IES Holdings reports Q3 adjusted EPS $1.08 vs. 46c last year

Reports Q3 revenue $584M vs. $567M last year. “We are pleased with our financial performance for the third quarter of fiscal 2023,” said Jeff Gendell, Chairman and Chief Executive Officer. “Operating income increased substantially compared with the same quarter of fiscal 2022, when results were significantly impacted by execution difficulties on several projects. All of our business segments have continued to perform well in the face of lingering supply chain and labor challenges. Year-over-year consolidated revenue increased 3% despite the loss of revenue resulting from the divestiture of STR Mechanical in October 2022 and a planned reduction in activity at a large, underperforming branch in our Commercial & Industrial segment. We continue to be surprised by the resilience of the U.S. economy, despite consumer uncertainty and substantially higher interest rates. “Strategically, this was an important quarter for IES as we effected a reorganization of our Residential segment to enhance management effectiveness and reduce administrative costs. Following substantial growth in the segment both organically and through four major acquisitions since fiscal 2020, we saw the opportunity to create a more efficient senior management structure. In connection with these management changes, we incurred pretax severance charges of $3.6 million during the quarter. In addition, we are combining multiple administrative facilities into a single location and are consolidating several underperforming branches. Although we incurred elevated operating costs during the quarter as these initiatives were implemented and we may incur some additional costs as they are finalized in the fourth fiscal quarter, we expect the reorganization to have a meaningfully positive impact on the Residential segment’s profitability as we enter fiscal 2024. In addition, over the next several quarters, we will focus on improving the segment’s procurement process, as we seek to leverage our vendor relationships to enhance margins.”