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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 March 31, 2011
 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.)
 4801 Woodway Drive, Suite 200-E, Houston, Texas 77056
 Registrants telephone number, including area code:
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 o þ
 þ 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 March 31, 2011 and September 30, 2010
    
    
    5Condensed Consolidated Statements of Operations for the Three and Six Months Ended
March 31, 2011 and 2010
    
    
    6Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31,
2011 and 2010
    
    
    8Notes to Condensed Consolidated Financial Statements
    
    
    9Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    36PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    36Item 1A. Risk Factors
    
    
    36Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3. Defaults Upon Senior Securities
    
    
    36Item 4. Submission of Matters to a Vote of Security Holders
    
    
    36Item 5. Other Information
    
    
    36Item 6. Exhibits
    
    
    37Signatures
    
    
    38Exhibit 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 customers or lead to lower margins on new
contracts;
 
    
    a general reduction in the demand for our services;
 
    
    a change in the mix of our customers, contracts and business;
 
    
    our ability to successfully manage construction projects;
 
    
    possibility of errors when estimating revenue and progress to date on
percentage-of-completion contracts;
 
    
    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 associated with our work and the potential
for vehicle accidents;
 
    
    success in transferring, renewing and obtaining electrical and construction licenses;
 
    
    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 which we
have sold or closed;
 
    
    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 or require additional collateral at their discretion;
  3




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
    
    increases in bad debt expense and days sales outstanding due to liquidity problems faced by
our customers;
 
    
    changes in the assumptions made regarding future events used to value our stock options and
performance-based stock awards;
 
    
    the recognition of potential goodwill, fixed asset and other investment impairments;
 
    
    uncertainties inherent in estimating future operating results, including revenues,
operating income or cash flow;
 
    
    disagreements with taxing authorities with regard to tax positions we have adopted;
 
    
    the recognition of tax benefits related to uncertain tax positions;
 
    
    complications associated with the incorporation of new accounting, control and operating
procedures;
 
    
    the financial impact of new or proposed accounting regulations;
 
    
    the ability of our controlling shareholder to take action not aligned with other
shareholders;
 
    
    the possibility that certain of our net operating losses may be restricted or reduced in a
change in ownership;
 
    
    credit and capital market conditions, including changes in interest rates that affect the
cost of construction financing and mortgages, and the inability for some of our customers to
retain sufficient financing which could lead to project delays or cancellations; and
 
    
    the sale or disposition of the shares of our common stock held by our majority shareholder,
which, under certain circumstances, would trigger change of control provisions in contracts
such as employment agreements, supply agreements, and financing and surety arrangements.
  www.ies-co.com
  4




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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE INFORMATION)
 March 31,
    
    
    September 30,2011
    
    
    2010(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    36,707
    
    
    $
    32,924Accounts receivable:Trade, net of allowance of $2,389 and $3,360, respectively
    
    
    82,915
    
    
    
    88,252Retainage
    
    
    18,397
    
    
    
    17,083Inventories
    
    
    9,454
    
    
    
    12,682Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    15,115
    
    
    
    12,566Prepaid expenses and other current assets
    
    
    5,031
    
    
    
    5,449Total current assets
    
    
    167,619
    
    
    
    168,956LONG-TERM RECEIVABLES, net of allowance of $77 and $4,069, respectively
    
    
    315
    
    
    
    440PROPERTY AND EQUIPMENT, net
    
    
    11,642
    
    
    
    19,846GOODWILL
    
    
    3,981
    
    
    
    3,981OTHER NON-CURRENT ASSETS, net
    
    
    8,942
    
    
    
    11,882Total assets
    
    $
    192,499
    
    
    $
    205,105LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    447
    
    
    $
    808Accounts payable and accrued expenses
    
    
    71,049
    
    
    
    67,799Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    14,212
    
    
    
    17,109Total current liabilities
    
    
    85,708
    
    
    
    85,716LONG-TERM DEBT, net of current maturities
    
    
    10,418
    
    
    
    10,448LONG-TERM DEFERRED TAX LIABILITY
    
    
    1,046
    
    
    
    1,046OTHER NON-CURRENT LIABILITIES
    
    
    6,177
    
    
    
    6,314Total liabilities
    
    
    103,349
    
    
    
    103,524STOCKHOLDERS 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 14,905,597 and 14,773,904 outstanding, respectively
    
    
    154
    
    
    
    154Treasury stock, at cost, 502,205 and 633,898 shares, respectively
    
    
    (6,861
    )
    
    
    (13,677
    )Additional paid-in capital
    
    
    165,065
    
    
    
    171,510Accumulated other comprehensive income
    
    
    
    
    
    
    (88
    )Retained deficit
    
    
    (69,208
    )
    
    
    (56,318
    )Total stockholders equity
    
    
    89,150
    
    
    
    101,581Total liabilities and stockholders equity
    
    $
    192,499
    
    
    $
    205,105
   5




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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    118,326
    
    
    $
    107,619Cost of services
    
    
    112,969
    
    
    
    94,031Gross profit
    
    
    5,357
    
    
    
    13,588Selling, general and administrative expenses
    
    
    13,333
    
    
    
    25,709(Gain) loss on sale of assets
    
    
    (87
    )
    
    
    13Restructuring charges
    
    
    
    
    
    
    65Loss from operations
    
    
    (7,889
    )
    
    
    (12,199
    )Interest and other:Interest expense
    
    
    576
    
    
    
    1,017Interest income
    
    
    (24
    )
    
    
    (59
    )Other income, net
    
    
    (8
    )
    
    
    (107
    )Interest and other expense, net
    
    
    544
    
    
    
    851Loss from operations before income taxes
    
    
    (8,433
    )
    
    
    (13,050
    )Provision for income taxes
    
    
    804
    
    
    
    180Net loss
    
    $
    (9,237
    )
    
    $
    (13,230
    )Loss per shareBasic
    
    $
    (0.64
    )
    
    $
    (0.92
    )Diluted
    
    $
    (0.64
    )
    
    $
    (0.92
    )Shares used in the computation of loss per share (Note 5):Basic
    
    
    14,481,005
    
    
    
    14,390,580Diluted
    
    
    14,481,005
    
    
    
    14,390,580
   6




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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    231,975
    
    
    $
    227,867Cost of services
    
    
    215,447
    
    
    
    194,347Gross profit
    
    
    16,528
    
    
    
    33,520Selling, general and administrative expenses
    
    
    31,354
    
    
    
    44,976Gain on sale of assets
    
    
    (6,816
    )
    
    
    (52
    )Asset Impairment
    
    
    3,551
    
    
    
    Restructuring charges
    
    
    
    
    
    
    763Loss from operations
    
    
    (11,561
    )
    
    
    (12,167
    )Interest and other:Interest expense
    
    
    1,175
    
    
    
    2,085Interest income
    
    
    (49
    )
    
    
    (116
    )Other income, net
    
    
    (24
    )
    
    
    (226
    )Interest and other expense, net
    
    
    1,102
    
    
    
    1,743Loss from operations before income taxes
    
    
    (12,663
    )
    
    
    (13,910
    )Provision for income taxes
    
    
    227
    
    
    
    126Net loss
    
    $
    (12,890
    )
    
    $
    (14,036
    )Loss per shareBasic
    
    $
    (0.89
    )
    
    $
    (0.98
    )Diluted
    
    $
    (0.89
    )
    
    $
    (0.98
    )Shares used in the computation of loss per share (Note 5):Basic
    
    
    14,463,996
    
    
    
    14,393,328Diluted
    
    
    14,463,996
    
    
    
    14,393,328
   7




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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (IN THOUSANDS)
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010(Unaudited)
    
    
    (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (12,890
    )
    
    $
    (14,036
    )Adjustments to reconcile net loss to net cash provided by operating activities:Bad debt expense
    
    
    (466
    )
    
    
    4,984Deferred financing cost amortization
    
    
    169
    
    
    
    148Depreciation and amortization
    
    
    1,980
    
    
    
    2,795Gain on sale of assets
    
    
    (6,816
    )
    
    
    (52
    )Asset Impairment
    
    
    3,551
    
    
    
    Non-cash compensation expense
    
    
    436
    
    
    
    964Equity in (gains) losses of investment
    
    
    96
    
    
    
    Changes in operating assets and liabilitiesAccounts receivable
    
    
    389
    
    
    
    21,951Inventories
    
    
    (1,640
    )
    
    
    699Costs and estimated earnings in excess of billings
    
    
    (2,930
    )
    
    
    669Prepaid expenses and other current assets
    
    
    57
    
    
    
    641Other non-current assets
    
    
    2,820
    
    
    
    229Accounts payable and accrued expenses
    
    
    6,782
    
    
    
    (19,821
    )Billings in excess of costs and estimated earnings
    
    
    (2,842
    )
    
    
    (7,541
    )Other non-current liabilities
    
    
    (140
    )
    
    
    (574
    )Net cash provided by (used in) operating activities
    
    
    (11,444
    )
    
    
    (8,944
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (755
    )
    
    
    (502
    )Proceeds from sales of property and equipment
    
    
    207
    
    
    
    159Proceeds from sales of facilities
    
    
    16,287
    
    
    
    Distribution from unconsolidated affiliates
    
    
    (57
    )
    
    
    98Net cash provided by (used in) investing activities
    
    
    15,682
    
    
    
    (245
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings of debt
    
    
    
    
    
    
    744Repayments of debt
    
    
    (390
    )
    
    
    (1,449
    )Purchase of treasury stock
    
    
    (65
    )
    
    
    (98
    )Net cash used in financing activities
    
    
    (455
    )
    
    
    (803
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    3,783
    
    
    
    (9,992
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    32,924
    
    
    
    64,174CASH AND CASH EQUIVALENTS, end of period
    
    $
    36,707
    
    
    $
    54,182SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    1,009
    
    
    $
    2,637Cash paid for income taxes
    
    $
    106
    
    
    $
    33
   8




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INTEGRATED ELECTRICAL SERVICES, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 (UNAUDITED)
 1. BUSINESS
   CONTROLLING SHAREHOLDER
  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Notes to Consolidated Financial Statements
 RECLASSIFICATIONS
   9




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
 SALES OF FACILITIES
 Sale of Non-Strategic Manufacturing Facility
    Sale of Non-Core Electrical Distribution Facility
    LONG-TERM RECEIVABLES
 Legal Matters
  10




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
 FAIR VALUE OF FINANCIAL INSTRUMENTS
   The Tontine Capital Partners Term Loan
 Investment in
EnerTech Capital Partners II L.P.
 ASSET IMPAIRMENT
  USE OF ESTIMATES AND ASSUMPTIONS
  SEASONALITY AND QUARTERLY FLUCTUATIONS
  SUBSEQUENT EVENTS
  2. CONTROLLING SHAREHOLDER
   11




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
  3. STRATEGIC ACTIONS
 2011 Restructuring Plan
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010Revenues
    
    $
    10,807
    
    
    $
    8,840Net operating losses
    
    $
    (2,173
    )
    
    $
    (4,276
    )Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010Revenues
    
    $
    21,618
    
    
    $
    22,009Net operating losses
    
    $
    (3,305
    )
    
    $
    (5,204
    )
 2009 Restructuring Plan
    12




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
  4. DEBT AND LIQUIDITY
  March 31,
    
    
    September 30,2011
    
    
    2010Tontine Term Loan, due May 15, 2013, bearing interest at 11.00%
    
    $
    10,000
    
    
    $
    10,000Insurance Financing Agreements
    
    
    263
    
    
    
    653Capital leases
    
    
    602
    
    
    
    603Total debt
    
    
    10,865
    
    
    
    11,256Less  Short-term debt and current maturities of long-term debt
    
    
    (447
    )
    
    
    (808
    )Total long-term debt
    
    $
    10,418
    
    
    $
    10,448
  Capital Leases
    
    
    Term Debt
    
    
    Total2011
    
    $
    184
    
    
    $
    263
    
    
    $
    4472012
    
    
    318
    
    
    
    
    
    
    
    3182013
    
    
    318
    
    
    
    10,000
    
    
    
    10,3182014
    
    
    26
    
    
    
    
    
    
    
    262015
    
    
    
    
    
    
    
    
    
    
    Thereafter
    
    
    
    
    
    
    
    
    
    
    Less: Imputed Interest
    
    
    (244
    )
    
    
    
    
    
    
    (244
    )Total
    
    $
    602
    
    
    $
    10,263
    
    
    $
    10,865
  The Revolving Credit Facility
   13




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
   Annual Interest Rate forTotal Liquidity
    
    Annual Interest Rate for Loans
    
    Letters of CreditGreater than or equal to $60,000
    
    LIBOR plus 3.00% or Base Rate
plus 1.00%
    
    3.00% plus 0.25% fronting feeGreater than $40,000 and less than $60,000
    
    LIBOR plus 3.25% or Base Rate
plus 1.25%
    
    3.25% plus 0.25% fronting feeLess than or equal to $40,000
    
    LIBOR plus 3.50% or Base Rate
plus 1.50%
    
    3.50% plus 0.25% fronting fee
     The Tontine Term Loan
   14




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
 5. EARNINGS PER SHARE
   Three Months EndedMarch 31,2011
    
    
    2010Numerator:Net loss attributable to common shareholders
    
    $
    (9,237
    )
    
    $
    (13,230
    )Net income attributable to restricted shareholders
    
    
    
    
    
    
    Net loss
    
    $
    (9,237
    )
    
    $
    (13,230
    )Denominator:Weighted average common shares outstanding  basic
    
    
    14,481,005
    
    
    
    14,390,580Effect of dilutive stock options and non-vested restricted stock
    
    
    
    
    
    
    Weighted average common and common equivalent shares outstanding  diluted
    
    
    14,481,005
    
    
    
    14,390,580Loss per shareBasic
    
    $
    (0.64
    )
    
    $
    (0.92
    )Diluted
    
    $
    (0.64
    )
    
    $
    (0.92
    )
  15




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
 Six Months EndedMarch 31,2011
    
    
    2010Numerator:Net loss attributable to common shareholders
    
    $
    (12,890
    )
    
    $
    (14,036
    )Net income attributable to restricted shareholders
    
    
    
    
    
    
    Net loss
    
    $
    (12,890
    )
    
    $
    (14,036
    )Denominator:Weighted average common shares outstanding  basic
    
    
    14,463,996
    
    
    
    14,393,328Effect of dilutive stock options and non-vested restricted stock
    
    
    
    
    
    
    Weighted average common and common equivalent shares outstanding  diluted
    
    
    14,463,996
    
    
    
    14,393,328Loss per shareBasic
    
    $
    (0.89
    )
    
    $
    (0.98
    )Diluted
    
    $
    (0.89
    )
    
    $
    (0.98
    )
 6. OPERATING SEGMENTS
        16




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
  Three Months Ended March 31, 2011Commercial &Communications
    
    
    Residential
    
    
    Industrial
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    23,368
    
    
    $
    26,366
    
    
    $
    68,592
    
    
    $
    
    
    
    $
    118,326Cost of services
    
    
    20,920
    
    
    
    22,788
    
    
    
    69,261
    
    
    
    
    
    
    
    112,969Gross profit
    
    
    2,448
    
    
    
    3,578
    
    
    
    (669
    )
    
    
    
    
    
    
    5,357Selling, general and administrative
    
    
    2,293
    
    
    
    4,509
    
    
    
    3,832
    
    
    
    2,699
    
    
    
    13,333Loss (gain) on sale of assets
    
    
    
    
    
    
    (48
    )
    
    
    (7
    )
    
    
    (32
    )
    
    
    (87
    )Asset Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) from operations
    
    $
    155
    
    
    $
    (883
    )
    
    $
    (4,494
    )
    
    $
    (2,667
    )
    
    $
    (7,889
    )Other data:Depreciation and amortization expense
    
    $
    22
    
    
    $
    84
    
    
    $
    158
    
    
    $
    579
    
    
    $
    843Capital expenditures
    
    $
    
    
    
    $
    47
    
    
    $
    164
    
    
    $
    153
    
    
    $
    364Total assets
    
    $
    25,368
    
    
    $
    21,878
    
    
    $
    81,443
    
    
    $
    63,810
    
    
    $
    192,499
 Three Months Ended March 31, 2010Commercial &Communications
    
    
    Residential
    
    
    Industrial
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    16,402
    
    
    $
    28,068
    
    
    $
    63,149
    
    
    $
    
    
    
    $
    107,619Cost of services
    
    
    13,011
    
    
    
    21,814
    
    
    
    59,206
    
    
    
    
    
    
    
    94,031Gross profit
    
    
    3,391
    
    
    
    6,254
    
    
    
    3,943
    
    
    
    
    
    
    
    13,588Selling, general and administrative
    
    
    1,819
    
    
    
    6,526
    
    
    
    12,863
    
    
    
    4,501
    
    
    
    25,709Loss (gain) on sale of assets
    
    
    
    
    
    
    (2
    )
    
    
    15
    
    
    
    
    
    
    
    13Restructuring charge
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    67
    
    
    
    65Income (loss) from operations
    
    $
    1,572
    
    
    $
    (270
    )
    
    $
    (8,933
    )
    
    $
    (4,568
    )
    
    $
    (12,199
    )Other data:Depreciation and amortization expense
    
    $
    65
    
    
    $
    255
    
    
    $
    430
    
    
    $
    668
    
    
    $
    1,418Capital expenditures
    
    $
    31
    
    
    $
    64
    
    
    $
    142
    
    
    $
    189
    
    
    $
    426Total assets
    
    $
    15,794
    
    
    $
    32,886
    
    
    $
    85,518
    
    
    $
    92,406
    
    
    $
    226,604
  17




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
 Six Months Ended March 31, 2011Commercial &Communications
    
    
    Residential
    
    
    Industrial
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    43,290
    
    
    $
    52,410
    
    
    $
    136,275
    
    
    $
    
    
    
    $
    231,975Cost of services
    
    
    37,630
    
    
    
    44,249
    
    
    
    133,568
    
    
    
    
    
    
    
    215,447Gross profit
    
    
    5,660
    
    
    
    8,161
    
    
    
    2,707
    
    
    
    
    
    
    
    16,528Selling, general and administrative
    
    
    4,614
    
    
    
    9,286
    
    
    
    11,404
    
    
    
    6,050
    
    
    
    31,354Loss (gain) on sale of assets
    
    
    
    
    
    
    (70
    )
    
    
    (6,833
    )
    
    
    87
    
    
    
    (6,816
    )Asset Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,551
    
    
    
    3,551Restructuring charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) from operations
    
    $
    1,046
    
    
    $
    (1,055
    )
    
    $
    (1,864
    )
    
    $
    (9,688
    )
    
    $
    (11,561
    )Other data:Depreciation and amortization expense
    
    $
    48
    
    
    $
    183
    
    
    $
    393
    
    
    $
    1,356
    
    
    $
    1,980Capital expenditures
    
    $
    
    
    
    $
    74
    
    
    $
    390
    
    
    $
    291
    
    
    $
    755
 Six Months Ended March 31, 2010Commercial &Communications
    
    
    Residential
    
    
    Industrial
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    35,054
    
    
    $
    57,060
    
    
    $
    135,753
    
    
    $
    
    
    
    $
    227,867Cost of services
    
    
    28,306
    
    
    
    43,957
    
    
    
    122,084
    
    
    
    
    
    
    
    194,347Gross profit
    
    
    6,748
    
    
    
    13,103
    
    
    
    13,669
    
    
    
    
    
    
    
    33,520Selling, general and administrative
    
    
    3,705
    
    
    
    12,549
    
    
    
    20,820
    
    
    
    7,902
    
    
    
    44,976Loss (gain) on sale of assets
    
    
    
    
    
    
    (3
    )
    
    
    (49
    )
    
    
    
    
    
    
    (52
    )Restructuring charge
    
    
    16
    
    
    
    
    
    
    
    698
    
    
    
    49
    
    
    
    763Income (loss) from operations
    
    $
    3,027
    
    
    $
    557
    
    
    $
    (7,800
    )
    
    $
    (7,951
    )
    
    $
    (12,167
    )Other data:Depreciation and amortization expense
    
    $
    117
    
    
    $
    397
    
    
    $
    737
    
    
    $
    1,544
    
    
    $
    2,795Capital expenditures
    
    $
    31
    
    
    $
    76
    
    
    $
    174
    
    
    $
    221
    
    
    $
    502
  7. STOCKHOLDERS EQUITY
  Treasury Stock
   18




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
   Restricted Stock
    Stock Options
     Weighted AverageShares
    
    
    Exercise PriceOutstanding, September 30, 2010
    
    
    158,500
    
    
    $
    18.66Options granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding, March 31, 2011
    
    
    158,500
    
    
    $
    18.66Exercisable, March 31, 2011
    
    
    156,833
    
    
    $
    18.64
  19




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
  RemainingOutstanding as of
    
    
    Contractual Life
    
    
    Weighted-Average
    
    
    Exercisable as of
    
    
    Weighted-AverageRange of Exercise Prices
    
    March 31, 2011
    
    
    in Years
    
    
    Exercise Price
    
    
    March 31, 2011
    
    
    Exercise Price$12.31  $18.79
    
    
    123,500
    
    
    
    5.62
    
    
    $
    17.02
    
    
    
    123,500
    
    
    $
    17.02$20.75
 $25.08
    
    
    35,000
    
    
    
    6.23
    
    
    
    24.46
    
    
    
    33,333
    
    
    
    24.65158,500
    
    
    
    5.75
    
    
    $
    18.66
    
    
    
    156,833
    
    
    $
    18.64
  8. SECURITIES AND EQUITY INVESTMENTS
 Investment in EnerTech Capital Partners II L.P.
   March 31,
    
    
    September 30,2011
    
    
    2010Carrying value
    
    $
    1,985
    
    
    $
    2,005Unrealized gains (losses)
    
    
    (324
    )
    
    
    (179
    )Fair value
    
    $
    1,661
    
    
    $
    1,826
  Arbinet Corporation
    20




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INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
  9. EMPLOYEE BENEFIT PLANS
 Executive Savings Plan
   10. FAIR VALUE MEASUREMENTS
    Significant
    
    
    SignificantOther Observable
    
    
    UnobservableTotal
    
    
    Quoted Prices
    
    
    Inputs
    
    
    InputsFair Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Money market accounts
    
    $
    17,877
    
    
    $
    17,877
    
    
    $
    
    
    
    $
    Executive Savings Plan assets
    
    
    634
    
    
    
    634
    
    
    
    
    
    
    
    Executive Savings Plan liabilities
    
    
    (715
    )
    
    
    (715
    )
    
    
    
    
    
    
    Total
    
    $
    17,796
    
    
    $
    17,796
    
    
    $
    
    
    
    $
    
  Level 1
 Level 2
 Level 3
  21




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##### Table of Contents



INTEGRATED ELECTRICAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
(UNAUDITED)
 11. COMMITMENTS AND CONTINGENCIES
   Centerpoint Project
     Ward Transformer Site
    22




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##### Table of Contents



Risk Management
   Surety
    Other Commitments and Contingencies
    23




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
    SALES OF FACILITIES
 Sale of Non-Strategic Manufacturing Facility
    Sale of Non-Core Electrical Distribution Business
   24




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##### Table of Contents



ASSET IMPAIRMENT
  SEASONALITY AND QUARTERLY FLUCTUATIONS
  RESTRUCTURING PROGRAMS
 2011 Restructuring Plan
  2009 Restructuring Plan
    25




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##### Table of Contents



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2011 COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 2010
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Revenues
    
    $
    118.3
    
    
    
    100.0
    %
    
    $
    107.6
    
    
    
    100.0
    %Cost of services
    
    
    113.0
    
    
    
    95.5
    %
    
    
    94.0
    
    
    
    87.4
    %Gross profit
    
    
    5.3
    
    
    
    4.5
    %
    
    
    13.6
    
    
    
    12.6
    %Selling, general and administrative expenses
    
    
    13.3
    
    
    
    11.3
    %
    
    
    25.7
    
    
    
    23.9
    %Gain on sale of assets
    
    
    (0.1
    )
    
    
    (0.1
    )%
    
    
    0.0
    
    
    
    0.0
    %Asset Impairment
    
    
    0.0
    
    
    
    0.0
    %
    
    
    0.0
    
    
    
    0.0
    %Restructuring charges
    
    
    0.0
    
    
    
    0.0
    %
    
    
    0.1
    
    
    
    0.1
    %Income (loss) from operations
    
    
    (7.9
    )
    
    
    (6.7
    )%
    
    
    (12.2
    )
    
    
    (11.3
    )%Interest and other expense, net
    
    
    0.5
    
    
    
    0.5
    %
    
    
    0.8
    
    
    
    0.7
    %Loss before income taxes
    
    
    (8.4
    )
    
    
    (7.1
    )%
    
    
    (13.0
    )
    
    
    (12.1
    )%Provision for income taxes
    
    
    0.8
    
    
    
    0.7
    %
    
    
    0.2
    
    
    
    0.2
    %Net loss
    
    $
    (9.2
    )
    
    
    (7.8
    )%
    
    $
    (13.2
    )
    
    
    (12.3
    )%
 Revenues
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Communications
    
    $
    23.4
    
    
    
    19.7
    %
    
    $
    16.4
    
    
    
    15.2
    %Residential
    
    
    26.3
    
    
    
    22.3
    %
    
    
    28.0
    
    
    
    26.1
    %Commercial & Industrial
    
    
    68.6
    
    
    
    58.0
    %
    
    
    63.2
    
    
    
    58.6
    %Total Consolidated
    
    $
    118.3
    
    
    
    100.0
    %
    
    $
    107.6
    
    
    
    100.0
    %
      26




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##### Table of Contents



Gross Profit
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Communications
    
    $
    2.4
    
    
    
    10.5
    %
    
    $
    3.4
    
    
    
    20.7
    %Residential
    
    
    3.6
    
    
    
    13.6
    %
    
    
    6.3
    
    
    
    22.3
    %Commercial & Industrial
    
    
    -0.7
    
    
    
    -1.0
    %
    
    
    3.9
    
    
    
    6.2
    %Total Consolidated
    
    $
    5.3
    
    
    
    4.5
    %
    
    $
    13.6
    
    
    
    12.6
    %
     Selling, General and Administrative Expenses
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Communications
    
    $
    2.3
    
    
    
    9.8
    %
    
    $
    1.8
    
    
    
    11.0
    %Residential
    
    
    4.5
    
    
    
    17.1
    %
    
    
    6.5
    
    
    
    23.3
    %Commercial & Industrial
    
    
    3.8
    
    
    
    5.6
    %
    
    
    12.9
    
    
    
    20.4
    %Corporate
    
    
    2.7
    
    
    
    
    
    
    
    4.5
    
    
    
    Total Consolidated
    
    $
    13.3
    
    
    
    11.3
    %
    
    $
    25.7
    
    
    
    23.9
    %
    27




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Restructuring Charges
  Three Months EndedMarch 31,2011
    
    
    2010(Dollars in thousands)Severance compensation
    
    $
    
    
    
    $
    0.1Consulting and other charges
    
    
    
    
    
    
    Non-cash asset amortization and write-offs
    
    
    
    
    
    
    Total restructuring charges
    
    $
    
    
    
    $
    0.1
 Interest and Other Expense, Net
 Three Months EndedMarch 31,2011
    
    
    2010(Dollars in thousands)Interest expense
    
    $
    0.5
    
    
    $
    1.0Debt prepayment penalty and deferred cost amortization
    
    
    
    
    
    
    0.1Total interest expense
    
    
    0.5
    
    
    
    1.1Interest income
    
    
    
    
    
    
    (0.1
    )Other income (expense)
    
    
    
    
    
    
    (0.1
    )Total interest and other expense, net
    
    $
    0.5
    
    
    $
    0.9
   Provision for Income Taxes
    28




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##### Table of Contents



RESULTS
OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2011 COMPARED TO THE
SIX MONTHS ENDED MARCH 31, 2010
  Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Revenues
    
    $
    232.0
    
    
    
    100.0
    %
    
    $
    227.9
    
    
    
    100.0
    %Cost of services
    
    
    215.5
    
    
    
    92.9
    %
    
    
    194.4
    
    
    
    85.3
    %Gross profit
    
    
    16.5
    
    
    
    7.1
    %
    
    
    33.5
    
    
    
    14.7
    %Selling, general and administrative expenses
    
    
    31.4
    
    
    
    13.5
    %
    
    
    45.0
    
    
    
    19.7
    %Gain on sale of assets
    
    
    (6.8
    )
    
    
    (2.9
    )%
    
    
    (0.1
    )
    
    
    (0.0
    )%Asset Impairment
    
    
    3.5
    
    
    
    1.5
    %
    
    
    0.0
    
    
    
    0.0
    %Restructuring charges
    
    
    0.0
    
    
    
    0.0
    %
    
    
    0.8
    
    
    
    0.3
    %Income (loss) from operations
    
    
    (11.6
    )
    
    
    (5.0
    )%
    
    
    (12.2
    )
    
    
    (5.3
    )%Interest and other expense, net
    
    
    1.1
    
    
    
    0.5
    %
    
    
    1.7
    
    
    
    0.8
    %Loss before income taxes
    
    
    (12.7
    )
    
    
    (5.5
    )%
    
    
    (13.9
    )
    
    
    (6.1
    )%Provision for income taxes
    
    
    0.2
    
    
    
    0.1
    %
    
    
    0.1
    
    
    
    0.1
    %Net loss
    
    $
    (12.9
    )
    
    
    (5.6
    )%
    
    $
    (14.0
    )
    
    
    (6.2
    )%
 Revenues
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Communications
    
    $
    43.3
    
    
    
    18.7
    %
    
    $
    35.1
    
    
    
    15.4
    %Residential
    
    
    52.4
    
    
    
    22.6
    %
    
    
    57.1
    
    
    
    25.0
    %Commercial & Industrial
    
    
    136.3
    
    
    
    58.7
    %
    
    
    135.7
    
    
    
    59.5
    %Total Consolidated
    
    $
    232.0
    
    
    
    100.0
    %
    
    $
    227.9
    
    
    
    100.0
    %
     29




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Gross Profit
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Communications
    
    $
    5.7
    
    
    
    13.1
    %
    
    $
    6.8
    
    
    
    19.4
    %Residential
    
    
    8.2
    
    
    
    15.6
    %
    
    
    13.1
    
    
    
    23.0
    %Commercial & Industrial
    
    
    2.6
    
    
    
    2.0
    %
    
    
    13.6
    
    
    
    10.1
    %Total Consolidated
    
    $
    16.5
    
    
    
    7.1
    %
    
    $
    33.5
    
    
    
    14.7
    %
     Selling, General and Administrative Expenses
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions, Percentage of revenues)Communications
    
    $
    4.6
    
    
    
    10.7
    %
    
    $
    3.7
    
    
    
    10.5
    %Residential
    
    
    9.3
    
    
    
    17.7
    %
    
    
    12.6
    
    
    
    22.0
    %Commercial & Industrial
    
    
    11.4
    
    
    
    8.4
    %
    
    
    20.8
    
    
    
    15.4
    %Corporate
    
    
    6.1
    
    
    
    
    
    
    
    7.9
    
    
    
    Total Consolidated
    
    $
    31.4
    
    
    
    13.5
    %
    
    $
    45.0
    
    
    
    19.7
    %
   30




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##### Table of Contents



Restructuring Charges
  Six Months EndedMarch 31,2011
    
    
    2010(Dollars in thousands)Severance compensation
    
    $
    
    
    
    $
    0.8Consulting and other charges
    
    
    
    
    
    
    Non-cash asset amortization and write-offs
    
    
    
    
    
    
    Total restructuring charges
    
    $
    
    
    
    $
    0.8
 Interest and Other Expense, Net
 Six Months EndedMarch 31,2011
    
    
    2010(Dollars in thousands)Interest expense
    
    $
    1.2
    
    
    $
    1.9Debt prepayment penalty and deferred cost amortization
    
    
    
    
    
    
    0.2Total interest expense
    
    
    1.2
    
    
    
    2.1Interest income
    
    
    (0.1
    )
    
    
    (0.1
    )Other income (expense)
    
    
    
    
    
    
    (0.3
    )Total interest and other expense, net
    
    $
    1.1
    
    
    $
    1.7
   Provision for Income Taxes
   31




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##### Table of Contents



Working Capital
 March 31,
    
    
    September 30,2011
    
    
    2010(Dollars in millions)CURRENT ASSETS:Cash and cash equivalents
    
    $
    36.7
    
    
    $
    32.9Accounts receivableTrade, net of allowance of $2.5 and $3.4 respectively
    
    
    82.9
    
    
    
    88.3Retainage
    
    
    18.4
    
    
    
    17.1Inventories
    
    
    9.5
    
    
    
    12.7Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    15.1
    
    
    
    12.6Prepaid expenses and other current assets
    
    
    5.0
    
    
    
    5.4Total current assets
    
    $
    167.6
    
    
    $
    169.0CURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    0.5
    
    
    $
    0.8Accounts payable and accrued expenses
    
    
    71.0
    
    
    
    67.8Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    14.2
    
    
    
    17.1Total current liabilities
    
    $
    85.7
    
    
    $
    85.7Working capital
    
    $
    81.9
    
    
    $
    83.3
   Surety
    32




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##### Table of Contents



The Revolving Credit Facility
     The Tontine Term Loan
  Liquidity and Capital Resources
   33




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##### Table of Contents



Operating Activities
  Investing Activities
  Financing Activities
  Bonding Capacity
 Surety
 Controlling Shareholder
    34




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##### Table of Contents



Off-Balance Sheet Arrangements and Contractual Obligations
        2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    2016
    
    
    Thereafter
    
    
    TotalLong-term debt obligations
    
    $
    0.3
    
    
    $
    0.0
    
    
    $
    10.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    10.3Operating lease obligations
    
    $
    2.4
    
    
    $
    5.0
    
    
    $
    2.7
    
    
    $
    1.3
    
    
    $
    0.6
    
    
    $
    0.3
    
    
    $
    0.9
    
    
    $
    13.2Capital lease obligations
    
    $
    0.1
    
    
    $
    0.2
    
    
    $
    0.3
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.6Total
    
    $
    2.8
    
    
    $
    5.2
    
    
    $
    13.0
    
    
    $
    1.3
    
    
    $
    0.6
    
    
    $
    0.3
    
    
    $
    0.9
    
    
    $
    24.1
 
 (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
   35




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##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Disclosure controls and procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
 Legal Matters
 
 ITEM 1A.
    
    RISK FACTORS
 Risk Factors
 
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    REMOVED AND RESERVED
 
 ITEM 5.
    
    OTHER INFORMATION
   36




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##### Table of Contents



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 Terry L. Freeman, Chief Financial Officer (1)32.1
    
    
    Section 1350 Certification of Michael J. Caliel, Chief Executive Officer (1)32.2
    
    
    Section 1350 Certification of Terry L. Freeman, Chief Financial Officer (1)
 (1)
    
    Filed herewith.  37




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##### Table of Contents



INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  INTEGRATED ELECTRICAL SERVICES, INC.Date: May 16, 2011
    By:
    /s/ Terry L. FreemanTerry L. FreemanSenior Vice President and Chief Financial Officer  38




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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 Terry L. Freeman, Chief Financial Officer (1)32.1
    
    
    Section 1350 Certification of Michael J. Caliel, Chief Executive Officer (1)32.2
    
    
    Section 1350 Certification of Terry L. Freeman, Chief Financial Officer (1)
 (1)
    
    Filed herewith.  39