IES Holdings Reports Fiscal 2022 First Quarter Results
First Quarter 2022 Highlights
- Revenue of
$481 million for the first quarter of fiscal 2022, an increase of 53% compared with$315 million for the same quarter of fiscal 2021 - Operating income of
$20.3 million for the first quarter of fiscal 2022, an increase of 27% compared with$15.9 million for the same quarter of fiscal 2021 - Net income attributable to IES increased 20% to
$14.5 million , or$0.69 per diluted share, for the first quarter of fiscal 2022, compared with$12.1 million , or$0.58 per diluted share, for the same quarter of fiscal 2021 - Adjusted net income attributable to IES (a non-GAAP financial measure, as defined below) increased 19% to
$17 .6 million, or$0.83 per diluted share, for the first quarter of fiscal 2022, compared with$14 .8 million, or$0.71 per diluted share, for the same quarter of fiscal 2021 - Remaining performance obligations, a GAAP measure of future revenue to be recognized from current contracts with customers, of approximately
$721 million as ofDecember 31, 2021 - Backlog (a non-GAAP financial measure, as defined below) of approximately $948 million as of
December 31, 2021
Overview of Results
“As we enter a new fiscal year, demand for our services continues to be strong,” said
“Consolidated revenue for the first quarter of fiscal 2022 increased 53% over the prior year, led by significant growth in our Communications and Residential businesses, including the contribution of businesses acquired in fiscal 2021. Operating income for the first quarter of fiscal 2022 increased 27% over the prior year, despite the impact of ongoing pandemic-related headwinds on our business.”
Our Communications segment’s revenue was
Our Residential segment’s revenue was
Our Infrastructure Solutions segment’s revenue was
Our Commercial & Industrial segment’s revenue was
Stock Buyback Plan
In 2015, the Company’s Board of Directors authorized and announced a stock repurchase program for purchasing up to 1.5 million shares of our common stock from time to time, and on
Non-GAAP Financial Measures and Other Adjustments
This press release includes adjusted net income attributable to IES, adjusted diluted earnings per share attributable to common stockholders, and backlog, and, in the non-GAAP reconciliation tables included herein, adjusted net income attributable to common stockholders, adjusted EBITDA and adjusted net income before taxes, each of which is a financial measure not calculated in accordance with generally accepted accounting principles in the
Remaining performance obligations represent the unrecognized revenue value of our contract commitments. While backlog is not a defined term under GAAP, it is a common measurement used in IES’s industry and IES believes this non-GAAP measure enables it to more effectively forecast its future results and better identify future operating trends that may not otherwise be apparent. IES’s remaining performance obligations are a component of IES’s backlog calculation, which also includes signed agreements and letters of intent which we do not have a legal right to enforce prior to work starting. These arrangements are excluded from remaining performance obligations until work begins. IES’s methodology for determining backlog may not be comparable to the methodologies used by other companies.
For further details on the Company’s financial results, please refer to the Company’s quarterly report on Form 10-Q for the fiscal quarter ended
About
IES designs and installs integrated electrical and technology systems and provides infrastructure products and services to a variety of end markets, including data centers, residential housing, and commercial and industrial facilities. Our more than 6,500 employees serve clients in
Company Contact:
Chief Financial Officer
(713) 860-1500
Investor Relations Contact:
312-445-2870
IESC@alpha-ir.com
Certain statements in this release may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, all of which are based upon various estimates and assumptions that the Company believes to be reasonable as of the date hereof. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “seek,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” the negative of such terms or other comparable terminology. These statements involve risks and uncertainties that could cause the Company’s actual future outcomes to differ materially from those set forth in such statements. Such risks and uncertainties include, but are not limited to, the impact of the COVID-19 outbreak or future pandemics on our business, including the potential for job site closures or work stoppages, supply chain disruptions, delays in awarding new projects, construction delays, reduced demand for our services, delays in our ability to collect from our customers, the impact of third party vaccine mandates on employee recruiting and retention, or illness of management or other employees; the ability of our controlling shareholder to take action not aligned with other shareholders; the possibility that certain tax benefits of our net operating losses may be restricted or reduced in a change in ownership or a change in the federal tax rate; the potential recognition of valuation allowances or write-downs on deferred tax assets; the inability to carry out plans and strategies as expected, including our inability to identify and complete acquisitions that meet our investment criteria in furtherance of our corporate strategy, or the subsequent underperformance of those acquisitions; competition in the industries in which we operate, 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 projects; fluctuations in operating activity due to downturns in levels of construction or the housing market, seasonality and differing regional economic conditions; the possibility of inaccurate estimates used when entering into fixed-price contracts and our ability to successfully manage projects, as well as other risk factors discussed in this document, in the Company’s annual report on Form 10-K for the year ended
Forward-looking statements are provided in this press release pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of the estimates, assumptions, uncertainties, and risks described herein.
General information about
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended |
||||||||
2021 | 2020 | |||||||
Revenues | $ | 480.5 | $ | 314.8 | ||||
Cost of services | 400.8 | 256.2 | ||||||
Gross profit | 79.7 | 58.7 | ||||||
Selling, general and administrative expenses | 59.4 | 42.8 | ||||||
Contingent consideration | 0.1 | — | ||||||
Operating income | 20.3 | 15.9 | ||||||
Interest expense | 0.4 | 0.2 | ||||||
Other (income) expense, net | 0.8 | (0.1 | ) | |||||
Income from operations before income taxes | 19.1 | 15.8 | ||||||
Provision for income taxes | 4.0 | 3.6 | ||||||
Net income | 15.1 | 12.2 | ||||||
Net income attributable to noncontrolling interest | (0.6 | ) | (0.1 | ) | ||||
Net income attributable to |
$ | 14.5 | $ | 12.1 | ||||
Earnings per share attributable to common stockholders: | ||||||||
Basic | $ | 0.70 | $ | 0.58 | ||||
Diluted | $ | 0.69 | $ | 0.58 | ||||
Shares used in the computation of earnings per share: | ||||||||
Basic (in thousands) | 20,703 | 20,735 | ||||||
Diluted (in thousands) | 20,959 | 21,061 |
NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE
TO
ATTRIBUTABLE TO COMMON STOCKHOLDERS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended |
||||||||
2021 | 2020 | |||||||
Net income attributable to |
$ | 14.5 | $ | 12.1 | ||||
Provision for income taxes | 4.0 | 3.6 | ||||||
Adjusted net income before taxes | 18.5 | 15.7 | ||||||
Current tax expense (1) | (0.9 | ) | (0.9 | ) | ||||
Adjusted net income attributable to |
17.6 | 14.8 | ||||||
Adjustments for computation of earnings per share: | ||||||||
(Increase) decrease in noncontrolling interest | (0.1 | ) | 0.1 | |||||
Net income attributable to restricted stockholders | — | — | ||||||
Adjusted net income attributable to common stockholders | $ | 17.5 | $ | 14.9 | ||||
Adjusted earnings per share attributable to common stockholders: | ||||||||
Basic | $ | 0.85 | $ | 0.72 | ||||
Diluted | $ | 0.83 | $ | 0.71 | ||||
Shares used in the computation of earnings per share: | ||||||||
Basic (in thousands) | 20,703 | 20,735 | ||||||
Diluted (in thousands) | 20,959 | 21,061 | ||||||
(1) Represents the tax expense for the current period which will be paid in cash and not offset by the utilization of net operating loss forwards |
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
(UNAUDITED)
2021 | 2021 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 7.8 | $ | 23.1 | ||||||
Accounts receivable: | ||||||||||
Trade, net of allowance | 294.8 | 286.7 | ||||||||
Retainage | 45.7 | 41.3 | ||||||||
Inventories | 73.8 | 68.6 | ||||||||
Costs and estimated earnings in excess of billings | 52.5 | 43.4 | ||||||||
Prepaid expenses and other current assets | 21.8 | 21.1 | ||||||||
Total current assets | 496.5 | 484.2 | ||||||||
Property and equipment, net | 45.3 | 35.5 | ||||||||
92.4 | 92.4 | |||||||||
Intangible assets, net | 82.1 | 85.6 | ||||||||
Deferred tax assets | 16.8 | 19.0 | ||||||||
Operating right of use assets | 42.5 | 42.9 | ||||||||
Other non-current assets | 9.6 | 7.0 | ||||||||
Total assets | $ | 785.2 | $ | 766.6 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable and accrued expenses | $ | 232.5 | $ | 249.1 | ||||||
Billings in excess of costs and estimated earnings | 66.2 | 62.5 | ||||||||
Total current liabilities | 298.8 | 311.6 | ||||||||
Long-term debt | 67.8 | 39.7 | ||||||||
Operating long-term lease liabilities | 27.5 | 28.6 | ||||||||
Other non-current liabilities | 10.6 | 16.1 | ||||||||
Total liabilities | 404.7 | 396.1 | ||||||||
Noncontrolling interest | 24.1 | 24.6 | ||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||
Preferred stock | — | — | ||||||||
Common stock | 0.2 | 0.2 | ||||||||
(30.5 | ) | (29.3 | ) | |||||||
Additional paid-in capital | 199.2 | 201.9 | ||||||||
Retained earnings | 187.5 | 173.1 | ||||||||
Total stockholders’ equity | 356.5 | 346.0 | ||||||||
Total liabilities and stockholders’ equity | $ | 785.2 | $ | 766.6 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
Three Months Ended |
||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 15.1 | $ | 12.2 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Bad debt expense | 0.1 | (0.2 | ) | |||||
Depreciation and amortization | 6.2 | 4.0 | ||||||
Non-cash compensation expense | 0.9 | 0.8 | ||||||
Deferred income taxes | 2.2 | 2.8 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (8.2 | ) | 6.0 | |||||
Inventories | (5.2 | ) | (4.3 | ) | ||||
Costs and estimated earnings in excess of billings | (9.1 | ) | 6.1 | |||||
Prepaid expenses and other current assets | (5.4 | ) | (2.5 | ) | ||||
Other non-current assets | (1.6 | ) | (0.3 | ) | ||||
Accounts payable and accrued expenses | (23.2 | ) | (14.8 | ) | ||||
Billings in excess of costs and estimated earnings | 3.8 | 9.0 | ||||||
Other non-current liabilities | (0.1 | ) | 1.3 | |||||
Net cash provided by (used in) operating activities | (24.5 | ) | 20.3 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (12.3 | ) | (1.2 | ) | ||||
Proceeds from sale of assets | 0.1 | — | ||||||
Cash paid in conjunction with equity investments | (0.5 | ) | — | |||||
Cash paid in conjunction with business combinations | — | (54.8 | ) | |||||
Net cash used in investing activities | (12.8 | ) | (55.9 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings of debt | 444.2 | 25.1 | ||||||
Repayments of debt | (415.9 | ) | (10.1 | ) | ||||
Cash paid for finance leases | (0.3 | ) | (0.1 | ) | ||||
Distribution to noncontrolling interest | (1.2 | ) | — | |||||
Purchase of treasury stock | (4.8 | ) | (0.7 | ) | ||||
Net cash provided by financing activities | 21.9 | 14.2 | ||||||
(15.3 | ) | (21.5 | ) | |||||
CASH and CASH EQUIVALENTS, beginning of period | 23.1 | 53.6 | ||||||
CASH and CASH EQUIVALENTS, end of period | $ | 7.8 | $ | 32.1 |
OPERATING SEGMENT STATEMENT OF OPERATIONS
(DOLLARS IN MILLIONS)
(UNAUDITED)
Three Months Ended |
||||||||
2021 | 2020 | |||||||
Revenues | ||||||||
Communications | $ | 127.4 | $ | 98.4 | ||||
Residential | 241.8 | 119.5 | ||||||
Infrastructure Solutions | 42.1 | 34.4 | ||||||
Commercial & Industrial | 69.2 | 62.6 | ||||||
Total revenue | $ | 480.5 | $ | 314.8 | ||||
Operating income (loss) | ||||||||
Communications | $ | 9.1 | $ | 9.2 | ||||
Residential | 11.6 | 6.2 | ||||||
Infrastructure Solutions | 1.7 | 5.3 | ||||||
Commercial & Industrial | 1.6 | (0.7 | ) | |||||
Corporate | (3.7 | ) | (4.1 | ) | ||||
Total operating income | $ | 20.3 | $ | 15.9 |
NON-GAAP RECONCILIATION OF ADJUSTED EBITDA
(DOLLARS IN MILLIONS)
(UNAUDITED)
Three Months Ended |
|||||
2021 | 2020 | ||||
Net income attributable to |
$ | 14.5 | $ | 12.1 | |
Provision for income taxes | 4.0 | 3.6 | |||
Interest & other expense, net | 1.2 | 0.1 | |||
Depreciation and amortization | 6.2 | 4.0 | |||
EBITDA | $ | 25.9 | $ | 19.8 | |
Non-cash equity compensation expense | 0.9 | 0.8 | |||
Adjusted EBITDA | $ | 26.8 | $ | 20.7 |
SUPPLEMENTAL REMAINING PERFORMANCE OBLIGATIONS AND NON-GAAP RECONCILIATION OF BACKLOG DATA
(DOLLARS IN MILLIONS)
(UNAUDITED)
2021 | 2021 | 2020 | |||||||
Remaining performance obligations | $ | 721 | $ | 713 | $ | 525 | |||
Agreements without an enforceable obligation (1) | 227 | 187 | $ | 107 | |||||
Backlog | $ | 948 | $ | 900 | $ | 632 | |||
(1) Our backlog contains signed agreements and letters of intent which we do not have a legal right to enforce prior to work starting. These arrangements are excluded from remaining performance obligations until work begins. |
Source: IES Holdings, Inc.