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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, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-13783
 
 Integrated Electrical Services, Inc.
  Delaware
    
    76-0542208(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 1800 West Loop South, Suite 500, Houston, Texas 77027
  Registrants telephone number, including area code:
 
 Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 Yes o No 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 March 31, 2009 and September 30, 2008
    
    
    5Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2009 and
2008
    
    
    6Condensed Consolidated Statements of Operations for the Six Months Ended March 31, 2009 and 2008
    
    
    7Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2009 and 2008
    
    
    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
    
    
    37Item 4. Controls and Procedures
    
    
    37PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    39Item 1A. Risk Factors
    
    
    39Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3. Defaults Upon Senior Securities
    
    
    39Item 4. Submission of Matters to a Vote of Security Holders
    
    
    40Item 5. Other Information
    
    
    40Item 6. Exhibits
    
    
    41Signatures
    
    
    42Exhibit 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;
    
    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
after the recent consolidation of our divisions;
    
    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;
    
    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;
  3




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
    
    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 and days sales outstanding due to liquidity problems 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 new 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 possiblity that
investments we have made in other companies will become impaired due
to performance or liquidity problems.
  www.ies-co.com
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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE INFORMATION)
 March 31,
    
    
    September 30,2009
    
    
    2008(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    51,569
    
    
    $
    64,709Accounts receivable:Trade, net
of allowance of $2,641 and $3,556, respectively
    
    
    127,089
    
    
    
    132,273Retainage
    
    
    30,114
    
    
    
    30,833Inventories
    
    
    10,623
    
    
    
    12,856Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    15,259
    
    
    
    14,743Prepaid expenses and other current assets
    
    
    7,752
    
    
    
    6,711Assets from discontinued operations
    
    
    392
    
    
    
    2,034Total current assets
    
    
    242,798
    
    
    
    264,159LONG-TERM RECEIVABLE, net of allowance of $278
    
    
    3,730
    
    
    
    PROPERTY AND EQUIPMENT, net
    
    
    24,780
    
    
    
    25,742GOODWILL
    
    
    4,373
    
    
    
    4,395OTHER NON-CURRENT ASSETS, net
    
    
    20,366
    
    
    
    25,480Total assets
    
    $
    296,047
    
    
    $
    319,776LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    2,503
    
    
    $
    2,905Accounts payable and accrued expenses
    
    
    75,816
    
    
    
    98,046Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    36,487
    
    
    
    33,711Liabilities from discontinued operations
    
    
    319
    
    
    
    504Total current liabilities
    
    
    115,125
    
    
    
    135,166LONG-TERM DEBT, net of current maturities
    
    
    26,385
    
    
    
    26,739OTHER NON-CURRENT LIABILITIES
    
    
    11,852
    
    
    
    10,765Total liabilities
    
    
    153,362
    
    
    
    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 14,612,239 and 14,753,779 outstanding, respectively
    
    
    154
    
    
    
    154Treasury stock, at cost, 795,563 and 654,023 shares, respectively
    
    
    (14,227
    )
    
    
    (11,591
    )Additional paid-in capital
    
    
    169,563
    
    
    
    170,023Retained deficit
    
    
    (12,805
    )
    
    
    (11,480
    )Total stockholders equity
    
    
    142,685
    
    
    
    147,106Total liabilities and stockholders equity
    
    $
    296,047
    
    
    $
    319,776
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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, 2009
    
    
    March 31, 2008(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    167,305
    
    
    $
    195,659Cost of services
    
    
    137,517
    
    
    
    164,822Gross profit
    
    
    29,788
    
    
    
    30,837Selling, general and administrative expenses
    
    
    29,147
    
    
    
    27,486Gain on sale of assets
    
    
    (75
    )
    
    
    (7
    )Restructuring charges
    
    
    1,908
    
    
    
    2,098Income (loss) from operations
    
    
    (1,192
    )
    
    
    1,260Interest and other (income) expense:Interest expense
    
    
    1,105
    
    
    
    1,918Interest income
    
    
    (113
    )
    
    
    (441
    )Other (income) expense, net
    
    
    (67
    )
    
    
    (896
    )Interest and other expense, net
    
    
    925
    
    
    
    581Income (loss) from continuing operations before income taxes
    
    
    (2,117
    )
    
    
    679Provision (benefit) for income taxes
    
    
    (926
    )
    
    
    453Income (loss) from continuing operations
    
    
    (1,191
    )
    
    
    226Discontinued operations (Note 2)Loss from discontinued operations
    
    
    (73
    )
    
    
    (366
    )Benefit for income taxes
    
    
    (30
    )
    
    
    (179
    )Net loss from discontinued operations
    
    
    (43
    )
    
    
    (187
    )Net loss
    
    $
    (1,234
    )
    
    $
    39Basic earnings (loss) per share:Continuing operations
    
    $
    (0.08
    )
    
    $
    0.02Discontinued operations
    
    $
    (0.01
    )
    
    $
    (0.02
    )Total
    
    $
    (0.09
    )
    
    $
    0.00Diluted earnings (loss) per share:Continuing operations
    
    $
    (0.08
    )
    
    $
    0.02Discontinued operations
    
    $
    (0.01
    )
    
    $
    (0.02
    )Total
    
    $
    (0.09
    )
    
    $
    0.00Shares used in the computation of earnings (loss) per share (Note 4):Basic
    
    
    14,322,439
    
    
    
    15,015,717Diluted
    
    
    14,322,439
    
    
    
    15,021,520
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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, 2009
    
    
    March 31, 2008(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    340,675
    
    
    $
    392,779Cost of services
    
    
    281,227
    
    
    
    328,907Gross profit
    
    
    59,448
    
    
    
    63,872Selling, general and administrative expenses
    
    
    57,546
    
    
    
    57,889Gain on sale of assets
    
    
    (178
    )
    
    
    (24
    )Restructuring charges
    
    
    2,702
    
    
    
    3,393Income (loss) from operations
    
    
    (622
    )
    
    
    2,614Interest and other (income) expense:Interest expense
    
    
    2,090
    
    
    
    6,151Interest income
    
    
    (273
    )
    
    
    (1,545
    )Other (income) expense, net
    
    
    (217
    )
    
    
    (1,323
    )Interest and other expense, net
    
    
    1,600
    
    
    
    3,283Loss from continuing operations before income taxes
    
    
    (2,222
    )
    
    
    (669
    )Provision (benefit) for income taxes
    
    
    (955
    )
    
    
    25Net loss from continuing operations
    
    
    (1,267
    )
    
    
    (694
    )Discontinued operations (Note 2)Loss from discontinued operations
    
    
    (102
    )
    
    
    (114
    )Benefit for income taxes
    
    
    (44
    )
    
    
    (50
    )Net loss from discontinued operations
    
    
    (58
    )
    
    
    (64
    )Net loss
    
    $
    (1,325
    )
    
    $
    (758
    )Basic earnings (loss) per share:Continuing operations
    
    $
    (0.09
    )
    
    $
    (0.05
    )Discontinued operations
    
    $
    (0.00
    )
    
    $
    (0.00
    )Total
    
    $
    (0.09
    )
    
    $
    (0.05
    )Diluted earnings (loss) per share:Continuing operations
    
    $
    (0.09
    )
    
    $
    (0.05
    )Discontinued operations
    
    $
    (0.00
    )
    
    $
    (0.00
    )Total
    
    $
    (0.09
    )
    
    $
    (0.05
    )Shares used in the computation of earnings (loss) per share (Note 4):Basic
    
    
    14,320,588
    
    
    
    15,054,431Diluted
    
    
    14,320,588
    
    
    
    15,054,431
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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, 2009
    
    
    March 31, 2008(Unaudited)
    
    
    (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (1,325
    )
    
    $
    (758
    )Adjustments to reconcile net loss to net cash provided by operating activities:Net (income) loss from discontinued operations
    
    
    58
    
    
    
    64Bad debt expense
    
    
    617
    
    
    
    749Deferred financing cost amortization
    
    
    128
    
    
    
    1,400Depreciation and amortization
    
    
    4,454
    
    
    
    4,586Gain on sale of assets
    
    
    (178
    )
    
    
    (24
    )Non-cash restructuring write-off
    
    
    
    
    
    
    131Non-cash compensation expense
    
    
    1,128
    
    
    
    1,859Paid in kind interest
    
    
    678
    
    
    
    Equity in (gains) losses of investment
    
    
    37
    
    
    
    (550
    )Goodwill
adjustment under SOP 90-1
    
    
    22
    
    
    
    Changes in operating assets and liabilities, net of effect of discontinued operations:Accounts receivable
    
    
    1,708
    
    
    
    (10,213
    )Inventories
    
    
    2,234
    
    
    
    (3,103
    )Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    (516
    )
    
    
    647Prepaid expenses and other current assets
    
    
    (557
    )
    
    
    1,544Other non-current assets
    
    
    5,072
    
    
    
    (952
    )Accounts payable and accrued expenses
    
    
    (22,231
    )
    
    
    (8,212
    )Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    2,776
    
    
    
    2,343Other non-current liabilities
    
    
    1,088
    
    
    
    228Net cash used in continuing operations
    
    
    (4,807
    )
    
    
    (10,261
    )Net cash provided by discontinued operations
    
    
    1,400
    
    
    
    2,256Net cash used in operating activities
    
    
    (3,407
    )
    
    
    (8,005
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (2,301
    )
    
    
    (6,138
    )Proceeds from sales of property and equipment
    
    
    226
    
    
    
    218Investment in unconsolidated affiliate
    
    
    (2,000
    )
    
    
    Distribution from unconsolidated affiliate
    
    
    
    
    
    
    488Net cash used in investing activities of continuing operations
    
    
    (4,075
    )
    
    
    (5,432
    )Net cash provided by investing activities of discontinued operations
    
    
    
    
    
    
    7Net cash used in investing activities
    
    
    (4,075
    )
    
    
    (5,425
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings of debt
    
    
    
    
    
    
    25,000Repayments of debt
    
    
    (1,434
    )
    
    
    (45,467
    )Payments for debt issuance costs
    
    
    
    
    
    
    (500
    )Acquisition of treasury stock
    
    
    (4,224
    )
    
    
    (3,412
    )Net cash used in financing activities
    
    
    (5,658
    )
    
    
    (24,379
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (13,140
    )
    
    
    (37,809
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    64,709
    
    
    
    69,676CASH AND CASH EQUIVALENTS, end of period
    
    $
    51,569
    
    
    $
    31,867SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    1,382
    
    
    $
    1,902Cash paid for income taxes
    
    $
    380
    
    
    $
    260
   8




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INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2009
 (UNAUDITED)
 1. BUSINESS
  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Fair Value Measurements
 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
  Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code
  9




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RECLASSIFICATIONS
  LONG-TERM RECEIVABLE
  ACCOUNTING ADJUSTMENT
    10




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USE OF ESTIMATES AND ASSUMPTIONS
  SEASONALITY AND QUARTERLY FLUCTUATIONS
  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Business Combinations Business Combinations
 STOCK-BASED COMPENSATION
 Share-Based Payment
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Six Months EndedMarch 31,2009
    
    
    2008Weighted average value per option granted during the period (1)
    
    $
    8.56
    
    
    $
    8.49Assumptions:Stock price volatility
    
    
    86.4
    %
    
    
    51.6
    %Risk free rate of return
    
    
    1.3
    %
    
    
    3.3
    %Future forfeiture rate (2)
    
    
    0.0
    %
    
    
    0.0
    %Expected term
    
    6.0 years
    
    
    6.0 years
 
 (1)
    
    We do not pay dividends on our common stock.(2)
    
    The forfeiture rate is assumed to be zero based on the limited number of employees who have
been awarded stock options. 2. STRATEGIC ACTIONS
 The 2007 Restructuring Plan
   The 2009 Restructuring Plan
   Severance
    
    
    Consulting /Charges
    
    
    Other Charges
    
    
    TotalRestructuring liability at September 30, 2008
    
    $
    638
    
    
    $
    53
    
    
    $
    691Restructuring charges incurred during the six months ended March 31, 2009
    
    
    1,673
    
    
    
    1,029
    
    
    
    2,702Less  cash payments during the six months ended March 31, 2009
    
    
    (1,098
    )
    
    
    (53
    )
    
    
    (1,151
    )Less  non-cash amortization expense
    
    
    
    
    
    
    (804
    )
    
    
    (804
    )Restructuring liability at March 31, 2009
    
    $
    1,213
    
    
    $
    225
    
    
    $
    1,438
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Exit or Disposal Activities
  .
   Three Months EndedMarch 31,2009
    
    
    2008Revenues
    
    $
    
    
    
    $
    878Gross profit (loss)
    
    $
    8
    
    
    $
    (112
    )Pre-tax loss
    
    $
    (73
    )
    
    $
    (366
    )
 Six Months EndedMarch 31,2009
    
    
    2008Revenues
    
    $
    21
    
    
    $
    2,626Gross profit
    
    $
    27
    
    
    $
    292Pre-tax loss
    
    $
    (102
    )
    
    $
    (114
    )
 March 31,
    
    
    September 30,2009
    
    
    2008Accounts receivable, net
    
    $
    390
    
    
    $
    1,967Property and equipment, net
    
    
    2
    
    
    
    67Total assets
    
    $
    392
    
    
    $
    2,034Accounts payable and accrued liabilities
    
    $
    319
    
    
    $
    481Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    
    
    
    
    23Total liabilities
    
    
    319
    
    
    
    504Net assets
    
    $
    73
    
    
    $
    1,530
 3. DEBT AND LIQUIDITY
  March 31,
    
    
    September 30,2009
    
    
    2008Term Loan, due May 15, 2013, bearing interest at 11.0%
    
    $
    25,678
    
    
    $
    25,000Camden Note Payable, due July 1, 2010, bearing interest at 4.59%
    
    
    3,046
    
    
    
    4,419Capital lease and other
    
    
    164
    
    
    
    225Total debt
    
    
    28,888
    
    
    
    29,644Less  Short-term debt and current maturities of long-term debt
    
    
    (2,503
    )
    
    
    (2,905
    )Total long-term debt
    
    $
    26,385
    
    
    $
    26,739
  13




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2009
    
    $
    1,5262010
    
    
    1,6842011
    
    
    2012
    
    
    2013
    
    
    25,678Thereafter
    
    
    Total
    
    $
    28,888
  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%
  14




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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 $1.0 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
million.  The Eton Park / Flagg Street Term Loan
  4. EARNINGS PER SHARE
 Participating Securities and the Two-class method under FASB Statement No. 128
  15




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Three Months EndedMarch 31,2009
    
    
    2008Numerator:Net income (loss) from continuing operations attributable to common shareholders
    
    $
    (1,191
    )
    
    $
    223Net income (loss) from continuing operations attributable to restricted shareholders
    
    
    
    
    
    
    3Net income (loss) from continuing operations
    
    $
    (1,191
    )
    
    $
    226Net loss from discontinued operations attributable to common shareholders
    
    $
    (43
    )
    
    $
    (187
    )Net loss from discontinued operations attributable to restricted shareholders
    
    
    
    
    
    
    Net loss from discontinued operations
    
    $
    (43
    )
    
    $
    (187
    )Net income (loss) attributable to common shareholders
    
    $
    (1,234
    )
    
    $
    38Net income (loss) attributable to restricted shareholders
    
    
    
    
    
    
    1Net income (loss)
    
    $
    (1,234
    )
    
    $
    39Denominator:Weighted average common shares outstanding  basic
    
    
    14,322,439
    
    
    
    15,015,717Effect of dilutive stock options and non-vested restricted stock
    
    
    
    
    
    
    5,803Weighted average common and common equivalent shares outstanding  diluted
    
    $
    14,322,439
    
    
    
    15,021,520Basic income per share:Basic earnings (loss) per share from continuing operations
    
    $
    (0.08
    )
    
    $
    0.02Basic loss per share from discontinued operations
    
    $
    (0.01
    )
    
    $
    (0.02
    )Basic earnings (loss) per share
    
    $
    (0.09
    )
    
    $
    0.00Diluted income per share:Diluted earnings (loss) per share from continuing operations
    
    $
    (0.08
    )
    
    $
    0.02Diluted loss per share from discontinued operations
    
    $
    (0.01
    )
    
    $
    (0.02
    )Diluted earnings (loss) per share
    
    $
    (0.09
    )
    
    $
    0.00
 Six Months EndedMarch 31,2009
    
    
    2008Numerator:Net loss from continuing operations attributable to common shareholders
    
    $
    (1,267
    )
    
    $
    (694
    )Net loss from continuing operations attributable to restricted shareholders
    
    
    
    
    
    
    Net loss from continuing operations
    
    $
    (1,267
    )
    
    $
    (694
    )Net loss from discontinued operations attributable to common shareholders
    
    $
    (58
    )
    
    $
    (64
    )Net loss from discontinued operations attributable to restricted shareholders
    
    
    
    
    
    
    Net loss from discontinued operations
    
    $
    (58
    )
    
    $
    (64
    )Net loss attributable to common shareholders
    
    $
    (1,325
    )
    
    $
    (758
    )Net loss attributable to restricted shareholders
    
    
    
    
    
    
    Net loss
    
    $
    (1,325
    )
    
    $
    (758
    )Denominator:Weighted average common shares outstanding  basic
    
    
    14,320,588
    
    
    
    15,054,431Effect of dilutive stock options and non-vested restricted stock
    
    
    
    
    
    
    Weighted average common and common equivalent shares outstanding  diluted
    
    $
    14,320,588
    
    
    $
    15,054,431Basic income per share:Basic loss per share from continuing operations
    
    $
    (0.09
    )
    
    $
    (0.05
    )Basic loss per share from discontinued operations
    
    $
    (0.00
    )
    
    $
    (0.00
    )Basic loss per share
    
    $
    (0.09
    )
    
    $
    (0.05
    )Diluted income per share:Diluted loss per share from continuing operations
    
    $
    (0.09
    )
    
    $
    (0.05
    )Diluted loss per share from discontinued operations
    
    $
    (0.00
    )
    
    $
    (0.00
    )Diluted loss per share
    
    $
    (0.09
    )
    
    $
    (0.05
    )
  16




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##### Table of Contents



5. OPERATING SEGMENTS
 Disclosures about Segments of an Enterprise and Related
Information
    Three Months Ended March 31, 2009 (Unaudited)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    115,092
    
    
    $
    18,332
    
    
    $
    33,881
    
    
    $
    
    
    
    $
    167,305Cost of services
    
    
    95,958
    
    
    
    15,398
    
    
    
    26,161
    
    
    
    
    
    
    
    137,517Gross profit
    
    
    19,134
    
    
    
    2,934
    
    
    
    7,720
    
    
    
    
    
    
    
    29,788Selling, general and administrative
    
    
    7,530
    
    
    
    2,118
    
    
    
    7,095
    
    
    
    12,404
    
    
    
    29,147Loss (gain) on sale of assets
    
    
    (66
    )
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    (75
    )Restructuring charge
    
    
    169
    
    
    
    114
    
    
    
    888
    
    
    
    737
    
    
    
    1,908Income (loss) from operations
    
    $
    11,502
    
    
    $
    711
    
    
    $
    (264
    )
    
    $
    (13,141
    )
    
    $
    (1,192
    )Other data:Depreciation and amortization expense
    
    $
    166
    
    
    $
    159
    
    
    $
    175
    
    
    $
    2,117
    
    
    $
    2,617Capital expenditures
    
    $
    279
    
    
    $
    31
    
    
    $
    249
    
    
    $
    1,094
    
    
    $
    1,653Total assets
    
    $
    138,411
    
    
    $
    20,887
    
    
    $
    38,166
    
    
    $
    98,191
    
    
    $
    295,655
 Three Months Ended March 31, 2008 (Unaudited)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    111,491
    
    
    $
    33,848
    
    
    $
    50,320
    
    
    $
    
    
    
    $
    195,659Cost of services
    
    
    95,542
    
    
    
    29,025
    
    
    
    40,255
    
    
    
    
    
    
    
    164,822Gross profit
    
    
    15,949
    
    
    
    4,823
    
    
    
    10,065
    
    
    
    
    
    
    
    30,837Selling, general and administrative
    
    
    9,646
    
    
    
    1,715
    
    
    
    8,183
    
    
    
    7,942
    
    
    
    27,486Loss (gain) on sale of assets
    
    
    (103
    )
    
    
    
    
    
    
    61
    
    
    
    35
    
    
    
    (7
    )Restructuring charge
    
    
    1,873
    
    
    
    136
    
    
    
    89
    
    
    
    
    
    
    
    2,098Income (loss) from operations
    
    $
    4,533
    
    
    $
    2,972
    
    
    $
    1,732
    
    
    $
    (7,977
    )
    
    $
    1,260Other data:Depreciation and amortization expense
    
    $
    796
    
    
    $
    314
    
    
    $
    645
    
    
    $
    605
    
    
    $
    2,360Capital expenditures
    
    $
    106
    
    
    $
    474
    
    
    $
    212
    
    
    $
    637
    
    
    $
    1,429Total assets
    
    $
    131,382
    
    
    $
    32,599
    
    
    $
    64,094
    
    
    $
    86,272
    
    
    $
    314,347
  17




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##### Table of Contents



Six Months March 31, 2009 (Unaudited)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    217,062
    
    
    $
    44,366
    
    
    $
    79,247
    
    
    $
    
    
    
    $
    340,675Cost of services
    
    
    182,083
    
    
    
    37,919
    
    
    
    61,225
    
    
    
    
    
    
    
    281,227Gross profit
    
    
    34,979
    
    
    
    6,447
    
    
    
    18,022
    
    
    
    
    
    
    
    59,448Selling, general and administrative
    
    
    15,788
    
    
    
    3,893
    
    
    
    15,266
    
    
    
    22,599
    
    
    
    57,546Loss (gain) on sale of assets
    
    
    (169
    )
    
    
    (23
    )
    
    
    14
    
    
    
    
    
    
    
    (178
    )Restructuring charges
    
    
    420
    
    
    
    194
    
    
    
    1,355
    
    
    
    732
    
    
    
    2,702Income (loss) from operations
    
    $
    18,940
    
    
    $
    2,382
    
    
    $
    1,387
    
    
    $
    (23,331
    )
    
    $
    (622
    )Other data:Depreciation and amortization expense
    
    $
    358
    
    
    $
    483
    
    
    $
    1,453
    
    
    $
    2,160
    
    
    $
    4,454Capital expenditures
    
    $
    321
    
    
    $
    75
    
    
    $
    265
    
    
    $
    1,640
    
    
    $
    2,301
 Six Months March 31, 2008 (Unaudited)Commercial
    
    
    Industrial
    
    
    Residential
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    221,172
    
    
    $
    65,993
    
    
    
    105,614
    
    
    $
    
    
    
    $
    392,779Cost of services
    
    
    188,965
    
    
    
    55,296
    
    
    
    84,646
    
    
    
    
    
    
    
    328,907Gross profit
    
    
    32,207
    
    
    
    10,697
    
    
    
    20,968
    
    
    
    
    
    
    
    63,872Selling, general and administrative
    
    
    20,597
    
    
    
    4,191
    
    
    
    16,712
    
    
    
    16,389
    
    
    
    57,889Loss (gain) on sale of assets
    
    
    (120
    )
    
    
    
    
    
    
    61
    
    
    
    35
    
    
    
    (24
    )Restructuring charges
    
    
    3,025
    
    
    
    227
    
    
    
    141
    
    
    
    
    
    
    
    3,393Income (loss) from operations
    
    $
    8,705
    
    
    $
    6,279
    
    
    $
    4,054
    
    
    $
    (16,424
    )
    
    $
    2,614Other data:Depreciation and amortization expense
    
    $
    1,359
    
    
    $
    598
    
    
    $
    1,333
    
    
    $
    1,279
    
    
    $
    4,569Capital expenditures
    
    $
    170
    
    
    $
    534
    
    
    $
    284
    
    
    $
    3,506
    
    
    $
    4,494
    6. STOCKHOLDERS EQUITY
   Treasury Stock
   18




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##### Table of Contents



Restricted Stock
     Performance-Based Restricted Stock
   Stock Options
    19




---



##### Table of Contents



Weighted AverageShares
    
    
    Exercise PriceOutstanding, September 30, 2008
    
    
    161,000
    
    
    $
    19.87Options granted
    
    
    7,500
    
    
    
    12.31Exercised
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding, March 31, 2009
    
    $
    168,500
    
    
    $
    19.53Exercisable, March 31, 2009
    
    $
    83,668
    
    
    $
    18.98
  RemainingContractual Life
    
    
    Weighted-Average
    
    
    
    
    
    
    Weighted-AverageRange of Exercise Prices
    
    Outstanding
    
    
    in Years
    
    
    Exercise Price
    
    
    Exercisable
    
    
    Exercise Price$12.31  $18.79
    
    
    123,500
    
    
    
    7.6
    
    
    $
    17.02
    
    
    
    70,334
    
    
    $
    17.43$20.75  $33.55
    
    
    45,000
    
    
    
    8.2
    
    
    
    26.44
    
    
    
    13,334
    
    
    
    27.15168,500
    
    
    
    7.8
    
    
    $
    19.53
    
    
    
    83,668
    
    
    $
    18.98
  7. FAIR VALUE MEASUREMENTS
 Investment in EPV Solar
 Accounting for
Certain Investment in Debt and Equity Securities
 Fair Value Measurement Accounting
     20




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##### Table of Contents



Significant
    
    
    SignificantOther Observable
    
    
    UnobservableTotal
    
    
    Quoted Prices
    
    
    Inputs
    
    
    InputsFair Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Investments in equity securities
    
    $
    297
    
    
    $
    53
    
    
    $
    
    
    
    $
    244Total
    
    $
    297
    
    
    $
    53
    
    
    $
    
    
    
    $
    244
  Level 1
 Level 2
 Level 3
  Investments inequity securitiesBalance at October 1, 2008
    
    $
    Purchases
    
    $
    244Balance at March 31, 2009
    
    $
    244
 8. COMMITMENTS AND CONTINGENCIES
 Legal Matters
    21




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##### Table of Contents



Clark Construction v. IES Commercial, Inc. f/k/a J.W. Gray
  Ward Transformer Site
    Self-insurance
 Accounting for
Contingencies.
 Surety
   22




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##### Table of Contents



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
  Notes to Consolidated Financial Statements
 Fair
Value Measurements . Condensed Consolidated Financial Statements Business
 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 . Condensed Consolidated
Financial Statements Business
 RESTRUCTURING PROGRAMS
 The 2007 Restructuring Plan
  The 2009 Restructuring Plan
   24




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##### Table of Contents



EXIT OR DISPOSAL ACTIVITIES
  .
  FINANCING
 The Tontine Capital Partners Term Loan
  The Revolving Credit Facility
 .
Condensed Consolidated Financial Statements Debt and Liquidity
  Camden Note Payable
   25




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##### Table of Contents



The Eton Park / Flagg Street Term Loan
  SURETY
 Surety
     26




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##### Table of Contents



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2009 COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 2008
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions. Percentage of revenues.)Revenues
    
    $
    167.3
    
    
    
    100.0
    %
    
    
    195.7
    
    
    
    100.0
    %Cost of services (including depreciation)
    
    
    137.5
    
    
    
    82.2
    %
    
    
    164.9
    
    
    
    84.2
    %Gross profit
    
    
    29.8
    
    
    
    17.8
    %
    
    
    30.8
    
    
    
    15.8
    %Selling, general & administrative expenses
    
    
    29.2
    
    
    
    17.4
    %
    
    
    27.5
    
    
    
    14.0
    %Gain on sale of assets
    
    
    (0.1
    )
    
    
    (0.0
    )%
    
    
    (0.0
    )
    
    
    (0.0
    )%Restructuring charges
    
    
    1.9
    
    
    
    1.1
    %
    
    
    2.1
    
    
    
    1.1
    %Income (loss) from operations
    
    
    (1.2
    )
    
    
    (0.7
    )%
    
    
    1.3
    
    
    
    0.6
    %Interest and other expense, net
    
    
    0.9
    
    
    
    0.6
    %
    
    
    0.6
    
    
    
    0.3
    %Income (loss) before income taxes
    
    
    (2.1
    )
    
    
    (1.3
    )%
    
    
    0.7
    
    
    
    0.3
    %Provision (benefit) for income taxes
    
    
    (0.9
    )
    
    
    0.6
    %
    
    
    0.5
    
    
    
    0.2
    %Loss from continuing operations
    
    
    (1.2
    )
    
    
    (0.7
    )%
    
    
    0.2
    
    
    
    0.1
    %Income (loss) from discontinued operations
    
    
    (0.1
    )
    
    
    (0.0
    )%
    
    
    (0.2
    )
    
    
    (0.1
    )%Net loss
    
    $
    (1.3
    )
    
    
    (0.7
    )%
    
    $
    0.0
    
    
    
    0.0
    %
 Revenues
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions. Percentage of revenues.)Commercial
    
    $
    115.1
    
    
    
    68.8
    %
    
    $
    111.5
    
    
    
    57.0
    %Industrial
    
    
    18.3
    
    
    
    10.9
    %
    
    
    33.9
    
    
    
    17.3
    %Residential
    
    
    33.9
    
    
    
    20.3
    %
    
    
    50.3
    
    
    
    25.7
    %Total Consolidated
    
    $
    167.3
    
    
    
    100.0
    %
    
    $
    195.7
    
    
    
    100.0
    %
      27




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##### Table of Contents



Gross Profit
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    
    
    
    %(Dollars in millions. Percentage of revenues.)Commercial
    
    $
    19.1
    
    
    
    16.6
    %
    
    $
    15.9
    
    
    
    14.3
    %Industrial
    
    
    2.9
    
    
    
    16.0
    %
    
    
    4.8
    
    
    
    14.3
    %Residential
    
    
    7.8
    
    
    
    22.8
    %
    
    
    10.1
    
    
    
    20.0
    %Total Consolidated
    
    $
    29.8
    
    
    
    17.8
    %
    
    $
    30.8
    
    
    
    15.8
    %
     Selling, General and Administrative Expenses
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions. Percentage of revenues.)Commercial
    
    $
    7.5
    
    
    
    6.5
    %
    
    $
    9.7
    
    
    
    8.7
    %Industrial
    
    
    2.1
    
    
    
    11.6
    %
    
    
    1.7
    
    
    
    5.1
    %Residential
    
    
    7.1
    
    
    
    20.9
    %
    
    
    8.2
    
    
    
    16.3
    %Corporate
    
    
    12.5
    
    
    
    
    
    
    
    7.9
    
    
    
    Total Consolidated
    
    $
    29.2
    
    
    
    17.4
    %
    
    $
    27.5
    
    
    
    14.0
    %
   28




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##### Table of Contents



Restructuring Charges
   Three Months EndedMarch 31,2009
    
    
    2008(Dollars in thousands)Severance compensation
    
    $
    1,211
    
    
    $
    1,139Consulting and other charges
    
    
    295
    
    
    
    828Non-cash asset amortization and write-offs
    
    
    402
    
    
    
    131Total restructuring charges
    
    $
    1,908
    
    
    $
    2,098
 Interest and Other Expense, Net
 Three Months EndedMarch 31,2009
    
    
    2008(Dollars in thousands)Interest expense
    
    $
    1,041
    
    
    $
    1,256Deferred financing charges
    
    
    64
    
    
    
    662Total interest expense
    
    
    1,105
    
    
    
    1,918Interest income
    
    
    (113
    )
    
    
    (441
    )Other income
    
    
    (67
    )
    
    
    (896
    )Total interest and other expense, net
    
    $
    925
    
    
    $
    581
  29




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##### Table of Contents



Provision for Income Taxes
   Income (Loss) from Discontinued Operations
    30




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##### Table of Contents



RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2009 COMPARED TO THE SIX 
MONTHS ENDED MARCH 31, 2008
  Six Months Ended
    
    
    Six Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions. Percentage of revenues.)Revenues
    
    $
    340.7
    
    
    
    100.0
    %
    
    $
    392.8
    
    
    
    100.0
    %Cost of services (including depreciation)
    
    
    281.3
    
    
    
    82.5
    %
    
    
    328.9
    
    
    
    83.7
    %Gross profit
    
    
    59.4
    
    
    
    17.5
    %
    
    
    63.9
    
    
    
    16.3
    %Selling, general & administrative expenses
    
    
    57.5
    
    
    
    16.9
    %
    
    
    57.9
    
    
    
    14.7
    %Gain on sale of assets
    
    
    (0.2
    )
    
    
    (0.0
    )%
    
    
    (0.0
    )
    
    
    (0.0
    )%Restructuring charges
    
    
    2.7
    
    
    
    0.8
    %
    
    
    3.4
    
    
    
    0.9
    %Income from operations
    
    
    (0.6
    )
    
    
    (0.2
    )%
    
    
    2.6
    
    
    
    0.7
    %Interest and other expense, net
    
    
    1.6
    
    
    
    0.5
    %
    
    
    3.3
    
    
    
    0.9
    %Loss before income taxes
    
    
    (2.2
    )
    
    
    (0.7
    )%
    
    
    (0.7
    )
    
    
    (0.2
    )%Provision (benefit) for income taxes
    
    
    (0.9
    )
    
    
    (0.3
    )%
    
    
    0.0
    
    
    
    0.0
    %Loss from continuing operations
    
    
    (1.3
    )
    
    
    (0.4
    )%
    
    
    (0.7
    )
    
    
    (0.2
    )%Income (loss) from discontinued operations
    
    
    (0.1
    )
    
    
    0.0
    %
    
    
    (0.1
    )
    
    
    0.0
    %Net loss
    
    $
    (1.4
    )
    
    
    (0.4
    )%
    
    $
    (0.8
    )
    
    
    (0.2
    )%
 Revenues
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions. Percentage of revenues.)Commercial
    
    $
    217.1
    
    
    
    63.7
    %
    
    $
    221.2
    
    
    
    56.3
    %Industrial
    
    
    44.4
    
    
    
    13.0
    %
    
    
    66.0
    
    
    
    16.8
    %Residential
    
    
    79.2
    
    
    
    23.3
    %
    
    
    105.6
    
    
    
    26.9
    %Total Consolidated
    
    $
    340.7
    
    
    
    100.0
    %
    
    $
    392.8
    
    
    
    100.0
    %
      31




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##### Table of Contents



Gross Profit
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    
    
    
    %(Dollars in millions. Percentage of revenues.)Commercial
    
    $
    35.0
    
    
    
    16.1
    %
    
    $
    32.2
    
    
    
    14.6
    %Industrial
    
    
    6.4
    
    
    
    14.5
    %
    
    
    10.7
    
    
    
    16.2
    %Residential
    
    
    18.0
    
    
    
    22.7
    %
    
    
    21.0
    
    
    
    19.9
    %Total Consolidated
    
    $
    59.4
    
    
    
    17.5
    %
    
    $
    63.9
    
    
    
    16.3
    %
     Selling, General and Administrative Expenses
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2009
    
    
    March 31, 2008$
    
    
    %
    
    
    $
    
    
    %(Dollars in millions. Percentage of revenues.)Commercial
    
    $
    15.8
    
    
    
    7.3
    %
    
    $
    20.6
    
    
    
    9.3
    %Industrial
    
    
    3.9
    
    
    
    8.8
    %
    
    
    4.2
    
    
    
    6.4
    %Residential
    
    
    15.3
    
    
    
    19.3
    %
    
    
    16.7
    
    
    
    15.8
    %Corporate
    
    
    22.5
    
    
    
    
    
    
    
    16.4
    
    
    
    Total Consolidated
    
    $
    57.5
    
    
    
    16.9
    %
    
    $
    57.9
    
    
    
    14.7
    %
     32




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##### Table of Contents



Restructuring Charges
   Six Months EndedMarch 31,2009
    
    
    2008(Dollars in thousands)Severance compensation
    
    $
    1,603
    
    
    $
    1,768Consulting and other charges
    
    
    295
    
    
    
    1,494Non-cash asset amortization and write-offs
    
    
    804
    
    
    
    131Total restructuring charges
    
    $
    2,702
    
    
    $
    3,393
 Interest and Other Expense, Net
 Six Months EndedMarch 31,2009
    
    
    2008(Dollars in thousands)Interest expense
    
    $
    1,962
    
    
    $
    2,699Deferred financing charges
    
    
    128
    
    
    
    1,400Debt prepayment penalty
    
    
    
    
    
    
    2,052Total interest expense
    
    
    2,090
    
    
    
    6,151Interest income
    
    
    (273
    )
    
    
    (1,545
    )Other income
    
    
    (217
    )
    
    
    (1,323
    )Total interest and other expense, net
    
    $
    1,600
    
    
    $
    3,283
  33




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##### Table of Contents



Provision for Income Taxes
   Income (Loss) from Discontinued Operations
    34




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##### Table of Contents



Working Capital
 March 31,
    
    
    September 30,2009
    
    
    2008(Dollars in millions)CURRENT ASSETS:Cash and cash equivalents
    
    $
    51.6
    
    
    $
    64.7Accounts receivableTrade, net of allowance of $3.0 and $3.6 respectively
    
    
    127.1
    
    
    
    132.3Retainage
    
    
    30.1
    
    
    
    30.8Inventories
    
    
    10.6
    
    
    
    12.9Costs and estimated earnings in excess of billings on uncompleted contracts
    
    
    15.3
    
    
    
    14.8Prepaid expenses and other current assets
    
    
    7.7
    
    
    
    6.7Assets from discontinued operations
    
    
    0.4
    
    
    
    2.0Total current assets
    
    $
    242.8
    
    
    $
    264.2CURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    2.5
    
    
    $
    2.9Accounts payable and accrued expenses
    
    
    75.8
    
    
    
    98.1Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    36.5
    
    
    
    33.7Liabilities from discontinued operations
    
    
    0.3
    
    
    
    0.5Total current liabilities
    
    $
    115.1
    
    
    $
    135.2Working capital
    
    $
    127.7
    
    
    $
    129.0
    Liquidity and Capital Resources
    35




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##### Table of Contents



Bonding Capacity
 Surety
 Off-Balance Sheet Arrangements and Contractual Obligations
         2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    TotalLong-term debt obligations
    
    $
    1,526
    
    
    $
    1,684
    
    
    $
    
    
    
    $
    
    
    
    $
    25,678
    
    
    $
    
    
    
    $
    28,888Operating lease obligations
    
    $
    4,114
    
    
    $
    5,283
    
    
    $
    3,404
    
    
    $
    2,061
    
    
    $
    695
    
    
    $
    844
    
    
    $
    16,401Capital lease obligations
    
    $
    121
    
    
    $
    43
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    164
 
 (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.  36




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##### Table of Contents



2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    TotalLetters of credit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Other commercial commitments (2)
    
    $
    
    
    
    $
    150
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    150
 
 (2)
    
    Balance of investment commitment in EnerTech. Outlook
  Inflation
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 (a) Disclosure controls and procedures
    37




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##### Table of Contents



(b) Changes in Internal Control Over Financial Reporting
    38




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##### Table of Contents



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.
  
 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)
    
    
    programsJanuary 1, 2009 to January 31, 2009
    
    
    
    
    
    $
    
    
    
    
    886,360
    
    
    
    113,640February 1, 2009 to February 28, 2009
    
    
    
    
    
    $
    
    
    
    
    886,360
    
    
    
    113,640March 1, 2008 to March 31, 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
   39




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Affirmative
    
    
    VotesNominee
    
    Votes
    
    
    WithheldCharles H. Beynon
    
    
    13,806,217
    
    
    
    26,709Michael J. Caliel
    
    
    13,806,148
    
    
    
    26,778Michael J. Hall
    
    
    13,806,133
    
    
    
    26,793Joseph P. Lash
    
    
    12,830,319
    
    
    
    1,002,607Donald L. Luke
    
    
    13,806,183
    
    
    
    26,743John E. Welsh
    
    
    13,806,144
    
    
    
    26,782
  
 ITEM 5. OTHER INFORMATION
   40




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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 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.  41




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##### Table of Contents



INTEGRATED ELECTRICAL SERVICES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  Integrated Electrical Services, Inc.Date: May 18, 2009
    By:
    /s/ Raymond K. GubaRaymond K. GubaExecutive Vice President and
Chief Financial and Administrative Officer  42




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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.  43