##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 COMMISSION FILE NUMBER 001-32582
 PIKE ELECTRIC CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of incorporation)
    
    20-3112047(I.R.S. Employer Identification No.)
 100 Pike Way, PO Box 868, Mount Airy, NC 27030  (Address of principal executive offices)   (336) 789-2171  (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



PIKE ELECTRIC CORPORATION
FORM 10-Q
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2011

INDEX
 Part I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited):Condensed consolidated balance sheets
    
    
    1Condensed consolidated statements of operations
    
    
    2Condensed consolidated statements of cash flows
    
    
    3Notes to condensed consolidated financial statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23Part II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    24Item 6. Exhibits
    
    
    24Signatures
    
    
    25EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 PIKE ELECTRIC CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share amounts)
 March 31,
    
    
    June 30,2011
    
    
    2010(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,851
    
    
    $
    11,133Accounts receivable from customers, net
    
    
    69,374
    
    
    
    64,672Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    51,005
    
    
    
    50,215Inventories
    
    
    9,734
    
    
    
    6,401Prepaid expenses and other
    
    
    14,230
    
    
    
    9,115Deferred income taxes
    
    
    8,044
    
    
    
    10,526Total current assets
    
    
    164,238
    
    
    
    152,062Property and equipment, net
    
    
    178,599
    
    
    
    194,885Goodwill
    
    
    110,893
    
    
    
    114,778Other intangibles, net
    
    
    39,484
    
    
    
    38,527Deferred loan costs, net
    
    
    2,484
    
    
    
    3,021Other assets
    
    
    1,847
    
    
    
    2,105Total assets
    
    $
    497,545
    
    
    $
    505,378LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    27,926
    
    
    $
    17,484Accrued compensation
    
    
    20,683
    
    
    
    22,589Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    11,372
    
    
    
    8,925Accrued expenses and other
    
    
    12,041
    
    
    
    6,112Current portion of insurance and claim accruals
    
    
    17,028
    
    
    
    23,422Total current liabilities
    
    
    89,050
    
    
    
    78,532Long-term debt
    
    
    99,000
    
    
    
    114,500Insurance and claim accruals, net of current portion
    
    
    6,487
    
    
    
    6,005Deferred compensation, net of current portion
    
    
    6,065
    
    
    
    5,844Deferred income taxes
    
    
    43,537
    
    
    
    48,170Other liabilities
    
    
    2,247
    
    
    
    2,859Commitments and contingenciesStockholders equity:Preferred stock, par value $0.001 per share; 100,000 authorized shares; no
shares issued and outstanding
    
    
    
    
    
    
    Common stock, par value $0.001 per share; 100,000 authorized shares; 33,651
and 33,544 shares issued and outstanding at March 31, 2011 and
June 30, 2010, respectively
    
    
    6,427
    
    
    
    6,427Additional paid-in capital
    
    
    160,416
    
    
    
    158,030Accumulated other comprehensive loss, net of taxes
    
    
    (188
    )
    
    
    (142
    )Retained earnings
    
    
    84,504
    
    
    
    85,153Total stockholders equity
    
    
    251,159
    
    
    
    249,468Total liabilities and stockholders equity
    
    $
    497,545
    
    
    $
    505,378
   1




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PIKE ELECTRIC CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 (In thousands, except per share amounts)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Revenues
    
    $
    153,825
    
    
    $
    120,931
    
    
    $
    431,146
    
    
    $
    383,349Cost of operations
    
    
    137,416
    
    
    
    110,500
    
    
    
    386,377
    
    
    
    344,287Gross profit
    
    
    16,409
    
    
    
    10,431
    
    
    
    44,769
    
    
    
    39,062General and administrative expenses
    
    
    13,810
    
    
    
    12,007
    
    
    
    40,114
    
    
    
    38,261Loss on sale and impairment of
property
and equipment
    
    
    39
    
    
    
    240
    
    
    
    588
    
    
    
    1,202Restructuring expenses
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    8,983Income (loss) from operations
    
    
    2,560
    
    
    
    (1,875
    )
    
    
    4,067
    
    
    
    (9,384
    )Other expense (income):Interest expense
    
    
    1,620
    
    
    
    1,441
    
    
    
    5,094
    
    
    
    6,085Other, net
    
    
    (22
    )
    
    
    (49
    )
    
    
    (38
    )
    
    
    (229
    )Total other expense
    
    
    1,598
    
    
    
    1,392
    
    
    
    5,056
    
    
    
    5,856Income (loss) before income taxes
    
    
    962
    
    
    
    (3,267
    )
    
    
    (989
    )
    
    
    (15,240
    )Income tax expense (benefit)
    
    
    342
    
    
    
    (1,236
    )
    
    
    (340
    )
    
    
    (5,802
    )Net income (loss)
    
    $
    620
    
    
    $
    (2,031
    )
    
    $
    (649
    )
    
    $
    (9,438
    )Earnings (loss) per share:Basic
    
    $
    0.02
    
    
    $
    (0.06
    )
    
    $
    (0.02
    )
    
    $
    (0.28
    )Diluted
    
    $
    0.02
    
    
    $
    (0.06
    )
    
    $
    (0.02
    )
    
    $
    (0.28
    )Shares used in computing
earnings (loss) per share:Basic
    
    
    33,446
    
    
    
    33,149
    
    
    
    33,368
    
    
    
    33,119Diluted
    
    
    34,062
    
    
    
    33,149
    
    
    
    33,368
    
    
    
    33,119
   2




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PIKE ELECTRIC CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In thousands)
 Nine Months EndedMarch 31,2011
    
    
    2010Cash flows from operating activities:Net loss
    
    $
    (649
    )
    
    $
    (9,438
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Depreciation and amortization
    
    
    28,598
    
    
    
    26,860Non-cash interest expense
    
    
    1,749
    
    
    
    1,415Deferred income taxes
    
    
    (3,347
    )
    
    
    (6,573
    )Loss on sale and impairment of property and equipment
    
    
    588
    
    
    
    1,202Restructuring expenses, non-cash
    
    
    
    
    
    
    7,958Equity compensation expense
    
    
    2,991
    
    
    
    3,514Excess tax (benefit) expense from stock-based compensation
    
    
    (79
    )
    
    
    43Changes in operating assets and liabilities:Accounts receivable
    
    
    (4,702
    )
    
    
    (4,087
    )Costs and estimated earnings in excess of billings on
uncompleted contracts
    
    
    (790
    )
    
    
    1,486Inventories, prepaid expenses and other
    
    
    (7,257
    )
    
    
    2,452Insurance and claim accruals
    
    
    (5,912
    )
    
    
    (2,403
    )Accounts payable and other
    
    
    15,692
    
    
    
    (2,623
    )Deferred compensation
    
    
    
    
    
    
    (1,402
    )Net cash provided by operating activities
    
    
    26,882
    
    
    
    18,404Cash flows from investing activities:Purchases of property and equipment
    
    
    (11,206
    )
    
    
    (13,628
    )Business acquisitions, net
    
    
    
    
    
    
    Net proceeds from sale of property and equipment
    
    
    1,616
    
    
    
    5,840Net cash used in investing activities
    
    
    (9,590
    )
    
    
    (7,788
    )Cash flows from financing activities:Principal payments on long-term debt
    
    
    (15,500
    )
    
    
    Stock option and employee stock purchase activity, net
    
    
    (162
    )
    
    
    82Excess tax benefit (expense) from stock-based compensation
    
    
    79
    
    
    
    (43
    )Deferred loan costs
    
    
    (991
    )
    
    
    (2,792
    )Net cash used in financing activities
    
    
    (16,574
    )
    
    
    (2,753
    )Net increase in cash and cash equivalents
    
    
    718
    
    
    
    7,863Cash and cash equivalents beginning of year
    
    
    11,133
    
    
    
    43,820Cash and cash equivalents end of period
    
    $
    11,851
    
    
    $
    51,683
   3




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PIKE ELECTRIC CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 For the three and nine months ended March 31, 2011 and 2010
 (In thousands, except per share amounts)
 1. Basis of Presentation
  2. Business
     4




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Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Core services
    
    $
    137,702
    
    
    
    89.5
    %
    
    $
    98,643
    
    
    
    81.6
    %
    
    $
    407,314
    
    
    
    94.5
    %
    
    $
    340,587
    
    
    
    88.8
    %Storm restoration
services
    
    
    16,123
    
    
    
    10.5
    %
    
    
    22,288
    
    
    
    18.4
    %
    
    
    23,832
    
    
    
    5.5
    %
    
    
    42,762
    
    
    
    11.2
    %Total
    
    $
    153,825
    
    
    
    100.0
    %
    
    $
    120,931
    
    
    
    100.0
    %
    
    $
    431,146
    
    
    
    100.0
    %
    
    $
    383,349
    
    
    
    100.0
    %
 3. Acquisition Activity
    Three months ended
    
    
    Nine months endedMarch 31, 2010
    
    
    March 31, 2010Revenues
    
    $
    126,502
    
    
    $
    408,792Net loss
    
    $
    (2,591
    )
    
    $
    (8,838
    )Basic loss per common share
    
    $
    (0.08
    )
    
    $
    (0.27
    )Diluted loss per common share
    
    $
    (0.08
    )
    
    $
    (0.27
    )
 4. Assets Held For Sale
   5




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5. Derivative Instruments and Hedging Activities
   Interest Rate Risk
      Diesel Fuel Risk
    6




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Balance Sheet and Statement of Operations Information
  Asset Derivatives
    
    
    Liability DerivativesFair Value
    
    
    Fair Value
    
    
    Fair Value
    
    
    Fair Valueat Mar. 31,
    
    
    at June 30,
    
    
    at Mar. 31,
    
    
    at June 30,Balance Sheet Location
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010Derivatives designated as hedging
instruments under U.S. GAAP:Interest rate swaps
    
    Accrued expenses and other
    
    $
    
    
    
    $
    
    
    
    $
    309
    
    
    $
    245Total derivatives designated as
hedging instruments under U.S.
GAAP
    
    
    
    $
    
    
    
    $
    
    
    
    $
    309
    
    
    $
    245Derivatives not designated as hedging
instruments under U.S. GAAP:Diesel fuel swaps (gross) (1)
    
    Prepaid expenses and other
    
    $
    2,195
    
    
    $
    169
    
    
    $
    
    
    
    $
    Diesel fuel swaps (gross) (1)
    
    Accrued expenses and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    166Total derivatives not designated as
hedging instruments under U.S.
GAAP
    
    
    
    $
    2,195
    
    
    $
    169
    
    
    $
    
    
    
    $
    166Total derivatives
    
    
    
    $
    2,195
    
    
    $
    169
    
    
    $
    309
    
    
    $
    411
 (1)
    
    The fair values of asset and liability derivatives with the same counterparty are
netted on the balance sheet.  7




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Derivatives designated as cash flow hedging instruments under U.S. GAAP:
 Location of Loss
    
    Amount of LossAmount of Gain (Loss)
    
    
    Reclassified from
    
    Reclassified fromRecognized in OCI
    
    
    Accumulated OCI into
    
    Accumulated OCI into(Effective Portion)
    
    
    Earnings
    
    EarningsFor the Three Months Ended March 31,
    
    2011
    
    
    2010
    
    
    
    
    2011
    
    
    2010Interest rate swaps
    
    $
    28
    *
    
    $
    
    
    
    Interest expense
    
    $
    (51
    )*
    
    $
    Totals
    
    $
    28
    *
    
    $
    
    
    
    
    
    $
    (51
    )*
    
    $
    For the Nine Months Ended March 31,
    
    2011
    
    
    2010
    
    
    
    
    2011
    
    
    2010Interest rate swaps
    
    $
    (46)
    *
    
    $
    1,109
    *
    
    Interest expense
    
    $
    (152
    )*
    
    $
    (1,068
    )*Totals
    
    $
    (46)
    *
    
    $
    1,109
    *
    
    
    
    $
    (152
    )*
    
    $
    (1,068
    )*
 *
    
    Net of tax Derivatives not designated as cash flow hedging instruments under U.S. GAAP:
 Location of GainRecognized in
    
    Amount of Gain Recognized inEarnings
    
    EarningsFor the Three Months Ended March 31,
    
    
    
    2011
    
    
    2010Diesel fuel swaps
    
    Cost of operations
    
    $
    1,387
    
    
    $
    232Total
    
    
    
    $
    1,387
    
    
    $
    232For the Nine Months Ended March 31,
    
    
    
    2011
    
    
    2010Diesel fuel swaps
    
    Cost of operations
    
    $
    2,192
    
    
    $
    927Total
    
    
    
    $
    2,192
    
    
    $
    927
 Accumulated OCI
  For the Three Months
    
    
    For the Nine MonthsEnded March 31,
    
    
    Ended March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Net accumulated derivative loss deferred at beginning of
period
    
    $
    (216
    )
    
    $
    (2,031
    )
    
    $
    (142
    )
    
    $
    (9,438
    )Changes in fair value
    
    
    (23
    )
    
    
    
    
    
    
    (198
    )
    
    
    Reclassification to net income (loss)
    
    
    51
    
    
    
    
    
    
    
    152
    
    
    
    1,109Net accumulated derivative loss deferred at end of period
    
    $
    (188
    )
    
    $
    (2,031
    )
    
    $
    (188
    )
    
    $
    (8,329
    )
  8




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6. Comprehensive Income (Loss)
  For the Three Months EndedMarch 31,2011
    
    
    2010Net income (loss)
    
    $
    620
    
    
    $
    (2,031
    )Change in fair value of interest rate cash
flow hedges, net
of income taxes of $18
    
    
    28
    
    
    
    Comprehensive income (loss)
    
    $
    648
    
    
    $
    (2,031
    )
 For the Nine Months EndedMarch 31,2011
    
    
    2010Net loss
    
    $
    (649
    )
    
    $
    (9,438
    )Change in fair value of interest rate
cash flow hedges, net
of income taxes of ($25) and $711,
respectively
    
    
    (46
    )
    
    
    1,109Comprehensive loss
    
    $
    (695
    )
    
    $
    (8,329
    )
 7. Fair Value
   
    
    Level 1  Valuations based on quoted
prices in active markets for identical
instruments that we are able to access.
Since valuations are based on quoted prices
that are readily and regularly available in
an active market, valuation of these
products does not entail a significant
degree of judgment.
    
    Level 2  Valuations based on quoted
prices in active markets for instruments
that are similar, or quoted prices in
markets that are not active for identical
or similar instruments, and model-derived
valuations in which all significant inputs
and significant value drivers are
observable in active markets.
    
    Level 3  Valuations based on inputs
that are unobservable and significant to
the overall fair value measurement.
   9




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March 31,Description
    
    2011
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Asset:Diesel fuel swap agreements
    
    $
    2,195
    
    
    $
    
    
    
    $
    2,195
    
    
    $
    Liability:Interest rate swap agreements
    
    
    (309
    )
    
    
    
    
    
    
    (309
    )
    
    
    Total
    
    $
    1,886
    
    
    $
    
    
    
    $
    1,886
    
    
    $
    
 Description
    
    June 30, 
2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Asset:Diesel fuel swap agreements
    
    $
    3
    
    
    $
    
    
    
    $
    3
    
    
    $
    Liability:Interest rate swap agreements
    
    
    (245
    )
    
    
    
    
    
    
    (245
    )
    
    
    Total
    
    $
    (242
    )
    
    $
    
    
    
    $
    (242
    )
    
    $
    
   8. Stock-Based Compensation
   10




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9. Income Taxes
    10. Earnings (Loss) Per Share
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Basic:Net income (loss)
    
    $
    620
    
    
    $
    (2,031
    )
    
    $
    (649
    )
    
    $
    (9,438
    )Weighted average common shares
    
    
    33,446
    
    
    
    33,149
    
    
    
    33,368
    
    
    
    33,119Basic earnings (loss) per share
    
    $
    0.02
    
    
    $
    (0.06
    )
    
    $
    (0.02
    )
    
    $
    (0.28
    )Diluted:Net income (loss)
    
    $
    620
    
    
    $
    (2,031
    )
    
    $
    (649
    )
    
    $
    (9,438
    )Weighted average common shares
    
    
    33,446
    
    
    
    33,149
    
    
    
    33,368
    
    
    
    33,119Potential common stock arising
from stock
options and restricted stock
    
    
    592
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares 
diluted
    
    
    34,038
    
    
    
    33,149
    
    
    
    33,368
    
    
    
    33,119Diluted earnings (loss) per share
    
    $
    0.02
    
    
    $
    (0.06
    )
    
    $
    (0.02
    )
    
    $
    (0.28
    )
    11




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11. Recent Accounting Pronouncements
  12. Commitments and Contingencies
 Legal Proceedings
  Performance Bonds and Parent Guarantees
  Collective Bargaining Agreements
  Indemnities
   12




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our historical consolidated financial statements and
related notes thereto in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K
for the fiscal year ended June 30, 2010. The discussion below contains forward-looking statements
that are based upon our current expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from these expectations due to inaccurate
assumptions and known or unknown risks and uncertainties, including those identified in
Uncertainty of
Forward-Looking Statements and Information below in this Item 2 and in Risk Factors in Item
1A of Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2010.
 Overview
   Critical Accounting Policies
   13




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Results of Operations
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Revenues:Core services
    
    
    89.5
    %
    
    
    81.6
    %
    
    
    94.5
    %
    
    
    88.8
    %Storm restoration services
    
    
    10.5
    %
    
    
    18.4
    %
    
    
    5.5
    %
    
    
    11.2
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations
    
    
    89.3
    %
    
    
    91.4
    %
    
    
    89.6
    %
    
    
    89.8
    %Gross profit
    
    
    10.7
    %
    
    
    8.6
    %
    
    
    10.4
    %
    
    
    10.2
    %General and administrative expenses
    
    
    9.0
    %
    
    
    9.9
    %
    
    
    9.3
    %
    
    
    10.0
    %Loss on sale and impairment of property and equipment
    
    
    0.0
    %
    
    
    0.2
    %
    
    
    0.2
    %
    
    
    0.3
    %Restructuring expenses
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    2.3
    %Income (loss) from operations
    
    
    1.7
    %
    
    
    (1.6
    %)
    
    
    0.9
    %
    
    
    (2.4
    %)Interest expense and other, net
    
    
    1.1
    %
    
    
    1.1
    %
    
    
    1.1
    %
    
    
    1.6
    %Income (loss) before income taxes
    
    
    0.6
    %
    
    
    (2.7
    %)
    
    
    (0.2
    %)
    
    
    (4.0
    %)Income tax expense (benefit)
    
    
    0.2
    %
    
    
    (1.0
    %)
    
    
    0.0
    %
    
    
    (1.5
    %)Net income (loss)
    
    
    0.4
    %
    
    
    (1.7
    %)
    
    
    (0.2
    %)
    
    
    (2.5
    %)
 Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010
 Revenues.
   Three Months EndedMarch 31,Category of Core Revenue
    
    2011
    
    
    2010
    
    
    % ChangeOverhead distribution and other
    
    $
    67.9
    
    
    $
    51.2
    
    
    
    32.5
    %Underground distribution
    
    
    14.8
    
    
    
    14.6
    
    
    
    1.3
    %Transmission
    
    
    17.5
    
    
    
    16.3
    
    
    
    7.5
    %Engineering and substation
    
    
    37.5
    
    
    
    16.5
    
    
    
    127.0
    %Total
    
    $
    137.7
    
    
    $
    98.6
    
    
    
    39.6
    %
  14




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##### Table of Contents




    
    Distribution Revenues. Our combined revenues for overhead and underground distribution
services increased 25.3% from the prior year, primarily due to a general increase in demand
for overhead distribution maintenance coupled with the addition of Klondyke. Distribution
revenues were also positively impacted by less storm restoration revenues compared to the
same period in the prior year, as storm restoration work generally diverts man-hours from
core work, which had decreased core revenues in the prior year. Underground maintenance
experienced a smaller level of quarter-over-quarter growth and demand for underground
distribution remains depressed due to the weak market for new residential housing.
 
    
    Transmission Revenues. Transmission revenues increased 7.5% from the prior year,
primarily due to the timing of certain projects that have started in the southeast United
States, increased material procurement revenues and the addition of Klondyke. We expect
our transmission revenues to continue to increase year-over-year, but revenues may vary
period to period due to the timing of work on significant projects.
 
    
    Engineering and Substation Revenues. Engineering and substation revenues increased
127.0% from the prior year, primarily due to material procurement services, including for
the VC Summer project, along with the addition of Klondyke. Our engineering and
substation services continue to produce increased revenues, and we expect that trend to
continue in the foreseeable future. However, engineering and substation revenues may
fluctuate, especially on a quarterly basis, due to the timing of material procurement
revenues.
   Gross Profit.
 General and Administrative Expenses.
 Loss on Sale and Impairment of Property and Equipment .
 Interest Expense and Other, Net.
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Income Tax Expense or Benefit.
 Nine Months Ended March 31, 2011 Compared to Nine Months Ended March 31, 2010
 Revenues.
   Nine Months EndedMarch 31,Category of Core Revenue
    
    2011
    
    
    2010
    
    
    % ChangeOverhead distribution and other
    
    $
    209.1
    
    
    $
    185.1
    
    
    
    12.9
    %Underground distribution
    
    
    48.1
    
    
    
    46.9
    
    
    
    2.5
    %Transmission
    
    
    60.8
    
    
    
    51.7
    
    
    
    17.5
    %Engineering and substation
    
    
    89.3
    
    
    
    56.9
    
    
    
    57.0
    %Total
    
    $
    407.3
    
    
    $
    340.6
    
    
    
    19.6
    %
 
    
    Distribution Revenues. Our combined revenues for overhead and underground distribution
services increased 10.7% from the prior year, primarily due to a general increase in demand
for overhead distribution maintenance during the period coupled with the addition of
Klondyke. Distribution revenues were also positively impacted by less storm restoration
revenues compared to the same period in the prior year, as storm restoration work generally
diverts man-hours from core work, which had decreased core revenues in the prior year.
Underground maintenance experienced a smaller level of period-over-period growth and demand
for underground distribution remains depressed due to the weak market for new residential
housing.
 
    
    Transmission Revenues. Transmission revenues increased 17.5% from the prior year,
primarily due to the timing of certain projects that have started in the southeast United
States, increased material procurement revenues and the addition of Klondyke. We expect
our transmission revenues to continue to increase year-over-year, but revenues may vary
period to period due to the timing of work on significant projects.
 
    
    Engineering and Substation Revenues. Engineering and substation revenues increased
57.0% increase from the prior year, primarily due to material procurement services,
including for the VC Summer project, along with the addition of Klondyke. Our engineering
and substation services continue to produce increased revenues, and we expect that trend to
continue in the foreseeable future. However, engineering and substation revenues may
fluctuate, especially on a quarterly basis, due to the timing of material procurement
revenues.
  16




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##### Table of Contents



Gross Profit.
 General and Administrative Expenses.
 Loss on Sale and Impairment of Property and Equipment .
 Restructuring Expenses.
  Interest Expense and Other, Net.
 Income Tax Benefit.
 Liquidity and Capital Resources
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Changes in Cash Flows:
 Nine Months EndedMarch 31,2011
    
    
    2010(In millions)Net cash provided by operating activities
    
    $
    26.9
    
    
    $
    18.4Net cash used in investing activities
    
    $
    (9.6
    )
    
    $
    (7.8
    )Net cash used in financing activities
    
    $
    (16.6
    )
    
    $
    (2.7
    )
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##### Table of Contents



EBITDA U.S. GAAP Reconciliation
  Three months ended
    
    
    Nine months endedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010(In millions)
    
    
    (In millions)Net income (loss)
    
    $
    0.6
    
    
    $
    (2.0
    )
    
    $
    (0.6
    )
    
    $
    (9.4
    )Adjustments:Interest expense
    
    
    1.6
    
    
    
    1.4
    
    
    
    5.1
    
    
    
    6.1Income tax expense (benefit)
    
    
    0.3
    
    
    
    (1.2
    )
    
    
    (0.3
    )
    
    
    (5.8
    )Depreciation and
amortization
    
    
    9.4
    
    
    
    8.5
    
    
    
    28.5
    
    
    
    26.8EBITDA
    
    $
    11.9
    
    
    $
    6.7
    
    
    $
    32.7
    
    
    $
    17.7
  Senior Credit Facility
   19




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Concentration of Credit Risk
  Legal Proceedings
   20




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##### Table of Contents



Off-Balance Sheet Arrangements
  Letters of Credit
  Performance Bonds and Parent Guarantees
   Seasonality; Fluctuations of Results
  Recent Accounting Pronouncements
   21




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##### Table of Contents



Uncertainty of Forward-Looking Statements and Information
  
    
    our expectation that the Tanzanian powerline projects will utilize our engineering,
procurement and construction capabilities, that distribution construction work on the
project will begin during the fourth quarter of fiscal 2011 and that work on the project
will continue through the second quarter of fiscal 2013;
 
    
    our expectation that the goodwill recognized in our acquisition of Klondyke will be
amortizable for tax purposes;
 
    
    our expectation that substantially all the assets held for sale at March 31, 2010 will
be sold during the next twelve months;
 
    
    our belief that the lawsuits, claims or other proceedings to which we are subject in the
ordinary course of business, individually or in the aggregate, will not have a material
adverse effect on our results of operations, financial position or cash flows;
 
    
    our expectation that our engineering and substation services will continue to produce
increased revenues in the foreseeable future;
 
    
    our expectation that our transmission revenues will continue to increase year-over-year;
 
    
    our expectation that current volatility in the capital markets will not have a material
impact on the principal amounts of our cash investments;
 
    
    our belief that our cash flow from operations, available cash and cash equivalents, and
borrowings available under our senior credit facility will be adequate to meet our ordinary
course liquidity needs for the foreseeable future;
    
    our expectation that our ability to satisfy our obligations or to fund planned capital
expenditures will depend on our future performance and our belief that this is subject to a
certain extent on general economic, financial, competitive, legislative, regulatory and
other factors beyond our control;
 
    
    the possibility that if we fail to comply with the covenants contained in our senior
credit facility, we may be unable to access the revolving portion of our senior credit
facility upon which we depend for letters of credit and other short-term borrowings and
that this would have a negative impact on our liquidity and could require us to obtain
alternative short-term financing;
 
    
    our belief that if we pursue any material acquisitions in the foreseeable future we may
need to finance this activity through additional equity or debt financing;
 
    
    our belief that it is unlikely that any material claims will be made under a letter of
credit in the foreseeable future;
 
    
    our belief that it is unlikely that we will have to fund significant claims under our
surety arrangements in the foreseeable future;
 
    
    our expectation that our gross profit and operating income (loss) would be negatively
affected if diesel prices rise due to additional costs that we may not fully recover
through increases in prices to customers;
 
    
    our expectation that the net amount of the existing losses in OCI at March 31, 2010
reclassified into net income (loss) over the next twelve months will be approximately
$150,000;
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##### Table of Contents




    
    our belief that any potential underfunded liability related to one or more
multi-employer pension plans in which Klondyke is a participant would not have a material
adverse effect on our results of operations, financial position or cash flows;
 
    
    our belief that we will be in compliance with the financial covenants of our senior
credit facility for the remainder of the term of such facility; and
 
    
    our anticipation that we will refinance our senior credit facility during late fiscal
2011 or early fiscal 2012.
   
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Internal Control over Financial Reporting
  Design and Operation of Control Systems
   23




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 6.
    
    Exhibits
 Exhibit
    
    Description3.1
    
    
    Certificate of Incorporation of Pike Electric Corporation
(Incorporated by reference to Exhibit 3.1 on our Registration
Statement on Form S-1/A filed July 11, 2005)3.2
    
    
    Amended and Restated Bylaws of Pike Electric Corporation, as of
April 30, 2009 (Incorporated by reference to Exhibit 3.1 on our
Form 8-K filed May 5, 2009)31.1
    
    
    Certification of Periodic Report by Chief Executive Officer
pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (filed herewith)31.2
    
    
    Certification of Periodic Report by Chief Financial Officer
pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (filed herewith)32.1
    
    
    Certification of Periodic Report by Chief Executive Officer and
Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith)
  24




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##### Table of Contents



SIGNATURES
  PIKE ELECTRIC CORPORATION(Registrant)Date: May 10, 2011
    
    By:
    
    /s/

J. Eric PikeChairman, Chief Executive Officer and PresidentDate: May 10, 2011
    
    By:
    
    /s/

Anthony K. SlaterExecutive Vice President and Chief Financial Officer
  25