Integrated Electrical Services Reports Fiscal 2003 Third Quarter Results
Integrated Electrical Services Reports Fiscal 2003 Third Quarter Results
Aug 4, 2003 at 9:09 PM EDT
HOUSTON, Aug 4, 2003 /PRNewswire-FirstCall via COMTEX/ --
Integrated Electrical Services, Inc. (NYSE: IES) today announced results for its fiscal 2003 third quarter ended June 30, 2003. Highlights for the quarter included:
-- Diluted earnings per share of $0.14 at the low end of IES' earnings
guidance range
-- Generated $17.9 million in cash flow from operations and have
$40.3 million in cash on the balance sheet
-- Repurchased 567,777 shares under the Company's stock repurchase
program
Net income for the third quarter was $5.4 million or $0.14 per diluted share versus $7.5 million or $0.19 per diluted share in last year's third quarter. Revenues for the third quarter of fiscal 2003 were $375.3 million compared to revenues of $374.8 million for the third quarter a year ago.
Third quarter segment revenues for commercial/industrial were $305.6 million in fiscal 2003 compared to $302.1 million in fiscal 2002. Residential revenues for the third quarter were $69.7 million in fiscal 2003 compared to $72.7 million in fiscal 2002.
IES president and chief executive officer H. Roddy Allen stated, "Our earnings performance was within the guidance range we provided last quarter, which is an accomplishment given that IES is operating in a construction environment that is less robust than originally expected. Commercial and industrial construction spending was down 18.6% in 2002 and was originally projected to increase by 12.1% in 2003 according to F.W. Dodge, the Government's source for construction spending. Currently F.W. Dodge has revised its projection for 2003 to a 2.6% decline on top of the decline in 2002. Additionally, although residential construction spending remains strong, it is not as robust as 2002. While we have no outstanding receivables issue related to HealthSouth Corporation, we did remove $16.5 million of work associated with HealthSouth from our backlog during the quarter, which had a negative impact on our revenue and profits for the quarter.
"We continue to successfully focus on our basic business initiatives; notwithstanding HealthSouth, backlog remains strong, selling general and administrative costs were down 4.3% to $38.2 million compared to the third quarter of 2002 and IES generated $36.7 million in cash flow from operations year to date. This translates to free cash flow of $29.4 million year to date. We define free cash flow as cash flow from operations less capital expenditures and use this measure because it is a good gauge of operating efficiency."
Net income for the nine months ended June 30, 2003 was $12.6 million or $0.32 per diluted share versus $7.7 million or $0.19 per diluted share before a charge associated with a change in accounting principle in the first nine months of 2002. Including this charge, net loss in the same period a year ago was $275.6 million or $6.91 per diluted share. Last year's results included an accounting charge for the adoption of Statement of Financial Accounting Standards (SFAS) No. 142 of $283.3 million or $7.10 per diluted share and restructuring charges for workforce reduction of $5.6 million or $0.09 per diluted share. Revenues for the first nine months of fiscal 2003 were $1.1 billion, the same as revenues were for the first nine months of fiscal 2002.
REVIEW OF NEW PROJECTS
IES added $175 million of new larger project work, which is defined as projects greater than $300,000, to backlog during the third quarter compared to $130 million added in the third fiscal quarter of 2002. Backlog is currently $747 million compared to $771 million at the end of the third quarter of 2002. New work includes:
-- $57 million of new work at institutions including schools
-- $21 million of new work at hospitals and healthcare centers
-- $18 million of new work on apartment buildings
-- $15 million of new work at retail centers
-- $14 million of new work on utility projects and highway projects
-- $14 million of new office building work
-- $12 million of new work on hotels and condominiums
-- $7 million of new work on manufacturing facilities
OUTLOOK
H. Roddy Allen stated, "IES expects diluted earnings per share in the fiscal fourth quarter of 2003 to range between $0.21 and $0.28 per share and earnings per diluted share of $0.53 to $0.60 for fiscal 2003. Our guidance for free cash flow for the full fiscal year is $30 million to $40 million."
CONFERENCE CALL
Integrated Electrical Services has scheduled a conference call for Tuesday, August 5, 2003, at 9:30 a.m. eastern time. To participate in the conference call, dial (303) 262-2193 at least ten minutes before the call begins and ask for the Integrated Electrical Services conference call. A brief slide presentation will accompany the call and can be viewed by accessing the web cast on the company's web site. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until August 12, 2003. To access the replay, dial (303) 590-3000 using a pass code of 546036.
Investors, analysts and the general public will also have the opportunity to listen to the conference call and view the accompanying slide presentation over the Internet by visiting www.ies-co.com . To listen to the live call on the web, please visit the company's web site at least fifteen minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live web cast, an archive will be available shortly after the call.
Integrated Electrical Services, Inc. is the leading national provider of electrical solutions to the commercial and industrial, residential and service markets. The company offers electrical system design and installation, contract maintenance and service to large and small customers, including general contractors, developers and corporations of all sizes. For additional corporate information, please visit our web site at www.ies-co.com .
This press release includes certain statements, including statements relating to the Company's expectations of its future operating results that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's expectations and involve risks and uncertainties that could cause the Company's actual results to differ materially from those set forth in the statements. Such risks and uncertainties include, but are not limited to, the inherent uncertainties relating to estimating future results, fluctuations in operating results because of downturns in levels of construction, incorrect estimates used in entering into fixed price contracts, difficulty in managing the operation of existing entities, the high level of competition in the construction industry, difficulty in the integration of newly acquired companies, development and replacement of senior management in subsidiary companies, changes in banking industry affecting availability of funds, changes in surety relationships, negative results from litigation in excess of reserved amounts, changes in financial reporting rules established by New York Stock Exchange or under the Securities and Exchange Commission, interest rates, general level of the economy, changes in the level of competition from other major electrical contractors and due to seasonality. The foregoing and other factors are discussed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended September 30, 2002.
Tables to follow
INTEGRATED ELECTRICAL SERVICES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Nine Months Ended
June 30, June 30,
2002 2003 2002 2003
Revenues $374,819 $375,339 $1,106,479 $1,067,051
Cost of services
(including depreciation) 316,328 321,930 936,058 913,181
Gross profit 58,491 53,409 170,421 153,870
Selling, general and
administrative expenses 39,918 38,193 133,083 114,272
Restructuring charge --- --- 5,556 ---
Income from operations 18,573 15,216 31,782 39,598
Other (income)/expense:
Interest expense 6,337 6,397 19,766 19,196
(Gain) Loss on sale of
assets (24) 234 (157) 204
Other, net 47 (215) 524 (270)
6,360 6,416 20,133 19,130
Income before income taxes
and cumulative effect of
change in accounting
principle 12,213 8,800 11,649 20,468
Provision for income taxes 4,736 3,389 3,919 7,881
Cumulative effect of change
in accounting principle,
net of tax --- --- 283,284 ---
Net income (loss) $7,477 $5,411 $(275,554) $12,587
Earnings per share before
cumulative effect of change
in accounting principle:
Basic $0.19 $0.14 $0.19 $0.32
Diluted $0.19 $0.14 $0.19 $0.32
Earnings (loss) per share:
Basic $0.19 $0.14 $(6.91) $0.32
Diluted $0.19 $0.14 $(6.91) $0.32
Shares used in the
computation of earnings
(loss) per share:
Basic 39,937 38,789 39,877 39,189
Diluted 40,074 39,162 39,877 39,297
Reconciliation of GAAP to
EBIT and EBITDA
Net income (loss) $7,477 $5,411 $(275,554) $12,587
Cumulative effect of change
in accounting principle,
net of tax --- --- 283,284 ---
Provision for income taxes 4,736 3,389 3,919 7,881
Interest expense 6,337 6,397 19,766 19,196
EBIT $18,550 $15,197 $31,415 $39,664
Depreciation expense 4,133 3,590 12,707 10,931
EBITDA $22,683 $18,787 $44,122 $50,595
Selected Balance Sheet Data: 09/30/02 06/30/03
(audited) (unaudited)
Cash and Cash Equivalents $32,779 $40,342
Working Capital 244,214 263,064
Goodwill, net 198,220 198,005
Total Assets 721,639 725,999
Total Debt 248,959 248,427
Total Stockholders' Equity 254,432 262,943
Selected Cash Flow Data: Three Months Ended Nine Months Ended
06/30/02 06/30/03 06/30/02 06/30/03
Cash provided by operating
activities $37,460 $17,929 $47,273 $36,720
Cash used in investing
activities (1,098) (1,595) (7,561) (7,656)
Cash used in financing
activities (6,116) (2,122) (10,232) (21,501)
Contacts: William W. Reynolds, CFO
Integrated Electrical Services, Inc.
713-860-1500
Ken Dennard / kdennard@drg-e.com
Karen Roan / kroan@drg-e.com
DRG&E / 713-529-6600
SOURCE Integrated Electrical Services, Inc.
William W. Reynolds, CFO of Integrated Electrical Services, Inc., +1-713-860-1500; or Ken Dennard, kdennard@drg-e.com , or Karen Roan, kroan@drg-e.com , both of DRG&E, +1-713-529-6600, for Integrated Electrical Services, Inc.http://www.ies-co.com
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