What changed in this filing

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Item 1. Business

2023-12-07 compared with 2022-12-06 · 18 added, 22 removed, 284 unchanged (12% of the section changed)

48 unchanged sentences

Demand in the data center market remains strong, and we continue to provide structured cabling services for applications such as data centers, distribution centers, and high-tech manufacturing facilities.

Additionally, we are continuing to expand our offerings in this market to broaden our customer base.

Demand has also been strong for our audio-visual and other building technology offerings.

As technology evolves, we are focused on expanding our capabilities as an integrator of audio-visual and other building technology offerings, which continue to experience strong demand.

At September 30, 2023, our Communications business has a record level of backlog.

23 unchanged sentences

Although demand for both single-family and multi-family housing has increased in recent years, due to economic, technological or other factors, there can be no assurance that overall construction and demand will continue to increase in the future.

Entering fiscal 2023, we expect continued revenue growth in our multi-family business as our strong backlog is expected to offset much of he expected impact of demand weakness in the single-family market, where we typically do not enter into long-term contracts.

Entering fiscal 2024, we are cautious about demand for single-family housing, as higher interest rates on mortgages and the impacts of inflation on materials and labor costs have resulted in a decline in housing affordability.

We also expect a slowing in multi-family housing starts, as changing credit conditions have made it more difficult and more expensive to finance new projects.

Although we expect fiscal 2024 multi-family revenues will be supported by our current backlog, the anticipated reduction in multi-family housing starts may impact our ability to maintain current levels of backlog.

Sales and Marketing

52 unchanged sentences

mechanical services such as maintenance agreements, installation, or replacement of mechanical equipment for commercial and industrial facilities.

This segment provides services for a variety of project types, including office buildings, manufacturing facilities, data centers, chemical plants, refineries, wind farms, solar facilities, municipal infrastructure and health care facilities.

This segment provides services for a variety of project types, including office buildings, manufacturing facilities, data centers, wind farms, solar facilities, municipal infrastructure and health care facilities.

The Commercial & Industrial segment consists of 16 locations, which includes the segment headquarters in Houston, Texas.

28 unchanged sentences

However, during fiscal 2021 and 2022, supply chain interruptions became increasingly common, primarily as a result of the COVID-19 pandemic and its aftermath.

Although supply of most raw materials has begun to normalize, we continue to experience delays in sourcing certain components.

Although supply of most raw materials normalized during fiscal 2023, we continue to experience longer lead times in sourcing certain components.

Such delays may lead to project inefficiencies resulting from schedule extensions.

16 unchanged sentences

We have a diverse customer base.

During each of the years ended September 30, 2022, 2021 and 2020, no single customer accounted for more than 10% of our consolidated revenues.

During the year ended September 30, 2023, one customer accounted for 12.0% of our consolidated revenues and no other customer accounted for more than 10% of our consolidated revenues.

No single customer accounted for more than 10% of our consolidated revenues during each of the years ended September 30, 2022 and 2021.

We emphasize developing and maintaining relationships with our customers by providing superior, high-quality service.

3 unchanged sentences

("Tontine Associates") and its affiliates (collectively, “Tontine”).

Tontine owns approximately 57 percent of our outstanding common stock based on a Form 4 filed by Tontine with the United States Securities and Exchange Commission (the "SEC") on December 3, 2021, and the Company's shares outstanding as of December 2, 2022.

Tontine owns approximately 58 percent of our outstanding common stock based on Amendment No.

27 to the Schedule 13D filed by Tontine with the United States Securities and Exchange Commission (the "SEC") on September 8, 2023, and the Company's shares outstanding as of November 30, 2023.

As a result, Tontine can control most of our affairs, including most actions requiring the approval of shareholders, such as the approval of any potential merger or sale of all or substantially all of the Company's assets or business segments, or the Company itself.

2 unchanged sentences

For more information, see Note 3, “Controlling Shareholder” in the notes to our Consolidated Financial Statements.

NET OPERATING LOSS TAX CARRYFORWARDS

The Company and certain of its subsidiaries have an estimated federal net operating loss (“NOL”) of approximately $61.0 million of federal NOLs that are available to use to offset future taxable income, including approximately $55.1 million resulting from net operating losses on which a deferred tax asset is not recorded at September 30, 2022.

A change in ownership, as defined by Internal Revenue Code Section 382, could reduce the availability of NOLs for federal and state income tax purposes.

Should Tontine sell or otherwise dispose of all or a portion of its position in IES, a change in ownership could occur.

In addition, a change in ownership could result from the purchase of common stock by an existing or a new 5% shareholder as defined by Internal Revenue Code Section 382.

Should a change in ownership occur, all NOLs incurred prior to the change in ownership would be subject to limitation imposed by Internal Revenue Code Section 382, which would substantially reduce the amount of NOLs available to offset future taxable income.

For more information see Note 3, “Controlling Shareholder” in the notes to our Consolidated Financial Statements.

REMAINING PERFORMANCE OBLIGATIONS AND BACKLOG

1 unchanged sentence

While backlog is not a defined term under accounting principles generally accepted in the United States of America ("GAAP"), it is a common measurement used in our industry, and we believe it improves our ability to forecast future results and identify operating trends that may not otherwise be apparent.

Backlog is a measure of revenue that we expect to recognize from work that has yet to be performed on

uncompleted contracts and from work that has been contracted but has not started, exclusive of short-term projects.

Backlog is a measure of revenue that we expect to recognize from work that has yet to be performed on uncompleted contracts and from work that has been contracted but has not started, exclusive of short-term projects.

While all of our backlog is supported by documentation from customers, backlog is not a guarantee of future revenues, as contractual commitments may change and our performance may vary.

3 unchanged sentences

The table below summarizes our remaining performance obligations and backlog by segment:

Year Ended September 30,

September 30,

Remaining Performance Obligations Agreements without an enforceable obligation (1)

24 unchanged sentences

During fiscal year 2023, the Company maintained a revolving credit facility, as further described in Item 7.

“ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources ” of this Annual Report

on Form 10-K.

“ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources ” of this Annual Report on Form 10-K.

For a discussion of the Company’s capital resources, see Item 7.

26 unchanged sentences

As of September 30, 2023, we have 129 domestic locations.

In addition to our two executive and corporate offices, as of September 30, 2022, we have 19 locations within our Communications business, 77 locations within our Residential business, 13 locations within our Infrastructure Solutions business and 19 locations within our Commercial & Industrial business.

In addition to our 2 executive and corporate offices, as of September 30, 2023, we have 19 locations within our Communications business, 80 locations within our Residential business, 12 locations within our

Infrastructure Solutions business and 16 locations within our Commercial & Industrial business.

This geographic diversity helps to reduce our exposure to unfavorable economic developments in any given region.

8 unchanged sentences

Gendell held senior investment management positions at several other private investment firms, including Odyssey Partners, L.P., and began his career in investment banking over 35 years ago at Smith Barney, Harris Upham & Co., where he was involved in capital markets, corporate finance and M&A activity.

Simmes , 47, has served as Chief Operating Officer of the Company since December 3, 2021.

Simmes , 48, was appointed President and Chief Operating Officer of the Company effective December 7, 2023;

he previously served as Chief Operating Officer of the Company from December 3, 2021 to December 6, 2023.

Simmes has spent 30 years at IES and its predecessors in a variety of roles.

Prior to becoming President of IES Communications in January 2017, he was the segment’s Vice President of Operations from March 2007 to December 2016 and branch manager of its Arizona operations from 2003 to 2006.

He served as President of IES Communications from January 2017 to December 2021 and as Vice President of Operations of the segment from March 2007 to December 2016.

McLauchlin , 54, has served as Senior Vice President, Chief Financial Officer and Treasurer of the Company since May 2015.

25 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business