IESC 10-K & 10-Q changes, risk factors and insider trading

WeWhile we do not have oneany single customer that represented approximatelymore 12.0%than 10% of our consolidated revenue in fiscal 2024, and2025, there are other customers that are significant to our individual operating segments. Although we have long-standing relationships with some of these significant customers, it is not possible for us to predict the future level of demand for our services by these customers, and if one or more of them were to significantly delay, reduce or curtail activity, or stop accepting bids from us, it could have a material impact on our operating results.

We hire third-party subcontractors to perform work on certain of our projects, and if we are unable to retain qualified subcontractors or if our subcontractors do not perform in accordance with their obligations, we have in the past incurred, and may in the future incur, additional costs or experience delays in project execution, which could subject us to contractual penalties. We also rely on suppliers for the materials necessary to complete our projects, and if a supplier fails to provide supplies when scheduled or at a higher than price than expected, project delays and additional costs could have an adverse effect on our operating results.

We maintain insurance coverage in part because some of our contracts require us to carry certain levels of insurance coverage, which is common in the industries in which we operate. Our third-party insurance is subject to high deductibles for which we establish reserves.reserves, and therefore we are effectively self-insured for typical claims up to those deductibles. In addition, we maintain most of our employee health insurance coverage on a self-insured basis and are responsible for losses up to our stop loss coverage, which sets a limit on our liability for claim costs. No assurance can be given that our insurance or our provisions for incurred claims and incurred but not reported claims will be adequate to cover all losses or liabilities we may incur in our operations, including employee health care costs, which have increased in recent years; nor can we provide assurance that we will be able to maintain adequate insurance at reasonable rates.

We have from time to time experienced cybersecurity incidents, such as ransomware attacks or unauthorized parties gaining access to our information technology systems, and privacy incidents, such as potential or actual exposure of data. While to date such incidents have not had a material impact on our business, there can be no assurance that future incidents would not have an adverse effect on our business or reputation. Additionally, the process of integrating the information systems of the businesses we acquire is complex and exposes us to additional risk as we might not adequately identify weaknesses in the acquired business’s information systems or information handling, privacy and security policies and protocols, which could expose us to unexpected liabilities or make our own systems and data more vulnerable to attack. In addition, data privacy laws and regulations governing the unauthorized disclosure of confidential information may pose compliance challenges and result in additional costs for our businesses. A failure to comply with such laws and regulations could result in penalties or fines, legal liabilities or reputational harm.

Our effective tax rate and cash paid for taxes are impacted by the tax positions that we have adopted. Taxing authorities may not always agree with the positions we have taken. We have established reserves for tax positions that we have determined to be less than likely to be sustained upon examination by taxing authorities. However, there can be no assurance that our results of operations will not be adversely affected in the event that disagreement over our tax positions does arise. Additionally, new tax laws or changes in existing interpretation and guidance could affect our provision for income taxes, deferred tax assets and liabilities, and reserves for uncertain tax positions, potentially resulting in an increase to our effective tax rate, which could adversely affect our results.

We have restrictions and covenants under our credit agreement and the failure to meet these covenants, including liquidity and other financial requirements,covenants could result in a default under our credit agreement.

We may not be able to remain in compliance with the covenants in our credit agreement, including financial covenants which, among other things, require minimum levels of liquidity and require us to maintain a specified fixedleverage chargeand interest coverage ratioratios as defined under our credit agreement. Other covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and subsidiaries, restrict changes to our organization documents, limit asset dispositions, limit investments, limit the ability to incur debt, restrict certain payments to shareholders, limit our ability to repurchase our stock, and limit the ability to change the nature of our business. A failure to fulfill the terms and requirements of our credit agreement may result in a default under our credit agreement and acceleration of any indebtedness we may incur, as well as a default under one or more of our material agreements, any of which could have a material adverse effect on our ability to conduct our operations and our financial condition.

A majority of our outstanding common stock is owned by Tontine, and Jeffrey Gendell, founder and managing member of Tontine, serves as our Chief Executive Officer and as Chairman of our Board of Directors. Tontine owns approximately 5554 percent of the Company’s outstanding common stock based on a Form 4 and a Schedule 13D/A filed by Tontine with the SEC on September 16,17, 2024,2025, and the Company's shares outstanding as of November 18,17, 2024.2025. As a result, Tontine can control most of our affairs, including the election of our directors, who in turn appoint executive management and can control most actions requiring the approval of shareholders, including the adoption of amendments to our corporate charter and approval of any potential merger or sale of all or substantially all of the Company's assets or business segments or the Company itself. This control also gives Tontine the ability to bring matters to a shareholder vote that may not be in the best interest of our other shareholders or stakeholders. The concentration of ownership may also have the effect of discouraging a change in control transaction, which could prevent other shareholders from selling their shares in the Company at a premium as part of such transaction. Additionally, Tontine is in the business of investing in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us or act as suppliers or customers of the Company. Most of Tontine's shares are registered for resale on a resale shelf registration statement filed by the Company with the SEC. Pursuant to such resale shelf registration statement, Tontine has the ability to resell any or all of its registered shares from time to time in one or more offerings as long as the registration statement remains effective and the Company remains eligible to use it, as described further in the registration statement and in any prospectus supplement filed in connection with an offering pursuant to the shelf registration statement. Tontine’s sale of all or a significant portion of its shares could result in a change of control of the Company, which may trigger the change of control provisions in a number of our material agreements, including our credit agreement, bonding agreements with our sureties, and our executive severance plan.

Increasing scrutiny and changing expectations from investors and customers with respect to our environmental,approach socialto andclimate governancerelated practicesrisks may impose additional costs on us or expose us to reputational or other risks.

Various stakeholders have increased their emphasis on companies' disclosures of climate related risks and the environmental impact of operations. Mandatory and voluntary reporting of climate related matters continues to expand. A failure to comply with requirements or to meet investor or customer expectations and standards, which are evolving and vary considerably, or the perception that we have not responded appropriately to the growing concern for ESGclimate related issues, could result in reputational harm to our business and could have an adverse effect on us.

In addition, organizations that provide ratings information to investors on ESGsuch matters may assign unfavorable ratings to IES or our industries, which may lead to negative investor sentiment and the diversion of investment capital to other companies or industries, which could have a negative impact on our stock price and our costs of capital.

Our performance is affected by a number of trends that drive the demand for our services. In particular, the markets in which we operate are exposed to many regional and national trends such as the demand for single and multi-family housing, the need for mission critical facilities as a result of technology-driven advancements, capital spending on data centers, distribution centers, and high-tech manufacturing facilities, the demand for single and multi-family housing, demand for back-up power, output levels and equipment utilization at heavy industrial facilities, demand for our rail and infrastructure services and custom engineered products, and changes in commercial, institutional, public infrastructure and electric utility spending. Over the long term, we believe that there are numerous factors that could positively drive demand and affect growth within the industries in which we operate, including (i) an increasing demand for data storage, (ii) population growth, which will increase the need for commercial and residential facilities, (iiiii) aging public infrastructure, which must be replaced or repaired, (iii) an increasing demand for data storage, and (iv) increased emphasis on environmental and energy efficiency, which may lead to increased public and private spending. However, there can be no assurance that we will not experience a decrease in demand for our services due to economic, technological or other factors beyond our control, including interest rate increases, increases in the price of copper, aluminum, steel, fuel, electrical components, certain plastics, and other commodity prices and other economic factors, which may reduce the demand for housing in the regions where our Residential division operates, and may impact levels of construction. For further discussion of the industries in which we operate, please see Item 1. “Business - Operating Segments” of this Annual Report on Form 10-K.

Revenue. Revenues in our Infrastructure Solutions segment increased by $133.7$147.6 million, or 61.5%42.0% during the year ended September 30, 20242025 compared to the year ended September 30, 2023.2024. The increase in revenues was driven primarily by continued strong demand and expanded capacity in our custom engineered solutions manufacturing businesses. WeAcquisitions alsocompleted acquiredduring the fiscal year contributed revenues of $15.1 million in the year ended September 30, 2025. In addition, the year ended September 30, 2025 included a full year of revenue contribution from Greiner Industries, Inc. (“Greiner”), which was acquired on April 1, 2024, whichcompared contributedto $34.0six millionmonths inof revenue contribution in the year ended September 30, 2024.

During the year ended September 30, 2022,2023, we incurred interest expense of $3.0 million primarily comprised of interest expense on an average outstanding balance of $82.3$26.9 million under our revolving credit facility,facility and on our finance lease agreements, in addition to fees on an average letter of credit balance of $4.5$4.7 million under our revolving credit facility and an average unused line of credit balance of $49.2$117.8 million. Total other income, net of $1.8 million in the year ended September 30, 2023 was primarily the result of gains on investments in equity securities of $1.0 million.

For the year ended September 30, 2023, we recorded income tax expense of $38.8 million, which reflects a higher pretax income than in the year ended September 30, 2022.million.

During the year ended September 30, 2024,2025, our current assets exclusive of cash increased to $770.9$958.3 million, as compared to $595.5$770.9 million as of September 30, 2023.2024. AnThe increase was primarily driven by a $92.5 million increase in activityaccounts receivable including retainage due to higher overall volume of sales and the timing of customer billings and project execution at ourthe Communications and Infrastructure Solutions businesses, along with trade receivables acquired as partend of the Greineryear. acquisition, drove a $106.0 million increase in trade accounts receivable and a $12.9 million increase in retainage. 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. Additionally, marketableMarketable securities also increased by $35.0$69.6 million as a portion of our excess cash during the year ended September 30, 2024 was invested in trading securities,securities. andIn addition, costs and estimated earnings in excess of contract billings increased by $11.5$9.1 million, driven by the timing of contract billings, and inventory increased by $9.8 million primarily fromdue contractto assetsacquisitions acquiredcompleted as part ofduring the Greineryear acquisition.ended September 30, 2025.

During the year ended September 30, 2024,2025, our total current liabilities increased by $122.0$110.9 million to $522.6$633.4 million, compared to $400.6$522.6 million as of September 30, 2023,2024, driven by a $55.2$93.1 million increase in accounts payable and accrued expenses primarily as a result of increased activity and the timing of payments across all of our operating segments and a $17.8 million increase in contract billings in excess of costs and estimated earnings, which varies based on the timing of contract billings on projects on which revenue is recognized using the percentage of completion method, and a $66.8 million increase in accounts payable and accrued expenses primarily as a result of increased activity and the timing of payments across all of our operating segments, and an increase in income tax payable based on the timing of tax payments.method.

In addition, we are charged monthly in arrears for (1) an unused commitment fee of 0.25% to 0.35% per annum,annum (2)on aany collateralunused monitoring feeportion of $5the thousand per quarter, (3) a letter ofrevolving credit feefacility based on the then-applicableCompany's interestConsolidated rateTotal marginLeverage (4) appraisal fees, costs and expenses and (5) certain other fees and charges as specified in the Amended Credit Agreement.Ratio.

IfUnder the Amended Credit Agreement, if in the future our LiquidityConsolidated fallsTotal belowLeverage $15.0Ratio millionis (greater than 3.00:1.00, or Excess Availability falls below 50% of our minimumConsolidated Liquidity), our Fixed ChargeInterest Coverage Ratio is less than 1.13.00:1.0,1.00, or if we otherwise fail to perform or otherwise comply with certain of our covenants or other agreements under the Amended Credit Agreement, it would result in an event of default under the Amended Credit Agreement, which could result in some or all of our then-outstanding indebtedness becoming immediately due and payable.

Please refer to Part I, Item 1. “Business” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, for a discussion of the Company’s services and corporate strategy. IES Holdings, Inc., a Delaware corporation, designs and installs integrated electrical and technology systems and provides infrastructure productssolutions and services to a variety of end markets, including data centers, residential housing, and commercial and industrial facilities. Our operations are organized into four business segments: Communications, Residential, Infrastructure Solutions and Commercial & Industrial.

EnteringAs we enter the secondfourth halfquarter of fiscal 2026, we have significantly expanded our backlog.remaining performance obligations and backlog are at record levels. Demand with respect to data centers, a key end market served by our Communications, Infrastructure Solutions, and Commercial & Industrial segments, has continued to grow. We expect the continuing investmentsInvestments in capacity we have made in recent years,years have allowed us to meet our customers' growing needs, and we expect to continue to invest in building our capacity and capabilities. We expect that these strategic investments, combined with our increased backlog, will drive growth in our business in the secondfourth halfquarter of the year.fiscal 2026 and into fiscal 2027. Availability of labor remains challenging, and will continue to be an area of focus for us. While demand is strong for much of our business, our operating segments each have their own unique set of factors influencing demand for our services. HousingIn affordabilityour challengesResidential frombusiness, elevatedlower mortgage ratesdemand and inflation,reduced concernshousing around the availability and cost of insurance, and the impact of overall economic uncertainty on consumer confidencestarts have persistedlimited fromour fiscal 2025. The large national and regional home builders continueability to putrecover higher material costs through increased pricing, putting pressure on suppliersour suchmargins. asWhile IESwe expect challenges in the single-family housing market to reducecontinue ourin pricing,the whichnear hasterm, continuedwe remain committed to impactthis our revenuesmarket, and grosswill marginswork into ourposition single-familythe business.business to benefit when demand conditions improve. In the multi-family residential business, higher borrowing costs for project owners in recent years resulted in a reduction in backlog during fiscal 2025, which wedrove expect to drive a reduction inlower multi-family residential revenuesrevenue for the first nine months of fiscal 2026.2026 compared with the prior year. Multi-family backlog recently has begunincreased toover increase,the first nine months of fiscal 2026, which we expect will benefit us in fiscal 2027. We are continuing to expand our Plumbing and HVAC offerings and focus on electrical markets where there may be an opportunity to expand our market share.

Consolidated revenues for the three months ended MarchJune 31,30, 2026, were $140.3$352.5 million higher than for the three months ended MarchJune 31,30, 2025, an increase of 16.8%,39.6%, with increases at our Communications, Infrastructure Solutions and Commercial & Industrial segments and a decrease at our Residential segment. See further discussion below of changes in revenues for our individual segments.

Consolidated gross profit for the three months ended MarchJune 31,30, 2026 increased $45.9$101.1 million compared to the three months ended MarchJune 31,30, 2025. Our overall gross profit percentage was 26.2%27.4% during the three months ended MarchJune 31,30, 2026, as compared to 25.0%26.9% during the three months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue increased at our Communications and Commercial & Industrial segments and decreased at our Residential and Infrastructure Solutions segments. See further discussion below of changes in gross margin for our individual segments.

During the three months ended MarchJune 31,30, 2026, our selling, general and administrative expenses were $142.4$162.2 million, an increase of $26.4$34.8 million, or 22.7%,27.4%, over the three months ended MarchJune 31,30, 2025, driven by increased personnel costs across our operating segments to support their growth and increased incentive compensation in connection with higher earnings than in the prior fiscal year. Certain of our stock-based employee compensation awards are expected to be cash-settled upon vesting, and our liability for these awards is adjusted at each period end based on the stock price at the balance sheet date. Expense related to these cash-settled stock-based awards was $11.4 million for the three months ended June 30, 2026, compared to $2.7 million for the three months ended June 30, 2025. The increase in expense was driven primarily by the increase in the price of our common stock. As a percentage of revenue, selling, general and administrative expenses increaseddecreased from 13.9%14.3% for the three months ended MarchJune 31,30, 2025 to 14.6%13.0% for the three months ended MarchJune 31,30, 2026.

Consolidated revenues for the sixnine months ended MarchJune 31,30, 2026 were $261.7$614.3 million higher than for the sixnine months ended MarchJune 31,30, 2025, an increase of 16.5%,24.8%, with increases at our Communications, Infrastructure Solutions and Commercial & Industrial segments and a decrease at our Residential segment. See further discussion below of changes in revenues for our individual segments.

Consolidated gross profit for the sixnine months ended MarchJune 31,30, 2026 increased $87.9$189.0 million compared to the sixnine months ended MarchJune 31,30, 2025. Our overall gross profit percentage increased to 25.7%26.4% during the sixnine months ended MarchJune 31,30, 2026 as compared to 24.4%25.3% during the sixnine months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue increased at our Communications, Infrastructure Solutions and Commercial & Industrial segments and decreased at our Residential segment. See further discussion below of changes in gross margin for our individual segments.

During the sixnine months ended MarchJune 31,30, 2026, our selling, general and administrative expenses were $264.3$426.4 million, an increase of $45.2$80.0 million, or 20.6%,23.1%, over the sixnine months ended MarchJune 31,30, 2025, driven primarily by increased personnel costs across our operating segments to support their growth, increased incentive compensation in connection with higher earnings than in the prior fiscal year and continued investment in technology to support the scalability of the business. Expense related to our cash-settled stock-based awards was $17.6 million for the nine months ended June 30, 2026, compared to $3.8 million for the nine months ended June 30, 2025, with the increase in expense driven by an increase in the price of our common stock. Selling, general and administrative expenses as a percentage of revenue increaseddecreased from 14.0% for the nine months ended June 30, 2025 to 13.8% for the sixnine months ended MarchJune 31, 2025 to 14.3% for the six months ended March 31,30, 2026.

Revenues. Our Communications segment’s revenues increased by $94.7$153.9 million during the three months ended MarchJune 31,30, 2026, or 34.7%,51.4%, compared to the three months ended MarchJune 31,30, 2025. The increase primarily resulted from ancontinued increasestrong in demand, particularlydemand in the data center market, whileand our recent capital investments have positioned us well to respond to that demand and deliver solutions to our customers. Demand for our services in the distribution center marketand high-tech manufacturing end markets also continuedincreased toyear grow.over year.

Gross Profit. Our Communications segment’s gross profit during the three months ended MarchJune 31,30, 2026 increased by $30.7$45.7 million, or 48.7%,62.5%, compared to the three months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue was 25.5%26.2% in the three months ended MarchJune 31,30, 2026 compared to 23.1%24.4% in the three months ended MarchJune 31,30, 2025. The increase in gross profit and gross margin primarily reflects strong demand as discussed above and successful project execution and improved margins on projects well-suited to our skilled workforce.

Selling, General and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased by $9.1$9.8 million, or 38.9%,38.7%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase primarily reflects higher personnel costs to support business growth and higher incentive compensation as a result of higher earnings. Selling, general and administrative expenses as a percentage of revenue was 8.9%7.8% during the three months ended MarchJune 31,30, 2026, compared to 8.6%8.5% during the three months ended MarchJune 31,30, 2025 as thewe increasebenefited in selling, general and administrative expenses was generally consistent withfrom the Communicationsincreased segment'sscale revenueof growthour during the period.operations.

Revenues. Our Communications segment’s revenues increased by $213.6$367.5 million, or 42.2%,45.6%, during the sixnine months ended MarchJune 31,30, 2026, compared to the sixnine months ended MarchJune 31,30, 2025. Continued strong demand in the data center market was the primary driver of the increase, while demand in the distribution center marketand high-tech manufacturing end markets also continued to grow.

Gross Profit. Our Communications segment’s gross profit during the sixnine months ended MarchJune 31,30, 2026 increased by $68.3$114.0 million, or 61.0%,61.6%, as compared to the sixnine months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue increased from 22.1%23.0% to 25.0%.25.5%. The increase in gross profit and gross margin primarily reflects strong demand as discussed above, successful project execution and improved margins on projects well-suited to our skilled workforce.

Selling, General and Administrative Expenses. Our Communications segment’s selling, general and administrative expenses increased by $17.3$27.2 million, or 39.7%,39.3%, during the sixnine months ended MarchJune 31,30, 2026, compared to the sixnine months ended MarchJune 31,30, 2025. The increase primarily reflects higher personnel cost to support business growth and higher incentive compensation as a result of higher earnings. Selling, general and administrative expenses as a percentage of revenue was 8.5%8.2% for the sixnine months ended MarchJune 31,30, 2026 compared with 8.6% during the sixnine months ended MarchJune 31,30, 2025 as thewe changebenefited in selling, general and administrative expenses was generally consistent withfrom the Communicationsincreased segment'sscale revenueof growthour during the period.operations.

Revenues. Our Residential segment’s revenues decreased by $30.4$21.9 million, or 9.5%,6.3%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Our single-family electrical revenues decreased by $25.9$20.4 million, primarily due to the continued impact of housing affordability and general economic conditions on consumer demand in the single-family housing market leading to a decline in construction volumes and pressure on pricing during the period, along with unfavorable weather conditions in certain regions reducing the total working days available during the three months ended March 31, 2026.period. Our single-family plumbing and HVAC revenues increased by $10.9 million compared to the prior year period, with expansion of the plumbing and HVAC trades into new markets partly offsetting the impact of slowing demand on new home construction and unfavorable weather conditions impacting existing projects.construction. Our multi-family revenues decreased by $15.4$12.4 million, or 19.5%,14.2%, driven byreflecting a reductiondecline in backlog during fiscal 2025 resulting from the impact of elevated interest rates on demand.

Gross Profit. During the three months ended MarchJune 31,30, 2026, our Residential segment's gross profit decreased by $17.9$25.2 million, or 22.4%,25.9%, compared to the three months ended MarchJune 31,30, 2025, driven primarily by lower volume as discussed above. Gross profit as a percentage of revenue decreased to 21.5%22.2% during the three months ended MarchJune 31,30, 2026, compared to 25.1%28.1% for the three months ended MarchJune 31,30, 2025 as the weaker demand environment and pricing pressure from our customers limited our ability to recover costhigher increasescosts of materials through pricing actions.

Selling, General and Administrative Expenses. Our Residential segment's selling, general and administrative expenses decreased by $1.8$8.0 million, or 3.1%,12.6%, during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by a reduction in headcount and lower incentive compensation costs associated with lower profitability. Selling, general and administrative expenses as a percentage of revenue in the Residential segment increaseddecreased to 19.3%17.2% during the three months ended MarchJune 31,30, 2026, compared to 18.0%18.5% in the three months ended MarchJune 31,30, 2025. The increasedecrease as a percentage of revenue was primarily drivenattributable byto selling, general and administrative expenses declining at a faster rate than revenues, reflecting the decreasereductions in revenuesincentive ascompensation discussedand headcount described above.

Revenues. Our Residential segment’s revenues decreased by $66.3$88.2 million, or 10.4%,9.0%, during the sixnine months ended MarchJune 31,30, 2026, compared to the sixnine months ended MarchJune 31,30, 2025. Our single-family electrical revenues decreased by $58.1$78.5 million compared to the prior year period. Consumer demand in the single-family housing market was impacted by housing affordability challenges, availability and cost of insurance, and overall economic uncertainty, leading to a decline in construction volumes and pressure on pricing during the period. Our multi-family revenues also decreased by $27.7$40.2 million, driven byreflecting a reductiondecline in backlog during fiscal 2025 resulting from the impact of elevated interest rates on demand. Our single-family plumbing and HVAC revenue increased by $19.6$30.5 million compared to the prior year period as the general decrease in demand for single-family housing was more than offset by continued expansion of our plumbing and HVAC business into new markets, as well as improved market conditions for these services in certain markets.

Gross Profit. During the sixnine months ended MarchJune 31,30, 2026, our Residential segment’s gross profit decreased by $34.1$59.3 million, or 21.5%,23.2%, compared to the sixnine months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue was 22.0% during the nine months ended June 30, 2026, compared to 26.0% during the nine months ended June 30, 2025. The decrease in gross profit and gross profit as a percentage of revenue reflects the decline in volume as discussed above and reduced pricing to our customers. Gross profit as a percentage of revenue was 21.8% during the six months ended March 31, 2026, compared to 24.9% during the six months ended March 31, 2025.

Selling, General and Administrative Expenses. Our Residential segment’s selling, general and administrative expenses decreased by $3.0$11.0 million, or 2.7%,6.3%, during the sixnine months ended MarchJune 31,30, 2026, compared to the sixnine months ended MarchJune 31,30, 2025. The decrease was primarily driven by reduceda reduction in headcount and lower incentive compensation expense in connection with lower profitability, partly offset by investments to support the future scalability of our business. Selling, general and administrative expenses as a percentage of revenue increased to 19.1%18.5% during the sixnine months ended MarchJune 31,30, 2026, compared to 17.6%17.9% during the sixnine months ended MarchJune 31,30, 2025. The increase as a percentage of revenue was primarily driven by the decrease in revenues as discussed above.

Revenues. Revenues in our Infrastructure Solutions segment increased by $74.8$94.6 million during the three months ended MarchJune 31,30, 2026, an increase of 63.6%73.1% compared to the three months ended MarchJune 31,30, 2025, driven primarily by continued strong demand in our custom engineered solutions manufacturing businesses, improvedprimarily pricing,in the data center end market, and theour impact of investmentsability to increasemeet capacitythat wedemand havethrough madeexpanded over the last several years.capacity. We also continued to expandgrow our field services offerings. Gulf Island Fabrication, Inc. (“Gulf Island”), which was acquired on January 16, 2026, contributed $37.5$51.7 million in revenues in the three months ended MarchJune 31,30, 2026.

Gross Profit. Our Infrastructure Solutions segment’s gross profit during the three months ended MarchJune 31,30, 2026 increased $23.8$30.0 million, or 60.6%,64.9%, compared to the three months ended MarchJune 31,30, 2025, driven by increased revenue as discussed above, while gross profit as a percentage of revenue decreased from 33.4%35.6% to 32.8%,34.0%, primarily reflecting lower gross margins at the recently acquired Gulf Island business as we reposition its operations to better utilize available manufacturing capacity.

Selling, General and Administrative Expenses. Our Infrastructure Solutions segment’s selling, general and administrative expenses during the three months ended MarchJune 31,30, 2026 increased by $8.6$9.5 million, or 68.6%,72.4%, compared to the three months ended MarchJune 31,30, 2025, primarily as a result of increased employee compensation cost to support growth in the business, higher incentive compensation as a result of higher earnings, and $5.4$6.5 million of expense, including amortization of acquired intangible assets, incurred at Gulf Island. Selling, general and administrative expenses as a percentage of revenue increasedremained fromconsistent 10.6%at 10.1% for the three months ended MarchJune 31,30, 2025 toand 10.9%June for30, the three months ended March 31, 2026, primarily reflecting the acquisition of Gulf Island.2026.

Revenues. Revenues in our Infrastructure Solutions segment increased by $106.9$201.5 million, or 47.3%,56.7%, during the sixnine months ended MarchJune 31,30, 2026 compared to the sixnine months ended MarchJune 31,30, 2025. The increase in revenue was driven primarily by continued strong demand in our custom engineered solutions manufacturing businesses, improvedprimarily pricingin the data center end market, and theour impact of investments we have made over the last several years to increase capacityability to meet increasingthat demand,demand asthrough wellexpanded ascapacity. expansionWe ofalso continued to grow our field services offerings and the acquisition ofofferings. Gulf Island ascontributed discussed$89.2 above.million of revenues during the nine months ended June 30, 2026.

Gross Profit. Our Infrastructure Solutions segment’s gross profit during the sixnine months ended MarchJune 31,30, 2026 increased by $39.4$69.3 million, or 53.0%,57.6%, compared to the sixnine months ended MarchJune 31,30, 2025, and gross profit as a percentage of revenue increased to 34.2%34.1% for the sixnine months ended MarchJune 31,30, 2026 compared to 32.9%33.9% for the sixnine months ended MarchJune 31,30, 2025. The improvement in gross profit and gross margin primarily reflects improved pricing and productivity improvements as our newer facilities ramped up production, partly offset by the lower gross margin at Gulf Island as we reposition its operations to better utilize available manufacturing capacity.

Selling, General and Administrative Expenses. Our Infrastructure Solutions segment’s selling, general and administrative expenses during the sixnine months ended MarchJune 31,30, 2026 increased by $12.2$21.7 million, or 51.4%,58.9%, compared to the sixnine months ended MarchJune 31,30, 2025, as a result of the growth of the business, as well as $5.4$11.9 million of expense, including amortization of acquired intangible assets, incurred at Gulf Island. Selling, general and administrative expenses as a percentage of revenue increased fromwas 10.5% for the sixnine months ended MarchJune 31,30, 20252026, tocompared 10.8%with 10.4% for the sixnine months ended MarchJune 31,30, 2026,2025 primarily reflectingas the acquisitionincrease ofin Gulfselling, Island.general and administrative expenses was generally consistent with the segment's revenue growth during the period.

Revenues. Revenues in our Commercial & Industrial segment increased by $7.5$126.0 million, or 3.5%,109.1%, during the sixthree months ended MarchJune 31,30, 2026, compared to the sixthree months ended MarchJune 31,30, 2025. The increase was primarily2025, driven by continuedan strong demand and successful executionexpansion of backlog,our particularlycapabilities in the data center end market, asallowing wellus asto expansionincrease the size and number of oneprojects we can execute. The increase also reflected the execution of ourcertain operationslarge, inshort duration projects during the Midwest market.quarter.

Gross Profit. Our Commercial & Industrial segment’s gross profit during the sixthree months ended MarchJune 31,30, 2026 increased by $14.3$50.6 million, or 34.1%,220.1%, compared to the sixthree months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue wasincreased 25.4%from 19.9% for the sixthree months ended MarchJune 31,30, 20262025 comparedto with 19.6%30.5% for the sixthree months ended MarchJune 31,30, 20252026, as we benefited from strong execution on certain large data center projects.projects, including certain large, short duration jobs that we executed at favorable margins.

Selling, General and Administrative Expenses. Our Commercial & Industrial segment’s selling, general and administrative expenses during the sixthree months ended MarchJune 31,30, 2026 increased by $6.2$9.3 million, or 32.4%,92.8%, compared to the sixthree months ended MarchJune 31,30, 2025 primarily as a result of increased employee compensation cost,cost includingas we continue to invest in the growth of the business and higher incentive compensation as a result of successful project execution, as we continue to invest in growth of the business.execution. Selling, general and administrative expenses as a percentage of revenue increaseddecreased tofrom 11.4%8.7% for the sixthree months ended MarchJune 31,30, 20262025 comparedto with 8.9%8.0% for the sixthree months ended MarchJune 31,30, 20252026 as awe resultbenefited offrom the increased compensationscale expenseof discussedour above.operations.

During the three months ended MarchJune 31,30, 2026, we incurred interest expense of $1.5$1.0 million primarily comprised of interest on our revolving credit facility, which had an average outstanding balance of $83.9$45.6 million, interest on our finance lease agreements and fees on an average letter of credit balance of $11.3$11.8 million under our revolving credit facility and an average unused line of credit balance of $204.8$242.6 million. This compares to interest expense of $0.3$0.5 million for the three months ended MarchJune 31,30, 2025, primarily comprised of interest on our finance lease agreements and fees on an average letter of credit balance of $5.5 million under our revolving credit facility and an average unused line of credit balance of $264.9$292.2 million.

We recorded a net gain on marketable securities of $54.2$26.2 million for the sixthree months ended MarchJune 31,30, 2026 compared to $7.9a net loss of $3.3 million for the sixthree months ended MarchJune 31,30, 2025 reflecting both realized gains or losses and an increasechanges in the market value of our holdings.

We recorded income tax expense of $38.3$51.3 million for the three months ended MarchJune 31,30, 2026, compared to $26.1$29.5 million for the three months ended MarchJune 31,30, 2025, driven primarily by increased pretax income.

We recorded income tax expense of $66.7$118.0 million for the sixnine months ended MarchJune 31,30, 2026, compared to $46.1$75.5 million for the sixnine months ended MarchJune 31,30, 2025, driven primarily by increased pretax income.

(2) DuringIn the quarter ended March 31,January 2026, Infrastructure Solutions acquired $29.1 million of remaining performance obligations and backlog in connection with the acquisition of Gulf Island.

During the sixnine months ended MarchJune 31,30, 2026, working capital exclusive of cash, cash equivalents and restricted cash increased by $87.4$190.7 million from September 30, 2025, reflecting a $287.0$499.0 million increase in current assets excluding cash and restricted cash and a $199.6$308.3 million increase in current liabilities during the period.

During the sixnine months ended MarchJune 31,30, 2026, our current assets exclusive of cash, cash equivalents and restricted cash increased to $1,245.3$1,457.3 million, as compared to $958.3 million as of September 30, 2025. The increase was primarily driven by a $121.9$209.5 million increase in accounts receivable including retainage associated with an increase in activity, and a $109.4$206.0 million increase in marketable securities. In addition, costs and estimated earnings in excess of billings increased by $31.6$51.2 million, driven by increased activity and the timing of contract billings.

During the sixnine months ended MarchJune 31,30, 2026, our total current liabilities increased by $199.6$308.3 million to $833.0$941.7 million, compared to $633.4 million as of September 30, 2025, primarily driven by a $109.8$180.8 million increase in billings in excess of costs and estimated earnings associated with increased activity and the timing of contract billings. WeIn also incurred $35.0 million of debt, which we have classified as a current liability as a result of our intention to repay it within the next 12 months, in connection with our acquisition of Gulf Island. Finally,addition, accounts payable increased by $54.8$127.5 million as a result of increased activity. After utilizing our credit facility during the second quarter of fiscal 2026 to fund a portion of the purchase price of Gulf Island and make significant investments in capital expenditures, we have repaid those borrowings, resulting in no outstanding debt as of June 30, 2026.

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 MarchJune 31,30, 2026, the estimated cost to complete our bonded projects was approximately $312.4$400.9 million.

Under the Amended Credit Agreement, the Company is subject to certain financial covenants including a maximum Consolidated Total Leverage Ratio (as defined in the Amended Credit Agreement) of 3.00 to 1.00 and a minimum Consolidated Interest Coverage Ratio (as defined in the Amended Credit Agreement) of 3.00 to 1.00. As of MarchJune 31,30, 2026, the Company was in compliance with the financial covenants under the Amended Credit Agreement.

At MarchJune 31,30, 2026, we had $11.3$12.2 million in outstanding letters of credit and $35.0 million ofno outstanding borrowings under our revolving credit facility.

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 capitalrequirements may also be offsetaffected by needs associated with higher growth or acquisitions. Currently,Through the first quarter of fiscal 2027, we expect an increase in our working capital needs are higher than they have been historically, as a result of growth in the backlog of our businessInfrastructure Solutions segment, as this type of work is not progress billed, and elevateddue commodityto prices.the timing of certain payments such as annual incentive compensation payments and our annual insurance renewal.

Net cash provided by operating activities was $131.0$239.4 million during the sixnine months ended MarchJune 31,30, 2026, as compared to $62.1$154.1 million in the sixnine months ended MarchJune 31,30, 2025. The increase in operating cash flow primarily resulted from increased earnings in the sixnine months ended MarchJune 31,30, 2026 as compared with the sixnine months ended MarchJune 31,30, 2025.2025, partially offset by an increased use of cash for working capital.

Net cash used in investing activities was $221.1$265.5 million for the sixnine months ended MarchJune 31,30, 2026, compared to $97.1$114.1 million used in investing activities in the sixnine months ended MarchJune 31,30, 2025. During the sixnine months ended MarchJune 31,30, 2026, we used $143.1 million to fund the purchase of Gulf Island and $78.4$123.0 million for capital expenditures in support of the growth of our business.business, $19.5 million of which was used to acquire the real property and certain related assets of Broadwind Heavy Fabrications, Inc.'s production facility in Abilene, Texas. During the sixnine months ended MarchJune 31,30, 2025, we paid $44.9 million to acquire a membership interest in Jett Texas Company LLC (“Jett”), an investment company, as part of the financing of Jett's investment in the CB&I storage solutions business. We also made capital expenditures of $30.1$47.3 million as we continued to purchase new assets instead of entering into new lease agreements at our Communications segment and made other capital expenditures to support the growth of our business.

Net cash provided by financing activities for the six months ended March 31, 2026 was $12.5 million, compared to net cash used in financing activities offor $43.4the nine months ended June 30, 2026 was $23.8 million, compared to $32.4 million for the sixnine months ended MarchJune 31,30, 2025. Net cash providedused byin financing activities for the sixnine months ended MarchJune 31,30, 20262026, included net borrowings of $35.0 million on our revolving credit facility, partly offset by $19.4$19.5 million used to repurchase our common stock, primarily to satisfy statutory withholding requirements upon the vesting of employee stock compensation. Net cash used in financing activities for the sixnine months ended MarchJune 31,30, 2025 included $36.3$41.6 million used to repurchase our common stock, including repurchases to satisfy statutory withholding requirements upon the vesting of employee stock compensation, and $5.0$7.5 million in distributions to noncontrolling interests under operating agreements in connection with certain acquisitions.

On July 31, 2024, our Board authorized a stock repurchase program for the purchase from time to time of up to $200.0 million of the Company’s common stock after the previous stock repurchase program was fully utilized. 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 repurchased 4,112 shares of our common stock in open market transactions during the sixnine months ended MarchJune 31,30, 2026.

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 MarchJune 31,30, 2026, we had firm commitments of $15.8$12.7 million outstanding under agreements to purchase materials in the next 12 months in the ordinary course of business. In January 2026, we funded our purchase of Gulf Island with a combination of borrowings on our revolving line of credit and cash on hand. In connection with the purchase of Gulf Island and the planned expansion of products produced there, as well as continuing investment in expanded customer offerings and capacity across our business, we have raised our expected capital expenditure forecast for fiscal 2026 to a range of $145 million to $160 million. 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, 2025. 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.