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Mar 31, 2023
IES Holdings Q2 2023 Earnings Report
Financial performance improved significantly due to focus on project execution and operating efficiency leading to improved margins.
Key Takeaways
IES Holdings reported a strong second quarter with a 13% increase in revenue, a significant improvement in operating income from a loss to a profit, and a net income of $21.6 million compared to a net loss in the same quarter of the previous year.
Revenue increased by 13% to $569 million compared to the same quarter last year.
Operating income was $31.6 million, a significant turnaround from an operating loss of $4.9 million in the prior year.
Net income attributable to IES was $21.6 million, or $0.92 per share, compared to a net loss of $5.4 million, or $0.30 per share, in the same quarter of the previous year.
Adjusted net income was $24.6 million, or $1.07 per share, compared to an adjusted net loss of $6.6 million, or $0.36 per share, in the prior year.
IES Holdings
IES Holdings
IES Holdings Revenue by Segment
Revenue by Segment
Communications Revenue
CapyFin.comResidential Revenue
CapyFin.comInfrastructure Solutions Revenue
CapyFin.com Forward Guidance
The company has recently made certain organizational changes at its operating segments to enhance profitability and improve the scalability of its business model.
Positive Outlook
- Opportunity for Residential segment to expand the plumbing and HVAC trades across the network of electrical branches
- Infrastructure Solutions segment to enhance manufacturing capacity and capabilities to meet market demand as it completes its facility expansions
- Generated operating cash flow of $60.1 million during the first six months of fiscal 2023
- Substantially reduced borrowings under credit facility and ended the quarter with a net cash position
- Expect to benefit from capital investments made in fiscal 2022 to expand the footprint and capabilities of the business
Challenges Ahead
- Continue to be cautious about the economic outlook and its impact on demand for construction
- Expect to fully utilize federal tax net operating loss carryforwards during fiscal 2023
- Began making federal estimated tax payments in January 2023 in anticipation of having a federal income tax obligation for the fiscal year
- Will have a higher cash tax rate for fiscal 2023 compared with 2022
- Limiting the size and duration of projects bid at a specific branch due to past execution issues
Revenue & Expenses
Visualization of income flow from segment revenue to net income