IES Holdings, Inc.

First-quarter fiscal 2009 revenue was $173 million, down from $197 million in the prior-year quarter. Gross profit was about $30 million versus $33 million last year, and gross margin was 17.1% compared with 16.8% a year ago. Adjusted net income from continuing operations excluding restructuring costs was $0.2 million, or $0.01 per diluted share, versus $1.3 million, or $0.09 per diluted share, a year earlier. Adjusted operating income excluding restructuring charges was $1 million versus $2.7 million, and adjusted EBITDA from continuing operations was $3.3 million versus $6.4 million. Backlog was $319 million at quarter-end, compared with $348 million a year ago and $337 million at the end of fiscal 2008. Looking ahead, management said it expects backlog to grow in fiscal 2009 and guided to pre-tax restructuring charges of approximately $2 million to $3 million over about 12 months.

Michael Caliel said the quarter was disappointing, especially on volume and backlog, but emphasized measurable progress on cost reduction and right-sizing the business. He highlighted that the 2008 restructuring reduced the cost base by about $20 million and that the company is now entering another optimization phase to streamline local project and support operations through regional centers. He also said the new sales model is a more structured approach focused on targeted markets and national strategic relationships, and that this is already producing encouraging signs in the pipeline.

Randy Guba walked through the financial pressure from lower activity and the impact of the go-to-market shift, noting revenue of $173 million, gross profit of about $30 million, gross margin of 17.1%, and SG&A of about $29 million net of restructuring charges. He said unrestricted cash and cash equivalents were about $49 million, with about $6 million available under the revolver for total liquidity of roughly $55 million, against total debt of about $29 million. He also noted approximately $400,000 of restructuring costs in the quarter and said the company believes it has adequate liquidity to meet operating needs.

There was no analyst Q&A on the call; management explicitly said the format would be non-interactive and questions would not be taken. The most notable discussion points were management’s explanation that the shift in go-to-market strategy temporarily hurt backlog and sales, especially in industrial, and that backlog quality remained strong even as the total declined. Management also framed the new restructuring and sales approach as necessary responses to a weak construction market.