Integrated Electrical Services Reports Fiscal 2004 First Quarter Results
Integrated Electrical Services Reports Fiscal 2004 First Quarter Results
Jan 27, 2004 at 5:11 PM EST
HOUSTON, Jan 27, 2004 /PRNewswire-FirstCall via Comtex/ -- Integrated Electrical Services, Inc. (NYSE: IES) today announced results for its fiscal 2004 first quarter ended December 31, 2003. Highlights for the quarter include:
-- Revenues up 3.2% over the same quarter last year
-- Diluted EPS of $0.16 includes the release of a $1.4 million tax
valuation allowance
-- Record cash flow from operations of $6.4 million
-- Repurchase of 449,200 common shares under new $13 million stock
buyback program
Net income for the first quarter was $6.2 million or $0.16 per diluted share compared to $3.8 million or $0.10 per diluted share in the same quarter last year. Net income for the first fiscal quarter includes the release of $1.4 million or $0.04 per share of a tax valuation allowance. Deferred tax valuation allowances were established upon the adoption of SFAS 142 during fiscal 2002. The remaining valuation allowance of $4.8 million will be evaluated annually and as events require to determine adequacy.
Revenues for the first quarter of fiscal 2004 were $359.8 million compared to revenues of $348.6 million for the first quarter one year ago. First quarter segment revenues for commercial/industrial were $288.2 million in fiscal 2004 compared to $271.6 million in fiscal 2003. A portion of the revenue increase is from Riviera Electric, which was acquired in February of 2003 and was not included in the company's fiscal 2003 financial performance. Residential revenues were $71.6 million in the first quarter of fiscal 2004 compared to $76.9 million in the same period a year ago. Residential revenues were down as a result of the softness in multifamily construction in the Southeast.
IES president and chief executive officer H. Roddy Allen stated, "We are encouraged by our performance in the first quarter. We generated earnings in the middle of our guidance range before the release of a tax valuation allowance as a result of solid revenues and continued effectiveness in managing our costs. First quarter revenues were up 3.2% over last year, which we believe continues to be an indication that the commercial and industrial construction market is turning around. We have initiated our 'Continued Growth' strategy to focus on organic as well as Greenfield growth and feel it is well timed given construction market indicators. The U.S. Commerce department recently reported that non-residential construction spending for the month of November was up 1% over the period one year ago.
"We generated a record $6.4 million in cash flow from operations in the first quarter of fiscal 2004, which translated into free cash flow of $4.7 million. This compares to $0.7 million of free cash flow in the first quarter of fiscal 2003. We define free cash flow as cash flow from operations less capital expenditures and use this measure because we believe it is a good gauge of operating efficiency."
REVIEW OF NEW PROJECTS
Backlog is currently $714 million compared to $708 million at the end of the fourth quarter of 2003 and $766 million at the end of the first quarter of 2003. IES added $189 million of new larger project work, which is defined as projects greater than $300,000, to backlog during the first quarter compared to $148 million added during the fourth quarter of fiscal 2003 and $155 million during the first quarter of 2003. New work includes:
-- $63 million of hotel, apartment and condominium projects
-- $24 million of office buildings
-- $24 million of water and utility projects
-- $18 million of institutional projects
-- $17 million of manufacturing and high technology projects
-- $10 million of distribution centers
-- $9 million of healthcare facilities
-- $8 million of airport projects
-- $6 million of communications projects
-- $5 million of retail centers
OUTLOOK
The following statements are based on the current expectations of the company. These statements are forward looking, and actual results may differ materially as further elaborated in the last paragraph below.
Roddy Allen stated, "IES expects diluted earnings per share in the second fiscal quarter of 2004 to range between $0.10 and $0.15 per share. As we stated at the beginning of fiscal 2004, IES expects EPS to range between $0.55 and $0.75 per share for fiscal 2004."
CONFERENCE CALL
Integrated Electrical Services has scheduled a conference call for Wednesday, January 28, 2004 at 9:30 a.m. eastern time. To participate in the conference call, dial (303) 262-2190 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 February 4, 2004. To access the replay, dial (303) 590-3000 using a pass code of 567989.
Investors, analysts and the general public will also have the opportunity to listen to the conference call 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 a 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, 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, 2003.
Tables to follow
INTEGRATED ELECTRICAL SERVICES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended December 31,
2002 2003
Revenues $348,577 $359,843
Cost of services 297,221 309,232
Gross profit 51,356 50,611
Selling, general and administrative expenses 38,619 36,279
Income from operations 12,737 14,332
Other (income)/expense:
Interest expense 6,456 6,459
Loss on sale of assets 59 10
Other, net 31 (101)
6,546 6,368
Income before income taxes 6,191 7,964
Provision for income taxes 2,384 1,736
Net income $ 3,807 $ 6,228
Earnings per share:
Basic $ 0.10 $ 0.16
Diluted $ 0.10 $ 0.16
Shares used in the computation
of earnings per share:
Basic 39,447 38,273
Diluted 39,472 38,836
Reconciliation of GAAP to EBIT and EBITDA*
Net income $ 3,807 $ 6,228
Provision for income taxes 2,384 1,736
Interest expense 6,456 6,459
EBIT $ 12,647 $ 14,423
Depreciation expense 3,650 3,453
EBITDA $ 16,297 $ 17,876
* The company uses EBIT and EBITDA because we believe some investors use
this data to analyze performance.
Selected Balance Sheet Data:
09/30/03 12/31/03
(audited) (unaudited)
Cash and cash equivalents $ 40,201 $ 44,153
Working capital 266,411 277,323
Goodwill, net 197,884 197,884
Total assets 726,174 722,667
Total debt 248,336 248,240
Total stockholders' equity 267,557 273,414
Selected Cash Flow Data: Three Months Ended
12/31/02 12/31/03
Cash provided by operating activities 3,253 6,427
Cash used in investing activities (389) (1,922)
Cash used in financing activities (16,581) (553)
Contacts: William W. Reynolds, CFO
Integrated Electrical Services, Inc.
713-860-1500
Ken Dennard / ksdennard@drg-e.com
Karen Roan / kcroan@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, ksdennard@drg-e.com , or Karen Roan, kcroan@drg-e.com , both of DRG&E, +1-713-529-6600, for Integrated Electrical Services, Inc.
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