IES Holdings Inc

Previous wording

Increases in the target federal funds rate throughout calendar years 2022 and 2023 have resulted in higher mortgage rates, which when combined with elevated materials and labor costs, have had a substantial impact on the affordability of housing. While there continue to be several trends, such as rising household formation and population growth in our key markets, that we expect will drive long-term demand for our services in the single-family housing market, decreased housing affordability has led to uncertainty around near-term demand for our services in this market. Within the various other end markets we serve, our customers' capital budgets for new construction projects may be impacted by broader economic, technological or other factors.

Current wording

Increases in the target federal funds rate throughout calendar years 2022 and 2023 have resulted in higher mortgage rates, which when combined with elevated materials and labor costs, have had a substantial impact on the affordability of housing. While decreased housing affordability has led to uncertainty around near-term demand for our services in the single-family housing market and we continue to monitor market conditions for signs of slowing activity, demand in the primary markets we serve has remained firm. In addition, there continue to be several trends, such as rising household formation and population growth in our key markets, that we expect will drive long-term demand for our services. Within the various other end markets we serve, our customers' capital budgets for new construction projects may be impacted by broader economic, technological or other factors.

Previous wording

The COVID-19 pandemic and its impact on markets, the supply chain and the labor force continue to be areas of focus for our business as we work to protect our workforce and serve our customers. While the pandemic has had less of an impact on our business in the first quarter of fiscal 2024 compared with prior fiscal years, this or any future pandemic or other public health emergency could impact our workforce, customers and suppliers. An inability to procure materials in a timely manner, to complete work on schedule, and to reflect higher materials or labor costs in our pricing to customers has had, and could have in the future, a significant impact on our operating results.

Current wording

While the COVID-19 pandemic's impact on markets, the supply chain and the labor force had less of an impact on our business thus far in fiscal 2024 compared with prior fiscal years, COVID-19 and any future pandemic or other public health emergency could impact our workforce, customers and suppliers in the future. An inability to procure materials in a timely manner, to complete work on schedule, and to reflect higher materials or labor costs in our pricing to customers has had, and could have in the future, a significant impact on our operating results.

Previous wording

Consolidated revenues for the three months ended December 31, 2023, were $59.6 million higher than for the three months ended December 31, 2022, an increase of 10.4%, with increases at our Communications, Infrastructure Solutions and Commercial & Industrial operating segments, slightly offset by a decrease at our Residential segment. See further discussion below of changes in revenues for our individual segments.

Current wording

Consolidated revenues for the three months ended March 31, 2024, were $136.9 million higher than for the three months ended March 31, 2023, an increase of 24.1%, with increases at all four of our operating segments. See further discussion below of changes in revenues for our individual segments.

Previous wording

Consolidated gross profit for the three months ended December 31, 2023 increased $48.4 million compared to the three months ended December 31, 2022. Our overall gross profit percentage was 22.7% during the three months ended December 31, 2023, as compared to 16.6% during the three months ended December 31, 2022. Gross profit as a percentage of revenue increased at all four of our operating segments. See further discussion below of changes in gross margin for our individual segments.

Current wording

Consolidated gross profit for the three months ended March 31, 2024 increased $70.7 million compared to the three months ended March 31, 2023. Our overall gross profit percentage was 24.3% during the three months ended March 31, 2024, as compared to 17.7% during the three months ended March 31, 2023. Gross profit as a percentage of revenue increased at all four of our operating segments. See further discussion below of changes in gross margin for our individual segments.

Previous wording

During the three months ended December 31, 2023, our selling, general and administrative expenses were $85.9 million, an increase of $18.1 million, or 26.7%, over the three months ended December 31, 2022, driven largely by increased personnel costs at our Residential operating segment in connection with a reorganization of the segment's management structure in fiscal 2023 and higher incentive compensation at the division level as a result of higher earnings. Selling, general and administrative expenses as a percentage of revenue increased from 11.8% for the three months ended December 31, 2022 to 13.5% for the three months ended December 31, 2023.

Current wording

During the three months ended March 31, 2024, our selling, general and administrative expenses were $95.3 million, an increase of $25.9 million, or 37.4%, over the three months ended March 31, 2023, primarily driven by increased personnel costs at our Residential operating segment in connection with a reorganization of the segment's management structure in fiscal 2023 and higher incentive compensation at the division level as a result of higher earnings. Increases in selling, general and administrative expenses at our other operating segments were generally consistent with each segment's respective revenue growth. Selling, general and administrative expenses as a percentage of revenue increased from 12.2% for the three months ended March 31, 2023 to 13.5% for the three months ended March 31, 2024.

Previous wording

Gain on Sale of Assets. Our results for the three months ended December 31, 2022 included a pretax gain on sale of $13.0 million from the sale of STR Mechanical, LLC (“STR”) on October 7, 2022. STR previously operated as part of our Commercial & Industrial segment.

Current wording

Gain on Sale of Assets. Our results for the six months ended March 31, 2023 included a pretax gain on sale of $13.0 million from the sale of STR Mechanical, LLC (“STR”) on October 7, 2022. STR previously operated as part of our Commercial & Industrial segment.

Previous wording

Gross Profit. Our Communications segment’s gross profit during the three months ended December 31, 2023 increased by $14.5 million compared to the three months ended December 31, 2022. Gross profit as a percentage of revenue increased from 14.8% to 21.2%. The increase in profitability in the three months ended December 31, 2023 was primarily the result of improved project execution and pricing during the period, as well as the impact of investments we have made in hiring and training personnel to support the growth of our business.

Current wording

Gross Profit. Our Communications segment’s gross profit during the three months ended March 31, 2024 increased by $13.8 million compared to the three months ended March 31, 2023. Gross profit as a percentage of revenue increased from 17.8% to 20.1%. The increase in profitability in the three months ended March 31, 2024 was primarily the result of increased volume, improved project execution and pricing, and the impact of a more disciplined bidding process.

Previous wording

Selling, General and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased by $2.6 million, or 21.2%, during the three months ended December 31, 2023, compared to the three months ended December 31, 2022. The increase is primarily a result of higher personnel cost including higher incentive compensation as a result of higher earnings, investment in an organizational structure that will enhance the scalability of our business, and higher wages in an increasingly competitive labor market. Selling, general and administrative expenses as a percentage of revenue in the Communications segment were 8.7% during the three months ended December 31, 2023, compared to 8.4% for the three months ended December 31, 2022.

Current wording

Selling, General and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased by $3.6 million, or 26.9%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase primarily reflects higher personnel cost including higher incentive compensation as a result of higher earnings, investment in an organizational structure that will enhance the scalability of our business, and higher wages in an increasingly competitive labor market. Selling, general and administrative expenses as a percentage of revenue in the Communications segment decreased from 9.5% for the three months ended March 31, 2023 to 8.8% during the three months ended March 31, 2024 as we benefited from the scale of our operations.

Previous wording

Revenues. Our Communications segment’s revenues increased by $23.5 million during the three months ended December 31, 2023, or 16.0%, compared to the three months ended December 31, 2022. The increase primarily resulted from an increase in demand from high-tech manufacturing and e-commerce distribution center customers.

Current wording

Revenues. Our Communications segment's revenues increased by $75.9 million, or 26.3%, during the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The increase primarily resulted from an increase in demand from data center, high-tech manufacturing and e-commerce distribution center customers.

Previous wording

Gross Profit. During the three months ended December 31, 2023, our Residential segment's gross profit increased by $15.8 million, or 26.5%, compared to the three months ended December 31, 2022. Gross profit as a percentage of revenue increased to 23.9% during the three months ended December 31, 2023, from 18.7% for the three months ended December 31, 2022. The increase in profitability was driven primarily by improved project execution in our multi-family business, as well as the benefit of improved procurement and other processes implemented as part of the reorganization of the segment in fiscal 2023.

Current wording

Gross Profit. During the three months ended March 31, 2024, our Residential segment's gross profit increased by $33.8 million, or 61.7%, compared to the three months ended March 31, 2023. Gross profit as a percentage of revenue increased to 26.1% during the three months ended March 31, 2024, compared to 17.9% for the three months ended March 31, 2023. The increase in profitability was driven primarily by improved project execution in our multi-family business, as well as the benefit of improved procurement and other processes implemented as part of the reorganization of the segment in fiscal 2023.

Previous wording

Selling, General and Administrative Expenses. Our Residential segment's selling, general and administrative expenses increased by $12.3 million, or 31.6%, during the three months ended December 31, 2023, compared to the three months ended December 31, 2022. The increase was driven by higher personnel costs in connection with a reorganization of the segment's management structure in fiscal 2023 and incentive profit sharing for division management. Selling, general and administrative expenses as a percentage of revenue in the Residential segment increased to 16.3% during the three months ended December 31, 2023, compared to 12.3% in the three months ended December 31, 2022.

Current wording

Selling, General and Administrative Expenses. Our Residential segment's selling, general and administrative expenses increased by $17.3 million, or 45.4%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was driven by higher personnel costs in connection with a reorganization of the segment's management structure in fiscal 2023 and incentive profit sharing for division management resulting from higher earnings. Selling, general and administrative expenses as a percentage of revenue in the Residential segment increased to 16.3% during the three months ended March 31, 2024, compared to 12.4% in the three months ended March 31, 2023.

Previous wording

Revenues. Our Residential segment’s revenues decreased by $2.2 million, or 0.7%, during the three months ended December 31, 2023 compared to the three months ended December 31, 2022. Our multi-family revenue decreased as we have become more selective in our bidding process, and have reduced our activity in certain areas where we experienced project execution challenges in the prior year, resulting in a $5.1 million decrease in revenues compared to the prior year period. This was partially offset by expansion into new markets and continued strong demand in our single-family business, where revenues increased by $2.9 million compared to the prior year period.

Current wording

Revenues. Our Residential segment's revenues increased by $31.0 million, or 5.0%, during the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The increase was primarily driven by an expansion of our plumbing and HVAC offerings and continued strong demand in our single-family business, where revenues increased by $27.9 million compared to the prior year period. Multi-family and other revenue also increased by $3.1 million for the six months ended March 31, 2024 compared to the prior year period as continued strong demand and successful execution of existing backlog were partially offset by a more selective bidding process and a reduction in activity in certain areas where we experienced project execution challenges in the prior year.

Previous wording

Revenues. Revenues in our Infrastructure Solutions segment increased $13.6 million during the three months ended December 31, 2023, an increase of 27.6% compared to the three months ended December 31, 2022, driven primarily by continued strong demand in our custom power solutions manufacturing businesses.

Current wording

Revenues. Revenues in our Infrastructure Solutions segment increased by $23.2 million during the three months ended March 31, 2024, an increase of 44.0% compared to the three months ended March 31, 2023, driven primarily by continued strong demand in our custom power solutions manufacturing businesses, including generator enclosures.

Previous wording

Revenues. Revenues in our Commercial & Industrial segment increased $24.7 million, or 41.0%, during the three months ended December 31, 2023, compared to the three months ended December 31, 2022. The increase primarily relates to a large data center project.

Current wording

Revenues. Revenues in our Commercial & Industrial segment increased by $28.0 million, or 40.6%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase primarily relates to a large data center project.

Previous wording

Gross Profit. Our Commercial & Industrial segment’s gross profit during the three months ended December 31, 2023, increased by $10.3 million, as compared to the three months ended December 31, 2022. Gross profit as a percentage of revenue increased from 6.0% for the quarter ended December 31, 2022 to 16.4% for the quarter ended December 31, 2023. Our results for the quarter ended December 31, 2022 were impacted by continuing operating challenges at one branch that incurred significant losses during fiscal 2022 and into fiscal 2023. In the three months ended December 31, 2023, segment results benefited from improved project execution, improving bid margins in certain markets, and a more selective bidding strategy implemented in the prior year.

Current wording

Gross Profit. Our Commercial & Industrial segment’s gross profit during the three months ended March 31, 2024, increased by $13.5 million, compared to the three months ended March 31, 2023. Gross profit as a percentage of revenue increased from 9.8% for the quarter ended March 31, 2023 to 20.9% for the quarter ended March 31, 2024. In the three months ended March 31, 2024, segment results benefited from favorable project execution on the large data center project, improving bid margins in certain markets, and a more selective bidding strategy implemented in the prior year. Our results for the quarter ended March 31, 2023 were impacted by continuing operating challenges at one branch that incurred significant losses during fiscal 2022 and into fiscal 2023.

Previous wording

Gain on Sale of Assets. As discussed above, our results for the three months ended December 31, 2022 included a pretax gain on sale of $13.0 million from the sale of STR in October 2022.

Current wording

Gain on Sale of Assets. As discussed above, our results for the six months ended March 31, 2023 include a pretax gain on sale of $13.0 million from the sale of STR in October 2022.

Previous wording

During the three months ended December 31, 2023, we incurred interest expense of $0.4 million primarily comprised of interest on our finance lease agreements and fees on an average letter of credit balance of $5.6 million under our revolving credit facility and an average unused line of credit balance of $142.4 million. This compares to interest expense of $1.2 million for the three months ended December 31, 2022, primarily comprising interest expense from our revolving credit facility, which had an average outstanding balance of $43.0 million, in addition to fees on an average letter of credit balance of $5.4 million under our revolving credit facility and an average unused line of credit balance of $80.7 million. The reduction in interest expense in the three months ended December 31, 2023 compared to the three months ended December 31, 2022 was a result of a decrease in average outstanding borrowings under our revolving credit facility, which had no outstanding balance during the three months ended December 31, 2023.

Current wording

During the three months ended March 31, 2024, we incurred interest expense of $0.4 million primarily comprised of interest on our finance lease agreements and fees on an average letter of credit balance of $5.6 million under our revolving credit facility and an average unused line of credit balance of $142.7 million. This compares to interest expense of $1.0 million for the three months ended March 31, 2023, primarily comprising interest expense from our revolving credit facility, which had an average outstanding balance of $43.5 million, in addition to fees on an average letter of credit balance of $5.0 million under our revolving credit facility and an average unused line of credit balance of $106.6 million. The decrease in interest expense in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was a result of a decrease in average outstanding borrowings under our revolving credit facility, which had no outstanding balance during the three months ended March 31, 2024.

Previous wording

The improvement in Total other (income) expense, net for the three months ended December 31, 2023 as compared with December 31, 2022 is primarily the result of interest income earned during the three months ended December 31, 2023 on short-term investments made in late fiscal 2023 with no such interest income in the three months ended December 31, 2022, and unrealized gains on investments in trading securities of $0.1 million in the three months ended December 31, 2023, compared to no interest income and unrealized losses of $0.8 million in the three months ended December 31, 2022.

Current wording

The change in total other (income) expense, net for the three months ended March 31, 2024, compared to the three months ended March 31, 2023 is primarily the result of unrealized losses on investments in trading securities of $1.8 million in the three months ended March 31, 2024 compared to realized gains on investments in trading securities of $1.7 million in the three months ended March 31, 2023, partially offset by interest income of $1.1 million earned during the three months ended March 31, 2024 with no such interest income earned in the three months ended March 31, 2023.

Previous wording

We recorded income tax expense of $15.4 million for the three months ended December 31, 2023, compared to $10.0 million for the three months ended December 31, 2022, driven by increased pretax income.

Current wording

We recorded income tax expense of $19.4 million for the three months ended March 31, 2024, compared to $8.2 million for the three months ended March 31, 2023, driven by increased pretax income.

Previous wording

During the three months ended December 31, 2023, working capital exclusive of cash increased by $23.3 million from September 30, 2023, reflecting a $44.6 million increase in current assets excluding cash partially offset by a $21.3 million increase in current liabilities during the period.

Current wording

During the six months ended March 31, 2024, working capital exclusive of cash increased by $61.4 million from September 30, 2023, reflecting a $95.0 million increase in current assets excluding cash partially offset by a $33.7 million increase in current liabilities during the period.

Previous wording

During the three months ended December 31, 2023, our current assets exclusive of cash increased to $640.1 million, as compared to $595.5 million as of September 30, 2023. An increase in activity at our Communications, Infrastructure Solutions and Commercial & Industrial businesses drove a $24.7 million increase in trade accounts receivable. While the rate of collections may vary, our typically secured position, resulting from our ability in general to secure liens against our customers’ overdue receivables, offers some protection that collection will occur eventually to the extent that our security retains value. We also had an $18.1 million increase in inventories from advance material purchases primarily for projects not yet commenced in our Residential multi-family business.

Current wording

During the six months ended March 31, 2024, our current assets exclusive of cash increased to $690.5 million, as compared to $595.5 million as of September 30, 2023. An increase in activity at our Communications, Infrastructure Solutions and Commercial & Industrial businesses drove a $52.8 million increase in trade accounts receivable. While the rate of collections may vary, our typically secured position, resulting from our ability in general to secure liens against our customers’ overdue receivables, offers some protection that collection will occur eventually to the extent that our security retains value. We also had a $23.5 million increase in prepaid expenses and other current assets as we invested in equity and debt securities in the second quarter of fiscal 2024, a $10.1 million increase in retainage driven by the timing of large projects approaching completion, and a $9.0 million increase in inventories from advance material purchases primarily for projects not yet commenced in our Residential multi-family business.

Previous wording

During the three months ended December 31, 2023, our total current liabilities increased by $21.3 million to $421.9 million, compared to $400.6 million as of September 30, 2023, driven by a $23.2 million increase in billings in excess of costs and estimated earnings driven by the timing of contract billings on projects on which revenue is recognized using the percentage of completion method, partially offset by a $1.9 million decrease in accounts payable and accrued expenses primarily as a result of the timing of payments by our Communications segment.

Current wording

During the six months ended March 31, 2024, our total current liabilities increased by $33.7 million to $434.2 million, compared to $400.6 million as of September 30, 2023, driven by a $24.0 million increase in billings in excess of costs and estimated earnings driven by the timing of contract billings on projects on which revenue is recognized using the percentage of completion method, and a $9.7 million increase in accounts payable and accrued expenses primarily as a result of the timing of payments by our Communications segment.

Previous wording

We believe the bonding capacity provided by our sureties is adequate for our current operations and will be adequate for our operations for the foreseeable future. As of December 31, 2023, the estimated cost to complete our bonded projects was approximately $136.6 million.

Current wording

We believe the bonding capacity provided by our sureties is adequate for our current operations and will be adequate for our operations for the foreseeable future. As of March 31, 2024, the estimated cost to complete our bonded projects was approximately $138.6 million.

Previous wording

At December 31, 2023, our Liquidity was $229.9 million, our Excess Availability was $142.5 million (or greater than 50% of minimum Liquidity), and our Fixed Charge Coverage Ratio was 9.8:1.0.

Current wording

At March 31, 2024, our Liquidity was $249.5 million, our Excess Availability was $143.5 million (or greater than 50% of minimum Liquidity), and our Fixed Charge Coverage Ratio was 7.9:1.0.

Previous wording

Our cash flow from operations is not only influenced by cyclicality, demand for our services, operating margins and the type of services we provide, but can also be influenced by working capital needs such as the timing of our receivable collections. Working capital needs are generally lower during our fiscal first and second quarters due to the seasonality that we experience in many regions of the country; however, a seasonal decline in working capital may be offset by needs associated with higher growth or acquisitions. Currently, our working capital needs are higher than they have been historically, as a result of growth of our business, elevated commodity prices, and the steps taken to mitigate the impact of supply chain disruptions.

Current wording

Our cash flow from operations is not only influenced by cyclicality, demand for our services, operating margins and the type of services we provide, but can also be influenced by working capital needs such as the timing of our receivable collections. Working capital needs are generally lower during our fiscal first and second quarters due to the seasonality that we experience in many regions of the country; however, a seasonal decline in working capital may be offset by needs associated with higher growth or acquisitions. Currently, our working capital needs are higher than they have been historically, as a result of growth of our business and elevated commodity prices.

Previous wording

Net cash provided by operating activities was $25.0 million during the three months ended December 31, 2023, as compared to $14.3 million in the three months ended December 31, 2022. The increase in operating cash flow resulted from increased earnings, partially offset by an increase in cash used in working capital during the three months ended December 31, 2023 as compared with the three months ended December 31, 2022.

Current wording

Net cash provided by operating activities was $58.7 million during the six months ended March 31, 2024, as compared to $60.1 million in the six months ended March 31, 2023. The decrease in operating cash flow resulted from an increase in cash used in working capital during the six months ended March 31, 2024 as compared with the six months ended March 31, 2023, largely offset by increased earnings.

Previous wording

Net cash used in investing activities was $6.0 million for the three months ended December 31, 2023, compared to $16.3 million provided by investing activities in the three months ended December 31, 2022. During the three months ended December 31, 2023, we used $6.5 million for capital expenditures to support the growth of our business. During the three months ended December 31, 2022, the sale of assets, including the sale of STR, provided cash of $19.2 million, which was partially offset by $2.7 million used for capital expenditures.

Current wording

Net cash used in investing activities was $11.4 million for the six months ended March 31, 2024, compared to $12.3 million provided by investing activities in the six months ended March 31, 2023. During the six months ended March 31, 2024, we used $13.4 million for capital expenditures to support the growth of our business, which was partially offset by cash provided by the sale of assets of $2.4 million. During the six months ended March 31, 2023, the sale of assets, including the sale of STR, provided cash of $19.1 million, which was partially offset by $6.7 million used for capital expenditures.

Previous wording

Net cash used in financing activities for the three months ended December 31, 2023 was $7.3 million, compared to $50.3 million for the three months ended December 31, 2022. Net cash used in financing activities for the three months ended December 31, 2023 included $4.1 million to settle our contingent consideration liability related to prior year acquisitions and $1.3 million in distributions to noncontrolling interests under operating agreements in connection with certain acquisitions. Net cash used in financing activities for the three months ended December 31, 2022 included net repayments on our credit facility of $39.7 million, $7.5 million used to repurchase our common stock, including repurchases to satisfy statutory withholding requirements upon the vesting of employee stock compensation, and distributions of $2.3 million to noncontrolling interests under operating agreements in connection with certain acquisitions.

Current wording

Net cash used in financing activities for the six months ended March 31, 2024 was $17.1 million, compared to $82.1 million for the six months ended March 31, 2023. Net cash used in financing activities for the six months ended March 31, 2024 included $4.1 million to settle our contingent consideration liability related to prior year acquisitions, $7.9 million in distributions to noncontrolling interests under operating agreements in connection with certain acquisitions, and $3.2 million in repurchases our common stock to satisfy statutory withholding requirements upon the vesting of employee stock compensation. Net cash used in financing activities for the six months ended March 31, 2023 included net repayments on our credit facility of $67.5 million, $7.6 million used to repurchase our common stock, including repurchases to satisfy statutory withholding requirements upon the vesting of employee stock compensation, and distributions of $5.3 million to noncontrolling interests under operating agreements in connection with certain acquisitions.

Previous wording

In December 2022, our Board authorized a stock repurchase program for the purchase from time to time of up to $40.0 million of the Company’s common stock, replacing the Company's previous repurchase program. Share purchases are made for cash in open market transactions at prevailing market prices or in privately negotiated transactions or otherwise. The timing and amount of purchases under the program are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. All or part of the repurchases may be implemented under a Rule 10b5-1 trading plan, which allows repurchases under pre-set terms at times when the Company might otherwise be prevented from purchasing under insider trading laws or because of self-imposed blackout periods. The program does not require the Company to purchase any specific number of shares and may be modified, suspended, reinstated, or terminated at any time at the Company’s discretion and without notice. We had no purchases pursuant to our repurchase programs during the three months ended December 31, 2023.

Current wording

In December 2022, our Board authorized a stock repurchase program for the purchase from time to time of up to $40.0 million of the Company’s common stock, replacing the Company's previous repurchase program. Share purchases are made for cash in open market transactions at prevailing market prices or in privately negotiated transactions or otherwise. The timing and amount of purchases under the program are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. All or part of the repurchases may be implemented under a Rule 10b5-1 trading plan, which allows repurchases under pre-set terms at times when the Company might otherwise be prevented from purchasing under insider trading laws or because of self-imposed blackout periods. The program does not require the Company to purchase any specific number of shares and may be modified, suspended, reinstated, or terminated at any time at the Company’s discretion and without notice. We had no purchases pursuant to our repurchase programs during the six months ended March 31, 2024.

Previous wording

From time to time, we may enter into firm purchase commitments for materials, such as copper or aluminum wire, which we expect to use in the ordinary course of business. These commitments are typically for terms of less than one year and require us to buy minimum quantities of materials at specific intervals at a fixed price over the term. As of December 31, 2023, we did not have any such firm commitments to purchase materials outstanding. There have been no other material changes in our material cash requirements from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We expect that cash and cash equivalents, cash flow from operations and availability under our revolving credit facility will be sufficient to satisfy cash requirements during at least the next 12 months.

Current wording

From time to time, we may enter into firm purchase commitments for materials, such as copper or aluminum wire, which we expect to use in the ordinary course of business. These commitments are typically for terms of less than one year and require us to buy minimum quantities of materials at specific intervals at a fixed price over the term. As of March 31, 2024, we did not have any such firm commitments to purchase materials outstanding. In connection with expected growth in our business, we are planning to expand capacity in certain areas. Further, based on increased availability of vehicles and other equipment needed in the business and the relative costs and benefits of purchasing compared with leasing, we expect to satisfy a larger proportion of our vehicle and other equipment needs through purchasing and to reduce our reliance on leasing. As a result, we have updated our capital expenditure expectations for the current fiscal year, and now expect our capital spending for the year ending September 30, 2024 will range from $35 million to $45 million, compared to $17.7 million for the year ended September 30, 2023. There have been no other material changes in our material cash requirements from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We expect that cash and cash equivalents, cash flow from operations and availability under our revolving credit facility will be sufficient to satisfy cash requirements during at least the next 12 months.