##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q/A
 
 
 Amendment No. 1
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-13783
 
 Integrated Electrical Services, Inc.
  Delaware
    
    76-0542208(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 1800 West Loop South, Suite 500, Houston, Texas 77027
 Registrants telephone number, including area code:
 
 þ o
 Yes
o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ
 Yes þ No o




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Explanatory Paragraph
  
  
     2




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##### 



INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets as of June 30, 2009 and September 30, 2008
    
    6Condensed Consolidated Statements of Income for the Three Months ended June 30, 2009 and 2008
    
    7Condensed Consolidated Statements of Income for the Nine Months Ended June 30, 2009 and 2008
    
    8Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2009 and 2008
    
    9Notes to Condensed Consolidated Financial Statements
    
    10Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    28Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    42Item 4. Controls and Procedures
    
    42PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    43Item 1A. Risk Factors
    
    43Item 1B. Unresolved Staff Comments
    
    44Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    44Item 3. Defaults Upon Senior Securities
    
    44Item 4. Submission of Matters to a Vote of Security Holders
    
    45Item 5. Other Information
    
    45Item 6. Exhibits
    
    45Signatures
    
    46Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
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DEFINITIONS
  DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
  
    
    fluctuations in operating activity due to downturns in levels of construction,
seasonality and differing regional economic conditions;
    
    competition in the construction industry, both from third parties and former employees,
which could result in the loss of one or more projects, customers or lead to lower margins
on new contracts;
    
    our ability to successfully manage construction projects;
    
    errors in estimating revenue and progress to date on percentage-of-completion
contracts;
    
    failure to recognize revenue from work that is yet to be performed on
uncompleted contracts and/or from work that has been contracted but not started due to
changes in contractual commitments;
    
    inaccurate estimates used when entering into fixed-priced contracts;
    
    challenges integrating new types of work or new processes into our divisions;
    
    the cost and availability of qualified labor, especially electricians and construction
supervisors;
    
    accidents resulting from the physical hazards related to our work and potential for
liabilities associated with vehicle accidents;
    
    success in transferring, renewing and obtaining electrical and construction licenses;
    
    the possibility that our restructuring program will not be successfully executed;
    
    our ability to pass along increases in the cost of commodities used in our business, in
particular, copper, aluminum, steel, fuel and certain plastics;
    
    potential supply chain disruptions due to credit or liquidity problems faced by
our suppliers;
    
    loss of key personnel and effective transition of new management;
    
    warranty losses or other latent defect claims in excess of our existing reserves and
accruals;
    
    warranty losses or other unexpected liabilities stemming from former divisions that we
have sold or closed;
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
    
    growth in latent defect litigation in states where we provide residential electrical work
for home builders not otherwise covered by insurance;
    
    limitations on the availability of sufficient credit or cash flow to fund our working
capital needs;
    
    difficulty in fulfilling the covenant terms of our credit facilities;
    
    increased cost of surety bonds affecting margins on work and the potential for our surety
providers to refuse bonding at their discretion;
    
    increases in bad debt expense, days sales outstanding due to liquidity problems
and potential bankruptcy faced by our customers;
    
    credit and capital market conditions, including changes in interest rates that
affect the cost and availability of construction financing and mortgages, and our customers
to retain existing financing which could lead to project cancellations;
    
    changes in the assumptions made regarding future events used to value our stock
options and performance-based stock awards;
    
    uncertainties inherent in estimating future operating results, including revenues,
operating income and cash flow;
    
    disagreements with taxing authorities with regard to tax positions we have adopted;
    
    complications associated with the incorporation of new accounting, control and operating
procedures;
    
    the financial impact of new or proposed accounting regulations;
    
    our ability to fully utilize our current and future operating, accounting and
financial systems;
    
    the ability of our controlling shareholder to take action not aligned with our other
shareholders;
    
    the sale or disposition of the shares of our common stock held by our majority
shareholder, which, under certain circumstances, might trigger change of control provisions
in contracts such as employment agreements, supply agreements, and financing and surety
arrangements;
    
    the possibility that certain of our tax net operating losses may be restricted
or reduced in a change of control;
    
    our ability to retain our financing agreements and surety arrangements under a
change in control; and
    
    the possibility that investments we have made in other companies will become
impaired due to performance or liquidity problems.
  www.ies-co.com
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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
 June 30,
    
    
    September 30,2009
    
    
    2008(Unaudited)(Restated)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    60,544
    
    
    $
    64,709Accounts receivable:Trade, net of allowance of $2,690 and $3,556, respectively
    
    
    120,795
    
    
    
    132,273Retainage
    
    
    31,110
    
    
    
    30,833Inventories
    
    
    10,074
    
    
    
    12,856Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    15,750
    
    
    
    14,743Prepaid expenses and other current assets
    
    
    7,337
    
    
    
    6,728Assets from discontinued operations
    
    
    511
    
    
    
    1,967Total current assets
    
    
    246,121
    
    
    
    264,109LONG-TERM RECEIVABLE, net of allowance of $278
    
    
    3,732
    
    
    
    PROPERTY AND EQUIPMENT, net
    
    
    25,798
    
    
    
    26,123GOODWILL
    
    
    4,827
    
    
    
    4,892OTHER NON-CURRENT ASSETS, net
    
    
    19,407
    
    
    
    25,414Total assets
    
    $
    299,885
    
    
    $
    320,538LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    3,556
    
    
    $
    2,905Accounts payable and accrued expenses
    
    
    79,820
    
    
    
    99,860Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    34,407
    
    
    
    33,711Liabilities from discontinued operations
    
    
    332
    
    
    
    504Total current liabilities
    
    
    118,115
    
    
    
    136,980LONG-TERM DEBT, net of current maturities
    
    
    25,980
    
    
    
    26,739OTHER NON-CURRENT LIABILITIES
    
    
    12,122
    
    
    
    10,584Total liabilities
    
    
    156,217
    
    
    
    174,303COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 100,000,000 shares authorized; 15,407,802 and 15,407,802
shares issued and 14,610,405 and 14,753,779 outstanding, respectively
    
    
    154
    
    
    
    154Treasury stock, at cost, 797,397 and 654,023 shares, respectively
    
    
    (14,245
    )
    
    
    (11,591
    )Additional paid-in capital
    
    
    170,121
    
    
    
    170,023Retained deficit
    
    
    (12,362
    )
    
    
    (12,351
    )Total stockholders equity
    
    
    143,668
    
    
    
    146,235Total liabilities and stockholders equity
    
    $
    299,885
    
    
    $
    320,538
 
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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
 
 Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008(Unaudited)
    
    
    (Unaudited)(Restated)Revenues
    
    $
    172,185
    
    
    $
    213,798Cost of services
    
    
    140,648
    
    
    
    179,565Gross profit
    
    
    31,537
    
    
    
    34,233Selling, general and administrative expenses
    
    
    26,995
    
    
    
    27,812Gain on sale of assets
    
    
    (221
    )
    
    
    (115
    )Restructuring charges
    
    
    633
    
    
    
    1,038Income from operations
    
    
    4,130
    
    
    
    5,498Interest and other (income) expense:Interest expense
    
    
    1,325
    
    
    
    1,356Interest income
    
    
    (67
    )
    
    
    (284
    )Other (income) expense, net
    
    
    251
    
    
    
    67Interest and other expense, net
    
    
    1,509
    
    
    
    1,139Income from continuing operations before income taxes
    
    
    2,621
    
    
    
    4,359Provision for income taxes
    
    
    1,405
    
    
    
    2,049Income from continuing operations
    
    
    1,216
    
    
    
    2,310Discontinued operations (Note 2)Income (loss) from discontinued operations
    
    
    217
    
    
    
    (527
    )Provision (benefit) for income taxes
    
    
    136
    
    
    
    (254
    )Net income (loss) from discontinued operations
    
    
    81
    
    
    
    (273
    )Net income
    
    $
    1,297
    
    
    $
    2,037Basic earnings (loss) per share:Continuing operations
    
    $
    0.08
    
    
    $
    0.15Discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Total
    
    $
    0.09
    
    
    $
    0.14Diluted earnings (loss) per share:Continuing operations
    
    $
    0.08
    
    
    $
    0.15Discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Total
    
    $
    0.09
    
    
    $
    0.14Shares used in the computation of earnings (loss) per share (Note 4):Basic
    
    
    14,339,066
    
    
    
    14,969,008Diluted
    
    
    14,403,139
    
    
    
    15,003,131
 
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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
 
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008(Unaudited)
    
    
    (Unaudited)(Restated)Revenues
    
    $
    512,597
    
    
    $
    606,577Cost of services
    
    
    423,188
    
    
    
    508,472Gross profit
    
    
    89,409
    
    
    
    98,105Selling, general and administrative expenses
    
    
    82,761
    
    
    
    85,700Gain on sale of assets
    
    
    (399
    )
    
    
    (139
    )Restructuring charges
    
    
    3,774
    
    
    
    4,431Income from operations
    
    
    3,273
    
    
    
    8,113Interest and other (income) expense:Interest expense
    
    
    3,415
    
    
    
    7,507Interest income
    
    
    (340
    )
    
    
    (1,829
    )Other (income) expense, net
    
    
    (222
    )
    
    
    (1,256
    )Interest and other expense, net
    
    
    2,853
    
    
    
    4,422Income from continuing operations before income taxes
    
    
    420
    
    
    
    3,691Provision for income taxes
    
    
    492
    
    
    
    2,074Net income from continuing operations
    
    
    (72
    )
    
    
    1,617Discontinued operations (Note 2)Income (loss) from discontinued operations
    
    
    182
    
    
    
    (641
    )Provision (benefit) for income taxes
    
    
    121
    
    
    
    (304
    )Net income (loss) from discontinued operations
    
    
    61
    
    
    
    (337
    )Net income
    
    $
    (11
    )
    
    $
    1,280Basic earnings (loss) per share:Continuing operations
    
    $
    (0.01
    )
    
    $
    0.11Discontinued operations
    
    $
    0.01
    
    
    $
    (0.02
    )Total
    
    $
    0.00
    
    
    $
    0.09Diluted earnings (loss) per share:Continuing operations
    
    $
    (0.01
    )
    
    $
    0.11Discontinued operations
    
    $
    0.01
    
    
    $
    (0.02
    )Total
    
    $
    0.00
    
    
    $
    0.09Shares used in the computation of earnings (loss) per share (Note 4):Basic
    
    
    14,326,747
    
    
    
    15,026,675Diluted
    
    
    14,348,238
    
    
    
    15,109,335
 
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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
 
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008(Unaudited)
    
    
    (Unaudited)(Restated)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    (11
    )
    
    $
    1,280Adjustments to reconcile net loss to net cash provided by operating activities:Net (income) loss from discontinued operations
    
    
    (61
    )
    
    
    337Bad debt expense
    
    
    1,295
    
    
    
    2,001Deferred financing cost amortization
    
    
    191
    
    
    
    1,714Depreciation and amortization
    
    
    6,237
    
    
    
    6,422Gain on sale of assets
    
    
    (399
    )
    
    
    (139
    )Non-cash restructuring write-off
    
    
    
    
    
    
    131Non-cash compensation expense
    
    
    1,745
    
    
    
    2,702Paid in kind interest
    
    
    678
    
    
    
    Equity in (gains) losses of investment
    
    
    33
    
    
    
    (424
    )Goodwill adjustment under SOP 90-1
    
    
    65
    
    
    
    1,057Changes in operating assets and liabilities, net of effect of discontinued operations:Accounts receivable
    
    
    6,325
    
    
    
    (17,293
    )Inventories
    
    
    2,782
    
    
    
    (1,578
    )Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    (1,007
    )
    
    
    5,345Prepaid expenses and other current assets
    
    
    (123
    )
    
    
    1,482Other non-current assets
    
    
    5,535
    
    
    
    (1,262
    )Accounts payable and accrued expenses
    
    
    (19,945
    )
    
    
    (6,004
    )Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    695
    
    
    
    4,961Other non-current liabilities
    
    
    1,538
    
    
    
    258Net cash provided by continuing operations
    
    
    5,573
    
    
    
    990Net cash provided by discontinued operations
    
    
    1,327
    
    
    
    2,065Net cash provided by operating activities
    
    
    6,900
    
    
    
    3,055CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (4,054
    )
    
    
    (9,613
    )Proceeds from sales of property and equipment
    
    
    226
    
    
    
    337Investment in unconsolidated affiliate
    
    
    (2,150
    )
    
    
    Distribution from unconsolidated affiliates
    
    
    
    
    
    
    488Changes in restricted cash
    
    
    
    
    
    
    20,000Net cash (used in) provided by investing activities of continuing operations
    
    
    (5,978
    )
    
    
    11,212Net cash provided by investing activities of discontinued operations
    
    
    
    
    
    
    5Net cash (used in) provided by investing activities
    
    
    (5,978
    )
    
    
    11,217CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings of debt
    
    
    1,055
    
    
    
    25,193Repayments of debt
    
    
    (1,841
    )
    
    
    (45,692
    )Payments for debt issuance costs
    
    
    
    
    
    
    (575
    )Acquisition of treasury stock
    
    
    (4,301
    )
    
    
    (6,056
    )Net cash used in financing activities
    
    
    (5,087
    )
    
    
    (27,130
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (4,165
    )
    
    
    (12,858
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    64,709
    
    
    
    69,676CASH AND CASH EQUIVALENTS, end of period
    
    $
    60,544
    
    
    $
    56,818SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    2,370
    
    
    $
    3,690Cash paid for income taxes
    
    $
    779
    
    
    $
    663
 
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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
 (UNAUDITED)
 1. BUSINESS
  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Fair Value Measurements Subsequent Events,
 Fair Value Measurements Effective Date of FASB Statement No. 157  
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
  Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement 109
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Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code
     RECLASSIFICATIONS
  LONG-TERM RECEIVABLE
  USE OF ESTIMATES AND ASSUMPTIONS
   11




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SEASONALITY AND QUARTERLY FLUCTUATIONS
  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
 Business Combinations Business Combinations
 
 Interim Disclosures about Fair Value
of Financial Instruments,
 Subsequent Events
 STOCK-BASED COMPENSATION
 Share-Based Payment
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Nine Months EndedJune 30,2009
    
    
    2008Weighted average value per option granted during the period (1)
    
    $
    8.56
    
    
    $
    8.49Assumptions:Stock price volatility
    
    
    86.4
    %
    
    
    51.6
    %Risk free rate of return
    
    
    1.3
    %
    
    
    3.3
    %Future forfeiture rate (2)
    
    
    0.0
    %
    
    
    0.0
    %Expected term
    
    6.0 years
    
    
    6.0 years
 
 (1)
    
    We do not pay dividends on our common stock.(2)
    
    The forfeiture rate is assumed to be zero based on the limited number of employees who have
been awarded stock options. 2. STRATEGIC ACTIONS
 The 2007 Restructuring Plan
   The 2009 Restructuring Plan
 
  
  
 Severance
    
    
    Consulting /Charges
    
    
    Other Charges
    
    
    TotalRestructuring liability at September 30, 2008
    
    $
    638
    
    
    $
    53
    
    
    $
    691Restructuring charges incurred during the nine months ended June 30, 2009
    
    
    2,034
    
    
    
    1,797
    
    
    
    3,831Less  cash payments during the nine months ended June 30, 2009
    
    
    (1,718
    )
    
    
    (110
    )
    
    
    (1,828
    )Less  non-cash amortization expense
    
    
    
    
    
    
    (1,206
    )
    
    
    (1,206
    )Restructuring liability at June 30, 2009
    
    $
    954
    
    
    $
    534
    
    
    $
    1,488
 
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Exit or Disposal Activities
     Three Months EndedJune 30,2009
    
    
    2008Revenues
    
    $
    
    
    
    $
    779Gross profit (loss)
    
    $
    85
    
    
    $
    (266
    )Pre-tax income (loss)
    
    $
    217
    
    
    $
    (527
    )
 
 Nine Months EndedJune 30,2009
    
    
    2008Revenues
    
    $
    21
    
    
    $
    3,405Gross profit
    
    $
    181
    
    
    $
    20Pre-tax income (loss)
    
    $
    182
    
    
    $
    (641
    )
 
 
 June 30,
    
    
    September 30,2009
    
    
    2008Accounts receivable, net
    
    $
    509
    
    
    $
    1,967Property and equipment, net
    
    
    2
    
    
    
    Total assets
    
    $
    511
    
    
    $
    1,967Accounts payable and accrued liabilities
    
    $
    332
    
    
    $
    481Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    
    
    
    
    23Total liabilities
    
    
    332
    
    
    
    504Net assets
    
    $
    179
    
    
    $
    1,463
 
 3. DEBT AND LIQUIDITY
  June 30,
    
    
    September 30,2009
    
    
    2008Term Loan, due May 15, 2013, bearing interest at 11.0%
    
    $
    25,000
    
    
    $
    25,000Camden Notes Payable, due July 1, 2010, bearing interest at 4.59%
    
    
    3,351
    
    
    
    4,419Capital lease and other
    
    
    1,185
    
    
    
    225Total debt
    
    
    29,536
    
    
    
    29,644Less  Short-term debt and current maturities of long-term debt
    
    
    (3,556
    )
    
    
    (2,905
    )Total long-term debt
    
    $
    25,980
    
    
    $
    26,739
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2009
    
    $
    7712010
    
    
    3,0422011
    
    
    2612012
    
    
    2732013
    
    
    25,1892014
    
    
    Thereafter
    
    
    Total
    
    $
    29,536
  The Tontine Capital Partners Term Loan
  Camden Note Payable
    The Revolving Credit Facility
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Total Liquidity
    
    Interest RateGreater than $60 million
    
    LIBOR plus 2.75% or Base Rate plus 0.75%From $40 million to $60 million
    
    LIBOR plus 3.00% or Base Rate plus 1.00%Less than $40 million
    
    LIBOR plus 3.25% or Base Rate plus 1.25%
    Financial Covenants
  Covenant
    
    Requirement
    
    ActualShutdown Subsidiaries Earnings
Before Interest and Taxes
    
    Cumulative loss not to 

exceed $2.0 million
    
    Cumulative loss of

$0.7 millionFixed Charge Coverage Ratio
    
    Minimum of 1.25:1.00
    
    N/A (1)Leverage Ratio
    
    Maximum of 3.50:1.00
    
    N/A (1)
 
 (1)
    
    This covenant requirement will not be in effect any time our total
liquidity, as defined in the Loan and Security Agreement, exceeds
$50.0 million. During the year to date period, we have maintained
over $50.0 million in liquidity.  Capital Lease
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2009
    
    $
    1832010
    
    
    3302011
    
    
    2872012
    
    
    2872013
    
    
    1922014
    
    
    Thereafter
    
    
    Total
    
    
    1,279Less: Amount representing interest
    
    
    (94
    )Total
    
    $
    1,185
 The Eton Park / Flagg Street Term Loan
  4. EARNINGS PER SHARE
 Participating Securities and the Two-class method under FASB Statement No. 128
  
 Three Months EndedJune 30,2009
    
    
    2008Numerator:Net income from continuing operations attributable to common shareholders
    
    $
    1,193
    
    
    $
    2,281Net income from continuing operations attributable to restricted shareholders
    
    
    23
    
    
    
    29Net income from continuing operations
    
    $
    1,216
    
    
    $
    2,310Net income from discontinued operations attributable to common shareholders
    
    $
    79
    
    
    $
    (273
    )Net income from discontinued operations attributable to restricted shareholders
    
    
    2
    
    
    
    Net income from discontinued operations
    
    $
    81
    
    
    $
    (273
    )Net income attributable to common shareholders
    
    $
    1,272
    
    
    $
    2,008Net income attributable to restricted shareholders
    
    
    25
    
    
    
    29Net income
    
    $
    1,297
    
    
    $
    2,037
 
  17




---



##### Table of Contents



Three Months EndedJune 30,2009
    
    
    2008Denominator:Weighted average common shares outstanding  basic
    
    
    14,339,066
    
    
    
    14,969,008Effect of dilutive stock options and non-vested restricted stock
    
    
    64,073
    
    
    
    34,123Weighted average common and common equivalent shares outstanding  diluted
    
    
    14,403,139
    
    
    
    15,003,131Basic income per share:Basic earnings per share from continuing operations
    
    $
    0.08
    
    
    $
    0.15Basic earnings per share from discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Basic earnings per share
    
    $
    0.09
    
    
    $
    0.14Diluted income per share:Diluted earnings per share from continuing operations
    
    $
    0.08
    
    
    $
    0.15Diluted earnings per share from discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Diluted earnings per share
    
    $
    0.09
    
    
    $
    0.14
 Nine Months EndedJune 30,2009
    
    
    2008Numerator:Net income from continuing operations attributable to common shareholders
    
    $
    (72
    )
    
    $
    1,593Net income from continuing operations attributable to restricted shareholders
    
    
    
    
    
    
    24Net income from continuing operations
    
    $
    (72
    )
    
    $
    1,617Net income (loss) from discontinued operations attributable to common shareholders
    
    $
    60
    
    
    $
    (337
    )Net income (loss) from discontinued operations attributable to restricted shareholders
    
    
    1
    
    
    
    Net income (loss) from discontinued operations
    
    $
    61
    
    
    $
    (337
    )Net income attributable to common shareholders
    
    $
    (12
    )
    
    $
    1,256Net income attributable to restricted shareholders
    
    
    1
    
    
    
    24Net income
    
    $
    (11
    )
    
    $
    1,280Denominator:Weighted average common shares outstanding  basic
    
    
    14,326,747
    
    
    
    15,026,675Effect of dilutive stock options and non-vested restricted stock
    
    
    21,491
    
    
    
    82,660Weighted average common and common equivalent shares outstanding  diluted
    
    
    14,348,238
    
    
    
    15,109,335Basic income per share:Basic loss per share from continuing operations
    
    $
    (0.01
    )
    
    $
    0.11Basic income (loss) per share from discontinued operations
    
    $
    0.01
    
    
    $
    (0.02
    )Basic loss per share
    
    $
    0.00
    
    
    $
    0.09Diluted income per share:Diluted loss per share from continuing operations
    
    $
    (0.01
    )
    
    $
    0.11Diluted income (loss) per share from discontinued operations
    
    $
    0.01
    
    
    $
    (0.02
    )Diluted loss per share
    
    $
    0.00
    
    
    $
    0.09
 
 5. OPERATING SEGMENTS
 Disclosures about Segments of an Enterprise and Related
Information
   18




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##### Table of Contents



Three Months Ended June 30, 2009 (Unaudited) RestatedCommercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    114,484
    
    
    $
    19,967
    
    
    $
    37,734
    
    
    $
    
    
    
    $
    172,185Cost of services
    
    
    95,736
    
    
    
    16,612
    
    
    
    28,300
    
    
    
    
    
    
    
    140,648Gross profit
    
    
    18,748
    
    
    
    3,355
    
    
    
    9,434
    
    
    
    
    
    
    
    31,537Selling, general and administrative
    
    
    7,515
    
    
    
    2,006
    
    
    
    6,948
    
    
    
    10,526
    
    
    
    26,995Loss (gain) on sale of assets
    
    
    (97
    )
    
    
    (142
    )
    
    
    15
    
    
    
    3
    
    
    
    (221
    )Restructuring charge
    
    
    256
    
    
    
    182
    
    
    
    260
    
    
    
    (65
    )
    
    
    633Income (loss) from operations
    
    $
    11,074
    
    
    $
    1,309
    
    
    $
    2,211
    
    
    $
    (10,464
    )
    
    $
    4,130Other data:Depreciation and amortization expense
    
    $
    313
    
    
    $
    319
    
    
    $
    432
    
    
    $
    475
    
    
    $
    1,539Capital expenditures
    
    $
    895
    
    
    $
    330
    
    
    $
    73
    
    
    $
    1,213
    
    
    $
    2,511Total assets
    
    $
    130,648
    
    
    $
    22,120
    
    
    $
    39,299
    
    
    $
    107,307
    
    
    $
    299,374
 
 Three Months Ended June 30, 2008 (Unaudited)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    125,547
    
    
    $
    32,989
    
    
    $
    55,262
    
    
    $
    
    
    
    $
    213,798Cost of services
    
    
    108,166
    
    
    
    26,651
    
    
    
    44,748
    
    
    
    
    
    
    
    179,565Gross profit
    
    
    17,381
    
    
    
    6,338
    
    
    
    10,514
    
    
    
    
    
    
    
    34,233Selling, general and administrative
    
    
    10,049
    
    
    
    1,833
    
    
    
    8,419
    
    
    
    7,511
    
    
    
    27,812Loss (gain) on sale of assets
    
    
    (58
    )
    
    
    (12
    )
    
    
    (5
    )
    
    
    (40
    )
    
    
    (115
    )Restructuring charge
    
    
    898
    
    
    
    108
    
    
    
    32
    
    
    
    
    
    
    
    1,038Income (loss) from operations
    
    $
    6,492
    
    
    $
    4,409
    
    
    $
    2,068
    
    
    $
    (7,471
    )
    
    $
    5,498Other data:Depreciation and amortization expense
    
    $
    550
    
    
    $
    240
    
    
    $
    468
    
    
    $
    587
    
    
    $
    1,845Capital expenditures
    
    $
    41
    
    
    $
    34
    
    
    $
    58
    
    
    $
    2,847
    
    
    $
    2,980Total assets
    
    $
    132,488
    
    
    $
    30,505
    
    
    $
    48,179
    
    
    $
    107,230
    
    
    $
    318,402
 
 Nine Months Ended June 30, 2009 (Unaudited) RestatedCommercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    331,283
    
    
    $
    64,332
    
    
    $
    116,982
    
    
    $
    
    
    
    $
    512,597Cost of services
    
    
    279,125
    
    
    
    54,531
    
    
    
    89,532
    
    
    
    
    
    
    
    423,188Gross profit
    
    
    52,158
    
    
    
    9,801
    
    
    
    27,450
    
    
    
    
    
    
    
    89,409Selling, general and administrative
    
    
    22,958
    
    
    
    6,025
    
    
    
    22,498
    
    
    
    31,280
    
    
    
    82,761Loss (gain) on sale of assets
    
    
    (266
    )
    
    
    (164
    )
    
    
    29
    
    
    
    2
    
    
    
    (399
    )Restructuring charge
    
    
    748
    
    
    
    377
    
    
    
    1,981
    
    
    
    668
    
    
    
    3,774Income (loss) from operations
    
    $
    28,718
    
    
    $
    3,563
    
    
    $
    2,942
    
    
    $
    (31,950
    )
    
    $
    3,273Other data:Depreciation and amortization expense
    
    $
    671
    
    
    $
    802
    
    
    $
    1,885
    
    
    $
    2,635
    
    
    $
    5,993Capital expenditures
    
    $
    1,216
    
    
    $
    405
    
    
    $
    338
    
    
    $
    2,471
    
    
    $
    4,430
 
 Nine Months Ended June 30, 2008 (Unaudited)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    346,719
    
    
    $
    98,982
    
    
    $
    160,876
    
    
    $
    
    
    
    $
    606,577Cost of services
    
    
    297,131
    
    
    
    81,947
    
    
    
    129,394
    
    
    
    
    
    
    
    508,472Gross profit
    
    
    49,588
    
    
    
    17,035
    
    
    
    31,482
    
    
    
    
    
    
    
    98,105Selling, general and administrative
    
    
    30,964
    
    
    
    6,346
    
    
    
    25,131
    
    
    
    23,259
    
    
    
    85,700Loss (gain) on sale of assets
    
    
    (177
    )
    
    
    (13
    )
    
    
    56
    
    
    
    (5
    )
    
    
    (139
    )Restructuring charge
    
    
    3,923
    
    
    
    335
    
    
    
    173
    
    
    
    
    
    
    
    4,431Income (loss) from operations
    
    $
    14,878
    
    
    $
    10,367
    
    
    $
    6,122
    
    
    $
    (23,254
    )
    
    $
    8,113Other data:Depreciation and amortization expense
    
    $
    1,914
    
    
    $
    846
    
    
    $
    1,801
    
    
    $
    1,861
    
    
    $
    6,422Capital expenditures
    
    $
    211
    
    
    $
    568
    
    
    $
    344
    
    
    $
    6,352
    
    
    $
    7,475
  19




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##### Table of Contents



6. STOCKHOLDERS EQUITY
   Treasury Stock
  Restricted Stock
     Performance-Based Restricted Stock
   20




---



##### Table of Contents



Stock Options
    Weighted AverageShares
    
    
    Exercise PriceOutstanding, September 30, 2008
    
    
    161,000
    
    
    $
    19.87Options granted
    
    
    7,500
    
    
    
    12.31Exercised
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Forfeited
    
    
    (10,000
    )
    
    
    (33.35
    )Outstanding, June 30, 2009
    
    
    158,500
    
    
    $
    18.66Exercisable, June 30, 2009
    
    
    92,000
    
    
    $
    19.02
  RemainingOutstanding as of
    
    
    Contractual Life
    
    
    Weighted-Average
    
    
    Exercisable as of
    
    
    Weighted-AverageRange of Exercise Prices
    
    June 30, 2009
    
    
    in Years
    
    
    Exercise Price
    
    
    June 30, 2009
    
    
    Exercise Price$12.31 - $18.79
    
    
    123,500
    
    
    
    7.4
    
    
    $
    17.02
    
    
    $
    72,000
    
    
    $
    17.34$20.75 - $33.55
    
    
    35,000
    
    
    
    8.0
    
    
    
    26.46
    
    
    
    20,000
    
    
    
    25.08158,500
    
    
    
    7.5
    
    
    $
    18.66
    
    
    $
    92,000
    
    
    $
    19.02
   21




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##### Table of Contents



7. FAIR VALUE MEASUREMENTS
 Investment in EPV Solar
 Accounting for Certain Investment in Debt and Equity Securities
    March 31,
    
    
    Restructuring
    
    
    
    
    
    
    June 30,2009
    
    
    Change
    
    
    Impairment
    
    
    2009Common stock (4.4 million shares),
    
    $
    
    
    
    
    1,001
    
    
    
    (210
    )
    
    $
    791Convertible note receivable due June 15, 2010
    
    
    1,756
    
    
    
    (1,756
    )
    
    
    
    
    
    
    Convertible note receivable due June 1, 2016
    
    
    
    
    
    
    692
    
    
    
    (145
    )
    
    
    547Stock warrants (0.5 million warrants / strike at $1.25)
    
    
    244
    
    
    
    
    
    
    
    (226
    )
    
    
    18Stock warrants (1.2 million warrants / strike at $0.54)
    
    
    
    
    
    
    63
    
    
    
    (13
    )
    
    
    50Total carrying value of restructured investment
    
    $
    2,000
    
    
    
    
    
    
    
    (594
    )
    
    $
    1,406
   22




---



##### Table of Contents



Investment in EnerTech Capital Partners II L.P.
  June 30,
    
    
    June 30,2009
    
    
    2008Carrying value
    
    $
    2,491
    
    
    $
    2,876Unrealized gains (losses)
    
    
    199
    
    
    
    124Fair value
    
    $
    2,690
    
    
    $
    3,000
 Arbinet-thexchange Inc.
  Fair Value Measurement Accounting
     Significant
    
    
    SignificantOther Observable
    
    
    UnobservableTotal
    
    
    Quoted Prices
    
    
    Inputs
    
    
    InputsFair Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Investments in equity securities
    
    $
    57
    
    
    $
    57
    
    
    $
    
    
    
    $
    Total
    
    $
    57
    
    
    $
    57
    
    
    $
    
    
    
    $
    
  Level 1
 Level 2
 Level 3
  23




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##### Table of Contents



8. COMMITMENTS AND CONTINGENCIES
 Legal Matters
   Clark Construction v IES Commercial, Inc. f/k/a J.W. Gray
 .
 Ward Transformer Site
    24




---



##### Table of Contents



Self-insurance
 Accounting for
Contingencies
 Surety
    Other Commitments and Contingencies
    25




---



##### Table of Contents



9. SUBSEQUENT EVENTS
  10. Restatement of Condensed Consolidated Financial Statements (Unaudited)
 
  
 Condensed Consolidated Balance Sheet at June 30, 2009:
 
 As Reported
    
    
    Adjustment
    
    
    As RestatedPrepaid expenses and other current
assets
    
    $
    7,320
    
    
    $
    17
    
    
    $
    7,337Total current assets
    
    
    246,104
    
    
    
    17
    
    
    
    246,121Property and equipment, net
    
    
    25,932
    
    
    
    (134
    )
    
    
    25,798Goodwill
    
    
    4,330
    
    
    
    497
    
    
    
    4,827Other non-current assets
    
    
    19,235
    
    
    
    172
    
    
    
    19,407Total assets
    
    
    299,333
    
    
    
    552
    
    
    
    299,885Accounts payable and accrued expenses
    
    
    77,812
    
    
    
    2,008
    
    
    
    79,820Total current liabilities
    
    
    116,107
    
    
    
    2,008
    
    
    
    118,115Other non-current liabilities
    
    
    12,463
    
    
    
    (341
    )
    
    
    12,122Total liabilities
    
    
    154,550
    
    
    
    1,667
    
    
    
    156,217Retained deficit
    
    
    (11,247
    )
    
    
    (1,115
    )
    
    
    (12,362
    )Total stockholders equity
    
    
    144,783
    
    
    
    (1,115
    )
    
    
    143,668Total liabilities and stockholders
equity
    
    $
    299,333
    
    
    $
    552
    
    
    $
    299,885
 
  26




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##### Table of Contents



Condensed Consolidated Statements of Operations for the periods ended June 30, 2009:
 
 Three Months Ended June 30, 2009
    
    
    Nine Months Ended June 30, 2009As
    
    
    
    
    
    
    As
    
    
    As
    
    
    
    
    
    
    AsReported
    
    
    Adjustment
    
    
    Restated
    
    
    Reported
    
    
    Adjustment
    
    
    RestatedRevenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    512,860
    
    
    $
    (263
    )
    
    $
    512,597Cost of services
    
    $
    139,858
    
    
    $
    790
    
    
    $
    140,648
    
    
    
    421,085
    
    
    
    2,103
    
    
    
    423,188Gross profit
    
    
    32,327
    
    
    
    (790
    )
    
    
    31,537
    
    
    
    91,775
    
    
    
    (2,366
    )
    
    
    89,409Selling, general and administrative
expenses
    
    
    26,671
    
    
    
    324
    
    
    
    26,995
    
    
    
    84,216
    
    
    
    (1,455
    )
    
    
    82,761Restructuring Charges
    
    
    645
    
    
    
    (12
    )
    
    
    633
    
    
    
    3,347
    
    
    
    427
    
    
    
    3,774Income from operations
    
    
    5,232
    
    
    
    (1,102
    )
    
    
    4,130
    
    
    
    4,611
    
    
    
    (1,338
    )
    
    
    3,273Other, net
    
    
    621
    
    
    
    (370
    )
    
    
    251
    
    
    
    404
    
    
    
    (626
    )
    
    
    (222
    )Interest and other expense, net
    
    
    1,879
    
    
    
    (370
    )
    
    
    1,509
    
    
    
    3,479
    
    
    
    (626
    )
    
    
    2,853Income from continuing operations
before income tax
    
    
    3,353
    
    
    
    (732
    )
    
    
    2,621
    
    
    
    1,132
    
    
    
    (712
    )
    
    
    420Provision for income taxes
    
    
    1,896
    
    
    
    (491
    )
    
    
    1,405
    
    
    
    941
    
    
    
    (449
    )
    
    
    492Net income (loss) from continuing
operations
    
    
    1,457
    
    
    
    (241
    )
    
    
    1,216
    
    
    
    191
    
    
    
    (263
    )
    
    
    (72
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115
    
    
    
    67
    
    
    
    182Provision (benefit) for income taxes
    
    
    117
    
    
    
    19
    
    
    
    136
    
    
    
    73
    
    
    
    48
    
    
    
    121Net loss from discontinued operations
    
    
    100
    
    
    
    (19
    )
    
    
    81
    
    
    
    42
    
    
    
    19
    
    
    
    61Net income (loss)
    
    
    1,557
    
    
    
    (260
    )
    
    
    1,297
    
    
    
    233
    
    
    
    (244
    )
    
    
    (11
    )Basic earnings (loss) per share:Continuing operations
    
    
    0.10
    
    
    
    (0.02
    )
    
    
    0.08
    
    
    
    0.02
    
    
    
    (0.01
    )
    
    
    0.01Total
    
    
    0.11
    
    
    
    (0.02
    )
    
    
    0.09
    
    
    
    0.02
    
    
    
    (0.02
    )
    
    
    0.00Diluted earnings (loss) per share:Continuing operations
    
    
    0.10
    
    
    
    (0.02
    )
    
    
    0.08
    
    
    
    0.02
    
    
    
    (0.01
    )
    
    
    0.01Total
    
    
    0.11
    
    
    
    (0.02
    )
    
    
    0.09
    
    
    
    0.02
    
    
    
    (0.02
    )
    
    
    0.00
 
 
 Condensed Consolidated Statement of Cash Flows for the nine months ended June 30,
2009:
 
 
 As Reported
    
    
    Adjustment
    
    
    As RestatedNet income (loss)
    
    
    233
    
    
    
    (244
    )
    
    
    (11
    )Depreciation and Amortization
    
    
    5,993
    
    
    
    244
    
    
    
    6,237Changes in operating assets and liabilities:Accounts payable and accrued expenses
    
    
    (20,232
    )
    
    
    268
    
    
    
    (19,964
    )Prepaid expenses and other current assets
    
    
    (124
    )
    
    
    1
    
    
    
    (123
    )Other non-current assets
    
    
    5,773
    
    
    
    (238
    )
    
    
    5,535Other non-current liabilities
    
    
    1,698
    
    
    
    (160
    )
    
    
    1,538Net cash used in continuing operations
    
    
    5,702
    
    
    
    (129
    )
    
    
    5,573Net cash provided (used) by discontinued operatrions
    
    
    1,394
    
    
    
    (67
    )
    
    
    1,327Net cash used in operating activities
    
    
    7,096
    
    
    
    (196
    )
    
    
    6,900Purchases of property and equipment
    
    
    (4,812
    )
    
    
    758
    
    
    
    (4,054
    )Proceeds from sales of property and equipment
    
    
    788
    
    
    
    (562
    )
    
    
    226Net cash used in investing activities of continuing
operations
    
    
    (6,174
    )
    
    
    196
    
    
    
    (5,978
    )Net cash used in investing activities
    
    
    (6,174
    )
    
    
    196
    
    
    
    (5,978
    )
 
   27




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
 Restatement
 
 
  
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Notes to Consolidated Financial Statements
 Fair Value Measurements Condensed Consolidated Financial Statements Business
 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Condensed Consolidated
Financial Statements Business
 RESTRUCTURING PROGRAMS
 The 2007 Restructuring Plan
   28




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##### Table of Contents



Condensed Consolidated Financial Statements Strategic Actions
 The 2009 Restructuring Plan
 Condensed Consolidated Financial Statements Strategic Actions
 EXIT OR DISPOSAL ACTIVITIES
    FINANCING
 The Tontine Capital Partners Term Loan
  Camden Note Payable
   29




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##### Table of Contents



The Revolving Credit Facility
 Condensed Consolidated Financial Statements Debt and Liquidity
  The Eton Park / Flagg Street Term Loan
  Capital Lease
  SURETY
 Surety
   30




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##### Table of Contents



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2009 COMPARED TO THE THREE
MONTHS ENDED JUNE 30, 2008
  
 Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Revenues
    
    $
    172.2
    
    
    
    100.0
    %
    
    $
    213.8
    
    
    
    100.0
    %Cost of services
    
    
    140.6
    
    
    
    81.6
    %
    
    
    179.6
    
    
    
    84.0
    %Gross profit
    
    
    31.6
    
    
    
    18.4
    %
    
    
    34.2
    
    
    
    16.0
    %Selling, general and administrative expenses
    
    
    27.0
    
    
    
    15.7
    %
    
    
    27.8
    
    
    
    13.0
    %Gain on sale of assets
    
    
    (0.2
    )
    
    
    (0.1
    )%
    
    
    (0.1
    )
    
    
    (0.1
    )%Restructuring charges
    
    
    0.7
    
    
    
    0.3
    %
    
    
    1.0
    
    
    
    0.5
    %Income from operations
    
    
    4.1
    
    
    
    2.5
    %
    
    
    5.5
    
    
    
    2.6
    %Interest and other expense, net
    
    
    1.5
    
    
    
    1.0
    %
    
    
    1.1
    
    
    
    0.6
    %Income before income taxes
    
    
    2.6
    
    
    
    1.5
    %
    
    
    4.4
    
    
    
    2.0
    %Provision for income taxes
    
    
    1.4
    
    
    
    0.9
    %
    
    
    2.1
    
    
    
    0.9
    %Income from continuing operations
    
    
    1.2
    
    
    
    0.6
    %
    
    
    2.3
    
    
    
    1.1
    %Income (loss) from discontinued operations
    
    
    0.1
    
    
    
    0.1
    %
    
    
    (0.3
    )
    
    
    (0.1
    )%Net income
    
    $
    1.3
    
    
    
    0.7
    %
    
    $
    2.0
    
    
    
    1.0
    %
 
 Revenues
 Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    114.5
    
    
    
    66.5
    %
    
    $
    125.5
    
    
    
    58.7
    %Industrial
    
    
    20.0
    
    
    
    11.6
    %
    
    
    33.0
    
    
    
    15.4
    %Residential
    
    
    37.7
    
    
    
    21.9
    %
    
    
    55.3
    
    
    
    25.9
    %Total Consolidated
    
    $
    172.2
    
    
    
    100.0
    %
    
    $
    213.8
    
    
    
    100.0
    %
   31




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##### Table of Contents



Gross Profit
 
 Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    18.8
    
    
    
    16.4
    %
    
    $
    17.4
    
    
    
    13.8
    %Industrial
    
    
    3.4
    
    
    
    16.8
    %
    
    
    6.3
    
    
    
    19.2
    %Residential
    
    
    9.4
    
    
    
    25.0
    %
    
    
    10.5
    
    
    
    19.0
    %Total Consolidated
    
    $
    31.6
    
    
    
    18.4
    %
    
    $
    34.2
    
    
    
    16.0
    %
 
 
  
 
  
    32




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##### Table of Contents



Selling, General and Administrative Expenses
 
 Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    7.5
    
    
    
    6.6
    %
    
    $
    10.1
    
    
    
    8.0
    %Industrial
    
    
    2.0
    
    
    
    10.0
    %
    
    
    1.8
    
    
    
    5.6
    %Residential
    
    
    7.0
    
    
    
    18.6
    %
    
    
    8.4
    
    
    
    15.2
    %Corporate
    
    
    10.5
    
    
    
    
    
    
    
    7.5
    
    
    
    Total Consolidated
    
    $
    27.0
    
    
    
    15.7
    %
    
    $
    27.8
    
    
    
    13.0
    %
 
  
  
  Restructuring Charges
   33




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##### Table of Contents



Three Months EndedJune 30,2009
    
    
    2008(Dollars in thousands)Severance compensation
    
    $
    217
    
    
    $
    666Consulting and other charges
    
    
    14
    
    
    
    372Non-cash asset amortization and write-offs
    
    
    402
    
    
    
    Total restructuring charges
    
    $
    633
    
    
    $
    1,038
 
 Interest and Other Expense, Net
 
 Three Months EndedJune 30,2009
    
    
    2008(Dollars in thousands)Interest expense
    
    $
    1,262
    
    
    $
    1,042Deferred financing charges
    
    
    63
    
    
    
    314Total interest expense
    
    
    1,325
    
    
    
    1,356Interest income
    
    
    67
    
    
    
    284Other income (expense)
    
    
    (251
    )
    
    
    (67
    )Total interest and other expense, net
    
    $
    1,509
    
    
    $
    1,139
 
    
  
 Provision for Income Taxes
 
  
 
  
 
 
 Income (Loss) from Discontinued Operations
   34




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RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2009 COMPARED TO THE NINE MONTHS ENDED JUNE 30, 2008
  
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Revenues
    
    $
    512.6
    
    
    
    100.0
    %
    
    $
    606.6
    
    
    
    100.0
    %Cost of services
    
    
    423.2
    
    
    
    82.6
    %
    
    
    508.5
    
    
    
    83.8
    %Gross profit
    
    
    89.4
    
    
    
    17.5
    %
    
    
    98.1
    
    
    
    16.2
    %Selling, general and administrative expenses
    
    
    82.7
    
    
    
    16.1
    %
    
    
    85.7
    
    
    
    14.1
    %Gain on sale of assets
    
    
    (0.4
    )
    
    
    (0.1
    )%
    
    
    (0.1
    )
    
    
    0.0
    %Restructuring charges
    
    
    3.8
    
    
    
    0.7
    %
    
    
    4.4
    
    
    
    0.8
    %Income from operations
    
    
    3.3
    
    
    
    0.8
    %
    
    
    8.1
    
    
    
    1.3
    %Interest and other expense, net
    
    
    2.9
    
    
    
    0.7
    %
    
    
    4.4
    
    
    
    0.7
    %Income before income taxes
    
    
    0.4
    
    
    
    0.1
    %
    
    
    3.7
    
    
    
    0.6
    %Provision for income taxes
    
    
    0.5
    
    
    
    0.1
    %
    
    
    2.1
    
    
    
    0.3
    %Income from continuing operations
    
    
    (0.1
    )
    
    
    0.0
    %
    
    
    1.6
    
    
    
    0.3
    %Income (loss) from discontinued operations
    
    
    0.1
    
    
    
    0.0
    %
    
    
    (0.3
    )
    
    
    (0.1
    )%Net income
    
    $
    (0.0
    )
    
    
    0.0
    %
    
    $
    1.3
    
    
    
    0.2
    %
 
 Revenues
 
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    331.3
    
    
    
    64.6
    %
    
    $
    346.7
    
    
    
    57.2
    %Industrial
    
    
    64.3
    
    
    
    12.6
    %
    
    
    99.0
    
    
    
    16.3
    %Residential
    
    
    117.0
    
    
    
    22.8
    %
    
    
    160.9
    
    
    
    26.5
    %Total Consolidated
    
    $
    512.6
    
    
    
    100.0
    %
    
    $
    606.6
    
    
    
    100.0
    %
 
 
  
 
  
   35




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##### Table of Contents

s

Gross Profit
 
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    52.2
    
    
    
    15.8
    %
    
    $
    49.6
    
    
    
    14.3
    %Industrial
    
    
    9.8
    
    
    
    15.2
    %
    
    
    17.0
    
    
    
    17.2
    %Residential
    
    
    27.4
    
    
    
    23.5
    %
    
    
    31.5
    
    
    
    19.6
    %Total Consolidated
    
    $
    89.4
    
    
    
    17.5
    %
    
    $
    98.1
    
    
    
    16.2
    %
 
 
  
 
  
   Selling, General and Administrative Expenses
 
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    22.9
    
    
    
    6.9
    %
    
    $
    31.0
    
    
    
    8.9
    %Industrial
    
    
    6.0
    
    
    
    9.4
    %
    
    
    6.3
    
    
    
    6.4
    %Residential
    
    
    22.5
    
    
    
    19.2
    %
    
    
    25.1
    
    
    
    15.6
    %Corporate
    
    
    31.3
    
    
    
    
    
    
    
    23.3
    
    
    
    Total Consolidated
    
    $
    82.7
    
    
    
    16.1
    %
    
    $
    85.7
    
    
    
    14.1
    %
 
  36




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##### Table of Contents



Restructuring Charges
   
 Nine Months EndedJune 30,2009
    
    
    2008(Dollars in thousands)Severance compensation
    
    $
    1,894
    
    
    $
    2,434Consulting and other charges
    
    
    674
    
    
    
    1,866Non-cash asset amortization and write-offs
    
    
    1,206
    
    
    
    131Total restructuring charges
    
    $
    3,774
    
    
    $
    4,431
 
  37




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##### Table of Contents



Interest and Other Expense, Net
 
 Nine Months EndedJune 30,2009
    
    
    2008(Dollars in thousands)Interest expense
    
    $
    3,224
    
    
    $
    3,741Deferred financing charges
    
    
    191
    
    
    
    1,714Debt prepayment penalty
    
    
    
    
    
    
    2,052Total interest expense
    
    
    3,415
    
    
    
    7,507Interest income
    
    
    340
    
    
    
    1,829Other income (expense)
    
    
    222
    
    
    
    1,256Total interest and other expense, net
    
    $
    2,853
    
    
    $
    4,422
 
  
  
    Provision for Income Taxes
 
  
 
  
 
 
  38




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##### Table of Contents



Income (Loss) from Discontinued Operations
  
  
 Working Capital
 
 June 30,
    
    
    September 30,2009
    
    
    2008(Dollars in millions)CURRENT ASSETS:Cash and cash equivalents
    
    $
    60.5
    
    
    
    64.7Accounts receivableTrade, net of allowance of $2.7 and $3.6 respectively
    
    
    120.8
    
    
    
    132.3Retainage
    
    
    31.1
    
    
    
    30.8Inventories
    
    
    10.1
    
    
    
    12.9Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    15.8
    
    
    
    14.7Prepaid expenses and other current assets
    
    
    7.3
    
    
    
    6.7Assets from discontinued operations
    
    
    0.5
    
    
    
    2.0Total current assets
    
    $
    246.1
    
    
    $
    264.1CURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    3.6
    
    
    $
    2.9Accounts payable and accrued expenses
    
    
    79.8
    
    
    
    99.9Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    34.4
    
    
    
    33.7Liabilities from discontinued operations
    
    
    0.3
    
    
    
    0.5Total current liabilities
    
    $
    118.1
    
    
    $
    137.0Working capital
    
    $
    128.0
    
    
    $
    127.1
 
 
  
 
  
  39




---



##### Table of Contents



Liquidity and Capital Resources
 
  
  Operating Activities
 
  
 
 Investing Activities
 
 
 Condensed Consolidated Financial Statements Fair Value Measurement Investment in EPV Solar
 
  40




---



##### Table of Contents



Financing Activities
  Bonding Capacity
 Surety.
 Off-Balance Sheet Arrangements and Contractual Obligations
         41




---



##### Table of Contents



2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    TotalLong-term debt obligations
    
    $
    603
    
    
    $
    2,748
    
    
    $
    
    
    
    $
    
    
    
    $
    25,000
    
    
    $
    
    
    
    $
    
    
    
    $
    28,351Operating lease obligations
    
    $
    1,510
    
    
    $
    5,489
    
    
    $
    3,697
    
    
    $
    2,282
    
    
    $
    758
    
    
    $
    
    
    
    $
    906
    
    
    $
    14,642Capital lease obligations
    
    $
    168
    
    
    $
    294
    
    
    $
    262
    
    
    $
    273
    
    
    $
    188
    
    
    $
    
    
    
    $
    
    
    
    $
    1,185Total
    
    $
    2,281
    
    
    $
    8,531
    
    
    $
    3,959
    
    
    $
    2,555
    
    
    $
    25,946
    
    
    $
    
    
    
    $
    906
    
    
    $
    44,178
 
 (1)
    
    The tabular amounts exclude the interest obligations that will be
created if the debt and capital lease obligations are outstanding for
the periods presented. Outlook
  Inflation
  SUBSEQUENT EVENTS
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 
 
 Disclosure controls and procedures
 
 
  
 
  
  42




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
 
 
  
 
  
 
  
 
 
 
 PART II. OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
 Commitments and Contingencies  Legal Matters
 
 ITEM 1A.
    
    RISK FACTORS
 Risk Factors
 Due to the recent financial and credit crisis, we may not be able to obtain funding, or obtain
funding on acceptable terms, to meet our future capital needs, which could negatively affect our
business, results of operations and financial performance.
  Availability of net operating losses may be reduced.
 
  
  43




---



##### Table of Contents



ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
 
  
 
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Purchases of Equity Securities by the Issuer and Affiliated Purchases
 Total number of
    
    
    Maximum ofshares purchased as
    
    
    shares    that mayTotal number
    
    
    
    
    
    
    part of publically
    
    
    yet be      purchasedof shares
    
    
    Average price
    
    
    announced plans or
    
    
    under the  plans orPeriod
    
    purchased
    
    
    paid per share
    
    
    programs (1)
    
    
    programsApril 1, 2009 to April 30, 2009
    
    
    
    
    
    $
    
    
    
    
    886,360
    
    
    
    113,640May 1, 2009 to May 31, 2009
    
    
    
    
    
    $
    
    
    
    
    886,360
    
    
    
    113,640June 1, 2008 to June 30, 2009
    
    
    
    
    
    $
    
    
    
    
    886,360
    
    
    
    113,640Total for period
    
    
    
    
    
    $
    
 
 (1)
    
    On December 12, 2007, we announced that our Board of Directors authorized the
repurchase of up to one million shares of our common stock. This share repurchase plan is
authorized through December 2009. This share repurchase table does not include 21,941
shares of common stock withheld to satisfy tax withholding requirements related to
restricted stock issued under the Amended and Restated 2006 Equity Incentive Plan. The
average cost of those shares was $8.71 per share. 
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
   44




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##### Table of Contents



ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5.
    
    OTHER INFORMATION
  
 ITEM 6.
    
    EXHIBITS
 3.1
    
    
    Second Amended and Restated Certificate of Incorporation of Integrated Electrical
Services, Inc. (Incorporated by reference to Exhibit 4.1 to the Companys Registration
Statement on Form S-8 filed on May 12, 2006)3.2
    
    
    Bylaws of Integrated Electrical Services, Inc. (Incorporated by reference to Exhibit
4.2 to the Companys Registration Statement on Form S-8, filed on May 12, 2006)31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Michael J. Caliel, Chief Executive Officer (1)31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Raymond K. Guba, Chief Financial Officer (1)32.1
    
    
    Section 1350 Certification of Michael J. Caliel, Chief Executive Officer (1)32.2
    
    
    Section 1350 Certification of Raymond K. Guba, Chief Financial Officer (1)
 
 (1)
    
    Filed herewith.  45




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##### Table of Contents



INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  
 Integrated Electrical Services, Inc.Date: December 14, 2009
    By:
    /s/ Raymond K. GubaRaymond K. GubaExecutive Vice President and
Chief Financial and Administrative Officer 
  46




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    
    Second Amended and Restated Certificate of Incorporation of Integrated Electrical
Services, Inc. (Incorporated by reference to Exhibit 4.1 to the Companys Registration
Statement on Form S-8 filed on May 12, 2006)3.2
    
    
    Bylaws of Integrated Electrical Services, Inc. (Incorporated by reference to Exhibit
4.2 to the Companys Registration Statement on Form S-8, filed on May 12, 2006)31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Michael J. Caliel, Chief Executive Officer (1)31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Raymond K. Guba, Chief Financial Officer (1)32.1
    
    
    Section 1350 Certification of Michael J. Caliel, Chief Executive Officer (1)32.2
    
    
    Section 1350 Certification of Raymond K. Guba, Chief Financial Officer (1)
 
 (1)
    
    Filed herewith.  47