##### 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, 2009
 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
    
    20-3112047(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 100 Pike Way, PO Box 868, Mount Airy, NC 27030
 (Address of principal executive office)
 (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
    
    Smaller reporting company o(Do not check if smaller reporting company)
 Yes o No þ




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##### 



PIKE ELECTRIC CORPORATION
FORM 10-Q
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2009
 INDEX
 Part I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited):Condensed consolidated balance sheets
    
    
    1Condensed consolidated statements of income
    
    
    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
    
    
    12Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    21Part II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    23Signatures
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32.1




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 PIKE ELECTRIC CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share amounts)
 March 31,
    
    
    June 30,2009
    
    
    2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    25,572
    
    
    $
    11,357Accounts receivable from customers, net
    
    
    70,531
    
    
    
    62,224Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    47,854
    
    
    
    40,410Inventories
    
    
    9,014
    
    
    
    8,343Prepaid expenses and other
    
    
    6,083
    
    
    
    5,123Deferred income taxes
    
    
    14,521
    
    
    
    15,376Total current assets
    
    
    173,575
    
    
    
    142,833Property and equipment, net
    
    
    225,004
    
    
    
    229,119Goodwill
    
    
    105,019
    
    
    
    94,402Other intangibles, net
    
    
    41,426
    
    
    
    40,065Deferred loan costs, net
    
    
    2,175
    
    
    
    2,778Other assets
    
    
    1,464
    
    
    
    1,463Total assets
    
    $
    548,663
    
    
    $
    510,660LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    10,778
    
    
    $
    10,867Accrued compensation
    
    
    21,716
    
    
    
    22,157Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    5,255
    
    
    
    397Accrued expenses and other
    
    
    9,713
    
    
    
    5,018Income taxes payable
    
    
    3,051
    
    
    
    442Current portion of deferred compensation
    
    
    1,383
    
    
    
    3,666Current portion of insurance and claim accruals
    
    
    30,636
    
    
    
    28,873Total current liabilities
    
    
    82,532
    
    
    
    71,420Long-term debt
    
    
    140,500
    
    
    
    140,500Insurance and claim accruals, net of current portion
    
    
    6,817
    
    
    
    7,989Deferred compensation, net of current portion
    
    
    5,369
    
    
    
    6,283Deferred income taxes
    
    
    56,510
    
    
    
    62,416Other liabilities
    
    
    3,983
    
    
    
    1,100Commitments 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; 33,419
and 33,183 shares issued and outstanding at March 31, 2009 and
June 30, 2008, respectively
    
    
    6,427
    
    
    
    6,427Additional paid-in capital
    
    
    151,931
    
    
    
    148,288Accumulated other comprehensive loss, net of taxes
    
    
    (1,559
    )
    
    
    (806
    )Retained earnings
    
    
    96,153
    
    
    
    67,043Total stockholders equity
    
    
    252,952
    
    
    
    220,952Total liabilities and stockholders equity
    
    $
    548,663
    
    
    $
    510,660
   1




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PIKE ELECTRIC CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 (In thousands, except per share amounts)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues
    
    $
    154,921
    
    
    $
    131,362
    
    
    $
    485,014
    
    
    $
    414,213Cost of operations
    
    
    126,792
    
    
    
    110,607
    
    
    
    393,488
    
    
    
    345,717Gross profit
    
    
    28,129
    
    
    
    20,755
    
    
    
    91,526
    
    
    
    68,496General and administrative expenses
    
    
    12,137
    
    
    
    10,377
    
    
    
    36,607
    
    
    
    31,253Loss on sale and impairment of property
and equipment
    
    
    1,096
    
    
    
    93
    
    
    
    1,949
    
    
    
    2,076Income from operations
    
    
    14,896
    
    
    
    10,285
    
    
    
    52,970
    
    
    
    35,167Other expense (income):Interest expense
    
    
    2,162
    
    
    
    3,327
    
    
    
    7,228
    
    
    
    11,473Other, net
    
    
    (238
    )
    
    
    (43
    )
    
    
    (746
    )
    
    
    (168
    )Total other expense
    
    
    1,924
    
    
    
    3,284
    
    
    
    6,482
    
    
    
    11,305Income before income taxes
    
    
    12,972
    
    
    
    7,001
    
    
    
    46,488
    
    
    
    23,862Income tax expense
    
    
    4,702
    
    
    
    2,718
    
    
    
    17,378
    
    
    
    9,217Net income
    
    $
    8,270
    
    
    $
    4,283
    
    
    $
    29,110
    
    
    $
    14,645Earnings per share:Basic
    
    $
    0.25
    
    
    $
    0.13
    
    
    $
    0.88
    
    
    $
    0.45Diluted
    
    $
    0.25
    
    
    $
    0.13
    
    
    $
    0.86
    
    
    $
    0.44Shares used in computing earnings per share:Basic
    
    
    33,036
    
    
    
    32,844
    
    
    
    33,011
    
    
    
    32,791Diluted
    
    
    33,703
    
    
    
    33,605
    
    
    
    33,733
    
    
    
    33,655
   2




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PIKE ELECTRIC CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In thousands)
 Nine Months EndedMarch 31,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    29,110
    
    
    $
    14,645Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    27,823
    
    
    
    27,408Non-cash interest expense
    
    
    1,116
    
    
    
    2,560Deferred income taxes
    
    
    (2,845
    )
    
    
    (5,621
    )Loss on sale and impairment of property and equipment
    
    
    1,949
    
    
    
    2,076Equity compensation expense
    
    
    2,520
    
    
    
    2,085Excess tax benefit from stock-based compensation
    
    
    (198
    )
    
    
    (977
    )Changes in operating assets and liabilities:Accounts receivable and costs and estimated earnings in excess
of billings on uncompleted contracts
    
    
    2,961
    
    
    
    14,062Inventories, prepaid expenses and other
    
    
    (1,717
    )
    
    
    770Insurance and claim accruals
    
    
    591
    
    
    
    (226
    )Accounts payable and other
    
    
    (5,603
    )
    
    
    (5,840
    )Deferred compensation
    
    
    (3,710
    )
    
    
    (3,034
    )Net cash provided by operating activities
    
    
    51,997
    
    
    
    47,908Cash flows from investing activities:Purchases of property and equipment
    
    
    (21,270
    )
    
    
    (6,353
    )Business acquisitions, net
    
    
    (22,632
    )
    
    
    Net proceeds from sale of property and equipment
    
    
    5,247
    
    
    
    10,182Net cash (used in) provided by investing activities
    
    
    (38,655
    )
    
    
    3,829Cash flows from financing activities:Principal payments on long-term debt
    
    
    
    
    
    
    (51,000
    )Borrowings under revolving credit facility
    
    
    84,705
    
    
    
    17,775Repayments under revolving credit facility
    
    
    (84,705
    )
    
    
    (17,775
    )Proceeds from exercise of stock options and employee stock purchases
    
    
    675
    
    
    
    1,285Excess tax benefit from stock-based compensation
    
    
    198
    
    
    
    977Net cash provided by (used in) financing activities
    
    
    873
    
    
    
    (48,738
    )Net increase in cash and cash equivalents
    
    
    14,215
    
    
    
    2,999Cash and cash equivalents beginning of year
    
    
    11,357
    
    
    
    1,467Cash and cash equivalents end of period
    
    $
    25,572
    
    
    $
    4,466
   3




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PIKE ELECTRIC CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 For the three and nine months ended March 31, 2009 and 2008
 (In thousands, except per share amounts)
 1. Basis of Presentation
  2. Business
    Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Core services
    
    $
    100,681
    
    
    
    65.0
    %
    
    $
    120,305
    
    
    
    91.6
    %
    
    $
    342,212
    
    
    
    70.6
    %
    
    $
    378,705
    
    
    
    91.4
    %Storm restoration
services
    
    
    54,240
    
    
    
    35.0
    %
    
    
    11,057
    
    
    
    8.4
    %
    
    
    142,802
    
    
    
    29.4
    %
    
    
    35,508
    
    
    
    8.6
    %Total
    
    $
    154,921
    
    
    
    100.0
    %
    
    $
    131,362
    
    
    
    100.0
    %
    
    $
    485,014
    
    
    
    100.0
    %
    
    $
    414,213
    
    
    
    100.0
    %
 3. Energy Delivery Services Acquisition
   4




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Current assets
    
    $
    19,225Property and equipment
    
    
    6,297Customer relationships
    
    
    3,400Non-compete agreements
    
    
    700Deferred tax asset
    
    
    1,723Goodwill
    
    
    10,617Total assets acquired
    
    
    41,962Current liabilities
    
    
    (16,359
    )Non-current liabilities
    
    
    (2,971
    )Total liabilities assumed
    
    
    (19,330
    )Net assets
    
    $
    22,632
   Three months ended
    
    
    Nine months endedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues
    
    $
    154,921
    
    
    $
    154,732
    
    
    $
    503,061
    
    
    $
    481,143Net income
    
    $
    8,270
    
    
    $
    1,996
    
    
    $
    28,621
    
    
    $
    8,284Basic earnings per common share
    
    $
    0.25
    
    
    $
    0.06
    
    
    $
    0.87
    
    
    $
    0.25Diluted earnings per common share
    
    $
    0.25
    
    
    $
    0.06
    
    
    $
    0.85
    
    
    $
    0.25
 4. Stock-Based Compensation
   5




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5. Property and Equipment
  6. Earnings Per Share
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Basic:Net income
    
    $
    8,270
    
    
    $
    4,283
    
    
    $
    29,110
    
    
    $
    14,645Weighted average common shares
    
    
    33,036
    
    
    
    32,844
    
    
    
    33,011
    
    
    
    32,791Basic earnings per share
    
    $
    0.25
    
    
    $
    0.13
    
    
    $
    0.88
    
    
    $
    0.45Diluted:Net income
    
    $
    8,270
    
    
    $
    4,283
    
    
    $
    29,110
    
    
    $
    14,645Weighted average common shares
    
    
    33,036
    
    
    
    32,844
    
    
    
    33,011
    
    
    
    32,791Potential common stock arising from stock
options and restricted stock
    
    
    667
    
    
    
    761
    
    
    
    722
    
    
    
    864Weighted average common shares  diluted
    
    
    33,703
    
    
    
    33,605
    
    
    
    33,733
    
    
    
    33,655Diluted earnings per share
    
    $
    0.25
    
    
    $
    0.13
    
    
    $
    0.86
    
    
    $
    0.44
  7. Fair Value of Financial Instruments
 Fair Value Measurements
 Effective Date of FASB
Statement No. 157
  
    
    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.
  6




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##### Table of Contents




    
    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.
    March 31,Description
    
    2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Interest rate swap agreements
    
    $
    (2,558
    )
    
    $
    
    
    
    $
    (2,558
    )
    
    $
    Diesel fuel swap agreements
    
    
    (1,190
    )
    
    
    
    
    
    
    (1,190
    )
    
    
    Total
    
    $
    (3,748
    )
    
    $
    
    
    
    $
    (3,748
    )
    
    $
    
 8. Income Taxes
  9. Derivative Instruments and Hedging Activities
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133
 Accounting for Derivative Instruments and Hedging
Activities
  7




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Interest Rate Risk
    Diesel Fuel Risk
   Balance Sheet and Statement of Income Information
  Liability DerivativesMarch 31, 2009Balance Sheet Location
    
    
    Fair ValueDerivatives designated as hedging
instruments under SFAS 133:Interest rate swaps
    
    Accrued expenses and other
    
    $
    2,558Total derivatives designated as hedging
instruments under SFAS 133
    
    
    
    
    
    $
    2,558Derivatives not designated as hedging
instruments under SFAS 133:Diesel fuel swaps
    
    Accrued expenses and other
    
    $
    1,190Total derivatives not designated as hedging
instruments under SFAS 133
    
    
    
    
    
    $
    1,190Total derivatives
    
    
    
    
    
    $
    3,748
  8




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Derivatives designated as cash flow hedging instruments under SFAS 133:
 Location of Gain (Loss)
    
    
    Amount of Gain (Loss)Amount of Gain (Loss)
    
    
    Reclassified from
    
    
    Reclassified fromRecognized in OCI
    
    
    Accumulated OCI into
    
    
    Accumulated OCI into(Effective Portion)
    
    
    Income
    
    
    IncomeFor the Three Months Ended March 31,
    
    2009
    
    
    2008
    
    
    
    
    
    
    2009
    
    
    2008Interest rate swaps
    
    $
    388
    
    
    $
    (1,487
    )
    
    Interest expense
    
    $
    (529
    )
    
    $
    (33
    )Diesel fuel swap
    
    
    
    
    
    
    (102
    )
    
    Cost of operations
    
    
    
    
    
    
    52Totals
    
    $
    388
    
    
    $
    (1,589
    )
    
    
    
    
    
    $
    (529
    )
    
    $
    19For the Nine Months Ended March 31,
    

    2009
    
    

    2008
    
    
    
    
    
    

    2009
    
    

    2008Interest rate swaps
    
    $
    (753
    )
    
    $
    (1,849
    )
    
    Interest expense
    
    $
    (976
    )
    
    $
    (3
    )Diesel fuel swap
    
    
    
    
    
    
    8
    
    
    Cost of operations
    
    
    
    
    
    
    114Totals
    
    $
    (753
    )
    
    $
    (1,841
    )
    
    
    
    
    
    $
    (976
    )
    
    $
    111
 Location of Gain (Loss)
    
    
    Amount of Gain (Loss)(Ineffective Portion)
    
    
    (Ineffective Portion)and Excluded from
    
    
    and Excluded fromEffectiveness Testing
    
    
    Effectiveness TestingFor the Three Months Ended March 31,

    
    
    
    
    
    2009
    
    
    2008Interest rate swaps
    
    
    
    
    
    $
    
    
    
    $
    Diesel fuel swap
    
    Cost of operations
    
    
    
    
    
    
    (7
    )Totals
    
    
    
    
    
    $
    
    
    
    $
    (7
    )For the Nine Months Ended March 31,
    
    
    
    
    

    2009
    
    

    2008Interest rate swaps
    
    
    
    
    
    $
    
    
    
    $
    Diesel fuel swap
    
    Cost of operations
    
    
    
    
    
    
    1Totals
    
    
    
    
    
    $
    
    
    
    $
    1
 Derivatives not designated as cash flow hedging instruments under SFAS 133:
 Amount of Gain (Loss) Recognized inIncomeLocation of Gain
    
    
    For the Three
    
    
    For the Nine(Loss) Recognized
    
    
    Months Ended
    
    
    Months Endedin Income
    
    
    March 31, 2009Diesel fuel swaps
    
    Cost of operations
    
    $
    406
    
    
    $
    (1,190
    )Totals
    
    
    
    
    
    $
    406
    
    
    $
    (1,190
    )
  9




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Accumulated OCI
  For the Three Months
    
    
    For the Nine MonthsEnded March 31,
    
    
    Ended March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Net accumulated derivative loss deferred
at beginning of period
    
    $
    (1,947
    )
    
    $
    (260
    )
    
    $
    (806
    )
    
    $
    (8
    )Deferral of net derivative loss in accumulated other
comprehensive loss
    
    
    (141
    )
    
    
    (1,570
    )
    
    
    (1,729
    )
    
    
    (1,730
    )Reclassification of net derivative income (loss) to
income
    
    
    529
    
    
    
    (19
    )
    
    
    976
    
    
    
    (111
    )Net accumulated derivative loss deferred at
end of period
    
    $
    (1,559
    )
    
    $
    (1,849
    )
    
    $
    (1,559
    )
    
    $
    (1,849
    )
    10. Comprehensive Income
  For the Three Months
    
    
    For the Nine MonthsEnded March 31,
    
    
    Ended March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    8,270
    
    
    $
    4,283
    
    
    $
    29,110
    
    
    $
    14,645Change in fair value of diesel fuel cash
flow hedge, net of income taxes
    
    
    
    
    
    
    (102
    )
    
    
    
    
    
    
    8Change in fair value of interest rate cash
flow hedges, net of income taxes
    
    
    388
    
    
    
    (1,487
    )
    
    
    (753
    )
    
    
    (1,849
    )Comprehensive income
    
    $
    8,658
    
    
    $
    2,694
    
    
    $
    28,357
    
    
    $
    12,804
 11. Recent Accounting Pronouncements
 Business Combinations
  10




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Noncontrolling Interests in Consolidated
Financial Statements, an amendment of ARB No. 51
 12. Commitments and Contingencies
 Legal Proceedings
  Performance Bonds and Parent Guarantees
  Operating Leases
  Indemnities
   11




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Introduction
    Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Core services
    
    $
    100.7
    
    
    
    65.0
    %
    
    $
    120.3
    
    
    
    91.6
    %
    
    $
    342.2
    
    
    
    70.6
    %
    
    $
    378.7
    
    
    
    91.4
    %Storm restoration services
    
    
    54.2
    
    
    
    35.0
    %
    
    
    11.1
    
    
    
    8.4
    %
    
    
    142.8
    
    
    
    29.4
    %
    
    
    35.5
    
    
    
    8.6
    %Total
    
    $
    154.9
    
    
    
    100.0
    %
    
    $
    131.4
    
    
    
    100.0
    %
    
    $
    485.0
    
    
    
    100.0
    %
    
    $
    414.2
    
    
    
    100.0
    %
 Critical Accounting Policies
   12




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##### Table of Contents



Operational and Other Factors
  
    
    General economic conditions may impact utility maintenance expenditures, and certain of
our customers powerline maintenance projects may be temporarily deferred. We continue to
work closely with all customers to provide a skilled, flexible work force.
 
    
    When we add new customers and arrangements, we generally experience an increase in
costs, including the costs of training and outfitting our crews and spending on equipment
and specialized tools and supplies. Once the crews and equipment are fully utilized, our
margins generally increase over the life of the arrangement.
 
    
    Industry-wide costs for workers compensation, medical and general liability insurance
could rise at a rate faster than our revenues. We have implemented several safety
initiatives designed to reduce incident rates and corresponding insurance costs.
 
    
    There are a limited number of skilled workers who can perform our work. When we
experience increased demand in a particular market, labor costs tend to increase. We
historically have been able to obtain price increases when we renegotiate rates with our
customers to offset these cost increases.
 
    
    We own the vast majority of our equipment and vehicles. Due to decreased demand for
our core services in recent periods, we maintain certain underutilized equipment and
vehicles for future growth. As utility maintenance is deferred our fixed fleet costs will
cause a decline in our gross profit percentage.
 
    
    We have a large fleet of vehicles and equipment that primarily use diesel fuel. Fuel
costs have been extremely volatile in recent years. We have implemented bulk purchasing in
certain areas to lower our fuel costs. We utilize diesel fuel swaps and fixed-price
arrangements and may enter into additional diesel fuel derivative instruments and
fixed-price arrangements in the future, depending on market conditions.
 Results of Operations
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Core services
    
    
    65.0
    %
    
    
    91.6
    %
    
    
    70.6
    %
    
    
    91.4
    %Storm restoration services
    
    
    35.0
    %
    
    
    8.4
    %
    
    
    29.4
    %
    
    
    86.0
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations
    
    
    81.8
    %
    
    
    84.2
    %
    
    
    81.1
    %
    
    
    83.5
    %Gross profit
    
    
    18.2
    %
    
    
    15.8
    %
    
    
    18.9
    %
    
    
    16.5
    %General and administrative expenses
    
    
    7.8
    %
    
    
    7.9
    %
    
    
    7.5
    %
    
    
    7.5
    %Loss on sale of property and equipment
    
    
    0.8
    %
    
    
    0.1
    %
    
    
    0.4
    %
    
    
    0.5
    %Income from operations
    
    
    9.6
    %
    
    
    7.8
    %
    
    
    11.0
    %
    
    
    8.5
    %Interest expense and other, net
    
    
    1.2
    %
    
    
    2.5
    %
    
    
    1.4
    %
    
    
    2.7
    %Income before income taxes
    
    
    8.4
    %
    
    
    5.3
    %
    
    
    9.6
    %
    
    
    5.8
    %Income tax expense
    
    
    3.0
    %
    
    
    2.0
    %
    
    
    3.6
    %
    
    
    2.3
    %Net income
    
    
    5.4
    %
    
    
    3.3
    %
    
    
    6.0
    %
    
    
    3.5
    %
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Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Revenues.
     Gross Profit.
 
    
    A higher mix of storm revenue.Our storm restoration services typically generate a
higher profit margin than core services. During a storm response, our storm-assigned crews
and equipment are fully utilized. In addition, the overtime typically worked on storm
events lowers the ratio of fixed costs to revenue. Storm
gross profit margins can vary greatly depending on the geographic area, customer and amount
of overtime worked.
  14




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##### Table of Contents




    
    Lower fuel expense as a percentage of revenue. Fuel expense decreased to 3.7% of total
revenues in the third quarter of fiscal 2009 compared to 6.4% for the same period in the
prior year as fuel costs have moderated significantly since the record highs reached during
the spring and summer of 2008.
  
    
    Lower gross profit margin material procurement services. Material procurement services
offered in the EDS business generate lower gross profit margins compared to other core
services. Our engineering and substation businesses recognized approximately $5.7 million
in material procurement revenues in the quarter.
 
    
    Higher fixed equipment costs as a percent of revenue due to decreased utilization.We
own much of our equipment, and both underground and overhead distribution equipment
utilization decreased as a result of a reduction in overall utility distribution
maintenance projects in our territory. This impact was compounded by the excess leased and
special rental equipment which we assumed in the EDS transaction.
 General and Administrative Expenses.
 Loss on Sale and Impairment of Property and Equipment .
 Interest Expense and Other, Net.
 Income Tax Expense.
 Net Income.
 Nine Months Ended March 31, 2009 Compared to the Nine Months Ended March 31, 2008
 Revenues.
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##### Table of Contents



Gross Profit.
 General and Administrative Expenses.
 Loss on Sale and Impairment of Property and Equipment .
 Interest Expense and Other, Net.
 Income Tax Expense.
 Net Income .
 Liquidity and Capital Resources
      16




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##### Table of Contents



Changes in Cash Flows:
 Nine Months EndedMarch 31,2009
    
    
    2008(In millions)Net cash provided by operating activities
    
    $
    52.0
    
    
    $
    47.9Net cash (used in) provided by investing activities
    
    $
    (38.7
    )
    
    $
    3.8Net cash provided by (used in) financing activities
    
    $
    0.9
    
    
    $
    (48.7
    )
    Senior Credit Facility
    17




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##### Table of Contents



Concentration of Credit Risk
  Legal Proceedings
  Off-Balance Sheet Arrangements
  Operating Leases
  Letters of Credit
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##### Table of Contents



Performance Bonds and Parent Guarantees
   Seasonality; Fluctuations of Results
  Inflation
  Recent Accounting Pronouncements
  Uncertainty of Forward-Looking Statements and Information
  
    
    our belief that a rise in diesel prices would negatively affect our gross profit and
operating income to an extent that may not be fully recoverable through price increases to
customers;
 
    
    our belief that the lawsuits, claims or other proceedings to which we are subject in the
ordinary course of business will not have a material adverse effect on our results of
operation or financial position;
  19




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##### Table of Contents




    
    our belief that no material claims will be made under a letter of credit issued on our
behalf;
 
    
    our belief that it is unlikely that we will have to fund significant claims under our
surety arrangements in the foreseeable future;
 
    
    our belief that a significant amount of pent-up demand for our services is building and
power system reliability is being challenged;
 
    
    our belief that smart-grid technology implementation, the demand for renewable energy
solutions, the anticipated energy infrastructure stimulus plan will continue to highlight
the needs for our services;
 
    
    our belief that the 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 belief that we will be able to renegotiate our revolving credit facility before its
maturity in July 2010.
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
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##### Table of Contents



Diesel Fuel Risk
   
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Internal Control over Financial Reporting
  Design and Operation of Control Systems
   21




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  We are unable to predict the impact of the weakening U.S. economy and financial market
deterioration on our industry, our customers or our ability to access the capital or credit
markets.
  22




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##### Table of Contents



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)10.1
    
    
    Form of Forfeiture and Termination Agreement between Pike Electric
Corporation and certain of its officers (Incorporated by reference
to Exhibit 10.1 on our Form 8-K filed February 3, 2009)10.2
    
    
    Form of Indemnification Agreement between Pike Electric
Corporation and its directors (Incorporated by reference to
Exhibit 10.1 on our Form 8-K filed May 5, 2009)10.3
    
    
    First Amendment to Amended and Restated Employment Agreement,
dated April 30, 2009, by and between Pike Electric Corporation and
J. Eric Pike (Incorporated by reference to Exhibit 10.2 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-14a 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-14a 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 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith)
  23




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##### Table of Contents



SIGNATURES
  PIKE ELECTRIC CORPORATION
(Registrant)Date: May 11, 2009
    By:
    /s/ J. Eric PikeJ. Eric PikeChairman, Chief Executive Officer and PresidentDate: May 11, 2009
    By:
    /s/ Anthony K. SlaterAnthony K. SlaterChief Financial Officer  24




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description31.1
    
    
    Certification of Periodic Report by Chief Executive Officer
pursuant to Rule 13a-14(a)/15d-14a 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-14a 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 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith)
  25