
Deferred financing cost amortization | 229 | 263 |
Depreciation and amortization | 6,884 | 3,503 |
Loss (gain) on sale of assets | (68) | 832 |
Deferred Income Tax Expense (Benefit) | 494 | 0 |
Non-cash compensation expense | 1,329 | 645 |
Changes in operating assets and liabilities | ||
Accounts receivable | (1,593) | (8,039) |
Inventories | (3,919) | (208) |
Costs and estimated earnings in excess of billings | (3,151) | 2,964 |
Prepaid expenses and other current assets | (9,082) | (3,098) |
Other non-current assets | 350 | (1,314) |
Accounts payable and accrued expenses | 600 | 1,611 |
Billings in excess of costs and estimated earnings | 6,438 | 2,482 |
Other non-current liabilities | 1,312 | (4,840) |
Net cash provided by operating activities | 10,202 | 13,904 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (3,796) | (2,156) |
Proceeds from Sale of Property, Plant, and Equipment | 237 | 2,200 |
Consideration for acquisition, net of cash acquired | (14,659) | (59,698) |
Net cash used in investing activities | (18,218) | (59,654) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings of debt | 5,313 | 20,026 |
Repayments of debt | (5,328) | (112) |
Contingent Consideration Payment | (448) | 0 |
Distribution to Noncontrolling Interest | (153) | 0 |
Stock Options Exercised | 207 | 133 |
Purchase of treasury stock | (891) | (590) |
Change in restricted cash | 260 | (260) |
Net cash provided by (used in) financing activities | (1,040) | 19,197 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (9,056) | (26,553) |
CASH AND CASH EQUIVALENTS, beginning of period | 32,961 | 49,360 |
CASH AND CASH EQUIVALENTS, end of period | 23,905 | 22,807 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 1,108 | 651 |
Cash paid for income taxes | $ 2,285 | $ 1,288 |
Business
Business | 9 Months Ended |
Jun. 30, 2017 | |
Business [Abstract] | |
Description of the Business | 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 services : Communications – Nationwide provider of technology infrastructure products and services to large corporations and independent businesses. 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 infrastruct ure market. Infrastructure Solutions – Provider of electro-mechanical solutions for industrial operations. The words “IES”, the “Company”, “we”, “our”, and “us” refer to IES Holdings, Inc. and, except as otherwise specified herein, to our wholly-owned 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 Communications, Commercial & Industrial, 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 ma y 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 o ur 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 T he accompanying unaudited condensed consolidated financial statements include the accounts of IES, its 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 Form 10-K for the fiscal year ended September 30, 2016 . In the opi nion 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 per iods reported herein. Any such adjustments are of a normal recurring nature . Noncontrolling Interest In conjunction with our purchase of STR Mechanical, LLC (“STR”) during the third quarter of fiscal 2016, we acquired a controlling interest of 80 percent of the membership interests of STR. The remaining 20 percent interest, which was retained by the third party sellers, is identified in our financials as noncontrolling interest and is classified outside of permanent equity on our consolidated balance she et. See Note 13 – Business Combinations for further discussion. 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 duri ng 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 combination s and analyzing goodwill, investmen ts, intangible assets and long-lived asset impairments and adjustments, allowance for doubtful accounts receivable, stock-based compensation, reserves for legal matters, realizability of defer red tax assets, unrecognized tax benefits and self-insured claims liabilities and related reserves. Tax Rate For the nine months ended June 30, 2017 , our effective tax rate differed from the statutory tax rate directly resulting from a $ 3, 689 benefit associated with the reversal of a reserve previously established for an uncertain tax position. For the nine months ended June 30, 2016 , our effective tax rate differed from the statutory tax rate directly resulting from benefits of $ 5, 002 related to the release of a valuation allowance in connection with the acquisition of deferred tax liabilities of Technibus , Inc. (“ Technibus ”), Shanahan Mechanical and Electrical, Inc. (“Shanahan”), and Calumet Armature & Electric, LLC (“Calumet”). Revenue Recognition Revenue is generally recognized once the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery of the product has occurred or services have been rendered, (iii) the price of the product or service is fixed and determinable, and (iv) collectability is reasonably assured. Costs associated with these services are recognized within the period they are incurred. We recognize revenue on project contracts using the percentage of completion method. Project contracts generally provide that customers accept completion of progress to date and compensate us for services rendered measured in terms of units installed, hours expended or some other measure of progress. We recognize revenue on both signed co ntracts and change orders. A discussion of our treatment of claims and unapproved change orders is described later in this section. Percentage of completion for construction contracts is measured principally by the percentage of costs incurred and accrued to date for each contract to the estimated total cost for each contract at completion. We generally consider contracts to be substantially complete upon departure from the work site and acceptance by the customer. Contract costs include all direct material , labor and insurance costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. 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. During the three and nine months ended June 30, 2017 , we recorded expense of $ 2,476 and $ 3,68 5 , respectively, related to changes in estimates on two jobs in our Commercial & Industrial segment. The change in estimate relates to labor cost overruns primarily caused by the customer’s schedule acceleration. Provisions for total estimated losses on u ncompleted contracts are made in the period in which such losses are determined. The balances billed but not paid by customers pursuant to retainage provisions in project contracts will be due upon completion of the contracts and acceptance by the customer . Based on our experience, the retention balance at each balance sheet date will generally be collected within the subsequent fiscal year. Certain divisions in the Residential and Infrastructure Solutions segments use the completed contract method of acco unting because the duration of their contracts are short in nature. We recognize revenue on completed contracts when the project is complete and billable to the customer. Provisions for estimated losses on these contracts are recorded in the period such lo sses are determined. The current asset “Costs and estimated earnings in excess of billings” represents revenues recognized in excess of amounts billed which management believes will generally be billed and collected within the next twelve months. Also inc luded in this asset, from time to time, are claims and unapproved change orders which are amounts we are in the process of collecting from our customers or agencies for changes in contract specifications or design, contract change orders in dispute or unap proved as to scope and price, or other related causes of unanticipated additional contract costs. Claims are limited to costs incurred and are recorded at estimated realizable value when collection is probable and can be reasonably estimated. We do not rec ognize profits on project costs incurred in connection with claims. Claims made by us involve negotiation and, in certain cases, litigation. Such litigation costs are expensed as incurred. The current liability “Billi ngs in excess of costs and estimated ea rnings” represents billings in excess of revenues recognized. Costs and estimated earnings in excess of billings are amounts considered recoverable from customers based on different measures of performance, including achievement of specific milestones, com pletion of specified units or at the completion of the contract. Accounting Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”), issued ASU No. 2014-09, Revenue from Contracts with Customers, a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The standard also requires expanded disclosures surrounding revenue recognition. The effective date will be the first quarter of our fiscal year ended September 30, 2019. The standard allows for either full retrospective or modified retrospective adoption, and we currently plan to use the modified retro spective basis on the adoption date. We are continuing to evaluate the impact of the adoption of this standard on our consolidated financial statements. In particular, we continue to analyze areas including contract termination provisions, customer furnish ed materials, and accounting for change orders. However, we expect that we will continue to recognize revenues for most of our fixed-price contracts over time, as services are performed. We are also continuing to assess the necessary changes in processes and controls to meet the disclosure requirements of the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). Under ASU 2016-02, lessees will need to recognize a right-of-use asset and a lease liability for all of the ir leases, other than those that meet the definition of a short-term lease. ASU 2016-02 becomes effective for the fiscal year ended September 30, 2020. We are currently evaluating whether to early adopt the standard and what impact it will have on our cons olidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows, to standardize the classification of restricted cash and cash equivalents transactions on the statement of cash flows. The new standard is effective for interim and annual reporting periods beginning after December 15, 2017, although early adoption is permitted. We expect we will adopt this guidance at September 30, 2017. In January 2017, the FASB issued ASU 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. The new standard is effective for interim and annual reporting periods beginnin g after December 15, 2017. The prospective transition method will be required for this new guidance. Also in January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other. This update is intended to simplify the subsequent measurement of go odwill by eliminating the second step in the current two-step goodwill impairment test. This update is effective for public entities for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The prospective transition method will be required for this new guidance. In May 2017, the FASB issued ASU 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 pa yment award. This update is effective for interim and annual financial reporting periods beginning after December 15, 2017, although early adoption is permitted. The prospective transition method will be required for this new guidance. We do not expect ASUs 2016-18, 2017-01, 2017-04 or 2017-09 to have a material effect on our consolidated financial statements. Adoption of New Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (“ASU 2016-09”). ASU 2016-09 eliminates additional paid in capital pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. The accounting for an employee’s use of shares to satisfy the employer’s s tatutory income tax withholding obligation and the accounting for forfeitures is also changing. ASU 2016-09 is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We elected to early adopt ASU 2016-09 in the quart er ended December 31, 2016, which required us to reflect any adjustments as of October 1, 2016. We elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized, resulting in a cumulative effect adjustment of $ 58 to reduce retained earnings for the increase to stock compensation expense. We recorded a cumulative effect adjustment of $ 362 to increase retained earnings to recognize a deferred tax asset related to tax benefits which were not previously recognized, as the tax deduction related to stock compensation expense resulted in an increase to a net operating loss rather than a reduction to income tax payable. Amendments to the accounting for minimum statutory withholding tax requirements had no im pact to retained earnings as of October 1, 2016. In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows, to standardize the classification of certain transactions on the statement of cash flows. These transactions include contingent consider ation payments made after a business combination. We implemented the standard for the quarter ended March 31, 2017. The adoption had no impact on our statement of cash flows. |
Controlling Shareholder
Controlling Shareholder | 9 Months Ended |
Jun. 30, 2017 | |
Controlling Shareholder [Abstract] | |
Controlling Shareholder | 2 . CONTROLLING SHAREHOLDER At June 30, 2017 , Tontine Capital Partners, L.P. together with its affiliates (collectively, “Tontine”) was the Company’s controlling shareholder, owning approximately 58 % of the Company’s outstanding common stock according to a Schedule 13D/A filed with the SEC by Tontine on October 5, 2016. Accordingly, Tontine has the ability to exercise significant control over our affairs, including the election of directors and most actions requiring the approval of shareholders. While Tontine is subject to 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 To ntine at the time of registration. As long as the shelf registration statement remains effective, 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 state ment 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 chan ge 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 protect ion plan (the “NOL Rights Plan”). T he NOL Rights Plan was designed to deter an acquisition of the Company's stock in excess of a th reshold 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 ch ange 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 non-executive 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 the Board of Directors since February 2012, as non-executi ve Vice Chairman of the Board since November 2016 and as non-executive Chairman of the Board from January 2015 to November 2016. David B. Gendell is also an employee of Tontine. The Company is party to a sublease agreement with Tontine Associates, LLC, an affiliate of Tontine, for corporate office space in Greenwich, Connecticut. The lease was renewed for a three-year term in April 2016 with an increase in the monthly rent to $ 8 , reflecting the increase paid by Tontine Associates, LLC to its landlord and the Company’s increased use of the corporate office space. The lease has terms at market rates and payments by the Company are at a rate consistent with that paid by Tontine Assoc iates, LLC to its landlord. |
Debt
Debt | 9 Months Ended |
Jun. 30, 2017 | |
Debt [Abstract] | |
Debt | 3 . DEBT At June 30, 2017 and September 30, 2016 , our long-term debt of $ 29,407 and $ 29,257 , respectively, primarily relates to amounts drawn on our revolving credit facility. Our weighted-average annual interest rate on these borrowings was 3.04 % at June 30, 2017 , and 2.76 % at September 30, 2016 . At June 30, 2017 , we also had $ 6,493 in outstandin g letters of credit and total availability of $ 43,821 under this facility without violating our financial covenants. On April 10, 2017, we entered into an amendment and restatement to our revolving credit facility (the “Amended Credit Agreement”). Pursuant to the Amended Credit Agreement, our maximum revolver amount increased from $70,000 to $ 100,000 , and the maturity date of the revolving credit facility was extended from August 9, 2019 to August 9, 2021. The Amend ed Credit Agreement also modified our financial covenants by, among other items: implementing a new covenant that requires the Company to maintain a minimum EBITDA (as defined in the Amended Credit Agreement) that will be tested quarterly on a trailing twe lve month basis; increasing the minimum liquidity requirement applicable to the Company from 12.5 % to 30 % of the maximum revolver amount; raising the Company’s required fixed charge coverage ratio (the “FCCR”) to 1.1:1.0 from 1.0:1.0; and requiring that th e FCCR be tested quarterly regardless of the Company’s liquidity levels. The amendment and restatement did not include any changes to interest rates and continues to contain other customary affirmative, negative and financial covenants as well as events o f default. On July 14, 2017, and August 2, 2017 , we entered into amendments to the Amended Credit Agreement that, respectively, permitted certain transactions related to our acquisition of NEXT Electric, LLC (“NEXT”) and modified our minimum E BITDA requirement under the facility, among other things. See Note 14 – Subsequent Events for further discussion of these amendments. The Company was in compliance with all covenants under the Amended Credit Agreement at June 30, 2017 . At June 30, 2017 , the carrying value of amounts outstanding under the Amended Credit Agreement approximated fair value, as debt incurs interest at a variable rate. The fair value of the debt is classified as a level 2 measurement. |
Per Share Information
Per Share Information | 9 Months Ended |
Jun. 30, 2017 | |
Per Share Information [Abstract] | |
Per Share Information | 4 . PER SHARE INFORMATION The following tables reconcile the components of basic and diluted earnings per share for the three and nine months ended June 30, 2017 and 2016 : Three Months Ended June 30, 2017 2016 Numerator: Net income attributable to common shareholders of IES Holdings, Inc. $ 5,824 $ 10,747 Net income attributable to restricted shareholders of IES Holdings, Inc. 44 58 Net income attributable to IES Holdings, Inc. $ 5,868 $ 10,805 Denominator: Weighted average common shares outstanding — basic 21,300,716 21,297,898 Effect of dilutive stock options and non-vested restricted stock 255,402 158,736 Weighted average common and common equivalent shares outstanding — diluted 21,556,118 21,456,634 Earnings per share attributable to IES Holdings, Inc.: Basic $ 0.27 $ 0.50 Diluted $ 0.27 $ 0.50 Nine Months Ended June 30, 2017 2016 Numerator: Net income attributable to common shareholders of IES Holdings, Inc. $ 10,195 $ 18,641 Net income attributable to restricted shareholders of IES Holdings, Inc. 81 157 Net income attributable to IES Holdings, Inc. $ 10,276 $ 18,798 Denominator: Weighted average common shares outstanding — basic 21,295,254 21,280,469 Effect of dilutive stock options and non-vested restricted stock 255,550 131,874 Weighted average common and common equivalent shares outstanding — diluted 21,550,804 21,412,343 Earnings per share attributable to IES Holdings, Inc.: Basic $ 0.48 $ 0.88 Diluted $ 0.48 $ 0.87 For the three and nine months ended June 30, 2017 and 2016 , 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 . |
Operating Segments
Operating Segments | 9 Months Ended |
Jun. 30, 2017 | |
Operating Segments [Abstract] | |
Operating Segments | 5 . OPERATING SEGMENTS We manage and measure performance of our business in four distinct operating segments: Communications, Residential , Commercial & Industrial and Infrastructure Solutions . 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 expen ses and depreciation expense. Segment information for the three and nine months ended June 30, 2017 and 2016 is as follows: Three Months Ended June 30, 2017 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 57,081 $ 70,162 $ 58,778 $ 22,302 $ - $ 208,323 Cost of services 46,958 54,307 54,174 17,486 - 172,925 Gross profit 10,123 15,855 4,604 4,816 - 35,398 Selling, general and administrative 6,252 11,003 4,849 4,958 3,709 30,771 Contingent consideration - - - (33) - (33) (Gain) loss on sale of assets - 37 (4) (88) - (55) Income (loss) from operations $ 3,871 $ 4,815 $ (241) $ (21) $ (3,709) $ 4,715 Other data: Depreciation and amortization expense $ 187 $ 135 $ 329 $ 1,785 $ 70 $ 2,506 Capital expenditures $ 328 $ 170 $ 283 $ 124 $ - $ 905 Total assets $ 70,427 $ 51,995 $ 66,190 $ 103,323 $ 125,222 $ 417,157 Three Months Ended June 30, 2016 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 48,702 $ 56,867 $ 59,512 $ 14,518 $ - $ 179,599 Cost of services 40,487 43,388 51,882 9,845 - 145,602 Gross profit 8,215 13,479 7,630 4,673 - 33,997 Selling, general and administrative 5,185 9,237 4,771 3,248 3,275 25,716 Contingent Consideration - - - 66 - 66 Loss on sale of assets - - (17) 51 - 34 Income (loss) from operations $ 3,030 $ 4,242 $ 2,876 $ 1,308 $ (3,275) $ 8,181 Other data: Depreciation and amortization expense $ 153 $ 122 $ 410 $ 897 $ 74 $ 1,656 Capital expenditures $ 122 $ 393 $ 377 $ 109 $ 71 $ 1,072 Total assets $ 53,711 $ 40,008 $ 58,559 $ 92,559 $ 32,686 $ 277,523 Nine Months Ended June 30, 2017 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 172,058 $ 204,527 $ 168,006 $ 59,572 $ - $ 604,163 Cost of services 144,668 157,370 154,628 45,103 - 501,769 Gross profit 27,390 47,157 13,378 14,469 - 102,394 Selling, general and administrative 18,086 32,488 14,434 13,280 10,797 89,085 Contingent consideration - - - 50 - 50 Gain on sale of assets (1) 34 (11) (90) - (68) Income (loss) from operations $ 9,305 $ 14,635 $ (1,045) $ 1,229 $ (10,797) $ 13,327 Other data: Depreciation and amortization expense $ 532 $ 436 $ 983 $ 4,730 $ 203 $ 6,884 Capital expenditures $ 1,888 $ 517 $ 927 $ 261 $ 203 $ 3,796 Total assets $ 70,427 $ 51,995 $ 66,190 $ 103,323 $ 125,222 $ 417,157 Nine Months Ended June 30, 2016 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 128,813 $ 162,381 $ 158,923 $ 40,230 $ - $ 490,347 Cost of services 105,855 124,459 141,237 29,354 - 400,905 Gross profit 22,958 37,922 17,686 10,876 - 89,442 Selling, general and administrative 14,877 26,856 13,014 9,062 8,685 72,494 Contingent Consideration - - - 332 - 332 Loss on sale of assets - - (17) 828 - 811 Income (loss) from operations $ 8,081 $ 11,066 $ 4,689 $ 654 $ (8,685) $ 15,805 Other data: Depreciation and amortization expense $ 410 $ 364 $ 845 $ 1,674 $ 210 $ 3,503 Capital expenditures $ 685 $ 537 $ 563 $ 300 $ 71 $ 2,156 Total assets $ 53,711 $ 40,008 $ 58,559 $ 92,559 $ 32,686 $ 277,523 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 6 . STOCKHOLDERS’ EQUITY Equity Incentive Plan The Company’s 2006 Equity Incentive Plan, which was amended and restated effective February 9, 2016, (as amended and restated, the “2006 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 2006 Equity Incentive Plan, of which approximately 1,055,391 shares were av ailable for issuance at June 30, 2017 . Stock Repurchase Program 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. 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 Rule 10b5-1 trading plan, which allows repurchases under pre-set terms at times when the Company might otherwise b e 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 51,673 shares of our common stock during the three and nine months ended June 30, 2017 , in open market transactions at an average price of $ 15.68 per share. Treasury Stock During the nine months ended June 30, 2017 , we repurchased 4,575 shares of common stock from our employees to satisfy their minimum tax withholding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Plan and 51,673 shares of common stock on the open market pursuant to the repurchase program . During the nine months ended June 30, 2017 , we issued 1,545 unrestricted shares of common stock from treasury stock to members of our Board of Directors as part of their overall compensation, and 32,250 unrestricted shares of co mmon stock to satisfy the exercise of outstanding options for employees and directors. During the nine months ended June 30, 2016 , we repurchased 6,084 shares of common stock from our employees to satisfy their minimum tax withho lding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Pla n, 46,929 shares of common stock on the open market pursuant to our share repurchase program, and 7,500 shares of common s tock were forfeited by former employees and returned to treasury stock . The Company had 6,859 shares returned to treasury stock during the same period related to the satisfaction of an obligation in connection with a reconciliation of our shares of common stock offered in exchange for shares of MISCOR Group, Ltd. during our 2013 a c quisition of that company. During the nine months ended June 30, 2016 , we issued 4,714 unrestricted shares of common stock fr om treasury stock to members of our Board of Directors as part of their overall compensation, and 27,500 unrestricted shares to satisfy the exercise of outstanding options for employees and directors . Restricted Stock During the three months ended June 30, 2017 and 2016 , we recognized $ 133 and $ 130 , respectively, in compensation expense related to our restricted stock awards . During the nine months ended June 30, 2017 and 2016 , we recognized $ 406 and $ 392 , respectively, in compensation expense related to our restricted stock awards . At June 30, 2017 , t he unamortized compensation cost related to outstanding unvested restricted stock was $ 408 . Performance Cash Units Performance based phantom cash units (“PPCUs”) are a contractual right to cash payment of $ 20 dollars per PPCU. At June 30, 2017 , the Company had outstanding an aggregate of 30,000 PPCUs, which will generally become vested, if at all, upon achievement of certain specified performance objectives and continued performance of services through mid-December 2018 , each of which as of June 30, 2017 are dee med probable. During the three months ended June 30, 2017 , and 2016 , we recognized compensation expense of $ 59 and zero , respectively, related to these units. During the nine months ended June 30, 2017 , and 2016 , we recognized compensation expense of $ 252 and zero , respectively, related to these units. Phantom Stock Units Phantom stock units (“PSUs”) are primarily granted to the members of the Board of Directors as part of their overall compensation. These PSUs are paid via unrestricted stock grants to each director upon their departure from the Board of Directors. We record compensation expense for the full value of the grant on the date of grant. For the three months ended June 30, 2017 and 2016 , we recognized $ 41 and $ 34 , respectively, i n compensation expense related to these grants. During the nine months ended June 30, 2017 and 2016 , we recognized $ 125 and $ 102 , 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. The PPSUs will generally become vested, if at all, upon the achievement of certain speci fied performance objectives and continued performance of services through mid-December 2018, each of which as of June 30, 2017 are deemed probable . At June 30, 2017 , the Company has outstanding an aggregate of 4 0 8 ,000 three-year PPSUs. The vesting of t hese awards is subject to the achievement of specified levels of cumulative net income before taxes or specified stock price levels . During the three months ended June 30, 2017 and 2016 , we recognized compensation expense of $ 225 and $ 22 , respectively, related to these grants. For the nine months ended June 30, 2017 and 2016 , we recognized compensation expense of $ 753 and $ 65 , respec tively, related to these grants. Stock Options During the three months ended June 30, 2017 and 2016 , we recognized compensation expense of zero and $ 17 , respectively, related to our stock option awards. During the nine months ended June 30, 2017 and 2016 , we recognized compensation expense of $ 23 and $ 50 , respectively, related to our stock option awards. A t June 30, 2017 , the unamortized compensation cost related to outstanding unvested stock options was zero . |
Securities and Equity Investmen
Securities and Equity Investments | 9 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Cost And Equity Method Investments | 7 . 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. Additionally, we have a cost method investment in EnerTech Capital Partners II L.P. ( “EnerTech”). We estimate the fair value of our investment in EnerTech (Level 3) using quoted market prices for underlying publicly traded securities, and estimated enterprise values are determined using cash flow projections and market multiples of the und erlying non-public companies. Investment in EnerTech During the nine months ended June 30, 2017 , we collected a distribution of $ 361 , redu cing our carrying value. The following table presents the reconciliation of the carrying val ue and unrealized gains to the fair value of the investment in EnerTech as of June 30, 2017 and September 30, 2016 : June 30, September 30, 2017 2016 Carrying value $ 558 $ 919 Unrealized gains 171 159 Fair value $ 729 $ 1,078 At each reporting date, the Company performs evaluations of impairment for this investment to determine if any unrealized losses are other-than-temporary. There was no impairment as of June 30, 2017 or September 30, 2016 . |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Jun. 30, 2017 | |
Employee Benefit Plans [Abstract] | |
401(k) and Retirement Plans | 8 . EMPLOYEE BENEFIT PLANS 401(k) Plan The Company offers employees the opportunity to participate in its 401(k) savings plans. During the three months ended June 30, 2017 and 2016 , we recognized $ 312 and $ 247 , respectively, in matching expense . During the nine months ended June 30, 2017 and 2016 , we recognized $ 771 and $ 525 , 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 $ 815 recorded as of June 30, 2017 , and $ 875 as of September 30, 2016 , related to such plans. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 9 . 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 account ing 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 estimatio n methods could have a material effect on the estimated fair value. At June 30, 2017 , 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 contin gent consideration liabilities related to our acquisitions of Calu met in October 2015, Freeman Enclosure Systems, LLC and its affiliate Strategic Edge LLC (together, “Freeman”) in March 2017 , and Technical Services II, LLC (“Technical Services”) in June 2017. Financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 , a re summarized in the following table by the type of inputs applicable to the fair value measurements: June 30, 2017 Total Fair Value Quoted Prices (Level 1) Significant Unobservable Inputs (Level 3) Executive savings plan assets $ 649 $ 649 $ - Executive savings plan liabilities (537) (537) - Contingent consideration (1,347) - (1,347) Total $ (1,235) $ 112 $ (1,347) Financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 , are summarized in the following table by the type of inputs applicable to the fair value measurements: September 30, 2016 Total Fair Value Quoted Prices (Level 1) Significant Unobservable Inputs (Level 3) Executive savings plan assets $ 599 $ 599 $ - Executive savings plan liabilities (486) (486) - Contingent consideration (1,100) - (1,100) Total $ (987) $ 113 $ (1,100) In fiscal years 2016 and 2017, we entered into contingent consideration arrangements related to certain acquisitions . Please see Note 13 – Business Combinations for further discussion. At June 30, 2017 , we estimated the fair value of these contingent consideration liabilities at $ 1,347 . 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, 2016 $ 1,100 Issuances 732 Settlements (535) Net Adjustments to Fair Value 50 Fair Value at June 30, 2017 $ 1,347 |
Inventory
Inventory | 9 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure | 10 . INVENTORY Inventories consist of the following components: June 30, September 30, 2017 2016 Raw materials $ 3,354 $ 2,538 Work in process 5,031 4,158 Finished goods 1,590 1,558 Parts and supplies 9,011 4,982 Total inventories $ 18,986 $ 13,236 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Intangible Assets Disclosure | 11 . GOODWILL AND INTANGIBLE ASSETS Goodwill The following is a progression of goodwill by segment for the nine months ended June 30, 2017 : Commercial & Infrastructure Residential Industrial Solutions Total Goodwill at September 30, 2016 $ 8,631 $ 3,806 $ 27,499 $ 39,936 Acquisitions (See Note 13) - 1,640 3,820 5,460 Divestitures - - (51) (51) Adjustments - (41) (271) (312) Goodwill at June 30, 2017 $ 8,631 $ 5,405 $ 30,997 $ 45,033 The adjustment to goodwill in the nine months ended June 30, 2017 , relates primarily to finalizing the deferred tax balances acquired in connection with our acquisitions of Technibus and STR. Please see Note 13 – Business Combinations for further discussion. Intangible Assets Intangible assets consist of the following: June 30, 2017 Estimated Useful Lives Gross Carrying Accumulated (in Years) Amount Amortization Net Trademarks/trade names 5 - 20 $ 4,374 $ 350 $ 4,024 Technical library 20 400 76 324 Customer relationships 6 - 15 30,284 4,015 26,269 Developed technology 4 400 400 - Backlog 1 2,151 1,614 537 Construction contracts 1 2,191 1,845 346 Total $ 39,800 $ 8,300 $ 31,500 September 30, 2016 Estimated Useful Lives Gross Carrying Accumulated (in Years) Amount Amortization Net Trademarks/trade names 5 - 20 $ 3,845 $ 139 $ 3,706 Technical library 20 400 61 339 Customer relationships 6 - 15 27,414 2,003 25,411 Developed technology 4 400 358 42 Backlog 1 1,621 545 1,076 Construction contracts 1 2,191 1,042 1,149 Total $ 35,871 $ 4,148 $ 31,723 |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies [Abstract] | |
Legal Matters | 12 . 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. The following is a discussion of our significant legal matters: Capstone Construction Claims From 2003 to 2005, two of our former subsidiaries performed HVAC and electrical work under contract with Capstone Building Corporation (“Capstone”) on a university student housing project in Texas. In 2005, our subsidiaries filed for arbitration against Capstone, seeking payment for work performed, change orders and other impacts. The parties settled those claims, and the release included a waiver of warranties associated with any of the HVAC work. Several years later, the su bsidiaries discontinued operations, and the Company sold their assets. On October 24, 2013, Capstone filed a petition in the 12th Judicial District Court of Walker County, Texas against these subsidiaries, among other subcontractors, seeking contribution, defense, indemnity and damages for breach of contract in connection with alleged construction defect claims brought against Capstone by the owner of the student housing project. The owner claims $ 10,406 in damages, plus attorneys’ fees and costs against Ca pstone, which Capstone is seeking to recover from the subcontractors. The claims against the Company are based on alleged defects in the mechanical design, construction and installation of the HVAC and electrical systems performed by our former subsidiarie s. Based on the settlement reached in the 2005 arbitration, we moved for, and the District Court granted us, summary judgment, dismissing all of Capstone’s claims in the 2013 lawsuit. Capstone appealed, and in April, 2016, the 10th Court of Appeals, Waco, Texas Division, reversed the ruling with respect to the indemnity claims and remanded the case back to the District Court. The Texas Supreme Court subsequently denied our petition to review this decision and our motion for rehearing. As a result, we filed a new motion for summary judgment at the District Court level in April 2017. The court denied the motion, and we were consolidated back into the main case. T he Company attended mediation on June 23, 2017. Settlement was not reached, and the Company did not commit to any offer at mediation. The Company will defend the claims and expects ultimately to prevail on the merits, but there can be no assurance that the Company will prevail or that it will not incur costs and liability for indemnity in connection with resolution of the claims. To date, the Compa ny has not established a reserve with respect to this matter, as we believe the likelihood of our responsibility for damages is not probable and a potential range of exposure is not reasonably estimable. 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 insu reds 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 June 30, 2017 and September 30, 2016 , we had $ 5,870 and $ 5,464 , respectively, accrued for self- insurance liabilities. We are also subject to construction defect liabilities, primarily within our Residential segment. As of June 30, 2017 and September 30, 2016 , we had $ 208 and $ 235 , 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 u nder a letter of credit. At June 30, 2017 and September 30, 2016 , $ 6,035 and $ 6,126 , respectively, of our outstanding letters of credit was utilized to collateralize our insurance program. Surety As of June 30, 2017 , the estimated cost to complete our bonded projects was approximately $ 44,008 . 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 le tter of credit. At June 30, 2017 and September 30, 2016 , $ 458 and $ 818 , respectively, of our outstanding letters of credit were to collateralize our vendors. From time to time, we may enter into firm pu rchase 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 in tervals at a fixed price over the term. As of June 30, 2017 , we had no such purchase orders. |
Business Combinations
Business Combinations | 9 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | 13 . BUSINESS COMBINATIONS 2017 The Company completed two acquisitions in the nine months ended June 30, 2017 : Freeman Enclosure Systems, LLC – We acquired 100% of the membership interests and associated real estate of Freeman and its affiliate Strategic Edge LLC on March 16, 2017. Strategic Edge LLC was subsequently merged into Freeman, with Freeman as the surviving entity. Freeman is included in our Infrastructure Solutions segment. Freeman’s ability to manufacture cus tom generator en closures has expanded our solutions offering. Technical Services II, LLC – STR, our 80% owned subsidiary which is consolidated, acquired all of the membership interests of Technical Services, a Chesapeake, Virginia-based provider of mechan ical maintenance services, including commercial heating, ventilation and air conditioning, food service equipment, electrical and plumbing services , on June 15, 2017. Technical Services will operate as a subsidiary of STR within the Company’s Commercial & Industrial segment. The acquisition of Technical Services has expanded our geographic reach and diversified our customer base for mechanical maintenance services. The total aggregate consideration of $ 15,871 for these two acquisitions includes aggregate cash consideration of $ 15,139 and $ 732 of contingent consideration. Of the cash consideration paid upon closing, $ 14,739 was paid on the dates of closing and the remaining $ 400 is payable within 18 months of the transaction date, after deducting certain seller liabilities. The fair value of the contingent considera tion liability was estimated at $ 732 at June 30, 2017 , and is included in other non-current liabilities on our condensed consolidated balance sheets. The Company accounted for the transactions un der the acquisition method of accounting, which requires recording assets and liabilities at fair value (Level 3). The valuations derived from estimated fair value assessments and assumptions used by management are preliminary, pending finalization of the valuations of deferred taxes, fixed assets, contingent consideration liability, and certain intangible assets. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assump tions could result in different values being assigned to individual assets acquired and liabilities assumed. This may result in adjustments to the preliminary amounts recorded. The preliminary valuation of the assets acquired and liabilities assumed as of the dates of the acquisitions is as follows: Current assets $ 6,059 Property and equipment 7,980 Intangible assets (primarily customer relationships) 3,929 Goodwill 5,460 Current liabilities (6,147) Long term liabilities (249) Deferred tax liability (1,161) Net assets acquired $ 15,871 The $ 5,460 of goodwill acquired in the nine months ended June 30, 2017 , is attributable to the workforces of the acquired businesses and other intangibles that do not qualify for separate recognition. Of this goodwill, $ 1,640 is tax deductible. These two acquisitions contributed $ 5,649 in additional revenue and $ 104 in operating loss during the three months ended June 30, 2017 . These two acquisitions contributed $ 7,047 in additional revenue and $ 150 in operating loss during the nine months ended June 30, 2017 . 2016 The Company completed four acquisitions in the fiscal year ended September 30, 2016 for total aggregate consideration of $ 59,592 . See Note 18 – Business Combinations and Divestitures in our Form 10-K for the year ended September 30, 2016 for further information: Technibus, Inc. , a Canton, Ohio based provider of custom engineered, metal enclosed bus duct solutions , on June 15, 2016. Technibus is included in our Infrastructure Solutions segment. STR Mechanical, LLC – We acquired 80% of the membership interests in STR, a Charlotte, North Carolina-based provider of commercial and industrial mechanical services , on April 27, 2016. STR is included in our Commercial & Industrial segment. Shanahan Mechanical and Electri cal, Inc. , a Nebraska-based provider of mechanical and electrical contracting services , on November 20, 2015. Shanahan is included in our Commercial & Industrial segment. Calumet Armature & Electric, LLC , an Illinois-based provider of design, manufacturin g, assembly, and repair services of electric motors for the industrial and mass transit markets , on October 30, 2015. Calumet is included in our Infrastructure Solutions segment. The total purchase consideration for the Calumet acquisition included conti ngent consideration payments based on the acquired company’s earnings, as defined in the purchase and sale agreement, through October 31, 2018. The fair value of the contingent consideration liability was estimated at $ 614 and $ 1,100 at June 30, 2017 and September 30, 2016 , respectively . We made the first payment of $ 535 during the nine months ended June 30, 2017 . The remaining con tingent consideration will be payable if earned, during fiscal years 2018 and 2019, and is included in accounts payable and accrued expenses on our condensed consolidated balance sheets . The Company accounted for these four transactions under the acquisition method of accounting, which requires recording assets and liabilities at fair value (Level 3). The valuations related to Calumet and Shanahan were finalized as of December 31, 2016. The valuations of STR and Technibus were finalized as of June 30, 2017 . These four acquisitions contributed $ 10,649 in revenue and $ 1,193 in operating income during the three months ended June 30, 2016 . These four acquisitions contributed $ 19,613 in additional revenue and $ 1,841 in operating income during the nine months ended June 30, 2016 . Unaudited Pro Forma Information The supplemental pro forma r esults of operations , calculated as if each acquisition occurred as of October 1 of the fiscal year prior to consummation, for the three and nine months ended June 30, 2017 and 2016 , are as follows: Unaudited Three Months Ended Three Months Ended June 30, 2017 June 30, 2016 Revenues $ 208,563 $ 230,315 Net Income $ 5,838 $ 98,610 Unaudited Nine Months Ended Nine Months Ended June 30, 2017 June 30, 2016 Revenues $ 626,235 $ 549,683 Net Income $ 10,759 $ 107,752 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 14 . SUBSEQUENT EVENTS Acquisition of NEXT Electric On July 14, 2017, the Company acquired 80% of the membership interests of NEXT, a Milwaukee, Wisconsin-based electrical contractor specializing in the design, installation and maintenance of electrical systems for commercial, industrial, healthcare, water treatment and education end markets. NEXT will operate within the Company’s Commercial & Industrial segment. Wind –Down of Commercial & Industrial branches In July 2017, we made the decision to wind-down operations at two branches of our Commercial & Industrial segment. This decision is the result of underperformance at these two locations in recent years. We do not expect to incur significant costs related to the terminat ion of leases, employee severance or other arrangements. Credit facility amendment On July 14, 2017, we entered into an amendment and joinder to our Amended Credit Agreement permitting certain transactions related to our acquisition of NEXT . On August 2, 2017 , we entered into an amendment to our Amended Credit Agreement , which modifies the definition of EBITDA used in calculating our financial covenants to exclude the results from the Denver and Roanoke branches , up to a maximum exclusion of $5 million for a given measurement period . The amendment also reduces the minimum EBITDA requirement for the quarters ended December 31, 2017 and March 31, 2018 from $32,500 to $30,000 and $35,000 to $32,500, respectively. Minimum EBITDA requirements for a ll other quarters are unchanged. |
Per Share Information (Tables)
Per Share Information (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Per Share Information [Abstract] | |
Schedule Of Earnings Per Share Basic And Diluted [Table Text Block] | Three Months Ended June 30, 2017 2016 Numerator: Net income attributable to common shareholders of IES Holdings, Inc. $ 5,824 $ 10,747 Net income attributable to restricted shareholders of IES Holdings, Inc. 44 58 Net income attributable to IES Holdings, Inc. $ 5,868 $ 10,805 Denominator: Weighted average common shares outstanding — basic 21,300,716 21,297,898 Effect of dilutive stock options and non-vested restricted stock 255,402 158,736 Weighted average common and common equivalent shares outstanding — diluted 21,556,118 21,456,634 Earnings per share attributable to IES Holdings, Inc.: Basic $ 0.27 $ 0.50 Diluted $ 0.27 $ 0.50 Nine Months Ended June 30, 2017 2016 Numerator: Net income attributable to common shareholders of IES Holdings, Inc. $ 10,195 $ 18,641 Net income attributable to restricted shareholders of IES Holdings, Inc. 81 157 Net income attributable to IES Holdings, Inc. $ 10,276 $ 18,798 Denominator: Weighted average common shares outstanding — basic 21,295,254 21,280,469 Effect of dilutive stock options and non-vested restricted stock 255,550 131,874 Weighted average common and common equivalent shares outstanding — diluted 21,550,804 21,412,343 Earnings per share attributable to IES Holdings, Inc.: Basic $ 0.48 $ 0.88 Diluted $ 0.48 $ 0.87 |
Operation Segments (Tables)
Operation Segments (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Operating Segments [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended June 30, 2017 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 57,081 $ 70,162 $ 58,778 $ 22,302 $ - $ 208,323 Cost of services 46,958 54,307 54,174 17,486 - 172,925 Gross profit 10,123 15,855 4,604 4,816 - 35,398 Selling, general and administrative 6,252 11,003 4,849 4,958 3,709 30,771 Contingent consideration - - - (33) - (33) (Gain) loss on sale of assets - 37 (4) (88) - (55) Income (loss) from operations $ 3,871 $ 4,815 $ (241) $ (21) $ (3,709) $ 4,715 Other data: Depreciation and amortization expense $ 187 $ 135 $ 329 $ 1,785 $ 70 $ 2,506 Capital expenditures $ 328 $ 170 $ 283 $ 124 $ - $ 905 Total assets $ 70,427 $ 51,995 $ 66,190 $ 103,323 $ 125,222 $ 417,157 Three Months Ended June 30, 2016 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 48,702 $ 56,867 $ 59,512 $ 14,518 $ - $ 179,599 Cost of services 40,487 43,388 51,882 9,845 - 145,602 Gross profit 8,215 13,479 7,630 4,673 - 33,997 Selling, general and administrative 5,185 9,237 4,771 3,248 3,275 25,716 Contingent Consideration - - - 66 - 66 Loss on sale of assets - - (17) 51 - 34 Income (loss) from operations $ 3,030 $ 4,242 $ 2,876 $ 1,308 $ (3,275) $ 8,181 Other data: Depreciation and amortization expense $ 153 $ 122 $ 410 $ 897 $ 74 $ 1,656 Capital expenditures $ 122 $ 393 $ 377 $ 109 $ 71 $ 1,072 Total assets $ 53,711 $ 40,008 $ 58,559 $ 92,559 $ 32,686 $ 277,523 Nine Months Ended June 30, 2017 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 172,058 $ 204,527 $ 168,006 $ 59,572 $ - $ 604,163 Cost of services 144,668 157,370 154,628 45,103 - 501,769 Gross profit 27,390 47,157 13,378 14,469 - 102,394 Selling, general and administrative 18,086 32,488 14,434 13,280 10,797 89,085 Contingent consideration - - - 50 - 50 Gain on sale of assets (1) 34 (11) (90) - (68) Income (loss) from operations $ 9,305 $ 14,635 $ (1,045) $ 1,229 $ (10,797) $ 13,327 Other data: Depreciation and amortization expense $ 532 $ 436 $ 983 $ 4,730 $ 203 $ 6,884 Capital expenditures $ 1,888 $ 517 $ 927 $ 261 $ 203 $ 3,796 Total assets $ 70,427 $ 51,995 $ 66,190 $ 103,323 $ 125,222 $ 417,157 Nine Months Ended June 30, 2016 Commercial & Infrastructure Communications Residential Industrial Solutions Corporate Total Revenues $ 128,813 $ 162,381 $ 158,923 $ 40,230 $ - $ 490,347 Cost of services 105,855 124,459 141,237 29,354 - 400,905 Gross profit 22,958 37,922 17,686 10,876 - 89,442 Selling, general and administrative 14,877 26,856 13,014 9,062 8,685 72,494 Contingent Consideration - - - 332 - 332 Loss on sale of assets - - (17) 828 - 811 Income (loss) from operations $ 8,081 $ 11,066 $ 4,689 $ 654 $ (8,685) $ 15,805 Other data: Depreciation and amortization expense $ 410 $ 364 $ 845 $ 1,674 $ 210 $ 3,503 Capital expenditures $ 685 $ 537 $ 563 $ 300 $ 71 $ 2,156 Total assets $ 53,711 $ 40,008 $ 58,559 $ 92,559 $ 32,686 $ 277,523 |
Securities and Equity Investm22
Securities and Equity Investments (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Cost Method Investments [Table Text Block] | June 30, September 30, 2017 2016 Carrying value $ 558 $ 919 Unrealized gains 171 159 Fair value $ 729 $ 1,078 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | June 30, 2017 Total Fair Value Quoted Prices (Level 1) Significant Unobservable Inputs (Level 3) Executive savings plan assets $ 649 $ 649 $ - Executive savings plan liabilities (537) (537) - Contingent consideration (1,347) - (1,347) Total $ (1,235) $ 112 $ (1,347) September 30, 2016 Total Fair Value Quoted Prices (Level 1) Significant Unobservable Inputs (Level 3) Executive savings plan assets $ 599 $ 599 $ - Executive savings plan liabilities (486) (486) - Contingent consideration (1,100) - (1,100) Total $ (987) $ 113 $ (1,100) |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Text Block] | Contingent Consideration Agreements Fair Value at September 30, 2016 $ 1,100 Issuances 732 Settlements (535) Net Adjustments to Fair Value 50 Fair Value at June 30, 2017 $ 1,347 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventory Current [Table Text Block] | June 30, September 30, 2017 2016 Raw materials $ 3,354 $ 2,538 Work in process 5,031 4,158 Finished goods 1,590 1,558 Parts and supplies 9,011 4,982 Total inventories $ 18,986 $ 13,236 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Commercial & Infrastructure Residential Industrial Solutions Total Goodwill at September 30, 2016 $ 8,631 $ 3,806 $ 27,499 $ 39,936 Acquisitions (See Note 13) - 1,640 3,820 5,460 Divestitures - - (51) (51) Adjustments - (41) (271) (312) Goodwill at June 30, 2017 $ 8,631 $ 5,405 $ 30,997 $ 45,033 |
Schedule Of Intangible Assets And Goodwill [Table Text Block] | June 30, 2017 Estimated Useful Lives Gross Carrying Accumulated (in Years) Amount Amortization Net Trademarks/trade names 5 - 20 $ 4,374 $ 350 $ 4,024 Technical library 20 400 76 324 Customer relationships 6 - 15 30,284 4,015 26,269 Developed technology 4 400 400 - Backlog 1 2,151 1,614 537 Construction contracts 1 2,191 1,845 346 Total $ 39,800 $ 8,300 $ 31,500 September 30, 2016 Estimated Useful Lives Gross Carrying Accumulated (in Years) Amount Amortization Net Trademarks/trade names 5 - 20 $ 3,845 $ 139 $ 3,706 Technical library 20 400 61 339 Customer relationships 6 - 15 27,414 2,003 25,411 Developed technology 4 400 358 42 Backlog 1 1,621 545 1,076 Construction contracts 1 2,191 1,042 1,149 Total $ 35,871 $ 4,148 $ 31,723 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Allocation to Fair Value of Net Assets Acquired and Liabilities Assumed | Current assets $ 6,059 Property and equipment 7,980 Intangible assets (primarily customer relationships) 3,929 Goodwill 5,460 Current liabilities (6,147) Long term liabilities (249) Deferred tax liability (1,161) Net assets acquired $ 15,871 |
Pro Forma Results of Operations | Unaudited Three Months Ended Three Months Ended June 30, 2017 June 30, 2016 Revenues $ 208,563 $ 230,315 Net Income $ 5,838 $ 98,610 Unaudited Nine Months Ended Nine Months Ended June 30, 2017 June 30, 2016 Revenues $ 626,235 $ 549,683 Net Income $ 10,759 $ 107,752 |
Business (Details)
Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Taxes [Abstract] | |||
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | $ 3,689 | ||
Valuation Allowance, Deferred Tax Asset, Change in Amount | $ 5,002 | ||
Labor And Related Expense | $ 2,476 | 3,685 | |
Adjustments For New Accounting Principle Early Adoption [Member] | Accounting Standards Update 2016-09 [Member] | |||
New Accounting Pronouncement Early Adoption [Line Items] | |||
New Accounting Pronouncement Or Change In Accounting Principle Cumulative Effect Of Change On Equity Or Net Assets 1 | 58 | 58 | |
Adjustment To Retained Earnings Recognized Deferred Tax Asset Related Stock Compensation Expense | $ 362 | $ 362 |
Controlling Shareholder (Detail
Controlling Shareholder (Details) - Tontine [Member] $ in Thousands | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Related Party Transaction [Line Items] | |
Related Party Lease | The Company is party to a sublease agreement with Tontine Associates, LLC, an affiliate of Tontine, for corporate office space in Greenwich, Connecticut. The lease was renewed for a three-year term in April 2016 with an increase in the monthly rent to $8 |
Monthly Lease Payments | $ 8 |
Ownership Percentage Of Common Stock | 58.00% |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | |
Debt [Abstract] | ||
Long-term Debt, Excluding Current Maturities | $ 29,407 | $ 29,257 |
Revolving Credit Facility [Member] | ||
Line Of Credit Facility [Line Items] | ||
Line Of Credit Facility Interest Rate At Period End | 3.04% | 2.76% |
Letters of Credit Outstanding, Amount | $ 6,493 | |
Excess Availability | 43,821 | |
Maximum Revolver Amount | $ 100,000 | |
Credit Facility Expiration Date | Aug. 9, 2021 | |
Credit Facility Covenant Terms | new covenant that requires the Company to maintain a minimum EBITDA (as defined in the Amended Credit Agreement) that will be tested quarterly on a trailing twelve month basis; increasing the minimum liquidity requirement applicable to the Company from 12.5% to 30% of the maximum revolver amount; raising the Company’s required fixed charge coverage ratio (the “FCCR”) to 1.1:1.0 from 1.0:1.0; and requiring that the FCCR be tested quarterly regardless of the Company’s liquidity levels. |
Per Share Information EPS (Deta
Per Share Information EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Net income attributable to common shareholders of IES Holdings, Inc. | $ 5,824 | $ 10,747 | $ 10,195 | $ 18,641 |
Net income attributable to restricted shareholders of IES Holdings, Inc. | 44 | 58 | 81 | 157 |
Net Income Loss | $ 5,868 | $ 10,805 | $ 10,276 | $ 18,798 |
Weighted Average Number of Shares Outstanding, Basic | 21,300,716 | 21,297,898 | 21,295,254 | 21,280,469 |
Effect of dilutive stock options and non-vested restricted stock | 255,402 | 158,736 | 255,550 | 131,874 |
Weighted Average Number of Shares Outstanding, Diluted | 21,556,118 | 21,456,634 | 21,550,804 | 21,412,343 |
Earnings per share attributable to IES Holdings, Inc.: | ||||
Earnings Per Share, Basic | $ 0.27 | $ 0.5 | $ 0.48 | $ 0.88 |
Earnings Per Share, Diluted | $ 0.27 | $ 0.5 | $ 0.48 | $ 0.87 |
Operating Segments (Details)
Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 208,323 | $ 179,599 | $ 604,163 | $ 490,347 | |
Cost of Services | 172,925 | 145,602 | 501,769 | 400,905 | |
Gross Profit | 35,398 | 33,997 | 102,394 | 89,442 | |
Selling, General and Administrative Expense | 30,771 | 25,716 | 89,085 | 72,494 | |
Contingent Consideration Expense | (33) | 66 | 50 | 332 | |
Loss (gain) on sale of assets | (55) | 34 | (68) | 811 | |
Operating Income | 4,715 | 8,181 | 13,327 | 15,805 | |
Depreciation and amortization | 2,506 | 1,656 | 6,884 | 3,503 | |
Capital Expenditures | 905 | 1,072 | 3,796 | 2,156 | |
Assets | 417,157 | 277,523 | 417,157 | 277,523 | $ 394,340 |
Communications [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 57,081 | 48,702 | 172,058 | 128,813 | |
Cost of Services | 46,958 | 40,487 | 144,668 | 105,855 | |
Gross Profit | 10,123 | 8,215 | 27,390 | 22,958 | |
Selling, General and Administrative Expense | 6,252 | 5,185 | 18,086 | 14,877 | |
Loss (gain) on sale of assets | 0 | 0 | (1) | 0 | |
Operating Income | 3,871 | 3,030 | 9,305 | 8,081 | |
Depreciation and amortization | 187 | 153 | 532 | 410 | |
Capital Expenditures | 328 | 122 | 1,888 | 685 | |
Assets | 70,427 | 53,711 | 70,427 | 53,711 | |
Residential [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 70,162 | 56,867 | 204,527 | 162,381 | |
Cost of Services | 54,307 | 43,388 | 157,370 | 124,459 | |
Gross Profit | 15,855 | 13,479 | 47,157 | 37,922 | |
Selling, General and Administrative Expense | 11,003 | 9,237 | 32,488 | 26,856 | |
Loss (gain) on sale of assets | 37 | 0 | 34 | 0 | |
Operating Income | 4,815 | 4,242 | 14,635 | 11,066 | |
Depreciation and amortization | 135 | 122 | 436 | 364 | |
Capital Expenditures | 170 | 393 | 517 | 537 | |
Assets | 51,995 | 40,008 | 51,995 | 40,008 | |
Commercial & Industrial [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 58,778 | 59,512 | 168,006 | 158,923 | |
Cost of Services | 54,174 | 51,882 | 154,628 | 141,237 | |
Gross Profit | 4,604 | 7,630 | 13,378 | 17,686 | |
Selling, General and Administrative Expense | 4,849 | 4,771 | 14,434 | 13,014 | |
Loss (gain) on sale of assets | (4) | (17) | (11) | (17) | |
Operating Income | (241) | 2,876 | (1,045) | 4,689 | |
Depreciation and amortization | 329 | 410 | 983 | 845 | |
Capital Expenditures | 283 | 377 | 927 | 563 | |
Assets | 66,190 | 58,559 | 66,190 | 58,559 | |
Infrastructure Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 22,302 | 14,518 | 59,572 | 40,230 | |
Cost of Services | 17,486 | 9,845 | 45,103 | 29,354 | |
Gross Profit | 4,816 | 4,673 | 14,469 | 10,876 | |
Selling, General and Administrative Expense | 4,958 | 3,248 | 13,280 | 9,062 | |
Contingent Consideration Expense | (33) | 66 | 50 | 332 | |
Loss (gain) on sale of assets | (88) | 51 | (90) | 828 | |
Operating Income | (21) | 1,308 | 1,229 | 654 | |
Depreciation and amortization | 1,785 | 897 | 4,730 | 1,674 | |
Capital Expenditures | 124 | 109 | 261 | 300 | |
Assets | 103,323 | 92,559 | 103,323 | 92,559 | |
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Cost of Services | 0 | 0 | 0 | 0 | |
Gross Profit | 0 | 0 | 0 | 0 | |
Selling, General and Administrative Expense | 3,709 | 3,275 | 10,797 | 8,685 | |
Loss (gain) on sale of assets | 0 | 0 | 0 | 0 | |
Operating Income | (3,709) | (3,275) | (10,797) | (8,685) | |
Depreciation and amortization | 70 | 74 | 203 | 210 | |
Capital Expenditures | 0 | 71 | 203 | 71 | |
Assets | $ 125,222 | $ 32,686 | $ 125,222 | $ 32,686 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||
Common Stock, Shares, Outstanding | 21,434,086 | 21,434,086 | 21,456,539 | ||
Equity Class Of Treasury Stock [Line Items] | |||||
Residual Shares Related To Acquisition Returned to Treasury Stock | 6,859 | ||||
The 2006 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock, Shares Authorized | 3,000,000 | 3,000,000 | |||
Common shares repurchased for tax withholding | 4,575 | 6,084 | |||
Unvested shares forfeited | 7,500 | ||||
Available Common Stock Authorized Shares | 1,055,391 | 1,055,391 | |||
The 2015 Stock Repurchase Program [Member] | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Approved Number of shares to be repurchased | 1,500,000 | 1,500,000 | |||
Treasury Stock Shares Acquired | 51,673 | 51,673 | 46,929 | ||
Average Share Price | $ 15.68 | $ 15.68 | |||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized compensation expense | $ 133 | $ 130 | $ 406 | $ 392 | |
Unamortized compensation cost | 408 | $ 408 | |||
Performance Cash Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued under share based compensation program | 30,000 | ||||
Recognized compensation expense | 59 | 0 | $ 252 | 0 | |
Description of Share Based Award Type | PPCUs are a contractual right to cash payment of $20 dollars per PPCU. The PPCUs will generally become vested, if at all, upon achievement of certain specified performance objectives and continued performance of services through mid-December 2018. | ||||
Phantom Share Units PSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized compensation expense | 41 | 34 | $ 125 | 102 | |
Performance Based Phantom Share Units PPSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued under share based compensation program | 408,000 | ||||
Recognized compensation expense | 225 | 22 | $ 753 | 65 | |
Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized compensation expense | 0 | $ 17 | 23 | $ 50 | |
Unamortized compensation cost | $ 0 | $ 0 | |||
Unrestricted Stock [Member] | The 2006 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued under share based compensation program | 32,250 | 27,500 | |||
Unrestricted Stock [Member] | The 2006 Equity Incentive Plan [Member] | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued under share based compensation program | 1,545 | 4,714 |
Securities and Equity Investm33
Securities and Equity Investments - (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Distribution Received From Enertech | $ 361 |
Securities and Equity Investm34
Securities and Equity Investments - Enertech FV (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||
Carrying Value | $ 558 | $ 919 |
Unrealized Gain (Loss) on Investments | 171 | 159 |
Fair Value | $ 729 | $ 1,078 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Employee Benefit Plans [Abstract] | |||||
401 (k) Matching Expenses | $ 312 | $ 247 | $ 771 | $ 525 | |
Unfunded Benefit Liability | $ 815 | $ 815 | $ 875 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Sep. 30, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Executive Savings Plan - Assets | $ 649 | $ 599 |
Executive Savings Plan - Liabilities | (537) | (486) |
Contingent Consideration Fair Value | 1,347 | 1,100 |
Fair Value Net Asset (Liability) | (1,235) | (987) |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Executive Savings Plan - Assets | 649 | 599 |
Executive Savings Plan - Liabilities | (537) | (486) |
Fair Value Net Asset (Liability) | 112 | 113 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration Fair Value | 1,347 | 1,100 |
Fair Value Net Asset (Liability) | $ 1,347 | $ 1,100 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) - Contingent Consideration [Member] - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 9 Months Ended |
Jun. 30, 2017USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Fair Value Beginning Balance | $ 1,100 |
Issuances | 732 |
Settlements | (535) |
Adjustments to Fair Value | 50 |
Fair Value Ending Balance | $ 1,347 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Sep. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 3,354 | $ 2,538 |
Work in Process | 5,031 | 4,158 |
Finished Goods | 1,590 | 1,558 |
Parts and Supplies | 9,011 | 4,982 |
Inventory, Net | $ 18,986 | $ 13,236 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Goodwill RollForward (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 39,936 |
Acquisitions | 5,460 |
Divestitures | (51) |
Goodwill Purchase Accounting Adjustments | (312) |
Goodwill, Ending Balance | 45,033 |
Residential [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 8,631 |
Goodwill, Ending Balance | 8,631 |
Commercial & Industrial [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 3,806 |
Acquisitions | 1,640 |
Goodwill Purchase Accounting Adjustments | (41) |
Goodwill, Ending Balance | 5,405 |
Infrastructure Solutions [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 27,499 |
Acquisitions | 3,820 |
Divestitures | (51) |
Goodwill Purchase Accounting Adjustments | (271) |
Goodwill, Ending Balance | $ 30,997 |
Goodwil and Intangible Assets -
Goodwil and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | $ 39,800 | $ 35,871 |
Accumulated Amortization | 8,300 | 4,148 |
Intangible assets, net | 31,500 | 31,723 |
Trademarks And Trade Names [Member] | ||
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | 4,374 | 3,845 |
Accumulated Amortization | 350 | 139 |
Intangible assets, net | $ 4,024 | $ 3,706 |
Trademarks And Trade Names [Member] | Maximum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 20 years | 20 years |
Trademarks And Trade Names [Member] | Minimum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 5 years | 5 years |
Technical Library [Member] | ||
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | $ 400 | $ 400 |
Accumulated Amortization | 76 | 61 |
Intangible assets, net | $ 324 | $ 339 |
Technical Library [Member] | Maximum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 20 years | 20 years |
Customer Relationships [Member] | ||
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | $ 30,284 | $ 27,414 |
Accumulated Amortization | 4,015 | 2,003 |
Intangible assets, net | $ 26,269 | $ 25,411 |
Customer Relationships [Member] | Maximum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 15 years | 15 years |
Customer Relationships [Member] | Minimum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 6 years | 6 years |
Developed Technology [Member] | ||
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | $ 400 | $ 400 |
Accumulated Amortization | 400 | 358 |
Intangible assets, net | $ 0 | $ 42 |
Developed Technology [Member] | Maximum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 4 years | 4 years |
Order Backlog [Member] | ||
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | $ 2,151 | $ 1,621 |
Accumulated Amortization | 1,614 | 545 |
Intangible assets, net | $ 537 | $ 1,076 |
Order Backlog [Member] | Maximum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 1 year | 1 year |
Construction Contract Value [Member] | ||
IntangibleAssets [Line Items] | ||
Gross Carrying Amount | $ 2,191 | $ 2,191 |
Accumulated Amortization | 1,845 | 1,042 |
Intangible assets, net | $ 346 | $ 1,149 |
Construction Contract Value [Member] | Maximum [Member] | ||
IntangibleAssets [Line Items] | ||
Estimated Useful Lives | 1 year | 1 year |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | |
Commitments And Contingencies [Abstract] | ||
Accrued Insurance | $ 5,870 | $ 5,464 |
Liability for Claims and Claims Adjustment Expense | 208 | 235 |
Estimated cost of completion of bonded project | 44,008 | |
Insurance Related [Member] | ||
Other Commitments [Line Items] | ||
Letters of Credit Outstanding, Amount | 6,035 | 6,126 |
Vendor Related [Member] | ||
Other Commitments [Line Items] | ||
Letters of Credit Outstanding, Amount | 458 | $ 818 |
Capstone [Member] | ||
Loss Contingency [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 10,406 | |
LossContingencyOpinionOfCounsel | Based on the settlement reached in the 2005 arbitration, we moved for, and the District Court granted us, summary judgment, dismissing all of Capstone’s claims in the 2013 lawsuit. Capstone appealed, and in April, 2016, the 10th Court of Appeals, Waco, Texas Division, reversed the ruling with respect to the indemnity claims and remanded the case back to the District Court. The Texas Supreme Court subsequently denied our petition to review this decision and our motion for rehearing. As a result, we filed a new motion for summary judgment at the District Court level in April 2017. The court denied the motion, and we were consolidated back into the main case. The Company attended mediation on June 23, 2017. Settlement was not reached, and the Company did not commit to any offer at mediation. The Company will defend the claims and expects ultimately to prevail on the merits, but there can be no assurance that the Company will prevail or that it will not incur costs and liability for indemnity in connection with resolution of the claims. To date, the Company has not established a reserve with respect to this matter, as we believe the likelihood of our responsibility for damages is not probable and a potential range of exposure is not reasonably estimable. |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | |
Business Acquisition [Line Items] | |||||
Cash Paid for Acquisition | $ 14,659 | $ 59,698 | |||
Contingent Consideration Fair Value | $ 1,347 | $ 1,347 | $ 1,100 | ||
2017 Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Number Of Businesses Acquired | 2 | ||||
Total Consideration Transferred | $ 15,871 | ||||
Cash Purchase Consideration | 15,139 | ||||
Cash Paid for Acquisition | 14,739 | ||||
Additional Consideration To Be Paid | 400 | ||||
Contingent Consideration Fair Value | 732 | 732 | |||
Revenues From Acquisitions | 5,649 | 7,047 | |||
Operating Income From Acquisitions | (104) | (150) | |||
2016 Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Number Of Businesses Acquired | 4 | ||||
Total Consideration Transferred | $ 59,592 | ||||
Contingent Consideration Fair Value | 614 | 614 | |||
Contingent Consideration Payment | $ 535 | ||||
Revenues From Acquisitions | $ 10,649 | 19,613 | |||
Operating Income From Acquisitions | $ 1,193 | $ 1,841 | |||
Business Acquisition Technibus [Member] | Infrastructure Solutions [Member] | |||||
Business Acquisition [Line Items] | |||||
Name of Acquired Business | Technibus, Inc. | ||||
Description of Acquired Business | a Canton, Ohio based provider of custom engineered, metal enclosed bus duct solutions | ||||
Date of Acquisition Agreement | Jun. 15, 2016 | ||||
Business Acquisition STR [Member] | Commercial & Industrial [Member] | |||||
Business Acquisition [Line Items] | |||||
Name of Acquired Business | STR Mechanical, LLC | ||||
Description of Acquired Business | a Charlotte, North Carolina-based provider of commercial and industrial mechanical services | ||||
Date of Acquisition Agreement | Apr. 27, 2016 | ||||
Business Acquisition Calumet [Member] | Infrastructure Solutions [Member] | |||||
Business Acquisition [Line Items] | |||||
Name of Acquired Business | Calumet Armature & Electric, LLC | ||||
Description of Acquired Business | an Illinois-based provider of design, manufacturing, assembly, and repair services of electric motors for the industrial and mass transit markets | ||||
Date of Acquisition Agreement | Oct. 30, 2015 | ||||
Contingent Consideration Fair Value | $ 614 | $ 614 | $ 1,100 | ||
Contingent Consideration Payment | $ 535 | ||||
Business Acquisition Shanahan [Member] | Commercial & Industrial [Member] | |||||
Business Acquisition [Line Items] | |||||
Name of Acquired Business | Shanahan Mechanical and Electrical, Inc. | ||||
Description of Acquired Business | a Nebraska-based provider of mechanical and electrical contracting services | ||||
Date of Acquisition Agreement | Nov. 20, 2015 | ||||
Freeman Acquisition [Member] | Infrastructure Solutions [Member] | |||||
Business Acquisition [Line Items] | |||||
Date of Acquisition Agreement | Mar. 16, 2017 | ||||
Technical Services Acquisition [Member] | Commercial & Industrial [Member] | |||||
Business Acquisition [Line Items] | |||||
Name of Acquired Business | Technical Services II, LLC | ||||
Description of Acquired Business | a Chesapeake, Virginia-based provider of mechanical maintenance services, including commercial heating, ventilation and air conditioning, food service equipment, electrical and plumbing services | ||||
Date of Acquisition Agreement | Jun. 15, 2017 |
Business Combination - Assets A
Business Combination - Assets And Liabilities Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Sep. 30, 2016 |
Business Acquisition [Line Items] | ||
Goodwill | $ 45,033 | $ 39,936 |
2017 Business Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Current Assets | 6,059 | |
Property Plant And Equipment | 7,980 | |
Intangible Assets | 3,929 | |
Goodwill | 5,460 | |
Current Liabilities | (6,147) | |
Long Term Liabilities | 249 | |
Deferred Tax Liability | (1,161) | |
Net Assets Acquired, less controlling interests | $ 15,871 |
Business Combinations - Pro For
Business Combinations - Pro Formas (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Pro Forma Revenue | $ 208,563 | $ 230,315 | $ 626,235 | $ 549,683 |
Pro Forma Net Income | $ 5,838 | $ 98,610 | $ 10,759 | $ 107,752 |
Subsequent Events (Details)
Subsequent Events (Details) | Aug. 02, 2017 | Jul. 14, 2017 | Jul. 31, 2017 | Jun. 30, 2017 |
Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Credit Facility Covenant Terms | new covenant that requires the Company to maintain a minimum EBITDA (as defined in the Amended Credit Agreement) that will be tested quarterly on a trailing twelve month basis; increasing the minimum liquidity requirement applicable to the Company from 12.5% to 30% of the maximum revolver amount; raising the Company’s required fixed charge coverage ratio (the “FCCR”) to 1.1:1.0 from 1.0:1.0; and requiring that the FCCR be tested quarterly regardless of the Company’s liquidity levels. | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Subsequent Event Description | we made the decision to wind-down operations at two branches of our Commercial & Industrial segment. | |||
Subsequent Event [Member] | NEXT Business Acquisition [Member] | ||||
Subsequent Event [Line Items] | ||||
Subsequent Event Description | On July 14, 2017, the Company acquired 80% of the membership interests of NEXT Electric, LLC (“NEXT”) | |||
Name of Acquired Business | NEXT Electric, LLC (“NEXT”) | |||
Description of Acquired Business | a Milwaukee, Wisconsin-based electrical contractor specializing in the design, installation and maintenance of electrical systems for commercial, industrial, healthcare, water treatment and education end markets. | |||
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Subsequent Event Description | we entered into an amendment and joinder to our Amended Credit Agreement permitting certain transactions related to our acquisition of NEXT | |||
Credit Facility Covenant Terms | we entered into an amendment to our Amended Credit Agreement, which modifies the definition of EBITDA used in calculating our financial covenants to exclude the results from the Denver and Roanoke branches, up to a maximum exclusion of $5 million for a given measurement period. The amendment also reduces the minimum EBITDA requirement for the quarters ended December 31, 2017 and March 31, 2018 from $32,500 to $30,000 and $35,000 to $32,500, respectively. Minimum EBITDA requirements for all other quarters are unchanged. |