##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 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(Address of principal executive offices and ZIP code)
 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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##### 



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
    
    
    5Condensed Consolidated Statements of Income for the Three Months ended June 30, 2009 and 2008
    
    
    6Condensed Consolidated Statements of Income for the Nine Months Ended June 30, 2009 and 2008
    
    
    7Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2009 and 2008
    
    
    8Notes to Condensed Consolidated Financial Statements
    
    
    9Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    41Item 4. Controls and Procedures
    
    
    41PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    42Item 1A. Risk Factors
    
    
    42Item 1B. Unresolved Staff Comments
    
    
    43Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    43Item 3. Defaults Upon Senior Securities
    
    
    43Item 4. Submission of Matters to a Vote of Security Holders
    
    
    44Item 5. Other Information
    
    
    44Item 6. Exhibits
    
    
    44Signatures
    
    
    45Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   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;
  3




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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
  4




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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)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
    
    
    7,320
    
    
    
    6,711Assets from discontinued operations
    
    
    511
    
    
    
    2,034Total current assets
    
    
    246,104
    
    
    
    264,159LONG-TERM RECEIVABLE, net of allowance of $278
    
    
    3,732
    
    
    
    PROPERTY AND EQUIPMENT, net
    
    
    25,932
    
    
    
    25,742GOODWILL
    
    
    4,330
    
    
    
    4,395OTHER NON-CURRENT ASSETS, net
    
    
    19,235
    
    
    
    25,480Total assets
    
    $
    299,333
    
    
    $
    319,776LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    3,556
    
    
    $
    2,905Accounts payable and accrued expenses
    
    
    77,813
    
    
    
    98,046Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    34,407
    
    
    
    33,711Liabilities from discontinued operations
    
    
    332
    
    
    
    504Total current liabilities
    
    
    116,108
    
    
    
    135,166LONG-TERM DEBT, net of current maturities
    
    
    25,980
    
    
    
    26,739OTHER NON-CURRENT LIABILITIES
    
    
    12,463
    
    
    
    10,765Total liabilities
    
    
    154,551
    
    
    
    172,670COMMITMENTS 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
    
    
    (11,248
    )
    
    
    (11,480
    )Total stockholders equity
    
    
    144,782
    
    
    
    147,106Total liabilities and stockholders equity
    
    $
    299,333
    
    
    $
    319,776
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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)Revenues
    
    $
    172,185
    
    
    $
    213,798Cost of services
    
    
    139,858
    
    
    
    179,565Gross profit
    
    
    32,327
    
    
    
    34,233Selling, general and administrative expenses
    
    
    26,671
    
    
    
    27,812Gain on sale of assets
    
    
    (221
    )
    
    
    (115
    )Restructuring charges
    
    
    645
    
    
    
    1,038Income from operations
    
    
    5,232
    
    
    
    5,498Interest and other (income) expense:Interest expense
    
    
    1,325
    
    
    
    1,356Interest income
    
    
    (67
    )
    
    
    (284
    )Other (income) expense, net
    
    
    621
    
    
    
    67Interest and other expense, net
    
    
    1,879
    
    
    
    1,139Income from continuing operations before income taxes
    
    
    3,353
    
    
    
    4,359Provision for income taxes
    
    
    1,896
    
    
    
    2,049Income from continuing operations
    
    
    1,457
    
    
    
    2,310Discontinued operations (Note 2)Income (loss) from discontinued operations
    
    
    217
    
    
    
    (527
    )Provision (benefit) for income taxes
    
    
    117
    
    
    
    (254
    )Net income (loss) from discontinued operations
    
    
    100
    
    
    
    (273
    )Net income
    
    $
    1,557
    
    
    $
    2,037Basic earnings (loss) per share:Continuing operations
    
    $
    0.10
    
    
    $
    0.15Discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Total
    
    $
    0.11
    
    
    $
    0.14Diluted earnings (loss) per share:Continuing operations
    
    $
    0.10
    
    
    $
    0.15Discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Total
    
    $
    0.11
    
    
    $
    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
   6




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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)Revenues
    
    $
    512,860
    
    
    $
    606,577Cost of services
    
    
    421,085
    
    
    
    508,472Gross profit
    
    
    91,775
    
    
    
    98,105Selling, general and administrative expenses
    
    
    84,216
    
    
    
    85,700Gain on sale of assets
    
    
    (399
    )
    
    
    (139
    )Restructuring charges
    
    
    3,347
    
    
    
    4,431Income from operations
    
    
    4,611
    
    
    
    8,113Interest and other (income) expense:Interest expense
    
    
    3,415
    
    
    
    7,507Interest income
    
    
    (340
    )
    
    
    (1,829
    )Other (income) expense, net
    
    
    404
    
    
    
    (1,256
    )Interest and other expense, net
    
    
    3,479
    
    
    
    4,422Income from continuing operations before income taxes
    
    
    1,132
    
    
    
    3,691Provision for income taxes
    
    
    941
    
    
    
    2,074Net income from continuing operations
    
    
    191
    
    
    
    1,617Discontinued operations (Note 2)Income (loss) from discontinued operations
    
    
    115
    
    
    
    (641
    )Provision (benefit) for income taxes
    
    
    73
    
    
    
    (304
    )Net income (loss) from discontinued operations
    
    
    42
    
    
    
    (337
    )Net income
    
    $
    233
    
    
    $
    1,280Basic earnings (loss) per share:Continuing operations
    
    $
    0.02
    
    
    $
    0.11Discontinued operations
    
    $
    0.00
    
    
    $
    (0.02
    )Total
    
    $
    0.02
    
    
    $
    0.09Diluted earnings (loss) per share:Continuing operations
    
    $
    0.02
    
    
    $
    0.11Discontinued operations
    
    $
    0.00
    
    
    $
    (0.02
    )Total
    
    $
    0.02
    
    
    $
    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
   7




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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)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    233
    
    
    $
    1,280Adjustments to reconcile net loss to net cash provided by operating activities:Net (income) loss from discontinued operations
    
    
    (42
    )
    
    
    337Bad debt expense
    
    
    1,295
    
    
    
    2,001Deferred financing cost amortization
    
    
    191
    
    
    
    1,714Depreciation and amortization
    
    
    5,993
    
    
    
    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 90-7
    
    
    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
    
    
    (124
    )
    
    
    1,482Other non-current assets
    
    
    5,773
    
    
    
    (1,262
    )Accounts payable and accrued expenses
    
    
    (20,232
    )
    
    
    (6,004
    )Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    695
    
    
    
    4,961Other non-current liabilities
    
    
    1,698
    
    
    
    258Net cash provided by continuing operations
    
    
    5,702
    
    
    
    990Net cash provided by discontinued operations
    
    
    1,394
    
    
    
    2,065Net cash provided by operating activities
    
    
    7,096
    
    
    
    3,055CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (4,812
    )
    
    
    (9,613
    )Proceeds from sales of property and equipment
    
    
    788
    
    
    
    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
    
    
    (6,174
    )
    
    
    11,212Net cash provided by investing activities of discontinued operations
    
    
    
    
    
    
    5Net cash (used in) provided by investing activities
    
    
    (6,174
    )
    
    
    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
    8




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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
   9




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Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code
     RECLASSIFICATIONS
  LONG-TERM RECEIVABLE
  ACCOUNTING ADJUSTMENTS
   10




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USE OF ESTIMATES AND ASSUMPTIONS
  SEASONALITY AND QUARTERLY FLUCTUATIONS
  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Business Combinations Business Combinations
  11




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Interim Disclosures about Fair Value
of Financial Instruments,
 Subsequent Events
 STOCK-BASED COMPENSATION
 Share-Based Payment
   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
    12




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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
    
    
    1,916
    
    
    
    1,431
    
    
    
    3,347Less  cash payments during the nine months ended June 30, 2009
    
    
    (1,600
    )
    
    
    (53
    )
    
    
    (1,653
    )Less  non-cash amortization expense
    
    
    
    
    
    
    (1,206
    )
    
    
    (1,206
    )Restructuring liability at June 30, 2009
    
    $
    954
    
    
    $
    225
    
    
    $
    1,179
 Exit or Disposal Activities
     13




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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
    
    $
    114
    
    
    $
    20Pre-tax income (loss)
    
    $
    115
    
    
    $
    (641
    )
 June 30,
    
    
    September 30,2009
    
    
    2008Accounts receivable, net
    
    $
    509
    
    
    $
    1,967Property and equipment, net
    
    
    2
    
    
    
    67Total assets
    
    $
    511
    
    
    $
    2,034Accounts payable and accrued liabilities
    
    $
    332
    
    
    $
    481Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    
    
    
    
    23Total liabilities
    
    
    332
    
    
    
    504Net assets
    
    $
    179
    
    
    $
    1,530
 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
  2009
    
    $
    7712010
    
    
    3,0422011
    
    
    2612012
    
    
    2732013
    
    
    25,1892014
    
    
    Thereafter
    
    
    Total
    
    $
    29,536
   14




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The Tontine Capital Partners Term Loan
  Camden Note Payable
    The Revolving Credit Facility
    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%
   15




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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
   2009
    
    $
    1832010
    
    
    3302011
    
    
    2872012
    
    
    2872013
    
    
    1922014
    
    
    Thereafter
    
    
    Total
    
    
    1,279Less: Amount representing interest
    
    
    (94
    )Total
    
    $
    1,185
 The Eton Park / Flagg Street Term Loan
   16




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##### Table of Contents



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
    
    $
    1,430
    
    
    $
    2,281Net income from continuing operations attributable to restricted shareholders
    
    
    27
    
    
    
    29Net income from continuing operations
    
    $
    1,457
    
    
    $
    2,310Net income from discontinued operations attributable to common shareholders
    
    $
    98
    
    
    $
    (273
    )Net income from discontinued operations attributable to restricted shareholders
    
    
    2
    
    
    
    Net income from discontinued operations
    
    $
    100
    
    
    $
    (273
    )Net income attributable to common shareholders
    
    $
    1,528
    
    
    $
    2,008Net income attributable to restricted shareholders
    
    
    29
    
    
    
    29Net income
    
    $
    1,557
    
    
    $
    2,037Denominator: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
    
    $
    0.10
    
    
    $
    0.15Basic earnings per share from discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Basic earnings per share
    
    $
    0.11
    
    
    $
    0.14Diluted income per share:Diluted earnings per share from continuing operations
    
    $
    0.10
    
    
    $
    0.15Diluted earnings per share from discontinued operations
    
    $
    0.01
    
    
    $
    (0.01
    )Diluted earnings per share
    
    $
    0.11
    
    
    $
    0.14
  17




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##### Table of Contents



Nine Months EndedJune 30,2009
    
    
    2008Numerator:Net income from continuing operations attributable to common shareholders
    
    $
    187
    
    
    $
    1,593Net income from continuing operations attributable to restricted shareholders
    
    
    4
    
    
    
    24Net income from continuing operations
    
    $
    191
    
    
    $
    1,617Net income (loss) from discontinued operations attributable to common shareholders
    
    $
    41
    
    
    $
    (337
    )Net income (loss) from discontinued operations attributable to restricted shareholders
    
    
    1
    
    
    
    Net income (loss) from discontinued operations
    
    $
    42
    
    
    $
    (337
    )Net income attributable to common shareholders
    
    $
    228
    
    
    $
    1,256Net income attributable to restricted shareholders
    
    
    5
    
    
    
    24Net income
    
    $
    233
    
    
    $
    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
    
    $
    0.02
    
    
    $
    0.11Basic income (loss) per share from discontinued operations
    
    $
    0.00
    
    
    $
    (0.02
    )Basic loss per share
    
    $
    0.02
    
    
    $
    0.09Diluted income per share:Diluted loss per share from continuing operations
    
    $
    0.02
    
    
    $
    0.11Diluted income (loss) per share from discontinued operations
    
    $
    0.00
    
    
    $
    (0.02
    )Diluted loss per share
    
    $
    0.02
    
    
    $
    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)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    114,484
    
    
    $
    19,967
    
    
    $
    37,734
    
    
    $
    
    
    
    $
    172,185Cost of services
    
    
    95,152
    
    
    
    16,539
    
    
    
    28,167
    
    
    
    
    
    
    
    139,858Gross profit
    
    
    19,332
    
    
    
    3,428
    
    
    
    9,567
    
    
    
    
    
    
    
    32,327Selling, general and administrative
    
    
    7,513
    
    
    
    2,003
    
    
    
    6,949
    
    
    
    10,206
    
    
    
    26,671Loss (gain) on sale of assets
    
    
    (97
    )
    
    
    (142
    )
    
    
    15
    
    
    
    3
    
    
    
    (221
    )Restructuring charge
    
    
    211
    
    
    
    182
    
    
    
    260
    
    
    
    (8
    )
    
    
    645Income (loss) from operations
    
    $
    11,705
    
    
    $
    1,385
    
    
    $
    2,343
    
    
    $
    (10,201
    )
    
    $
    5,232Other data:Depreciation and amortization expense
    
    $
    313
    
    
    $
    319
    
    
    $
    432
    
    
    $
    475
    
    
    $
    1,539Capital expenditures
    
    $
    895
    
    
    $
    330
    
    
    $
    73
    
    
    $
    1,213
    
    
    $
    2,511Total assets
    
    $
    130,473
    
    
    $
    22,123
    
    
    $
    39,376
    
    
    $
    106,850
    
    
    $
    298,822
 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)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    331,546
    
    
    $
    64,332
    
    
    $
    116,982
    
    
    $
    
    
    
    $
    512,860Cost of services
    
    
    277,246
    
    
    
    54,452
    
    
    
    89,387
    
    
    
    
    
    
    
    421,085Gross profit
    
    
    54,300
    
    
    
    9,880
    
    
    
    27,595
    
    
    
    
    
    
    
    91,775Selling, general and administrative
    
    
    23,301
    
    
    
    5,896
    
    
    
    22,214
    
    
    
    32,805
    
    
    
    84,216Loss (gain) on sale of assets
    
    
    (266
    )
    
    
    (164
    )
    
    
    29
    
    
    
    2
    
    
    
    (399
    )Restructuring charge
    
    
    630
    
    
    
    377
    
    
    
    1,615
    
    
    
    725
    
    
    
    3,347Income (loss) from operations
    
    $
    30,635
    
    
    $
    3,771
    
    
    $
    3,737
    
    
    $
    (33,532
    )
    
    $
    4,611Other data:Depreciation and amortization expense
    
    $
    671
    
    
    $
    802
    
    
    $
    1,885
    
    
    $
    2,635
    
    
    $
    5,993Capital expenditures
    
    $
    1,216
    
    
    $
    405
    
    
    $
    338
    
    
    $
    2,853
    
    
    $
    4,812
 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
  7. FAIR VALUE MEASUREMENTS
 Investment in EPV Solar
 Accounting for Certain Investment in Debt and Equity Securities
  21




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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
  Investment in EnerTech Capital Partners II L.P.
   22




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



9. SUBSEQUENT EVENTS
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Notes to Consolidated Financial Statements
 Fair Value Measurements Condensed Consolidated Financial Statements Business
  26




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##### Table of Contents



RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Condensed Consolidated
Financial Statements Note 1, Business
 RESTRUCTURING PROGRAMS
 The 2007 Restructuring Plan
 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
   27




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##### Table of Contents



Camden Note Payable
    The Revolving Credit Facility
 Condensed Consolidated Financial Statements Debt and Liquidity
  The Eton Park / Flagg Street Term Loan
  Capital Lease
   28




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##### Table of Contents



SURETY
 Surety
    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
    
    
    139.9
    
    
    
    81.2
    %
    
    
    179.6
    
    
    
    84.0
    %Gross profit
    
    
    32.3
    
    
    
    18.8
    %
    
    
    34.2
    
    
    
    16.0
    %Selling, general and administrative expenses
    
    
    26.7
    
    
    
    15.5
    %
    
    
    27.8
    
    
    
    13.0
    %Gain on sale of assets
    
    
    (0.2
    )
    
    
    (0.1
    )%
    
    
    (0.1
    )
    
    
    (0.1
    )%Restructuring charges
    
    
    0.6
    
    
    
    0.4
    %
    
    
    1.0
    
    
    
    0.5
    %Income from operations
    
    
    5.2
    
    
    
    3.0
    %
    
    
    5.5
    
    
    
    2.6
    %Interest and other expense, net
    
    
    1.8
    
    
    
    1.1
    %
    
    
    1.1
    
    
    
    0.5
    %Income before income taxes
    
    
    3.4
    
    
    
    1.9
    %
    
    
    4.4
    
    
    
    2.0
    %Provision for income taxes
    
    
    1.9
    
    
    
    1.1
    %
    
    
    2.1
    
    
    
    1.0
    %Income from continuing operations
    
    
    1.5
    
    
    
    0.8
    %
    
    
    2.3
    
    
    
    1.1
    %Income (loss) from discontinued operations
    
    
    0.1
    
    
    
    0.1
    %
    
    
    (0.3
    )
    
    
    (0.1
    )%Net income
    
    $
    1.6
    
    
    
    0.9
    %
    
    $
    2.0
    
    
    
    1.0
    %
  29




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##### Table of Contents



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
    %
     Gross Profit
 Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    19.3
    
    
    
    16.9
    %
    
    $
    17.4
    
    
    
    13.8
    %Industrial
    
    
    3.4
    
    
    
    17.2
    %
    
    
    6.3
    
    
    
    19.2
    %Residential
    
    
    9.6
    
    
    
    25.4
    %
    
    
    10.5
    
    
    
    19.0
    %Total Consolidated
    
    $
    32.3
    
    
    
    18.8
    %
    
    $
    34.2
    
    
    
    16.0
    %
   30




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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
    
    
    
    18.4
    %
    
    
    8.4
    
    
    
    15.2
    %Corporate
    
    
    10.2
    
    
    
    
    
    
    
    7.5
    
    
    
    Total Consolidated
    
    $
    26.7
    
    
    
    15.5
    %
    
    $
    27.8
    
    
    
    13.0
    %
      31




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##### Table of Contents



Restructuring Charges
   Three Months EndedJune 30,2009
    
    
    2008(Dollars in thousands)Severance compensation
    
    $
    172
    
    
    $
    666Consulting and other charges
    
    
    71
    
    
    
    372Non-cash asset amortization and write-offs
    
    
    402
    
    
    
    Total restructuring charges
    
    $
    645
    
    
    $
    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)
    
    
    (621
    )
    
    
    (67
    )Total interest and other expense, net
    
    $
    1,879
    
    
    $
    1,139
      32




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##### Table of Contents



Provision for Income Taxes
   Income (Loss) from Discontinued Operations
   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
    
    $
    512.9
    
    
    
    100.0
    %
    
    $
    606.6
    
    
    
    100.0
    %Cost of services
    
    
    421.1
    
    
    
    82.1
    %
    
    
    508.5
    
    
    
    83.8
    %Gross profit
    
    
    91.8
    
    
    
    17.9
    %
    
    
    98.1
    
    
    
    16.2
    %Selling, general and administrative expenses
    
    
    84.2
    
    
    
    16.4
    %
    
    
    85.7
    
    
    
    14.1
    %Gain on sale of assets
    
    
    (0.4
    )
    
    
    (0.1
    )%
    
    
    (0.1
    )
    
    
    0.0
    %Restructuring charges
    
    
    3.4
    
    
    
    0.7
    %
    
    
    4.4
    
    
    
    0.7
    %Income from operations
    
    
    4.6
    
    
    
    0.9
    %
    
    
    8.1
    
    
    
    1.3
    %Interest and other expense, net
    
    
    3.5
    
    
    
    0.7
    %
    
    
    4.4
    
    
    
    0.7
    %Income before income taxes
    
    
    1.1
    
    
    
    0.2
    %
    
    
    3.7
    
    
    
    0.6
    %Provision for income taxes
    
    
    0.9
    
    
    
    0.2
    %
    
    
    2.1
    
    
    
    0.3
    %Income from continuing operations
    
    
    0.2
    
    
    
    0.0
    %
    
    
    1.6
    
    
    
    0.3
    %Income (loss) from discontinued operations
    
    
    0.0
    
    
    
    0.0
    %
    
    
    (0.3
    )
    
    
    (0.1
    )%Net income
    
    $
    0.2
    
    
    
    0.0
    %
    
    $
    1.3
    
    
    
    0.2
    %
  33




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##### Table of Contents



Revenues
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    331.6
    
    
    
    64.6
    %
    
    $
    346.7
    
    
    
    57.2
    %Industrial
    
    
    64.3
    
    
    
    12.5
    %
    
    
    99.0
    
    
    
    16.3
    %Residential
    
    
    117.0
    
    
    
    22.9
    %
    
    
    160.9
    
    
    
    26.5
    %Total Consolidated
    
    $
    512.9
    
    
    
    100.0
    %
    
    $
    606.6
    
    
    
    100.0
    %
     Gross Profit
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    54.3
    
    
    
    16.4
    %
    
    $
    49.6
    
    
    
    14.3
    %Industrial
    
    
    9.9
    
    
    
    15.4
    %
    
    
    17.0
    
    
    
    17.2
    %Residential
    
    
    27.6
    
    
    
    23.6
    %
    
    
    31.5
    
    
    
    19.6
    %Total Consolidated
    
    $
    91.8
    
    
    
    17.9
    %
    
    $
    98.1
    
    
    
    16.2
    %
    34




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##### Table of Contents



Selling, General and Administrative Expenses
 Nine Months Ended
    
    
    Nine Months EndedJune 30, 2009
    
    
    June 30, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions Percentage of revenues)Commercial
    
    $
    23.3
    
    
    
    7.0
    %
    
    $
    31.0
    
    
    
    8.9
    %Industrial
    
    
    5.9
    
    
    
    9.2
    %
    
    
    6.3
    
    
    
    6.4
    %Residential
    
    
    22.2
    
    
    
    19.0
    %
    
    
    25.1
    
    
    
    15.6
    %Corporate
    
    
    32.8
    
    
    
    
    
    
    
    23.3
    
    
    
    Total Consolidated
    
    $
    84.2
    
    
    
    16.4
    %
    
    $
    85.7
    
    
    
    14.1
    %
     35




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##### Table of Contents



Restructuring Charges
   Nine Months EndedJune 30,2009
    
    
    2008(Dollars in thousands)Severance compensation
    
    $
    1,776
    
    
    $
    2,434Consulting and other charges
    
    
    365
    
    
    
    1,866Non-cash asset amortization and write-offs
    
    
    1,206
    
    
    
    131Total restructuring charges
    
    $
    3,347
    
    
    $
    4,431
 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)
    
    
    (404
    )
    
    
    1,256Total interest and other expense, net
    
    $
    3,479
    
    
    $
    4,422
    36




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##### Table of Contents



Provision
for Income Taxes
   Income
(Loss) from Discontinued Operations
    37




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##### Table of Contents



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
    
    
    
    14.8Prepaid expenses and other current assets
    
    
    7.3
    
    
    
    6.7Assets from discontinued operations
    
    
    0.5
    
    
    
    2.0Total current assets
    
    $
    246.1
    
    
    $
    264.2CURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    3.6
    
    
    $
    2.9Accounts payable and accrued expenses
    
    
    77.8
    
    
    
    98.1Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    34.4
    
    
    
    33.7Liabilities from discontinued operations
    
    
    0.3
    
    
    
    0.5Total current liabilities
    
    $
    116.1
    
    
    $
    135.2Working capital
    
    $
    130.0
    
    
    $
    129.0
     38




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##### Table of Contents



Liquidity and Capital Resources
   Operating Activities
  Investing Activities
 Condensed Consolidated Financial Statements Fair Value MeasurementInvestment in EPV Solar
 Financing Activities
   39




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##### Table of Contents



Bonding Capacity
 Surety
 Off-Balance Sheet Arrangements and Contractual Obligations
         40




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##### 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
 (a) Disclosure controls and procedures
   41




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##### Table of Contents



(b) 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.
   42




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##### Table of Contents



Availability of net operating losses may be reduced.
  
 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
   43




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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.  44




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##### Table of Contents



INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  Integrated Electrical Services, Inc.Date: August 10, 2009
    By:

/s/ Raymond K. GubaRaymond K. GubaExecutive Vice President and
Chief Financial and Administrative Officer  45




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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.  46