UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
March 28, 2006
INTEGRATED ELECTRICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation)
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001-13783
(Commission
File Number)
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76-0542208
(IRS Employer
Identification No.) |
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1800 West Loop South, Suite 500
Houston, Texas
(Address of principal
executive offices)
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77027
(Zip Code) |
Registrant’s telephone number, including area code: (713) 860-1500
(Former name or former address, if changed since last report): Not applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 2.05 Costs Associated with Exit or Disposal Activities
Following disappointing financial results for the quarter to date period ended February 28,
2006 (see Item 8.01 “Other Events” in this Form 8-K), the senior executive officers of Integrated
Electrical Services, Inc. (the “Company”), acting pursuant to authority delegated to them by the
Board of Directors of the Company, committed on March 28, 2006 to an exit plan (the “Plan”) with
respect to certain of the Company’s underperforming subsidiaries (the “Subsidiaries”). The Plan
contemplates a wind-down of the operations of the Subsidiaries or the earlier sale or other
disposition of the Subsidiaries.
In conjunction with the Plan, the Company expects to incur total charges in the estimated
range of $5.0 million to $11.0 million, which include the following estimated ranges:
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$2.0 million to $4.5 million for additional direct labor costs; |
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$1.3 million to $1.5 million for lease exit and other [related] costs; |
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$0.9 million to $2.1 million for severance and retention costs; |
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$0.5 million to $2.0 million for employment-related costs; and |
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$0.3 million to $0.9 million for additional direct costs of materials. |
The Company expects that all of the above charges will result in future cash expenditures
within the estimated ranges specified above. Additionally, the Company expects to monetize the
working capital of approximately $___in these businesses. In monetizing this working capital and
as a result of the Plan, the Company expects impairments to this working capital in an estimated
range of $6.1 million to $10.0 million.
The Plan is expected to be substantially completed by September 30, 2006. During the
execution of the Plan, the Company expects to continue to pay its vendors and suppliers in full in
the ordinary course of business [and to complete all projects in progress].
Item 8.01 Other Events
On March 28, 2006, the Company and certain of its direct and indirect subsidiaries
(collectively, the “Debtors”), filed their Monthly Operating Report covering the period beginning
February 14, 2006 and ending on February 28, 2006 (the “Monthly Operating Report”), with the United
States Bankruptcy Court for the Northern District of Texas, Dallas Division (the “Bankruptcy
Court”). A copy of the Monthly Operating Report was attached to the 8-K filed by the Debtors on
March 30, 2006.
To give investors a context for the partial monthly financial information set forth in the
Monthly Operating Report and to permit investors to relate this information to the Debtors’
financial statements and results of operations for the quarterly period ended December 31, 2005
filed on Form 10-Q on February 9, 2006, the Debtors have determined to release interim information
on their preliminary income statement financial results for the period from January 1, 2006 through
February 28, 2006 (the “Financial Results”). The Financial Results are filed as Exhibit 99.1
hereto.
The Financial Results are limited in scope and cover a limited time period. The Financial
Results are unaudited, have not been reviewed by the Debtors’ independent registered public
accounting firm and do not purport to show the financial statements of any of the Debtors in
accordance with accounting principles generally accepted in the United States (“GAAP”), and
therefore exclude items required by GAAP, such as certain reclassifications, eliminations,
accruals, and disclosure items. The Financial Results do not reflect the results of the Debtors
for the quarter ended March 31, 2006 and do not reflect quarter-end adjustments. The Debtors
caution readers not to place undue reliance upon the Financial Results. There is no assurance that
such information is complete. The information in the Financial Results should not be viewed as
indicative of future results.
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