EleBlog

09 Sep, 2010

The first paragraph of a July press release:


And the "about" paragraphs at the end:

Weifield Group Contracting is a full-service, privately held electrical contracting firm that holds a vast portfolio of experience in the mid-western and western electrical business region. At Weifield Group, we pride ourselves on our attention to detail and our ability to deliver the highest levels of customer satisfaction. Whatever your need –electrical remodeling, new construction, maintenance for wholesale, retail, telecom, non-profit businesses, and industrial – Weifield Group can help.

Weifield Group, which is self-certified with the Small Business Administration (SBA), is active in the Independent Electrical Contractors (IEC), Association of Prevailing Wage Contractors, The American Society of Professional Estimators (ASPE), Design-Build Institute of America (DBIA), and the Constructors & Designers Alliance (CDA).

We are confident our substantial experience, communication, innovative ideas, and cost-effective approach will deliver significant value to your critical project.

09 Sep, 2010

From a correction in the July 1 Las Vegas newspaper, on the list of mechanical & electrical contractors (ran in the 6/28 issue of the Business Press):

Helix Electric . . . . has 311 employees and was established in 2011. It has local annual sales of $74.5M and its top local executive is Victor Fuchs, president.

09 Sep, 2010

From a feature about Davis Electric in The News-Gazette of Champaign-Urbana, IL

Scot Davis said that as a boy, he often went to job sites and pulled wire for his dad.

"Ultimately, I wanted to be a contractor like my dad," he said. Like Tom, he went through the union apprenticeship program and became an electrician. In 1998, he became president of the company.

Scot Davis said he likes working with clients on projects and particularly being asked back for work. He also likes "the competitive nature" of the business.

Among the company's recent projects: the I Hotel and Houlihan's restaurant, the Gregory Place buildings on campus, the Forum at Carle, the Amdocs buildings on Fox Drive, One Main Plaza in downtown Champaign and the Patterson Companies building west of Champaign.

Carmen Davis Kirby, vice president of Davis Electric, began doing office work for the company at age 15 and continued to work there through high school and college.

Both Scot and Carmen have other business ventures. Scot Davis is a co-owner of Davis-Houk Inc., which does plumbing and mechanical work and employs about 60. Carmen Davis Kirby is an owner of the Bella Mia and Bella Bambini, south Champaign boutiques for women and children, which she said allow her to express her "creative side." As for Tom Davis, he devotes his extra time to restoring Cushman motor scooters. He figures he has restored close to 100 of them.

Tom Davis, the company's founder, is 74.

07 Sep, 2010

The 8/8/10 issue of The Tennessean apparently featured a Q-and-A with Steve Johnson, who opened Lightwave Solar Electric LLC in 2006. The company installs solar PV panels and is based in Nashville. Read the thing, it's interesting (note that it is posted to three web pages, not one).

Just a couple of the questions/answers:

How are your sales and what's the outlook for the coming year?


What changes do you see coming in the solar installation business?


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30 Aug, 2010

Ranked among the 25 fastest-growing companies in S.C. Recent story (short) from The Greenville News. The comopany targeted growth in structure cabling. Now, it's achieved that goal . . . and it's time to set its sights on something bigger:

30 Aug, 2010

From a vendor press release:

“Once we made the decision to work with Airclic – it clicked, and I don’t know why we didn’t invest in a mobile solution sooner,” said Robert Shaw, Vice President of Human Resources for Bergelectric. “Human resource managers are wasting time and money if they are not leveraging the real time data that mobile solutions can deliver. We are eager to see where else within our company that we could utilize this technology.”

24 Aug, 2010

The Rochester Business Journal (7/23) ran a 1,272-word article, Chances to grab assets on the cheap prove elusive. The relevance here: One of the companies having trouble finding something to buy is, the article said, O'Connell Electric of Victor, N.Y. From the piece:

O'Connell's last two acquisitions, in 2007 and 2003, deepened the electrical contractor's renewable energy division with companies that specialized in solar and wind energy.

Today, despite more opportunities in the marketplace, O'Connell's strong financial position and its desire to expand, the company is not necessarily going to find the right business and the right terms to make a good deal, CEO Victor Salerno said.

The Victor company, which is looking at opening an office in Albany to serve an expanding customer base, recently evaluated a local contractor as an acquisition, but the price, Salerno said, did not make sense. O'Connell walked away from the deal and instead may focus on growing organically.

Salerno said he has not seen prices come down yet, except in extreme circumstances.

"Usually, where you get your opportunity is when something happens to the ownership or the company has fallen on tough times," he said.

24 Aug, 2010

JSE Electrical Contractors of Waukesha, WI, shut down in the past month. Short article here. 

23 Aug, 2010

A vanity magazine's 965-word profile of the company actually touts "a key advantage" -- that the company is a union EC. From Tim Harlow, VP: "Right now, we've probably got the most experienced work force we've ever had. Even during these rough economic times, we've been able to keep our core people employed, which is one of our main goals. When things do turn around don't want to be chasing people -- because they'll already be gone."

NOTE: The story appears on page 118-119 (a spread) of this "NxtBook" presentation of a printed magazine.

20 Aug, 2010

This is an old release -- Rosendin has a project building (electrically) a Facebook data center here in the East. So it's opened an office in Arlington VA.

Rosendin is based in San Jose and is #4 or #5 among U.S. electrical contractors in revenue.

See the release. It includes this claim, from a company VP:

20 Aug, 2010

Texas Construction is another McGraw-Hill Dodge regional magazine - and like the others, it recently named the Top Specialty Contractors in the state (for 2009).

Here's the Top 100 Ranking -- four of the top 10 subcontractors are 100% electrical, with Fisk (#6 overall) as the #1 E.C. (with $184M in '09 revenues).


The breakdown by market sectors shows 25 electrical contractors (with sales for each given) -- the largest subgroup broken out.

17 Aug, 2010

Inglett & Stubbs (Smyrna, GA), an electrical contractor, won (on 7/7) a firm-fixed-price contract from the U.S. Army Corps of Engineers. The contract notice says "one bid was solicited with one big received."

The fee = $53.9 million.

What's the job?

" . . . provide electrical crews and material required for limited electrical inspection and repair of U.S.-occupied camps, not supported by the Logistics Civil Augmentation Program, in diverse areas in Afghanistan."

The verbiage, which is limited in detail, notes that Inglett & Stubbs "will field 60 licensed electricians" and that the firm will "correct immediate life, health, and safety issues."

EleBlog is tempted to link this to the electrocution deaths of U.S. military personnel in showers. It's not clear whether that is what this is.

17 Aug, 2010

Northwest Construction magazine's August issue listed the Top Specialty Contractors. Among other things worth knowing:

The verbiage began with this ominous sentence: The top 10 firms saw their revenue drop from 2008’s record $1.9 billion to just $1.45 billion in 2009.

Find the Top 50 ranking (all trades) here. There are electrical contractors at #4, #7, #9 (EMCOR), and #10.

Rankings by state (AK, OR, WA) are here.

Most interesting, probably, will be the rankings by specialty. There are 10 electrical contractors listed, with their revenue, including EMCOR, Rosendin, and IEC Commercial.

16 Aug, 2010

Interstate Electical Services Corp. of New England is now 44 years old, it told the world in a 7/13 release. 

16 Aug, 2010

Being #43 isn't bad. We're talking about an electrical contracting company that's #43 on the list of the Top 100 in Rochester NY (the "fastest-growing privately held companies in the nine-county region.")

See the Democrat and Chronicle article here, which is about O'Connell (not about the ranking). NOTE: The article is spread across 4 web pages.

It's a Q-and-A with Victor Salerno, CEO of O'Connell Electric. Something from Vic:

16 Aug, 2010

Families in South Bend, Ind., need $ help to buy school uniforms for their kids, according to a June article in the local paper.

09 Aug, 2010

I'm not sure if I'd invest in common stocks right now. The market is at an elevated level, it seems to me. Perhaps this is a rotten time to buy.

I'm also not certain why anyone would buy the stock of a company in the construction industry. It's an up-and-down biz. Wall Street does not like "lumpy" -- and has proven it, time after time, by kicking the living bejesus out of stocks of companies in construction.

I'm also very sure I would like to buy the stock of a company that paid a dividend. The mere fact that the company is able to mail checks every quarter tells you that the numbers on the corporate balance sheet are not total lies.

ADDITIONALLY, I can't do what I'm advocating here. I write about EMCOR Group. I write about other contractors. I refuse to buy the stock of EMCOR because it is, rather obviously, a HUGE conflict of interest.

However, were I you, and were I interested in buying stock, and were I willing to overlook the construction thing and the lack of a dividend, I might want to investigate EME stock.

- - - - -

Here's a 5-year chart of EME's performance vs. the S&P 500. Like what you see?



And here's a 1-year chart of EME's performance vs. the S&P 500.

 



[Charts above created by me at http://bigcharts.marketwatch.com/]

EME's recent (Q2) report can be read here. You can listen to the webcast of the Q2 phone "meeting" with analysts, here.

- - - - -

You might well decide that the company is richly valued right now, at a price of $26 and with anticipated earnings per share this year of less than $1.80. I could NOT argue. However, this is a well-managed company with relatively low levels of long-term owings. It is "diversified" to the extent it incorporates within it an electrical contracting operation, a mechanical contracting op, and a facilities service company.

Maybe you don't want to buy it now (I do! but I won't). You might want to put it down as a stock to follow, see how well it does the next time the stock market suffers a big downturn - and buy some then.
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04 Aug, 2010

Fischbach & Moore is -- or WAS -- one of the old-line electrical contracting companies. When I got to the staff of Electrical Contractor magazine, in 1979, F&M was a respected company, one that was founded in 1918 and did great work on big projects.

Something happened in the past 30+ years. The company fell upon unique times, dissolved into pieces, was acquired. Some of it disappeared. Last I heard, at least a piece of it had been acquired by the big Boston EC, Sullivan & McLaughlin.

Well, I came across a release from the solar module supplier SOLON on a 1-mW solar PV project in Haverhill, MA. The wording included this:

04 Aug, 2010

Michael Caliel, the president/CEO of Integrated Electrical Services -- largest pure-play electrical contractor with stock traded on an exchange -- recently sat for an interview with The Wall Street Transcript.

I can't afford to subscribe to TWST, but I have purchased individual copies of the thing from time to time. It's an amazing publication, well worth the money . . . if you've got it. Anyway, a TWST release shares a bit of what Caliel had to say:

As you well know, the residential and homebuilding markets have been under a lot of pressure for the last two years or so, and as a result of that, we've expanded our homeowner offering to help us deal with the downturn in new home construction - namely things like standby power systems. For example, in areas where frequent loss of power, we market, design and install a standby power offering, so your home will have a standby generator there ready to go if the power goes out. That's an add-on offering that we're taking to the market. Also with the renewable energy markets and solar federal tax credits, we have developed a residential solar installation offering. We work with both homeowners and large builders to install residential solar power-generating systems.

To see the rest of this, you'll have to see the release; there's probably significantly more in the publication itself (you can buy single copies).

- - - - -
NOTE ALSO: I interviewed Caliel at the Wind show back in May. The two-part Special Report (which I kinda called "wrestling with an octopus") that resulted posted here -- Part One and Part Two.

29 Jul, 2010

Spread across 10 schools in the Antelope Valley School District (California) by electrical contractor Rosendin -- which offered a release.

When done, the company -- which is the 4th or 5th-largest EC in the U.S. -- will have installed about 20 mW of solar power over 18 months in the state.

29 Jul, 2010

The 5/17 Mississippi Business Journal (of Jackson) noted that Business Communications Inc. was one of the best places to work in the state.

"The largest structured cabling company in Mississippi, BCI provides software, hardware, network products and services, IP and traditional phone systems, security, and wireless and storage services." The company is, it says, "one of only four companies worldwide that have achieved" Gold Partner status with Cisco Systems.

Founder: Tony Bailey. Employees: 150.
HQ in Madison County, MS, with offices in Little Rock and Birmingham.
2nd place in the medium-sized category in the Journal's 2010 "best places" contest.

26 Jul, 2010

As you might know, I at one time was Editor of Waste Age magazine.

That's why I was interested to read in the 7/13/10 issue of the monthly Rail Time Indicators -- from the Association of American Railroads -- about the correlation between waste + scrap rail traffic and quarterly GDP growth.

Now, thinking about it without the data (which follows), IT MAKES SENSE. Our American system is set up so that, if we're building a lot, if we're buying a lot, and if we're moving a lot of stuff around ....all the conditions of a return to booming business, in other words....... we'll generate a LOT of waste and scrap.

Here are the correlations between commodity carloads and quarterly GDP growth, going by the past 10 years (Q1/2000 to Q1/2010), according to AAR (using GDP data from the BEA):

Petroleum products = 82%
Waste + Scrap = 79%
Stone, clay & glass products = 79%
Primary metal products = 77%

In other words, Waste + Scrap is right up there!!!

What's the current reading: June 2010 shipments of waste + scrap material were UP 23.3% from 6/09 -- and down 20.8% from 6/08.

26 Jul, 2010

Power City Electric, according to a 6/17 story in the Journal of Business (Spokane, Wash.), has opened an "affiliate" in Las Vegas. There are three people working for the company now, but CFO Colin Thompson told the newspaper he expects PCE-Vegas to have 10 people by year-end 2010 and 30-40 working there at the end of 2011.

The nearly 1,200-word article can be found here (it's on two web pages, so you gotta click thru).

Here's an interesting perspective on things from Thompson:

"You really can't expand in a strong economy," he says. "The people that you need to hire are making really good money and have no interest in taking a risk" by leaving a good position.

"It's not going to get any worse" in Las Vegas, Thompson adds. "That isn't to say we think it's going to get better soon."

Still, he says, "Even in a terrible economy, most businesses need an electrician occasionally. Everybody knows that's a power-driven economy. That four-mile strip has a lot of lights. There's a lot of work that gets done."

25 Jul, 2010

From the 7 /14 Salt Lake Tribune:

Electrical Contractors Inc. has been named Contractor of the Year by ConocoPhillips' Midcontinent Business Unit.

-- award is for safety "as well as its work on grounded innovation, performance, and relability during 2009."

25 Jul, 2010

According to a 6/18 feature on Phoenix Communications in The Commercial Appeal (Memphis):

In that project, Phoenix installed nearly $1 million worth of controls on 800 circuits, or switches, in the house. The project included 32 zones for heating and air conditioning, 200 zones for security including every window and door, 16 security cameras that display in color by day and infrared by night, and 16 zones of audio/ video.

WOWSER!

21 Jul, 2010

A press release from Mister Sparky, the national franchise for electrical contractors, posted last December, talks about (and quotes) three fellows who got into the EC biz via a franchise op in Houston, TX. 

25 Jun, 2010

K&N Electric Motors has acquired high-voltage contractor Intermountain Electric. Tiny slice of story here (rest behind a firewall).


Rosendin, one of the 5 largest ECs in the land, said it was going to buy KST Electric of Texas. Now, it says it finished the acquisition.

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22 Jun, 2010

Truland, which is a damn big electrical contractor in the D.C. Metro area, just bought two contractors in the Richmond, Va., area. Combined with the company's existing operation in that area, the entire op is known as Northside Truland, according to the Richmond paper. 

22 Jun, 2010

I end up on the websites of electrical contractors from time to time -- and, when I do AND when I find a newsletter on the site, I download it immediately.

I was on the site of Hunt Electric (www.huntelectric.com) of Utah the other day. I know not-very-much about Hunt, except to note that the website is good, the company IS a TEGG contractor (which to me is a recommendation) . . . and the website is up-to-date. Unlike another contractor site to which I went this past week, where the most recent download on the newsletter page was from 2005, the 4/10 company newsletter was available from Hunt.

Here's something I found about a "dream home" (high-end residential):


You read that right -- 70,000 feet of romex in a house. And 10 load centers. My house has ONE.

21 Jun, 2010

. . . by Green Energy Live (stock symbol GELV.OB). I know nothing about the acquirer. From the press release, it sounds like Peck has got something going for it:

Peck Electric's established electrical contracting services division currently employs 60 people with training and experience in all aspects of electrical wiring for commercial, industrial and residential projects as well as control wiring and logic controllers, high voltage power distribution, lighting and 24 hour emergency service. The company is licensed, insured and has been servicing customers since 1972. Peck generated $6 million in gross revenue in 2009 with the majority of sales attributed to its electrical division.

IBM, UPS, Energizer Battery Company, PBM Nutritionals, Ben & Jerry's, Husky Injection Molding, Fletcher Allen Health Care, University of Vermont and Champlain College are among Peck's customers. The company has worked with most major general contractors throughout Vermont. In addition to electrical contracting Peck installs telecommunications systems, provides solar power installations, and designs and develops clean energy products.

19 Jun, 2010

E.S. Boulus Co., an electrical contractor, is working on expansion of the airport in Portland, Maine. Here's a bit from an article (in the New England Real Estate Journal):

To facilitate the project's coordination, planning, and scheduling, construction manager Turner Construction is utilizing a Building Information Modeling (BIM) approach for the facility's mechanical, electrical and plumbing (MEP) engineering services. ESB's commercial division will be utilizing AutoCad Revit MEP 2011 Suite and NavisWorks software, provided by and with technical support from Microdesk of Massachusetts.

Throughout the project, ESB will employ a field crew of 10 IBEW electricians, managed by project manager Joseph Bradley and project superintendent Steve Melanson. At peak construction, the electrical crew is projected to grow to 25.

Bradley said, "The most demanding part of the project will be the phasing and logistics as existing airport operations must be maintained." Adding to the project's logistical complexity is the fact that the facility is built over the existing public access roadway which must be kept passable and safe at all times.

Add to all of that (and more) -- the project is seeking LEED Silver certification.

17 Jun, 2010

I was drawn to a story about the appearance of Carly Fiorina, the Republican candidate for Senate in California, at Rex Moore Electrical Contractors & Engineers (Sacramento). The story gives no detail at all about the contracting company, dwells on stuff said by Fiorina. Disappointing (to me, anyway).

Then my eye wandered to the immediate right of the words (I mean, right next to them). It listed (with small pictures) related slide shows). From top to bottom:


Now, of the 6, I would guess that the one on "Laws" might have something or other to do with a campaign for a Senate seat. But -- is Fiorina dead? Does she have a tatoo? Is there she legendary (or, for that matter, the victim of a hoax?).

In Plain English -- what the HECK does any of that have to do with Carly Fiorina? Or, for that matter -- with anything else?

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TO MAKE THIS ITEM A LITTLE MORE USEFUL -- here's a link to the Rex Moore website. I know nothing about the company. The website itself LOOKS pretty good . . . until you go and try to download a newsletter (this is my first stop on the website of any contractor that has a newsletter). The most recent NL that was downloadable was from July . . . 2005.


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11 Jun, 2010

The Small Business of the Year, in the eyes of the Grand Rapids Area Chamber of Commerce (Mich.) -- according to the 5/17 Grand Rapids Business Journal -- was SecurAlarm Systems Inc.

You can see this online only if you're a paid-up subscriber, so I'll retype the relevant stuff from the piece about this co.:

27 May, 2010

A photo goes with this, as well as a lot more words; see 'em at Electronic House

“It was a custom home, and the homeowner was frustrated when he didn’t have a clue what all the wires were in his house,” Livingston says. “He called the low-voltage company that initially wired it, and he ‘fixed it’ but the owner was still frustrated. That messy panel was how it looked the day I got there, after the other guy ‘fixed it.’”

“Fix” would be quite an overstatement for what Livingston saw to be some zip ties and a few labels added to the original wiring - and incorrect labels at that, like the wiring labeled for the master bedroom actually running to the family room.

25 May, 2010

From Erdmann Electric, a contractor, as relayed by CE Pro's website.

21 May, 2010

From a story -- on a home & garden show! -- in the Statesman Journal (Salem, Ore.):

"We just had our 20th anniversary," Susan Evans said of M.E. "This is a local event, and we wanted to come out and target our local community."

Sounds like the "aged breaker box" display was a good idea. But I noted that this company, which is probably not huge, is diversified -- regular electrical work PLUS back-up generators PLUS security installs.

18 May, 2010

According to a write-up in the Mississippi Business Journal -- which, unfortunately, is now behind a firewall -- in 2003, Brian David Robinson became an electrical contractor.

Age then: 23. He's still relatively young, and was named (in the 4/26/10 issue of the pub) as one of the "Top 40 Under 40" in the area.

Robinson began in construction in 1997 (which would make him, what, 17 years old?) as a laborer, "working with crews doing simple electrical wiring."

He runs Robinson Electric (Cleveland, Miss.), which, according to the article, has grown from 25 employees + $3.5M in annual sales to $10M and 65 people. This makes it sound as if he took over a company that pre-existed, but the article isn't all that clear.

Included in the article is a quote from a construction contractor: "I do not know of many individuals Brian's age or, for that matter, even older, who can achieve and handle what this man does."

EleBlog take: I don't know the guy. But this appears to be a case of -- some people have it, and some don't. He apparently does!

14 May, 2010

I ran across an old clip of a St. Louis Post-Dispatch 782-word profile -- from 8/21/09 -- on Davie Payne of PayneCrest, an EC. Unfortunately, the STLPD took the thing down (at least, you can't see if for free, and I can't find it anywhere).

However, on 3/26/10, the local business newspaper ran a piece on PayneCrest. Click over. If you don't, here are the highlights:


and

14 May, 2010

I saved a clip from 11/09 -- EGPI Firecreek was to buy an electrical contractor. Here's the link.

I noticed the acquirer is a company with stock in public hands, so I went over to Yahoo! Finance (symbol EFIR.OB) to check it out. The stock price is 1 penny, down from one quarter (check out the "historical prices" page).

I don't know if the GA contractor sold out. I hope he/she/it got cash!

14 May, 2010

A port in Mobile, Ala., was written up -- by Jeff Griffin, just an excellent writer -- for Underground Construction magazine. The key:

AND
If you click over there, be sure to note that the story is distributed across 5 web pages.

12 May, 2010

MC Dean is a D.C.-area company that formerly was an electrical contractor -- and now includes EC work in a huge bag of tricks.

Recently, GovConExecutive did a Q-and-A with Bill Dean about the company's role in federal construction, LEED (green), and more. It's worth reading (the whole thing; click away).

Just in case you don't, here are a coupla quotes from the thing:


AND

09 May, 2010

On this year's list (from American Express OPEN and the Women Presidents' Organization) of The Top 50 Fastest-Growing Women-Owned/Led Companies, see #28 -- Cochran Electric (of Washington state). 

09 May, 2010

Joe Keller, who owns the Mr. Electric franchise in Williamson County, Texas, now has opened another one -- in Mason County. Check out the brief article in the  local rag.

Of significant interest, I would think, is this paragraph:


A "members-only" plan smells like recurring revenue, a neat idea for the EC biz!

09 May, 2010

From the S.A. Biz Journal:

03 May, 2010

From Entrepreneur magazine:

Veronica Rose, founder and CEO of Aurora Electric, a Jamaica, N.Y., electrical contracting company, has spent nearly 20 years successfully bidding on government contracts. One of the first women to obtain a master electrician's license in a heavily male-dominated industry, Rose has worked on major projects at JFK International Airport and the World Trade Center. Her seven-person firm boasts a customer list that includes General Electric, NBC and Columbia University.

So how much of the $787 billion in stimulus money that the government approved last year has ended up in Aurora Electric's bank account?

"We haven't seen any of it," Rose says. "The stimulus money went to the big infrastructure companies that build highways and bridges--the bigger, deeper, heavier part of our industry where you have to be a big company in order to compete."

26 Apr, 2010

These two electrical contractors have nothing to do with each other (as far as I know), but they are combined in a press release from a provider of "electronic mobility management." Leaving the product promo crap out of this, here's some interesting stuff:

McBride Electric specializes in planning, implementing and protecting the electrical and voice/data/video infrastructure that is vital to commercial and industrial clients nationwide. Their teams of experts are focused in the areas of Technology/Equipment rollouts, Critical Systems and Energy Conservation. With a proud heritage since 1950, McBride Electric serves more than 40% of the Fortune 100 through a unique combination of 13 regional branch offices and their best-of-breed affiliate organization.

25 Apr, 2010

This story (1,000 words) isn't necessarily fun to read. It's about Jennifer Kayden and her journey from a life of despair ("nearly homeless") to co-founder of IAM Unlimited, described as:

A disabled-veteran-owned electrical contracting company that specializes in electrical power distribution systems and infrared testing for businesses and government.

23 Apr, 2010

Featured in the April issue of Black Enterprise, Ms. Mitchell runs FYM Logic, an EC in Syracuse, NY. Revenue: $500,000 in '09, $515,000 in '10. According to the article, she's repositioned the company from the residential electrical biz to commercial.

But note that it didn't happen overnight:

13 Apr, 2010

One of Chicago's biggest electrical contractors, Continental is a company with which I'm quasi-familiar. They've done amazing things. Here's a bit from a profile in a publication called American Executive -- a paragraph that shows what ECs can do when they want to:


The Witz family has earned this amount of fame -- and more. Read it here.

05 Apr, 2010

Native Americans, that is. From the site of Indian Country Today --


More here:

http://www.indiancountrytoday.com/national/southwest/72848857.html

26 Mar, 2010

Tom O'Brien of O'Brien Electric has been a licensed EC in CA and OR for 27 years, according an 11/23/09 article. He fixes lamps.


and

25 Mar, 2010

It's a new company, formed by Energy Capital Partners (a private equity firm. PLS includes, as of right now:


That last company doesn't sound like the first? That's because Air2 provides "helicopter-assisted" services to the electric utility biz.

24 Mar, 2010

About Tennessee Electric Co., from a local newspaper (12/11/09) --

In early 2008 the company learned that contractors were having difficulty getting electrical work completed on wind farms out west.

“We contacted them and figured out that we had the skill sets to do what it takes — right here in Kingsport — to get the job done,” Boehling said.

The company was able to secure contracts to wire wind turbines across the Texas panhandle and Missouri.

Most recently, Tennessee Electric was contracted to provide wiring work on wind energy projects in Greensburg, Kansas — a town that was essentially destroyed a few years ago by a tornado, and is now being rebuilt with “green” projects in mind. The wind farms being constructed today will supply the town’s electricity needs tomorrow.

22 Mar, 2010

A profile of the company appeared in The Courier-Journal (1/19/10) -- it's in the newspaper's archives now, and you have to pay to see it -- so no link here. Some interesting pieces:

20 Mar, 2010

A company has filed for "additional patent protection" (it says here) -- on a technology that generates electricity from the kinetic energy of moving vehicles.

From the company's description of the technology on its website:

I can't tell whether or not this is hype. The company has stock in public hands (NENE.OB is the symbol) -- the stock's price has been as high as around $5 per share since it came public in 2007. Right now it's just below 50 cents per share.

15 Mar, 2010

I like the name "Synergy Electric Co." It's based in Santee, Calif. According to the 12/4/09 San Diego newspaper, it won a $9.3M contract "to install solar-panel systems at the Camp Pendleton Marine Corps base in Oceanside."

According to the article, the company will do "engineering, installation & testing" of the project (which is funded by stim $). The minimum power production is to be 1,445 kW. This is in sunny California, you know.

I went over to the company's site and found, on the "about" page, this interesting piece of information:

In addition to graduation from San Diego State University, Ms. Keltner became a certified Electrical Management at Arizona State University and Electrical Estimating through NECA Schools. Ms. Keltner sets an example for all Synergy employees. A true believer in education, she represents the best of women in the construction field today.

15 Mar, 2010

Dubak Electrical Group (Chicago), a company with which I was not previously familiar, sponsored an IIR webcast. See the release that went along with it by clicking on the link.

As for the effectiveness of self-promotion -- well, this made me aware of the company, didn't it?

13 Mar, 2010

Celebrating Year #50 -- the family-owned biz Ziegler Electric Service.

Don Z's blood is dyed electrical blue! From Don Ziegler: "My father owned an electrical contracting business in Salina until the early 1940s before moving to Wichita to work as an electrician. I also had two brothers who were electricians in Wichita, so I grew up around the electrical business."

11 Mar, 2010

I came across an article from the Westside Gazette (of Ft. Lauderdale, Fla.) on Burrows Electric Co. I can't find it online. Here's what it says:

Founded by George Burrows Sr. in 1948.

"Throughout the '50s, '60s, and '70s, Burrows Electric Co. has trained countless young black men eager to learn the electrical trade and provided employment opportunities which allowed them to provide for their families -- particularly at a time when opportunities were not readily available to them."

Management now includes daughter Sonya and son George Jr.

Motto: "Honesty, integrity, and experience have been the cornerstone of our business since its inception, and will continue to be our guide light as we move forward."

I searched for a website and didn't find one. However, I did find this 2008 note on the company:

 (More)

09 Mar, 2010

Two companies -- including E Light Wind + Solar -- won a $17.3M design-build contract for a 3.2 mW solar power system at the Denver Federal Center. One is Centerre Government Contracting (Denver).

The other partner is E Light Wind + Solar, a division of E Light Electric Services (Englewood, Colo.).

09 Mar, 2010

This news item notes that Element Power has purchased a 1.4 gW "portfolio" of future wind projects (now in development) from EcoEnergy.

What it doesn't say: EcoEnergy is a division of Morse Group (Freeport, Ill.), home of Morse Electric, a contractor founded in 1944.

09 Mar, 2010

Engineering News-Record's 2/22 issue included a little sidebar, Rosendin Juices Up Its Market Prospects.

No link? Yes, we have no bananas. Reason: ENR hides its features behind a password after one week online free. So if you wanna see this, it'll be $4.95. I really like Rosendin, but this is a really short (4 paragraphs) thing -- not worth $1.25 per paragraph, folks!

What it said:

09 Mar, 2010

From the Richmond Times-Dispatch (as posted to a McGraw-Hill site):

The first contracts started in June 2007 and the firm at times employed as many as 100 people to handle the work.

It was stimulus for the region before stimulus became a widely known term.

"For us, in the construction industry, it's been a lifesaver," said Martin, a senior project manager for the Colonial Heights electrical contractor. "We had to hire. We had some of our best years we ever had."

and at the end of the 1,150-word piece --

Business was good until last fall when Fort Lee contracts started to dry up and increased competition - from firms as far away as Alaska - took a toll.

"It's going to be a tough year, but there's work out there," he said.

02 Mar, 2010

Construction Today magazine's Feb issue includes a 1,000+-word feature on KenMor Electric of Texas (which has a president named John C. Quebe). From the article -- note that KenMor is a TEGG contractor:

“The best way to sell ourselves on a day-to-day basis is service,” Quebe adds. “Typically, emergencies don’t come until after the job takes place. The service department is our smallest work, but is the most profitable. We feel it’s just as important as any other service we provide.”

See KenMor's website -- and also, if you're unsure of what TEGG is, the TEGG site.

25 Feb, 2010

A release from Idaho's Dept. of Commerce is headlined "Small Scale Vertical Wind Turbines Arrive in Eastern Idaho." You have to read it to learn that Portneuf Electric, which describes itself (on its website) as a full-scale electrical contractor, has gone Even Fuller Scale . . . starting up a new subsidiary, River's Edge Energy Inc.

From the Idaho DoC release:

25 Feb, 2010

Newsday, the Long Island (NY) newspaper, ran a profile piece 2/1/10 on Don Hendler, president of Leviton Manufacturing (based in Melville, NY, which is on the island). I can't link to it b/c you must pay to see it.

Relevant here: Some facts about Leviton --

Revenue: "About $1 billion annually." Note from EleBlog: I'll bet it's a lot more than that!

Employees: 7,300, including 450 on Long Island

Locations: Beyond the HQ (a new, green building the company leases) -- another 20 locations in the U.S., China, Dubai, and India.

12 Feb, 2010

KVH Industries, which provides satellite TV and communications systems, named Harris Electric (a Seattle contractor) its 2009 commercial fishing dealer of the year. 

09 Feb, 2010

On 12/11/09, Business Wire ran a brief "company profile" on this company. In my experience, what that means is Interstate signs on with Business Wire, and we'll see more releases from the company sooner or later.

Read the profile here (it continues onto a 2nd web page). What's most interest to The EleBlog is the kinds of work the company does. It shows the number of different things that come under the heading these days of "Electrical Contracting" . . . in this case, all under one roof, so to speak:


AND


AND

09 Feb, 2010

There are a number of stories like this out there -- electrical contractors who sold out during the "roll-up" craze, and now are back running the operations that used to be under their control:


Find the feature (which is distributed across two web pages) on Terry's Electric (Kissimmee, Fla.) here. Note that the story says the company's revenue is down sharply, and the debt the Quigleys took on to buy the thing back. But it doesn't mention how much debt the company owned when it was purchased in 2002. In my experience, numbers of contractors sold the company AND the debt to the roll-up buyers -- and when they bought the thing back, they didn't take the debt back.

OF COURSE, this might not have been the case with Terry's. The family might not have had any debt when they sold in 2002; or they might have taken the debt back with them when they bought the thing back; or they might have kept the debt all of this time.

 (More)

26 Jan, 2010

Emard Electric (Loomis, Calif.) got the stimulus-funded work on a housing project in Monterey, Calif.

That's what you're learn in this release submitted by PV Powered, which makes inverters. Emard bought them via WESCO Distribution. Some quotes:


AND

23 Jan, 2010

It's State of the Art Electric, which has come into Ohio with "five sales people and eight installers." It has a warehouse in Columbus and is expanding into 2 other Ohio cities, according to Columbus Business Firts (12/18).

What's the draw? Utility rebate programs on lighting.

15 Jan, 2010

I have subscribed to FORTUNE magazine for years. I think it's a bunch of . . . stuff. I read it to see what the Conventional Wisdom might be -- you can't be a contrarian if you don't see what the consensus is, right?

The mag just came out with "The Best Stocks in 2010." There are 10 of them -- and Quanta Services is one of them.

I like Quanta. I've spoken with John Colson, The Boss there. I like him. I like the company.

Notes:

a. I won't invest in the company, because I might write about them. I know, it's a dumb rule. Still, it's a rule.

b. Without that rule, I would DEFINITELY buy the stock of Quanta (symbol PWR) --

c. . . . except now that FORTUNE thinks PWR is a buy, I'd . . . definitely, positively, think about changing my mind!

- - - - -

Here's a slice of the FORTUNE bit on Quanta --

14 Jan, 2010

South Hills Electric (Pittsburgh area) has done some PR/marketing work here, with a "hiring guide" and a video. 

31 Dec, 2009

Integrated Electrical Services (stock symbol IESC) came out recently with its annual report on FY09, which ended 9/30. Here are the recent annual sales of the company:


This is just ugly. IES was originally a "roll-up" -- a combination of companies (all of them non-union electrical contractors) put together with the help of a lot of money and a lot of stock. It was the idea of a bunch of high rollers (who, I think, made money). I believe even many of the ECs who sold into IES made money -- a lot of it.

At one time early on (1999), the CEO of IES said that, in five years, the company would have $3 billion in sales. It seemed possible at the time. People in the electrical manufacturing business and electrical distribution (larger distributors) freaked out.

At the time, I wrote a number of columns that said -- Won't Happen. I was, of course, right (funny how you remember and cite the times you got it right, and ignore the times you were so far off-base a grandmother could pick you off). As an example, here's a paragraph from a column posted in April 1999:


That was then. This is NOW.

- - - - -

As of the end of 2009, IES has the following distinguishing characteristics:

1. At $666 million, it still remains the largest pure-play electrical contracting company in which you can invest. Yes, EMCOR is much bigger -- but an investment in EMCOR stock gets you involved in two other businesses (Mechanical contracting and Facilities Services).

2. The company is still being reorganized. If you have read what IES management says about the company, it is still getting a handle on itself. Yes, that shouldn't be the case after 11 years of existence. But it is.

3. IES is not a national company. Many of the original components (significant local electrical contracting companies) were purchased, "rolled up" into IES -- and then disgorged in the 2000s. The company seems to relentless change focus (I don't think that's a good thing, but maybe it will turn out to be one of these days).

Here's what the boss, Michael Caliel, said in the Q4 release:


4. If you compare FY05 with FY09, sales are down almost 21% in the past four years. This does not seem to be a reason to run out and buy stock, does it?

5. According to the company's recent release on Q4 results, the backlog of work has declined in the past year from $337M to $241M (28%). This is not good. Note that this is NOT out of line: EMCOR's backlog declined in the same time from $4.42B to $3.39B, or 23%. Somehow, to the naked eye, $241M looks puny, whereas $3.39B looks . . . well, healthy.

6. On the other hand, there were other EC roll-ups launched in the late 1990s, including -- most notably -- two (Building One Services and GroupMAC) that merged into a damn big one, Encompass Services . . . which went out of business shortly thereafter. So you can debit IES for a number of years of flailing about in the water, or you can credit the company with a big positive = It HAS Survived!

IESC's Q4 release.

31 Dec, 2009

An article that's now four months old, the Atlantic ran a short "ideas" piece on the real impacts of IKEA's "low-price, high-style" furniture retailing approach.

Question for the house: IS IT GREEN?

Here's the Atlantic article's answer:


The article includes a quote from an environmental activisit: "IKEA is the least sustainable retailer on the planet."

15 Dec, 2009

Were you me, you would get to meet a lot of interesting people in the electrical industry. One of them is David Pinter of Zwicker Electric, a company that's one of the larger ECs in the New York City area. Pinter runs it.

On its website, NECA has a recent (11/27/09) article on the role Pinter played in negotiating a Project Labor Agreement in NYC. The article ends with this:

That reminded me of an article I wrote, "Burger With The Boss," about a dinner (that I attended) that Pinter hosted for some of his company's workers. Such dinners were (back when I wrote it, in 2006, anyway) a regular event.

Click on the "burger" link to see the 4-page PDF, which Zwicker has on its website.

12 Dec, 2009

A feature in The Daily Republic (of Mitchell, SD) notes that Muth Electric is moving its HQ.

Facts in the article:

12 Dec, 2009

American Executive magazine (11/09) contained a 1,335-word profile of Continental Electric Construction Co., one of the biggest electrical contractors (and a lot more) in the Chicago area.

Here's what the company does, from the article:

07 Dec, 2009

Can you afford the lowest bid?

That's the question asked by Jim Slack, Jr., on a blog (it's from Slack & Co., a contractor). He wrote:

Sadly, a truth exists in our industry that is becoming harder and harder to ignore: there are subcontractors who are intentionally submitting incomplete estimates so they will be the lowest price on bid day. They know that being the low bid means they win work. As long as there is a feeling among subcontractors that price is the only factor general contractors consider, the bidding game will continue to be played dishonestly. Not only does this behavior tarnish the integrity of our industry, but it also ultimately hurts projects and owners.

 

Action must be taken on both sides of the equation to improve the bidding process. General contractors must ensure they are comparing scopes of work when reviewing bids. And subcontractors must remember their responsibility to be good stewards of the owner’s money—meaning they must in good faith, present a bid that is complete to the best of their knowledge.

This was timely when he wrote it (back in April) -- and it's even more appropriate to think about right now.

02 Dec, 2009

Rosendin Electric, based in San Jose, Calif., but all over the place, really (it's one of the largest ECs in the nation), issued a release noting that it has received an award "for its outstanding safety program and its ability to create a corporate culture in which 'safety is everyone's responsibility'." 

29 Nov, 2009

What did analysts at Zacks Equity Research think about electrical manufacturers and distributors -- as of Oct. 12, 2009? See this Industry Outlook.

Hubbell: Price Oct. 12 = $43.00.


Grainger: Price Oct. 12 = $93.14  


How about the S&P 500? On 10/12, the close was 1076.19

Percentages: HUBa + 4.65%. GWW + 4.63%. S&P 500 + 1.42%.

22 Nov, 2009

A May 2009 profile of West Electric (quoting Brian A. Miller, co-owner and president) focused on how the company treats its employees. I especially liked this part:

It’s about human relations. If you treat people well, that goes a long way in them wanting to work harder for you. If you treat them like they’re not important, they’re going to find a way to either make it rough on you or go somewhere else.

As far as making people feel wanted, build them up. Let’s say our purchasing agent works hard and finds materials at a very good market, and we’re able to bring that in at high levels. Then, two months later, we find out that the prices went way up on a material, and since he bought it at a low end, that really gave us an advantage that this was purchased at a lower price.

When you’ve got an employee that’s done things like that, you need to let them know, ‘Hey, great job on that, you’re really thinking ahead and looking for the good of the company.’

You build them up not only with praise, but you also either give them a paid vacation or a couple days off. With the way the economy is right now, these things are going to be tough to do.

22 Nov, 2009

There are a number of companies named Miller Electric in Florida. This past summer, the Bradenton Herald ran a piece on Ed and Sue Gocher, who bought Miller Electric in 2003. The company has since increased from 2 to 11 employees (from $275K in sales in '03 to $1.1M in '08).

The story is no longer available online. As of June 2009, sales were off 8% from the 2008 pace. The company does mostly residential work, and most of its employees (according to the article) are electricians with 20 or more years of experience.

Here's the most interesting paragraph, quotes from Ed Gocher: "We took much of the money made in our first years and put it back into the company. We purchased new shirts for the men with the company logo, bought new ladders and tools that help the men perform the work more efficiently, and purchased new vans (all the same color and style), heavy duty, and equipped better, to help our men perform better."

17 Nov, 2009

Thanks to a subscription to Nexis, I accessed the 9,773-word EMCOR Group Q3 earnings conference call (transcripts of these quarterly events from EMCOR are not being posted to www.seekingalpha.com this year, as they had been in '08).

Needless to say, it would be an interested read for the EleBlog in any case -- as EMCOR is the home of the largest electrical contracting firm in the U.S. (and the largest mechanical, too).

I've selected two segments to retype and present to you here (I can't offer you a link to the transcript, but see the bottom of this item).

- - - - -

1. Tony Guzzi, president & COO, narrated part of a slide show to start the session off. The info below interested me (a) because it's local to me, and (b) because it may well be emblematic of what a company with EMCOR's capabilities can do:


Notes on these comments:


- - - - -

2. Frank T. MacInnis, chairman & CEO, answered a question on backlog (and more)


FINAL NOTE: A replay of the webcast of EMCOR's Q3 conference call is freely available, along with a PDF of the slides -- here.

28 Oct, 2009

Local newspapers sometimes run profiles of local business, and that's what the Corpus Christi Caller-Times did 10/11 (it's in TX, by the way) -- profiling Kyle S. Budd Jr. of Budd Electric. Mr. Budd, according to the article, went to work at age 11 for an EC company run by his uncle. Yes, it says age 11.

Some of the stuff that follows could have been written about a lot of the ECs I've met over the years (with the details varying in some directions, of course). That's one of the things that have made the 30 years I've spent (more or less) around these people enjoyable:

Biggest career break: My first big break was having Kyle S. Budd Sr. and Mary Alice Budd as my father and mother. In 1972, I started a four-year electrical apprenticeship program. I worked for Budd Electric with my dad, as an apprentice. After about eight months, I went to work for Fairbairn Electric until 1975. The owners were Jim Fairbairn and Jack Green. Their estimator was Eddie Brinkman. I learned a great deal working with these men.

Business turning point: My father started the business in 1972 and, now at the age of 90, he still comes to the office every day. I have been in the same position since 1978. My father let me make my mistakes and I learned from them. We’ve never had a huge misunderstanding. I attribute that to his good nature. What I learned from my father is the biggest reason Budd Electric is where it is today. My son, Tyler Budd, started working with us as an electrician in 1997. He came into the office as an estimator around 2002 and that has helped a lot.

Business philosophy: Our motto is “Quality Counts.” We try to conduct business and treat customers with integrity, honesty, and to offer quality work. I believe that the only stupid question is the one that is not asked. I want my employees to be successful because their success determines the success of Budd Electric.

There are differences in every story, of course. For example, this oine says Kyle S. Budd Sr. is now 90 and started the business in 1972. That means the elder Kyle Budd started an EC business at the tender age of 53!!!
 (More)

28 Oct, 2009

Johnson Electric has been growing steadily (according to a 10/14 story in The Observer of La Grande, OR). It's 674 words, but here's the part I liked, which quoted owner Dave Lowry (he and his wife bought it 14 years ago from Wade Johnson):

Though commercial accounts remain the bread-and-butter, Lowry and his crew handle many other kinds of jobs, including residential. His workers are even trained to install computer networks in homes and businesses.

“We’re not stuck in any one thing. We’re pretty versatile,” Lowry said, noting that all his workers are certified in phone and data system installation and maintenance. They keep up on the latest in lighting and security systems as well.

A key to maintaining versatility, Lowry said, is making sure the employees are well trained. Through the years, it’s always been his policy to send his workers to school as needed.

“I try to give them all the schooling and knowledge that they need,” he said. “I’ve always believed that if you don’t know how to do a thing, you don’t try and bluff your way through it. You get the training.”

Having a close-knit, knowledgeable staff is one thing that has helped keep the company healthy. Another is a pledge to integrity, Lowry said.

“The price I tell you is the price that it is,” Lowry said. “I don’t go over, and that truth is what has made the business grow.”

28 Oct, 2009

A 916-word profile of Electrical Contractors Inc. in the publication Construction Today delves into the work it did at the Naismith Memorial Basketball Hall of Fame:

“Our team utilized everything from mountain climbing gear to the Internet to install the highly detailed electrical, telecommunication, audio and video systems in this unique modern museum,” ECI states. “While much of our work is hidden within the walls, our workmanship will forever remain a part of this historical endeavor, enjoyed by thousands who visit from around the globe.”

28 Oct, 2009

From The Detroit News (10/22) -- serving a place where good news is at a premium:

[Ron] Harwood started Illuminating COncepts in 1981 as an electrical contracting business. Since then, it has virtually exploded into an internationally recognized lighting and 'immersion experience' development company."

and

"Part lighting experts and part magicians, the company came up with a small speaker that fitted nicely into the base of [a lighting fixture[. No one could see it, but everyone could hear the sound it produced."

I hope the link above works; I don't know of The News puts stuff behind a firewall after 14 days (as do some newspapers).

28 Oct, 2009

I've never been to Hawaii, but things are different there. According to Pacific Business News (story here):

"American Electric . . . is known for its work in industrial plants, government, and military facilities, commerciall buildings, hotels and hospitals. The 63-year-old company plans to offer homeowners some of the same services . . . "

Yes, this relatively large electrical contractor (on a Hawaii scale and, I believe, on a U.S. scale, too) is spreading its wings into RESIDENTIAL. Yes, right now, at what is probably the bottom or near-the-bottom of the market.

15 Oct, 2009

Mid-Atlantic Construction, one of the Dodge (McGraw-Hill) construction regionals mentioned in the previous item, included profiles of two ECs -- two companies that are local to me -- in its write-up of the top subcontractors. Here's what it had to say (find the article HERE):

On Truland Systems: From Alan Linder, vp operations --


On J.E. Richards: From Joe Richards, president

15 Oct, 2009

Engineering News-Record just came out with its "Top 600 Specialty Contractors" issue, which includes a list of the Top 50 Electrical Contractors. Unfortunately, while a bit of it is posted online, you have to pay ($50!!!) to get access online to reprints.

This is NOT the case for the regional lists of the top subcontractors. There are several Dodge regional magazines (like ENR, published by McGraw-Hill). In the August issues of most of them, they printed local/regional lists of the top subs, including a bunch of ECs in each.

A comprehensive list of these things, with brief descriptions -- and most importantly, links -- appears in a two-part blog I wrote for TEDMAG.com.

Part One.

Part Two.

04 Oct, 2009

I found a transcript of an appearance by Hubbell Inc. at a 9/1/09 Morgan Stanley conference in which Dave Nord, CFO of the company, was asked about The Smart Grid. Here's what he had to say (again, I'm retyping) -- you can listen to the thing, too -- a 60-minute web recording).

NORD: "Part of the question is, how do you define what is contemplated by The Smart Grid? There isn't a uniform answer.

"Certainly, there is agreement amonst all parties that it has -- the grid is wearing and has reliability issues and, sometimes, just fixing the reliability gets contemplated in The Smart Grid. All the way to the point of "smart" being more of the intelligence leading to some of the industry initiatives like smart metering and more homeowner management and end-user management.

"We survived for a long time without that. Certainly, there is a potential that can exist there. But there's a lot of demands on the industry for investments. So it's a question of where they are going to put those demands and where they are going to put the resources and what impetus there is to do one versus the other. And I think that is part of the uncertainty that currently exists from energy policy and where that might lead. That's the potential that could accelerate it.

"At the same time, we have been talking about big investments and acceleration for a number of years. And the only thing that we caution is that every investment that has any big numbers associated with it is a long-term investment. So it is going to be more ratable and so we tend to think of that as embedded in the normal 3%, 4% growth on an annual basis. It is just the composition of that investment in that growth."

21 Sep, 2009

EMCOR's management system is praised in an article from Gulf Construction -- as in the gulf across the world, not the one in the Southeast. It's about EMCOR's Facilities Services Group, not the electrical piece of the company. Here's a quote from the PIECE:

“This is a bespoke system which enables us to configure the exact requirements of any individual project – from grass management in stadiums to a/c and water systems to HR tools and health services; we even have a concierge service with one project – it’s a totally integrated service.

"Where it gets really exciting though and what’s so special about this project in KSA, is that the entire system is linked into portable devices carried by our staff on the ground, completely eliminating the paper trail in favour of efficiency and accuracy where everything can be eliminated, saving time and costs.”

Note that I provided the link to an article on an EMCOR-ish site, rather than to the original. My computer warned me away from the Gulf Construction site, based on some kind of web disease that site wants to give it.

29 Jul, 2009

Above, find a past-30-days stock-price chart for IESC, the stock of Integrated Electrical Services -- created on www.bigcharts.com. IES is the largest "pure play" electrical contractor (EMCOR Group is bigger, but has other operaitons).

Apparently, IESC has run up by better than 50% in the past month. In the same period, the S&P 500 average is up 5.7%.

What does this mean? I looked for news, and found only that the company will announce quarterly earnings/sales/etc. on Aug. 10. Perhaps someone knows something -- something good?

All else that I know is that Tontine Partners owns a rather big slug of IESC stock -- and has said it might want to get rid of some or all of it. Could that be a catalyst for someone or other thinking there's going to be a takeover?

24 Jul, 2009

New York Construction magazine recently ran its list of the Top Specialty Contractors in its region (NY metro) in 2008. Here it is, a 13-page PDF.

Of interest: EMCOR Group's electrical sales in the area are given as $440 million in 2008. In that company's 2008 annual report, electrical construction revenues are given as $1.7 billion. Therefore, one-fourth (25.88%, to be precise) of EMCOR's electrical revenues came from the NY metro area.

On the mechanical side, it's almost $477M out of $2.475B, or 19.27%.

22 Jul, 2009

Randy Guba is the EVP and CFO of Integrated Electrical Services, the largest "pure play" electrical contractor with stock traded on an exchange (the NASDAQ, symbol IESC). Earlier this year he sat for an interview with Business Finance magazine -- the thing weighs in at 4,299 words.

Unfortunately for those of us who like things easy, the Q-and-A is spread over 6 web pages of the BF site. To my way of working (and thinking), this makes it very hard to read.

Guba is part of the team put in place by Mike Caliel, the guy in charge these days at IES. Here's a piece of what he had to say about what the group found at the company upon arrival:

I'll give you a summary of what happened. When we started we had 27 fully autonomous business units that had never been integrated; we had never had an integration strategy, and we had business leaders who pretty much set their own agendas. We had localized reporting that resulted in little transparency, so it was very difficult to understand what was going on in the business.

We had controllers in each of the 27 companies who were backward-looking and who tended to be scorekeepers. There wasn't a lot of capacity for forecasting or understanding KPIs. We had some control weaknesses, and a lot of those resulted from personnel issues and problematic processes and systems.

Finance was historically aligned to local presidents and not to the finance function within IES, yet it had very little in the way of business partnership relationships with these presidents. From a market standpoint, business development was purely localized and opportunistic. So our role was to come in and develop a strategy that could tackle these problems and restructure the company.

Guba provides a lot more detail, of course (4300 words' worth!). Here's what he said in answer to a Q about "change management" issues [I bolded a key sentence at the end] that resulted from the wholesale revamp the new management pursued:

We worked through it openly. We had a high degree of transparency when we made the decision to eliminate the controller jobs at the local company levels and consolidate them centrally. There was a whole change management process to go through to treat people fairly and communicate what we were going to do and how we were going to operate as people's roles changed.

Of course not everyone accepted the new direction we were taking, so we parted ways when necessary as amicably as possible. And we were able to actually prove that many of the folks didn't have as much of a stranglehold on the business, markets, and customers as we were led to believe.

20 Jul, 2009

An Associated Press item, carried on Yahoo!, carries the headlined "Market decline seen for electrical contractors." But you have to read the thing. There are specifics in the short piece about Comfort Systems. This company is NOT in the electrical biz!!!

21 Jun, 2009

Intel says its "wireless resonant energy link" is about 5 to 7 years away from commercialization. But this article will make you think. BE SURE to read thru to the end of the short piece, where there are three short paragraphs about "energy harvesting."

Note that a post in March 2006 here on The EleBlog talked about ambient power harvesting.

04 Jun, 2009

One of the few frustrations I have in my work is that I will NOT permit myself to buy the stocks of companies in the electrical industry. The reason is simple: I'm likely to write about them at any given moment. I'm a selfish bastard. If I own the stock of, say, Hubbell, I'm likely to write very glowing things about Kellems, for example.

So, to avoid temptation (and to appear as pristine as a Vestal Virgin) -- I avoid any appearance of impropriety.

Well, I have to tell you, I am very frustrated about the performance of EMCOR Stock (symbol EME). Take a look:



This is the 3-month chart. The stock has run up from $14-$15 to $23-$24. I did notice that it was down around $15, and I would have bought it at the time. I'm not sure I'd be selling now (hint, hint!) . . . but the run up from $15 to $23 is a 53% move. In three months.

Note that the run-up in the S&P 500 index in that same period is about 35%.

31 Mar, 2009

I charted the two serious electrical (and other) contracting stocks vs. the S&P 500 via www.bigcharts.com. When it comes to my investments, I think "relative performance' is a bag of crap. However, relatively speaking, EMCOR Group (the blue line) has seriously "outperformed" the S&P 500 (the brownish/beige line) over the past year. Essentially, the stock of IESC (black lines) has, at this point, shadowed the S&P 500 -- after periods of outperformance AND underperformance.



I went back to BigCharts and asked it to show me prices over the past 3 months. In that time period, IESC stock has outperformed by turning in a precisely FLAT performance (the stock hasn't moved, net, in three months' time). The S&P 500 is down 15% since the year started; EMCOR is down 30%.

30 Jan, 2009

I was following some solar links the other day when I came across a company called SOLON. This interested me, as I know who Solon was!

On the Solon corporate home page (the English version, anyway), there's a little slogan:

"Don't leave the planet to the stupid."

23 Jan, 2009

. . . from HP. 23-page PDF. Summarized here. 

05 Jan, 2009

Marketwatch.com offered a 12/12 "IPO Report" on the stock of MYR Group. This electrical contractor (with most of its activities and revenue coming from utility power line work) was NOT public for 8 years. It was acquired in 1999. Now, it's public again.

MYR's stock symbol is MYRG.

MYR's prospects seem good (even if you don't trouble to read the article), b/c most savvy people think the national grid is going to continue to get a lot of attention and investment. In addition to building out NEW power lines (to bring power from remotely located power plants including Wind and Solar), companies like MYR and Quanta Services (symbol PWR) are going to be very busy for the foreseeable future doing renovations, rehabs, retrofits, and upgrades (pick a word) of the grid.

I learned from reading the article that MYR had recently disgorged the D.W. Close operation. I hadn't been aware of that. If memory serves, MYR bought Close in the late 1990s. So this is a 360-degree turn for that electrical contracting company (a big one, that serves the Pacific Northwest) as well.

14 Dec, 2008

S&S Electric (Oldsmar, Fla.) issued a press release about the stunning development from the IEC annual convention: Two awards. S&S took home a Residential excellence award for its work with a homebuilder in a specific development. The other award was for the S&S website.

EleBlog comments:

08 Dec, 2008

"Philips Illuminates World's First LED Nation" reads the headline on a 12/2 press release.

The "nation" referenced is, I kid you not, North Dumpling Island.

Yougottabekiddingme with that name, right?

Yep. And with the release.

30 Nov, 2008

I am one of those people who saw the end of the world (which we're now experiencing) coming -- and I can prove it. However, I was not ready for General Electric to go into the toilet. I can't explain that logically; I don't hold any GE stock. GE is not very electrical these days. I don't know anyone at GE's Consumer & Industrial operation.

However, this article (with the title, "Could Ge Collapse?") is a rational, logical exploration of the very real possibility that this company could have a serious struggle ahead of it.

Wow!

25 Nov, 2008

It's the largest residential electrical contractor in eastern Ontario, with a (claimed) 40% market share of new home starts. The September issue of Construction Today included a 1,000-word article on the company, which focuses on how to "retain valuable employees in an increasingly sparse labor market." 

17 Nov, 2008

First Solar makes solar PV modules "with an advanced thin film semiconductor technology." SolarCity Corp. claims to be "a national leader in residential and small commercial solar power system" work. Late last month, EarthToys.com offered a release on an agreement between these two companies:


EleBlog take: All of the news isn't necessarily good. FSLR's stock price (according to Yahoo! Finance) closed out trading in the week of May 12 above $300. It poked its head above the $300 level in the first week of July. It closed @ $207 on Sept. 26. Last Friday (11/14) the final trade took place below $117.

04 Nov, 2008

EMCOR Group's Q3 conference call with Wall Street analysts was interesting. I read the transcripts of a lot of these calls (and listen to some) and Frank T. MacInnis, the boss at EMCOR Group, is a one-of-a-kind chairman/CEO. He speaks plainly. In my experience (and limited knowledge) -- he tells the truth, too.

A potent combination.

Here's a slice from the recent conference, which printed out @ 14 pages single-spaced -- found here at SeekingAlpha.com:


He went on from there to talk about parts of the world. But that short sentence is the essence of how an electrical contractor SHOULD see his/her/its business.

- - - - -

There was another part that was interesting -- an answer from Tony Guzzi, president.


- - - - -

Incidentally, EMCOR stock (symbol EME) seems like a screaming bargain to me. The company has very little debt and no pressing need to borrow (which is very good right now, isn't it?). It has an established business. It has a big backlog. Very little of its core business (if any) can be moved off-shore. When you talk about "outsourcing" . . . well, EMCOR is in the outsourcing business!

According to Yahoo! Finance, EMCOR closed yesterday at $17.58, about half of its all-time high. At the nine-month mark, the company's earnings were $1.82 per share. It's possible the earnings will be around $2.40/share when the year ends, or thereabouts . . . which means it's trading at a price-earnings ratio of 7x. With almost no debt.

- - - - -

. . . SO WHY DON'T YOU BUY IT, JOE? I have a rule against buying the stock of companies I have to write about. It's a rule I've stuck with. No one imposes it on me, I do it to myself. It's simple common sense -- how can anyone reading anything I write put any credence in what I say if I'm enthusiastic not about a company, or a simple industry trend . . . but my investments?

30 Oct, 2008

Network World magazine has posted a package of articles about "The Google-ization of Bechtel." If you're not aware, Bechtel is a GIANT in the construction industry -- a privately owned company that is gigantic. The graphic below comes from the magazine; see links below the graphic.


Main article ("Google-ization")

Bechtel's guy is in the CIO Hall of Fame.

Bechtel's new benchmarks.

30 Aug, 2008

Integrated Electrical Services held a broadcast-only (no questions from analysts) conference call at the end of its Fiscal Q3. Here's some interesting stuff from CFO Ray Guba:

We have also experienced increased competition for low end retail work from residential contractors who have been impacted by the housing slowdown. Helping to offset the decline in this group were several significant institutional projects such as university buildings, data centers and health care facilities. Year-to-date revenues for our commercial group were $347 million compared to $340 million in the same period of 2007, an increase of 2%.

Our commercial groups’ gross margin percentage declined to 13.8% in the third quarter from 15.7% a year ago, principally the result of competitive pressures and market conditions. Also one of our business units has recently completed several underperforming legacy projects and another one continues to out flow our margins legacy projects. Year-to-date gross margin in our commercial group was 14.3% compared to 15.5% in the same period last year.

EleBlog note: If you read the transcript in full, or look at the IES Q3 statement, you'll find that there IS a decline in the company's residential operations (in terms of volume), but that gross margins on that end are actually going up.

EleBlog take: I've heard the same thing (resi contractors migrating into low-end commercial work and screwing up margins for the established commercial contracdtors) as noted above from a major electrical contractor in the Washington DC metro area, within the past two weeks.

See the IES transcript here.

30 Aug, 2008

Things are so good at EMCOR Group -- home of the largest electrical contractor in North America -- that they aren't looking too hard at niche opportunities in alternative energy. At least, that's the feeling one gets from reading the company's Q2 conference call with analysts, including this, from Frank MacInnis, chairman/CEO

As you mentioned, we have limited construction capabilities both in Canada and in the Northeast for participation in this area. But I think it’s unlikely that we will take the necessary significant capital expenditures to get further into this market, frankly because our other businesses are so good.

I will say, however, that we have been involved in some very interesting renewables projects involving landfill gases in particular, installation of photovoltaic cells on a large-scale. We were talking about, I don’t know if we ever performed that fuel cell pilot project for [LIPO] that they were talking about for Long Island; maybe not. But in general we’re interested in a broad range of renewable energy projects and have the ability to participate directly. Tony, do you want to talk about that.

But then there's this, from Tony Guzzi, president/CEO:

Yes, if you look at a kind of things that we can do, we get involved with solar. Frank talked about some of the work we do with fuel cells. We use it as a solution a lot of times to put in front of customers that want to emphasize more so the green aspect instead of just the strong energy savings aspects of our projects. Biomass boilers, we’ve done some interesting landfill gas projects to usable pipeline gas.

So we are involved in all of it. When you get to wind, we have been on a few wind projects. But it’s an interesting market in that it’s really a couple of things. One is the OEMs are heavily involved. A lot of the value is in the turbine. The second part of the job is it’s a big civil job for all intents and purposes. Transmission is the other piece that comes into play. There are a couple of places we would do that work.

But so far we don’t look at it as a significant construction opportunity per say for our electrical content or even our mechanical content although we do participate in several. But on long-term we are starting to think about what might be the maintenance requirements on those wind farms and how we may participate there.

EleBlog take:

a. I'm not interested in criticizing Frank MacInnis. He's done an amazing job at the helm of EMCOR Group. I've already come to the conclusion that he's a lot smarter about this stuff than I am (and, perhaps, smarter than anyone else in the EC business).

b. There is an implicit deflation here of the electrical contractor's role in wind turbine construction (see 2nd paragraph of Guzzi's comments).

c. I find interesting the idea that EMCOR is looking at the future opportunities in wind farm maintenance.

See EMCOR's Q2 conference call here.

29 Aug, 2008

The 8/11 Business Week included a Q+A with Bill Ford -- as in, Ford the car-maker. Here's a Q and an A that caught my eye:'

Q: If oil goes down, could we see a shift back to SUVs?

A: I don't think we'll ever see a shift back to where we were before. There may be a small drifting back, but I think this is relatively permanent, because a lot of it is psychology as well. It's not just what the absolute price is.

Once people have been shaken as they have been, even if gasoline comes back down to $3, people are still going to remember paying $4, and they'll be very nervous about resuming their old habits.

This is a permanent shift in the marketplace.

28 Aug, 2008

It's not the purpose of The EleBlog to analyze investments. However, it was for THAT purpose (my own investments) that I leafed through the Peabody Energy Corp. Q2 earnings call transcript last night.

Here are paragraphs you might want to read, even if you'd never buy the stock of a coal company:


EleBlog take: Didn't you think (from all of the "green" this, global-warming that, and alternative-energy "stuff" out there, that coal-fired electrical power generation was going down? WRONG!!!


EleBlog take: Now, every company ALWAYS puts its best foot forward. But if I read that correctly:


No one (not even the Peabody people) can tell you if demand for coal will be sustained. But it seems like a good bet.

- - - - -

JUST A BIT MORE

By the way, this company sells both "thermal" coal (for generating heat in power plants) and "met" coal (metallurgical coal -- also called "coking" coal -- used in manufacture of iron and steel).

If you're interested, here are a couple of paragraphs from the conf call on "met" coal:

To begin with, the current market conditions are providing great opportunities for seaborne coal suppliers such as Peabody. And we have the greatest leverage of the any of the U.S-based companies with over half of our EBITDA expected to come from our international sales platform. In our last call, we were just settling met coal agreements for the contract year that begins in April. I am pleased that the settlements came in at the expected $300 per metric ton benchmark level for the highest quality coking coal . . .

And we are seeing met coal sales right now on the spot markets that are fetching $300 plus per ton. This bodes extremely well for the next contracting season. As you'll recall, when went into '08, we had significant excellent legacy contracts that we expected to roll off in '09, which will hopefully double our unpriced position in 2009 from what we had at the beginning of 2008. This has very favorable implications for Peabody.

I don't know if Peabody is a "screaming buy." But coal sure seems to be, and this company seems to have its arms around the trend. As my investment guru, Bill Fleckenstein, says -- the difference between a great company and a great investment is The Price (at which you can buy in).

I'm planning to do more thinking and watching on BTU -- and if you are looking for an energy investment that's NOT oil, so should you!


 (More)

18 Aug, 2008

Sometimes, my personal interests intersect with my professional pursuits. In catching up on some financial reading recently, I ran across The murder of US manufacturing, a 6/16 missive by Martin Hutchinson (author of Great Conservatives -- which might make one believe I would not like him).

It's about how GE turned its appliance business from a "cow" into a "dog." I heartily agree. Here's a piece of Hutchinson's rant:


EleBlog take: For a long time now, I have tried to imagine why people "admire" Jack Welch. I've been unable to come up with what they saw (or see now) in the guy. The recent incident (not very long ago, anyway) in which he turned on his successor on CNBC, the financial cable TV station, was revealing, I think.

Welch's "innovations" at the helm of GE included:


There's nothing to admire in Welch. Not in what he did, not in what he "built," and not in who he is. If you want to credit him with something, see (b) above -- waving a shiny spoon at a 4-month-old (maybe Jack Welch kissed the blarney stone?).

09 Aug, 2008

Here -- read this:


Is that some kind of crazy greenie's idea of "the right thing?" No. The writer was Larry Beltramo, executive vice president of Rosendin Electric -- 4th largest electrical contractor in the U.S. (by sales) in 2007.

Read the rest of the Rosendin 5-page green newsletter (a PDF) by clicking here.

04 Jun, 2008

Reading through a transcript of The Home Depot's recent (4/29) conference call on Q1 results, I stumbled across this. This speaker, Craig Menear, is SVP merchandising --

Regionally in markets where home prices have declined approximately 15%, we are continuing to see double-digit negative comps. This was reflected in our results in California and in Florida. Even garden, which posted a positive comp for the company reported negative comps in those areas.

Got that? Electrical was down double-digits (along with much else) compared with last year's Q1. The Garden department, although up nationwide, posted a negative comparison to last year's Q1 in CA and FL. This is, at the very least, interesting to think about -- isn't it?

- - - - -

Menear continued:

We are also seeing pressure from commodity price inflation and deflation in the market, although pricing for wood products has stabilized, including dimensional lumber and sheet goods, which are now on par with pricing from last year, we continue to see pressure from gypsum deflation.

Copper pricing is up year over year and higher than we had anticipated. Additionally, we are seeing inflationary pressure from petroleum and metals, which is leading to cost pressure.

- - - - -

As you'd expect, THD's execs were not entirely negative in this thing (it's a long transcript). Here's a bit from Paul Raines, EVP of U.S. stores:


I actually do not know what a Homer badge is. Before the advent of Homer Simpson, my knowledge of the descriptor "Homer" was for a basketball referee who called fouls repeatedly against the visiting team.

- - - - -

Distributors who compete with THD might be interested in this, from Mark Holifield, SVP supply chain:


If you want to read the whole thing, go here.

03 Jun, 2008

Yes, you already know about inflation in the general economy. I'm talking about the prices of MATERIALS for construction contractors. Here's a segment from the Hubbell Q1 earnings call transcript (find it here) -- the words of Tim Powers, chair, president, CEO:

Steven Gambuzza - Longbow Research

I'd just question on your outlook for operating margin improvement over the balance of the year, you demonstrated the success and were then improving the operating margin with the current flat to down organic sales growth in the first quarter and I guess, I'm just wondering when you look out for the balance of the year, how contingent is your operating margin forecast on your sales growth, the markets soften a little bit more than you anticipated and sales becoming lower, are you able to kind of achieve your targets through internal productivity initiatives, or does lack of fixed cost absorption start to become an issue towards the lower end of your sales range?

Timothy H. Powers - Chairman of the Board, President and Chief Executive Officer

Well, I would say the biggest variable in the future of our margins has more to do with the cost price equation and the coming increases in the cost of steel and the effect of hundred and something teen dollar per barrel of oil and our ability on the timeliness to recoup that from the market.

So, like all of us in the electrical business, we're staring double-digit increases in steel and we have price increases out there in the markets. So our ability, I have no doubt in our ability to recoup it.

It's a question of the timing to get back those cost increases with price increases and that probably is a bigger variable than I see in the risk of revenue between now and the end of the year.

EleBlog take: This is what Powers said out loud, with full knowledge that the call was being taped (and that his competitors were listening in). The message he's sending is: THE PRICE IS GOING UP.

03 Jun, 2008

I've been interested (for a while) in buying the stock of a company, Headwaters (symbol HW). I've followed without buying for a while; that's been good (so far), as the stock's price, now around $11, is less than half of where I started.

To get to the point: I was reading HW's Fiscal Q2 earnings call transcript (find it here), and stumbled over this, from Kirk Benson, chair/CEO. Note that HW doesn't build houses, but supplies stuff (there's a Building Products Segment):

The inventory of new homes for sale has declined. Non-seasonally adjusted units of unsold inventory are now at their lowest levels since July 2005 as builders continue to scale back building activities. However, seasonally adjusted months of inventory reached a new high in March due to a significant slowdown in sales. There are now 11 months of supply based on the current sales pace. Steadily declining inventory levels failed to offset the dramatic slowdown in sales.

So, as expected, we continue to be impacted by the down cycle in new residential construction. In addition, weather in the March 2008 quarter was more superior than the March 2007 quarter, exacerbating the effect of the down cycle. A combination of the residential down cycle and poor weather conditions resulted in a 19% drop in the year-over-year revenue.

Why is this here? This is about HOUSING, not HW.

The point Benson makes in the 2nd paragraph -- "weather in 3/08 was more superior than the 3/07 quarter" . . . something I had not spent much time thinking about. So if housing was down in the 3/08 quarter vs. the 3/07 quarter, that's bad; and then add to the fact that weather was better this year than last over the same time period.

09 Apr, 2008

Fidelity Electric, which is based in San Diego, was honored with a Super Service Award from Angie's List. The PR caught my eye -- especially the followin paragraph:


Here's a link to the 4 quick questions -- which actually aren't that quick (but they are good!). Incidentally, I don't know the Ervines at all. Here are the questions; you'll have to go to the site for the answers:

Is your quote a fixed “bid” for the total contract price, or is it merely a vague “estimate” of what you think my project will cost?

I don’t have time to sit around all day. Will you give me a specific appointment time or do I have to wait during a four-hour window?

I need to get a service panel upgrade. How much do you charge?

I want to add a new light and switch where there is no existing power. What will my walls look like when you are finished?

27 Feb, 2008

Pike Electric Corp. is a non-union electrical contractor that (a) specializes in powerline work, and (b) has stock (symbol PEC) trades on a public exchange. On 1/31 the company held its quarterly earnings phone call with analysts. Thanks to SeekingAlpha.com, a site of which I am increasingly fond, the transcript of the call is available at no charge. The thing weighs in at about 5,000 words.

Here's a piece that I thought interesting -- initial comments by Anthony Slater, CFo. The "Eric" he references is Eric Pike, CEO.

Core power line billable hours decreased approximately 14.1% year-over-year, the decline in billable hours was due to the reduction in headcount as a result of exiting certain contracts and the moderation in our customers demand. In addition to increases in storm restoration work which diverted some core power line revenues. Revenue generated in the second quarter of fiscal 2007 from exited accounts totaled $8 million. Excluding revenue from exited accounts, core power line revenue decreased 2.2%. Storm restoration revenues totaled $19.6 million, a 39.3% increase from $14.1 million for the comparable quarter last year.

As Eric mentioned, winter storms in the mid West and mid Atlantic regions drove demand for our storm work in the quarter. Gross profit for the second quarter was $24.5 million or 17.1% of revenue compared to $24.5 million or 16.5% of revenue for the second quarter last year. The 60-basis point year-over-year improvement in gross margins was due to a number of factors. As with previous quarter, gross margins continued to benefit from operational efficiencies as well as the prior elimination of certain lower margin accounts and more favorable pricing which we achieved in the latter part of 2007. In addition, a greater contribution from higher margin storm revenues also contributed to the increase in the quarter.

These factors were partially offset by a $500,000.00 investment in retardant uniform shirts.

EleBlog notes:

1 -- Pike didn't do so well in the most recent quarter, whereas Quanta Services had a spectacular 90 days. One difference: Quanta bought InfraSource Services. Also, Pike is smaller.

2 -- Investing in Quanta or Pike (or any other powerline contractor, if any come public) is certainly chancy. Revenues soar when there are destructive hurricanes. No storms = revenue drops. The company managers have to cope with both conditions: Staffing up to meet storm-generated demand isn't easy; ramping things down when no significant storms materialize (as was the case for much of 2007) isn't a simple thing, either.

3 -- Note that last sentence -- the half-a-million-dollar investment in PPE (personal protective equipment).

22 Jan, 2008

Integrated Electrical Services' filed its 10-K (annual report) on FY07 with the Securities & Exchange Commission. This covers the FY ended 9-30-07. It weighs in at 69,000+ words (166 pages of MS Word doc). Some highlights of the early verbiage in the document:

Geographic diversity —We have 122 locations serving the continental 48 states, and we worked on more than 900 contracts over $250,000 and nearly 3,100 contracts overall in 2007. Our national presence sometimes mitigates much of the region specific economic slowdowns. Since 1997, much of our revenues have been derived from the Sunbelt states, which have had higher growth rates than overall U.S. construction. Our geographic diversity also enables us to serve national customers with multiple locations.


Utilization of prefabrication processes —Our size and 100% merit shop environment has allowed us to implement best prefabrication practices across our company quickly. We prefabricate and preassemble or prepackage significant portions of electrical installations off-site and ship materials to the installation sites in specific sequences to optimize materials management, improve efficiency and minimize our employees' time on job sites. This is safer, more efficient and more cost effective for both us and our customers.


- - - - -

Industry Overview -- The residential and non-residential construction industries have both experienced strong growth rates for several years. Since the middle of 2007, economic conditions, notably restricted access to credit, have lead to a sharp decrease in demand for residential housing. Reviewing the most recently available data from McGraw Hill Construction Analytics and FMI Construction Outlook, we believe the effects of reduced availability of credit are a significant concern for the construction industry, and we have already experienced a downturn in our residential construction business. Using data from both sources mentioned above, for the period from 2001 to 2006, the five-year compounded annual growth rate for non-residential construction was 3.5%. For the same period, the five-year compounded annual growth rate for residential construction was 9.5%. Fiscal year 2007 forecasts indicate that non-residential construction will increase approximately 8.2% from the previous year; however, residential construction could decline by up to 16%.

Looking forward, the housing market is projected to return to a moderate growth rate. Based on research provided by FMI Construction Outlook and McGraw-Hill Construction, residential construction is expected to continue to grow, but at a modest rate with the projected five-year compounded annual growth rate to be 0.7%. In contrast to the decreased growth in residential construction, growth in non-residential construction is still expected to outpace the economy as a whole. The projected five-year compounded annual growth rate for non-residential construction is approximately 7.3%.

Commercial/Industrial -- Demand for our commercial and industrial services is driven by construction and renovation activity levels, as well as more stringent local and national electrical codes. From fiscal 2003 through 2007, our compound annual growth rate from commercial and industrial revenue has fallen approximately 1.4% per year, due in large part to a more selective strategy focused on higher margin projects. The industry average for non-residential construction services has grown at a compound annual rate of approximately 6.7% per year. Commercial and industrial work represented approximately 62%, 58% and 63% of our consolidated revenues for the twelve month periods ended September 30, 2007, 2006 and 2005, respectively.


Residential --We are currently one of the largest providers of electrical contracting services to the U.S. residential construction market, and our residential business has experienced significant growth over the last five years. During the last year however, we have been impacted by the residential industry down turn that has resulted in a 25% decline in revenues compared to fiscal year 2006. Our compound annual growth rate from residential electrical revenue has grown 9.1% from fiscal 2003 through 2007 compared to an industry average of approximately 9.5% over the same period. Residential electrical contracting represented approximately 38%, 42% and 37% of our consolidated revenues for the twelve month periods ended September 30, 2007, 2006 and 2005, respectively.

27 Nov, 2007

Here at EleBlog, I feel no obligation to post the more-than-one-side (often there are MORE than two!) to every story. However, I just stumbled across a piece posted to SeekingAlpha.com that's FAVORABLE to Home Depot stock.

I am not a great admirer of what's gone on at this company in recent years. As I have written (on TEDMAG.com) -- it looks like a very large moron flailing around, trying to maintain a growth rate that is clearly NOT maintainable.

However, for what it's worth, here's what someone named Keith Lefebvre wrote:

It is hard to find much fault with the company fundamentally. However, there is one lingering risk; they are involved in this industry that built up so much overcapacity that it collapsed upon itself. How long does it take for this growth to get humming again. Home Depot will eventually have some pretty easy prior-year comparables to go up against for earnings and revenue growth. What is the immanent catalyst short-term though? That is the clincher, as noted by S&P in their latest research report.

This stock could languish for years, how long could you stand holding a flat or declining stock.......? They are currently willing to pay you 3.1% to wait, that is more than their closest competitor...

If you are a long term investor though, I'll bet that when the U.S. housing debacle becomes a distant memory, you'll be glad you picked up a few shares of this company.

EleBlog take:

a. He might be right!

b. There are higher dividends than 3.1% if one is looking for yield, tho. There are lower dividends that might be more secure and more interesting in the long run (GE is right now paying $1.12 on its $37 stock price, which works out to about the same -- 3.0%.)

c. I tripped over KL's last point -- "when the U.S. housing debacle becomes a distant memory." He's probably right about this, of course. But -- what if the housing debacle starts to become a distant memory around the years 2012-15...?????

20 Aug, 2007

Integrated Electrical Services is a pure-play investment in electrical contracting. The company isn't as large as EMCOR Group's electrical construction wing, but it is the only way to purchase shares on a public market (the NASDAQ -- symbol IESC) in a company whose sole interest in electrical construction.

On 8/13, IES produced its FY07 Q3 report. A few background notes:

a. I couldn't bring up historical prices for this stock on Yahoo! Finance, for reasons unknown to me. I used Big Charts instead. From the look of the chart, IESC has fallen from the $35 range in July down to $21 more recently. Find the IES release here.

b. IES last year went into a "pre-packaged" bankruptcy, emerging having shed a big slice of its debt.

c. Over the years I've followed it (go back to its inception in 1997), this company has had numerous reorganizations, shifts in management, new approaches that were sure to work, new ideas, company initiatives, etc. I once went to Houston and interviewed Bobby Stalvey, who had run a local company bought by IES. He told me when he got to Houston, there were 22 (if my memory serves) initiatives from Houston HQ that local people were supposed to be implementing. Paraphrasing here, Stalvey told me: "It's not possible for people on the local level to do their jobs, locally, AND work on 22 of these. I wanted to get it down to a reasonable level. I thought 3 would be reasonable. The people here [other management types at HQ] wouldn't let me go that far, but I got it down to 5."

d. Years ago, the then-CEO of IES scared the crap out of electrical distributors and manufacturers -- when he said (circa 1999-2000) that IES would hit $3B in annual sales, at an annual run rate, in about 2003. I (on the web) said that wasn't going to happen -- because it was going to be impossible for a company to gain control over all of the local electrical contracting companies that IES had bought (my mind remembers the number 80, but that might not be accurate).

e. It was't possible. I was right (very, very, VERY right!). IEC's Q3 report shows sales through 3/4ths of this fiscal year at $666M. The company won't break $1B this year.

Now, for a look at the Q3 report:

f. That $666M is below the nearly $684M that IES did through 3/4ths of 2006.

g. Q3 sales of $222.6M were below the $241.1M in FY06.

h. Profit margins ARE higher this year. The gross margin in '07 is 16.8% thus far, vs. 15.2% through 9 months of FY06. This might be the result of:

• IES has finally shed enough of its money-losing local operations (it has sold numbers of these local operations off over time, usually selling them back to the people who initial sold them into IES . . . electrical contractors with TONS of local savvy).

• The company is doing a better job of selecting jobs to take on, and a better job of estimating what it will cost to do them profitably.

• Having taken on fewer jobs, the company is managing them better.

• All of the above.

i. The company's backlog was $330.8M on 6/30/06, $352.8M on 3/31/07, and $329.5M on 6/30/07. That's not indicative of any particular thing; it might mean IES is being more selective on the longer-range projects it elects to pursue.


STRANGE INFORMATION

All of the above is preamble for what Freaked Me Out about this quarterly release. Right up there in the headline, it said IES was reporting Q3 results "and Announces Operational Restructuring Initiative." What, yet again? YES. This time, the company "has commenced restructuring its operations into three major lines of business: Industrial, Commercial and Residential" -- from its current decentralized structure.

[I really like the use of the word "commenced" in there. It reminds me of Casey Stengel, the former Yankees manager, who used that word fairly frequently.]


There is MORE.


AND STILL MORE


Let's add it all together:


One conclusion might be: THIS IS UGLY. How ugly? I stole a look at the bottom line -- cents per share in earnings. Here's what it shows after 9 months:

20 Aug, 2007

Goldfield (stock symbol GV) is a weird company. First, the name comes from the fact that it used to be in the gold mining business (it sold that off just as gold heated up in the early 2000s!). Remaining operations combined a powerline electrical construction operation with a real estate development arm. The RE dev is in FLORIDA, where the homebuilding business ain't so damn good.

One result: GV shares, which at one time earlier this year had daily closes near a buck and a quarter (i.e., $1.23), closed last Friday at 73 cents. This kind of performance lands you in the category of "No Fun Whatsoever." See GV's Q2 results here.

BAD: The company saw decreases in its electrical construction segment in Q1 and its first half. Of course, it did the same in real estate. In theory, a company has disparate operating divisions so that one offsets the other (i.e., one goes up when the other goes down -- at the very least). This isn't happening here.

REALLY BAD: I thought this quote from the 3rd paragraph of the GV release was telling --


Yeeeeeeeeeeeek!

20 Aug, 2007

Perhaps you've not heard of this company. It says it is "a provider of mechanical and electrical industrial services and products," which is why you find it here. Stock symbol: MCGL.OB. The stock went public at 25 cents, and last week closed at 28 cents. Along the way, it's been as high as 47 cents (according to my quick glance at daily historical trades on Yahoo! Finance) . . . a nice return on a quarter for someone!

Find MISCOR's Q2 release here. The thing that caught my eye is that, thanks to the sale of 62.5M shares of its stock, MISCOR has knocked down its deb-to-equity ratio from 7.4-to-1 to 1-to-1. Pretty neat trick.

What might be dismaying is that, accoridng to the release, this company -- which isn't new, but does have "newly minted" stock -- just recently completed a reorg of its operations. It now has 2 segments -- RRM (repair, remanufacturing, and manufacturing) and CES (construction and engineering services). In Q2, RRM's $12.1M in sales was a 12% gain; CES had $4.6M in revenue, up 26% "due to increases in electrical contracting, a strong local constructionmarket, and growing name brand recognition."

Further dismaying is this quote from John Martell, the boss: "The industrial services sector has substantial potential . . . blahblahblah." OK -- quick now: In which area (RRM or CES) is "the industrial services sector"....?

20 Aug, 2007

FY08's first quarter ended 6/30 for Black Box Corp. (BBOX is the stock symbol). The company's sales were up 10% to $252M in the quarter; it is headed for a $1B year, thanks to the acquisition of NextiraOne. As you probably know, the company is in a number of datacom and telecom businesses -- including the installation of same. At one time, BBOX spent a lot of money buying small cabling companies.

Here are parts of the release that seemed unfortunate:


Other news:

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10 Aug, 2007

I just scanned the transcript of EMCOR Group's Q2 earnings conference call.

According to Frank MacInnis (the boss), "Our U.S. Electrical & Facilities Services segment companies nearly doubled their operating income [compared with Q2 '06, one assumes] to $21.2 million or 6.2% of revenues on an 11% increase in revenues."

I can't find the transcript online, but you can listen to the conference call (a web recording) at EMCOR's home page.

31 Jul, 2007

EMCOR Group posted eye-popping 2nd-quarter results. Unfortunately for the company's stockholders (I am not one), the news was released Thursday 7/26, amidst the current stock market "case of the shakes." As a result, the company -- which had a 2-for-1 stock split earlier in July -- hasn't seen a reaction to the report in the stock's price.

However, the news is amazing.


EMCOR's operations include electrical contracting, mechanical contracting, and facilities services.

EleBlog take: I am a BIG fan of EMCOR and of Mr. MacInnis. However, I do not own EME stock (or have any other investment in the company). Reason: I don't think I could ethically rave about the company's performance if I had stock in the thing. Is EME stock a buy right now? Generally speaking, I'd be giving the stock market a wide berth at this very moment, so my answer (were I to remove the self-applied shackles) would be NO.

But if you take the time to check out EMCOR's situation, you can see that it has no debt, that it's been very prudent in terms of shopping for acquisitions (even during the go-go contractor roll-up days of 1997-2001), and that the company is now generating cash flow -- and if the backlog numbers and characterization are honest, it will do more of that in the future.

A big change for EMCOR, as I've written here recently, comes from that 2-for-1 split. Before the split, the company had too few shares outstanding to earn the notice of Wall Street types. This has now changed. There could well be more recommendations from more analysts coming the company's way in the near future which -- should the stock market calm down (???) -- might make this a worthwhile investment.

23 Jul, 2007

I've long been an admirer of Frank MacInnis, the boss at EMCOR Group. For those who don't know, EMCOR is the largest electrical contractor -- and the largest mechanical contractor -- in the U.S. It also is home to a large ($1 billion sales) and growing facilities services operation.

I've listened to MacInnis in conference calls with analysts, I've read transcripts, I've even seen TV commercials and CNBC-TV interviews with him. What I like about the guy is that he is A Straight Shooter. He doesn't tailor his answers.

More of this is on display in a USA Today Q-and-A with MacInnis. Among the flat declarative statements in here:


It breaks my heart that I've not been able to invest in EME stock. Why not? I write about electrical construction; I think it would be at least unethical for me to write glowing stuff about EMCOR and MacInnis (as I have several times in the past) and be a stockholder. So I don't own any, and won't. But the company is almost debt-free, is huge (more than $5 billion in annual sales), and just underwent a 2-for-1 stock split. You might look into it.

[About the split: I don't believe you should buy a stock because of a stock split. In this case, EMCOR had a problem BEFORE the split -- it didn't have very many shares outstanding. It still doesn't. However, I have noticed that, since the split, there are more stock brokers "initiating coverage" on EMCOR. That's probably because there are more shares outstanding. Weird, eh?]

05 Apr, 2007

I took a stroll through the 10-K filing (annual report) for Fiscal Year 2006 of Integrated Electrical Services, the only real pure-play electrical contracting investment you can make (stock symbol IESC). Because IES went into "pre-pack" bankruptcy on 2/14/06, a lot of the numbers from the past year are not useful. So let's forget the sales, profits, etc. Here's what I found of note:

1. In FY04 (ended 9/30/04), IES, pre-bankruptcy, had $838 million in sales. In FY05, it was $869 million. In the 7-month period up to the bankruptcy (from 10/1/05 to 4/30/06), the company had $530 million in sales. In the 5-month period after the bankruptcy (5/1/06 to 9/30/06), the new IES had $420 million in sales. HERE is what's different: In the most recent (5-month) period, 43% of the company's total sales came from Residential. Back in 2004, the company got 33.7% of its annual sales from Residential. Thanks to shedding various companies -- a lot of sell-offs in the past couple of years -- IES has morphed into a company in which Residential plays a bigger role. It's weird that this happened just in time for a new housing construction down-turn!

2. "Our residential business has experienced significant growth. Our compound annual growth rate from residential electrical revenue has grown 11.3% from fiscal 2002 through 2006, compared to an industry average of approximately 8.3% over the same period. Residential electrical contracting represented approximately 34%, 37%, and 42% of our revenues for the years ended September 30 2004, 2005, and 2006, respectively."

3. "Costs derived from labor and related expenses currently account for 44% of our total costs" . . . "Cost incurred for materials installed on project currently account for 52% of our total costs."

4. On 7/16/06, the company sold $1 million in stock to Tontine Capital Overseas Master Fund L.P., which owns 34% of IES' outstanding stock. Purpose: To make a new investment in Energy Photovoltaics, Inc. IES took the money and invested it in EPV; IES has a history of investing in EPV -- and (unfortunately) . . . thus far . . . seeing not very much from the deal. As of 9/30/05, IES has decreased the carrying value of its investment in EPV to ZERO. "Additionally, we had a note receivable from EPV of $18 million that was completely written off" before 9/30/05. IES now owns 17.64% of EPV, a figure which could be decreased as low as 15.81% (assuming various stock options and warrants are exercised). Find the company at www.epv.net.

5. IES also has an investment in EnerTech Capital Partners II L.P. This (apparently -- see www.enertechcapital.com) is some kind of partnershpi that invests in energy projects. IES has invested $4.7 million total in the partnership, a deal that had a "carrying value" as of 9/30/06 of $2.9 million.


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10 Jan, 2007

For reasons at which I can't guess, InsuranceNewsNet has posted the transcript of the recent Q4 earnings report conference call held by Integrated Electrical Services (the largest pure-play electrical contracting company in which you can buy stock). I guess a lot of insurance companies own IES stock or have lent it money . . . ? Click here to see it.

22 Dec, 2006

Integrated Electrical Services, the only real pure-play electrical contractor in which you can easily invest, emitted a press release on Q4 + FY06 results yesterday. I've read it several times. There's a particular sentence that I've actually read EIGHT times.

First, see the release here. Second, here's the segment (in the IES release's first few paragraphs) that I'm choking on. I've taken the liberty of putting the sentence that's distracting the heck out of me in bold:

"Fiscal 2006 was a year of transition for IES," stated Michael Caliel, IES' president and chief executive officer. "The financial restructuring was a pivotal step in strengthening the foundation this company needs to be successful in the future. We still have much to do in order to reach our goals. However, in the first full quarter as the new IES, we generated positive operating income from Continuing Operations and with the continued support of our customers, we produced double digit growth of new work in backlog.

"More importantly, during the fiscal fourth quarter, our management team invested significant time assessing the operations to better understand the capabilities and potential of this organization. Based on our findings, we embarked on a comprehensive program that we believe will allow IES to more fully capitalize its potential.

"Our focus is on building the company's core competencies, such as estimating, project management and supply chain management, as well as removing costs that do not add value. We are also focused on cash management, and we have implemented very aggressive programs aimed at improving our cash flow."

- - - - -

Here's my understanding of IES, in a nutshell:

1. It was assembled in the 1997-2001 period, during the contractor roll-up mania.

2. Companies acquired by IES mostly had several items in common. They were big independents. They were non-union. And they were, generally speaking, well-run (i.e, they generated a profit).

3. In the past two years, IES has revamped itself. It has sold off supposedly less-than-stellar local operations -- contracting companies that it bought earlier. In many cases, the buyers were the very people from whom IES bought the things! Additionally, thanks to a brief trip into Bankruptcy, and emergence via what's called a "pre-pack" (pre-packaged bankruptcy solution), IES has cleaned up its balance sheet, shedding debt.

4. A simple diagnosis of IES is that it is a roll-up that failed. The act of taking a bunch of successful local electrical contractors and fashioning them into a national unit is (apparently) very, very difficult.

5. However, I have been under the impression that the various units of IES knew their business. That is to say, I thought companies such as Daniel Electrical Contractors (Florida) and Primo Electric Co. (Baltimore) knew what the heck they were doing. In fact, before reading the bold-faced sentence above, I would have CERTAINLY told you that the basic "blocking and tackling" of electrical construction was NOT a problem at IES.

- - - - -

That last bit is the reason I've read the sentence above 8 times in less than 2 days. If you read it in context (which is why I provided all of the material that appears above the bold-faced sentence), the official quote from the boss at IES seems to say:


- - - - -

Holy moley! Perhaps I'm misinterpreting what I'm reading. But: No matter how I parse it, that sentence says that IES management is "reviewing core competencies" -- estimating, project management, and supply chain (relationships with distributors, reps, and manufacturers).

There is an obvious inference: The company's leaders do not think it is doing estimating, project management, and buying of installables (and more) all that well.

Unfortunately, I can't speak with any expertise. I don't know the facts from inside the company.

However, it is startling -- at the very least -- to think that after shedding a bunch of money-losing operations, IES had to go back to Square One -- "this is a football" -- with the people and units that remain with the company.

- - - - -

How could such a thing come about? I can hazard some guesses, which I present here as independent alternatives.

Either:

The really good people left IES in droves, including estimators and project managers who knew what they were doing. The local operating units do not have an "institutional memory" of how to go about doing first-class estimating and project management (which I think most of them DID at one time have).

This seems the best possible explanation.

OR

Despite the fact that it sold off a big bunch of money-losing local contracting units, IES has found a wide variance in the skill levels of estimators and project managers that it employs all over the U.S.

This would be dismaying.

OR

Someone at IES HQ thinks there should be an "IES way" to do things, uniformly, throughout the country. So estimating must be done "according to the book," and project management, and everything else. If this is true, even Heaven won't be able to help this company.

You're probably laughing about this, but it's precisely what I saw from Waste Management, Inc., in the 1980s. This not only didn't work, it hurt the company.

OR

A final alternative is: The people at IES HQ (management) do not know what the heck they are doing. Despite the fact that the words above came from the company's official release, these folks are so damn dumb that they are unaware they are spending money to make themselves look like a gang of idiots.

Now, I guess, you see why I keep re-reading the sentence.



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22 Sep, 2006

I've posted a 1.02-MB file from InfraSource, an electrical contractor that specializes in powerline construction. It's a 38-page PDF which consists of 31 slides from the company's presentation at the 5th annual Engineering & Construction Conference sponsored by D.A. Davidson & Co.

Download it by clicking here.

07 Aug, 2006

Integrated Electrical Services ended its 2nd quarter on 3/31/06.

The company filed it's 10-Q (quarterly report) with the SEC (Securities & Exchange Commission) on 5/10.

One day later, the company filed an amended 10-Q -- to correct an error. Apparently, the date of the quarter's end was incorrect in the original "certifications" filed by the CEO and CFO (these were included in the 10-Q).

Then, on June 29th (seven weeks later), IES issued another amended 10-Q (yes, for the same quarter) "to correct a misstatement of insurance expense" contained in the original filing + the first amended filing.

I don't think this is "the end of the world." But it makes the company seem on a shaky footing.

31 Jul, 2006

Frank MacInnis, the boss at EMCOR Group, is CEO of the company that houses the largest U.S. electrical contractor (and the largest mechanical contractor, too). EMCOR declared its earnings on 7/27, and CNBC-TV took the opportuinty to interview MacInnis.

You can see/hear a replay on the Web -- at www.emcorgroup.com (click the link on the left-hand side).

Here's what I heard, in a Q-and-A with Bill Griffeth:

Griffeth made a reference to various energy plants on the drawing board, but asked -- is it really too little, too late? MacInnis: Yes.

MacInnis expanded on the point, saying we're facing a natural gas shortage. For EMCOR, he said, expansion of the nation's LNG infrastructure -- and distributed power work -- are great opportunities.

Griffith asked what MacInnis would do about the energy problem if he ruled the world. Many interviewees would come up short, or pause, or (even) giggle. I liked the fact that MacInnis took the question in stride, answering -- without hesitation: "Get started on a return to nuclear power."

Note that EMCOR is not in the nuclear business (other than whatever work it would get from building and maintaining nuclear plants).

 

27 Jul, 2006

Yes, I'm back from an extended absence, which included preparing for a vacation (getting all of the work done ahead of time), the vacation itself (two glorious weeks in Botswana -- seeing dozens and dozens of elephants), and recovering from the vacation (adjusting my internal time zones + trying to leave lethargy in the dust).

- - - - -

The BIG news in the period between my last post and this one was the acquisition by Rexel SA of GE Supply. I was called upon to do a write-up for TEDMAG.com -- a "second-week lead" on the deal. It's 928 words, with some perspectives you might not find elsewhere (he said, immodestly). Read it here.

A couple of notes:

a. YES, I work for Rexel Inc., the U.S. subsidiary of Paris-based Rexel SA. I am a freelance wordsmith. One of my jobs is as Editor of Rexel's U.S. magazine, POWER OUTLET.

b. Fact (a) doesn't mean I have any inside information on this deal.

c. Rexel and Wesco are now neck-and-neck for the title of #1 electrical distributor in the U.S. in terms of sales voluime. Graybar appears to be #3. Wesco's first-half '06 sales were $2.6B; some of that, I think, was nonelectrical. Rexel's 2005 sales, adding GE Supply, come out to about $4.7B. Add in 10% or so for 2006, and you come to more than $5.1B. Double Wesco's first half, and you get about $5.2B. See?

d. I know it's important to writers and editors, but I'm not sure the specifics of whether Wesco, Rexel, or Graybar is #1, #2, or #3 in U.S. sales volume matters to anyone else.  It's a fact, but it might not have a a great deal of  relevance or importance.

e. On the other hand, Rexel SA -- the global company -- might have sales of $12B to $13B in 2006, thanks to the GE Supply acquisition (and a number of smaller recent buys). That's what the TEDMAG article says. That's a might nice neighborhood!

f. What matters, of course, is profitability. Along those lines:

• Rexel said it's Q1 gross margins were 25.2%
• Wesco said its 1H gross margins were 20%.
• Graybar's Q1 gross margins (from its 10Q filing with the SEC) were 19.8%.

- - - - -

Thanks for your patience with me. I've got a plan; you'll find more information, and more interesting material, here on the EleBlog in the coming weeks.

10 Jun, 2006

Houston Wire & Cable, which supplies . . . wire and cable! -- to electricaldistributors, is selling stock to the public. The IPO should take place really soon. I've posted the S-1/A (amended statement leading to an IPO) from the company -- a 157-page, 1.2MB PDF. The stock symbol on NASDAQ will be HWCC.

Download the PDF by clicking here.

19 Apr, 2006

Back in mid-2005, Schneider Electric’s North American Operating Division (SENAOD) bought Juno Lighting. SENAOD essentially = Square D and a few other moving parts. Square D is, of course, “the contractor brand” of electrical construction products. Schneider is based in Paris.

Recently, in clearing out various files, I found a transcript of a Schneider conference call held about its acquisition of Juno back in mid-2005. I never put it to any use, probably the result of an overwhelming influx of information at the time.

But there’s some stuff worth knowing in there. Before I pitch it, here are some slices, all quotes from Dave Petratis of SENOAD:

“Clearly, Juno is is the industry reference in the U.S. down-lighting market, with a total market share of 18% and it ranks number 2.” 

“Very clearly, obviously, Juno will enhance our position in the residential market in the U.S., since Juno’s sales breakdown is 45% in the residential market. And you know that this has been one of Schneider’s goals, to rebalance its sales breakdown in the residential markets.” 

“If we look at the lighting segment or the available market in lighting . . . we see it’s a $12.4 billion market in North America. Juno brings us the opportunity access $4.8B of this $12B market. . . . we calculate [the down-lighting segment] at about $1.3B, in which Juno has an 18% market share.” 

“30% of [Juno’s] business is in track lighting . . . overall sales for Juno in 2004 was $242M. They have an operating margin of 21% and 1,000 employees.”

“ . . . from an opportunistic standpoint . . . Juno can be more aggressively developed in Canada . . . as well as Mexico. The down-lighting market is present in Mexico, not well-developed by Juno. Schneider Electric, under its Square D brand, has been in Mexico for over 60 years. And in the residential segment, we have over 50% market share.”

“ . . . to give you an idea, in the contractor segment, residential and industrial construction, we have about a 38% market share.” – the context here suggests he’s talking about SENAOD and Square D, not Juno.

“Today, in an average home in the U.S., Schneider Electric provides about $250 per home. We [can] more than quadruple this . . . when you add the down-lighting piece, we clearly get a bigger part of the purchase in residential and commercial construction.”

The Juno buy “puts us in a position to understand and participate very intimately as LEDs are introduced.”

“We will increase Juno sales through electrical contractor promotion, where we have tremendous relationships with large builders, where we have tremendous relationships with large builders, focused not only on commercial construction but residential. I would remind you that residential construction today has really consolidated over the last decade . . . the developing of cross-selling to national accounts is clearly attractive for us.”

In the Q-and-A, an analyst asked about Juno’s Modulight product. Here’s what Petratis said about that: “Juno, through its Modulight business development, is creating a rupture in what we call the traditional trapper space. So it’s really a business in its infancy. But it addresses about a $1.8B market, in what we would call fluorescent lighting systems.” I’m not sure that “trapper space” quote wasn’t misquoted by whoever typed up this transcript.

Another analyst Q asked about what portion of Juno’s sales were going through big-box retailers (Home Depot, Lowe’s). Petratis: “It’s less than 1%. Juno has been very loyal to their wholesale distribution. And we clearly see that there’s an opportunity for us to help facilitate that in the right way.”

Another Q was about the profit margins of different lighting suppliers. What’s the difference? Why do some make more than others? The difference, Petratis said, was; “Focus – Juno are a focus player. And as we know, focused players tend to be more profitable. It’s this very efficient business model, which takes advantage of 40% outsourcing [to Asia] and variable sales compensation [Juno uses reps]. And it’s an excellent model.”

Much of what’s above is background information -- selected details about SENAOD, Juno, and Square D of which you perhaps were not aware. I certainly didn’t know that the Square D brand had a 50% market share in Mexico, for example.

NEWS in what’s above – albeit more than 9 months old at this point (the conference call took place 6/30/05) – includes:

•   Plans to expand Juno’s presence on the shelves of big box retailers.
•   Scheider gets about $250 in sales per new U.S. home.
•   All of the market share and background figures about Juno, including it’s 18% share of the downlighting market.
•   Petratris’s remarks about Modulight – specifically, use of the word “rupture.”

Note: Power Outlet magazine, which is published by large distributor Rexel, has run a few articles about Modulight. I’m the Editor of Power Outlet. If you don’t know about Modulight, you probably should (as a user, contractor, distributor, competitor, or whatever) – take a look at this two-page PDF of an article which appeared in the Spring 2005 issue.

# # #

13 Apr, 2006

It’s tough for me to know what’s going on most of the time. I did extensive reporting here about the bankruptcy of Integrated Electrical Services – but it was surface reporting. I did not dive into the 385-page documents filed with the SEC.

I did write a column, for TEDMAG.com, which posted there 1/26/05. (Yes -- in early 2005, 10+ months before IES pulled the plug on itself). The column basically asked: Why doesn't IES just liquidate itself? Here’s an excerpt:

Like the rube at a poker game, the IES board continues to yell, "Deal!" The smart move would be to let the thing go bust, sell off all operations to any buyers, and try very hard to forget the whole thing. Smart players know when to raise the stakes -- and they also know when to walk away from the table.

To see the whole column, click here.

Recently, of course, IES finished selling off various parts of itself and declared bankruptcy. I thought it was weird and premature (the company was NOT in awful financial trouble).

As it turned out, what IES did was a “prepack” – a prepackaged bankruptcy, with a plan for emerging as a whole company, with new owners. Stockholders (those who owned 100% of the company before the bankruptcy) were relegated to the back of the line, and were to end up with 15% of the new company.

Boiled down to its essentials, the bankruptcy got IES out from under $170-million-plus in debt. The folks who loans that money are (in the plan) to get 82% ownership of the new IES. Here’s a selection of IES news that’s appeared here in recent months:

12/15/05 – IES Agreement With Note Holders

1/2/06 – IES: Here’s the Situation (with links to various docs)

2/15/06 – IES Goes For It (link to press release on bankruptcy filing)

3/15/06 – IES Bankruptcy News

 

What’s New As Of 3/31

The “official committee of equity security holders” of IES has issued a document, dated 3/31. It is devastating. If you think markets and legal activities are rigged, this four-page document will convince you. Download the 4-page PDF from here.

You should read it, whether you hold IES stock or debt or compete with IES or sell to IES – or not. You should read it because you are (I think) a Capitalist, and it appears that what’s gone on here . . . might smell a bit.

I’m not going to quote the entire document, but let me summarize three devastating bullet points from the 4-page doc:

1. An expert hired by the committee “believes that the projections of EBITDA and free cash flow through 2010 . . . may be understated.” If this understatement is corrected, the expert says, the result would be “a significant increase in enterprise value.”
2. Cash on the IES balance sheet was ignored in valuing IES as it approached bankruptcy. How much cash? The report says this “results in a $32.5 million understatement of value.”
3. Net operating loss carry-forwards (translation: potential future tax reductions) were ignored in valuing IES. The committee says these losses have “a present value in excess of $18 million.”

There’s more, but let’s ignore another 4^th bullet point and cut to the chase.

“The committee believes the Debtors have so understated the value of the New Common Stock upon the Debtors’ emergence from chapter 11 that the allocation of 82% to holders of the Senior Subordinated Notes constitutes a material overpayment of those claims to the detriment of existing shareholders.” (emphasis added by EleBlog)

# # #

15 Mar, 2006

Integrated Electrical Services posted a 282-page PDF today -- an 8K filing with the Securities & Exchange Commission. It is, essentially, the company's plan to emerge from bankruptcy, and includes details of what's going to happen with the newly reconstituted company. According to the filing, the court date is set for April 25. There's a heck of a lot of legal details in this filing, but I've posted it, if you're interested -- it's a 1.7MB document -- click here.

Once the legal stuff is put away, the company will, once again, have stock on the public markets. According to the filing, the stock will be allocated as follows:

12.63 million shares to holders of senior subordinated note claims (in exchange for the IES debt they hold).

I believe these folks were owed on the order of $173 million. They get 82% of the new company. All other things being equal, this would seem to value the company at about $210 million.

2.3 million shares of stock will go to the holders of 41 million shares of OLD stock in IES. This is 15% of the new company. These will be awarded on a pro-rata basis to folks who held roughly 39 million of the OLD shares.

Note that, during the “contractor roll-up” excitement of the late 1990s, IES stock got up over the $20/share mark. That means the collective shareholder stake was worth roughly $780 million.

At the new company’s valuation, these folks collectively own around $32 million of stock. Quite a come-down!

462,125 shares – or 3% of the new company – are set aside for management. Of that, 5/6ths (2.5% of the company) is going to existing IES management. The rest (0.5%) is reserved for the new Chief Executive Officer and/or other new key employees, to be allocated by the board of directors of Reorganized IES.

07 Mar, 2006

Here's the latest news on the acquisition of Hughes Supply by The Home Depot (a deal which is all but done!). Much of this comes from or as a result of stuff printed in the Orlando Sentinel newspaper (Orlando is the hometown of Hughes).

HD SUPPLY TO MOVE TO ORLANDO – according to an article in the 3/7 Sentinel (i.e., today’s paper), Home Depot Supply “will operate out of Hughes’ existing HQ . . . after the deal is complete.” That means, at a minimum, that Joe DeAngelo, the executive veep of HD Supply, is going to move to Orlando.

HUGHES EXECS GET PAID – a column (by Susan Strother Clarke) in the 2/17 Sentinel noted that “30 honchos and board members” of Hughes “will walk away from this deal a whole lot richer – pocketing as much as $212 million, collectively.”

Clarke wrote this: “It’s impossible for me to justify how so few can be made so very comfortable, while so many more just soldier on.” She went on to note that Tom Morgan, CEO, will get more than $30 million from the deal “after just five short years of service.” Other specifics:

• CFO David Bearman “will get up to $20 million if he doesn’t work for Home Depot.”

• COO Neal Keating “will be forced to limp along with about $13 million” if he doesn’t work for HD.

“David Hughes, whose family founded the company, will receive more than $40 million from all his stock holdings. He’s also eligible for more than $5 million in severance and retirement – as well as almost $1 million more to help him with his tax bill," she wrote.

HUGHES EXECS OBJECT – Clarke’s column was followed by a Letter to the Editor from Chairman David Hughes of Hughes, which both appeared in the paper (2/28) AND was filed with the SEC by Hughes Supply.

“The fact is that most of the payment she cites as being excessive are for stock and retirement benefits which are already owned and otherwise earned,” it said.

“Most good companies have change-in-control provisions because it is difficult to recruit and retain top executives like Tom Morgan, David Bearman, and Neal Keating without some assurance that they won’t lose everything in the event of a takeover.”

ELEBLOG OBJECTS TO THE OBJECTION – Here’s the text of a paragraph from a document Hughes filed (on 2/27/06) with the SEC on its coming acquisition. This was part of ONE paragraph, but I've broken it up for readability:

At a meeting held on October 19, 2005, the compensation committee approved the Company entering into renewed and amended change in control severance agreements with up to 18 senior executives, as well as certain amendments to the Company's Supplemental Executive Retirement Plan.

The committee determined that the renewal of the severance agreements and the amendments to the Company's Supplemental Executive Retirement Plan were essential for retention of the Company's senior executives, especially in light of the uncertainties surrounding the sale process. The severance agreements were also intended to promote uniform treatment of the Company's senior executives.

The terms of the renewed severance agreements were substantially similar to the expired agreements, but added gross-up payments for excise taxes that may be payable under Section 4999 of the Internal Revenue Code, a non-competition and non-solicitation covenant, a continuation of benefits provision relating to health and life insurance, and a reduction in the termination benefit from three times average annual compensation to two times average annual compensation, for each senior executive except the Chairman, CEO, CFO and COO.

In other words, the “change in control” provisions referenced in the letter to the editor of Feb. 28^th had been altered, at the very least, on Oct. 19. On or before that date, the Hughes board and executives had very good reason to suspect that a change in control was about to take place. There is no other conclusion to reach except this one: With the company "in play" and about to be taken over, management and the board monkeyed with the "change in control" provisions.

Without sorting out all of the details, this certainly has the LOOK of folks helping themselves.

There is a way to benefit from a change in control, you know, for board members and managements of public companies, and it is NOT revolutionary, illegal, or questionable:

They can buy stock in the companies for which they work ahead of time, and have faith that their hard work will result in increased profits and a higher stock price (which happened at Hughes BEFORE the acquisition talk started!).

. . . of course, it's a lot easier to WAIT until the company is "in play" and revise or create "change in control" provisions that put cash in one's pocket. The method that seems to have been chosen here by the Hughes board/management has tremendous advantages over the approach I suggest, including a lack of risk and amazingly good timing.

# # #

03 Mar, 2006

EMCOR's stock recently split 2-for-1. I checked this morning (before the market opened); last night's close (Thursday March 2) was $42.89. That makes the pre-split price above $85.

I told you so.

On Oct. 8, 2003, TEDMAG.com posted a column I wrote after some bad news had caused EMCOR Group's stock to swoon. The fainting spell took the stock to $41 a share before I wrote. Here's the key paragraph (about earnings-per-share expectations and the ultimate stock price):

The original expectations MacInnis expressed for EMCOR earnings per share were in the $4.50 range. Someday in the next few years, EMCOR's earnings WILL top $5/share.The company has damn little debt for a construction company -- and debt really does kill! At 17 times earnings -- a slight premium to the multiple I would put on the market, which would be 15 (not the 30-plus that seems to be the average) . . . EMCOR would trade at $85. That's a reasonable three-year or even five-year return from $41, doncha think?

Here's a link.

Note that (unlike the touts you may see on CNBC), I don't own EMCOR stock, and never have. I believe that, to be ethical, I can't own, short, buy puts or calls, or even buy or sell the bonds of the companies I write about in the electrical/datacom industry. So I don't.

Don't feel sorry for me; I didn't buy stock in Encompass (bankrupt and gone) or IES (bankrupt and soon to emerge).

However, the point is: Had you followed my advice in October 2003, you would have done DAMN well! It turns out that the stock price fell further, so by the time the column referenced above posted to TEDMAG, EMCOR's stock had fallen to the $33 level. It never got out of the $30 range during the rest of the month. Had you purchased at the high price in the balance of October ($37.97, according to Yahoo! finance) -- you'd have better than a double today.

It's less than 30 months later. Had you bought the S&P 500 on 10/31/03, your return would be less than 30%, including dividends.

So, I think I really earned this one -- I told you so!

 (More)

01 Mar, 2006

On Feb. 27, Hughes Supply filed a document that it sent to shareholders -- who have to vote on the company's proposed acquisition by The Home Depot. It's a 141-page PDF, and it puts forward the case for the merger. Obviously, in some detail. There's a lot of info here; some of it can be ignored (as it's oriented to shareholders, who have to vote). Best advice: Start on Page 22.

If I've posted it correctly, you can download it from here.

27 Feb, 2006

Lots of folks have been speculating on what's going to happen to the Hughes Supply folks after The Home Depot purchases the company. The 2/23 Orlando Sentinel had this tiny item, buried somewhere, which seems to indicate that President Tom Morgan isn't going to be working for HD! The sale is slated to be finalized before May Day.

[snip, snip]

Montana bound

Hughes Supply Inc. chief executive Tom Morgan will be moving to Montana after Home Depot completes the purchase of the Orlando-based Fortune 500 company this spring. Morgan said he is building a guest home there now and plans to live in it this summer while he builds the main home in Bigfork, near Glacier National Park. Several of his Isleworth neighbors will build there as well, he said, along with another longtime friend, University of Tennessee football coach Phil Fulmer. "We hope to grow old together," Morgan said.

17 Feb, 2006

Developments:

1. IES filed a 357-page (that's the length of the PDF) 8K with the Securities & Exchange Commission on 2/15.

2. I got a phone call from someone I trust -- and I don't trust many -- in the industry yesterday (TH 2/16). He told me that IES mailed checks to its vendors/suppliers on Thursday, after getting court clearance. IES has said all along that it would not "stiff" its vendors, and apparently it will not do so.

3. A LOT OF THIS IS CONFUSING. I capitalize that, because some of this is hard to follow. It will take me some time to sort through 357 pages of legal crap and distill something to put here, for example. But in going over the 8K filing quickly, I noted this section under "Conference Call With Vendors" -- which, I think, kind of makes the point.

Two quick points:

(a) This was one paragraph in the filing; I subdivided it to boost readability;

(b) Byron Snyder, the guy referenced below, is not an idiot. I've never met him, but I've learned a lot about him (he is the founder of IES, and took over running of the firm only recently). He just made a mistake -- because what's going on at this company is SO complex, even the very intelligent prime mover (Snyder) can't keep all of the facts straight!

"On February 14, 2006, in connection with the Chapter 11 Cases, the Company’s President and Chief Executive Officer, C. Byron Snyder, held a conference call with key vendors in which he inadvertently misstated certain details regarding the Company’s surety bonding arrangements. As previously disclosed in the Company’s Current Report on Form 8-K filed on February 7, 2006, the Company has an agreement for surety bonding with Federal Insurance Company for debtor-in-possession surety bonding in the aggregate amount of $48 million.

"The Company does not have an agreement with International Bonding and Construction Services at the present time, although the Company does engage in discussions and makes arrangements with bonding sources from time to time in the ordinary course of business.

"In addition, on February 15, 2006, Mr. Snyder was quoted in the Houston Chronicle (Bill Hensel Jr., Quick Work Planned on Debt — IES to Swap Stock in a Fast Bankruptcy Exit , Houston Chronicle, February 15, 2006, at D1) stating that the Company’s cash flow “is and continues to remain extremely strong.” As set forth in the Company’s Quarterly Report on Form 10-Q for the period ending December 31, 2006, the Company’s cash flow from operations in the first quarter of fiscal 2006 was $1.1 million, an improvement of $10.2 million from the same quarter in fiscal 2005, although net cash and cash equivalents at the end of the first quarter of fiscal 2006 was lower than at the beginning of the quarter by approximately $3.5 million.

"Moreover, the Financial Projections show a projected decrease in cumulative cash flow (cumulative net disbursements) during the 13 weeks following the filing of the Chapter 11 Cases of approximately $24 million, reflecting the expected negative impact of the filing of the Chapter 11 Cases on the Company’s business and including approximately $4.2 million in net restructuring-related disbursements."

# # #

15 Feb, 2006

Here's today's news from Standard & Poors, which rates debt:

- - - - -

Integrated Electrical Services Inc. Ratings Lowered To 'D'

NEW YORK Feb. 14, 2006--Standard & Poor's Ratings Services said today that it lowered its corporate credit rating on Houston, Texas-based Integrated Electrical Services Inc. to 'D' from 'CC'. At the same time, the rating on the company's senior subordinated notes was lowered to 'D' from 'C'. IES, one of the larger electrical contractors in the U.S., had total debt of about $223 million as of Dec. 31, 2005.

"The downgrade reflects the company's decision to file for reorganization under Chapter 11 of the U.S. Bankruptcy Code," said Standard & Poor's analyst James Siahaan.

The company said that it has successfully negotiated an $80 million debtor-in-possession financing facility. To execute the financial restructuring through a plan of reorganization, the company has also come to an agreement with institutions controlling 61% of the dollar value on IES' $173 million in senior subordinated notes.

- - - - -

Here's what I think this means:

a. If you're one of the institutions who own 61% of the $173M in senior subordinated notes, you have voted to exchange your debt for equity in the new IES. Together, these folks end up owning 82% of the new IES. It's not clear what that's worth . . .

b. If you're one of the folks owning the other 39%, I'm not sure what happens to you.

c. If you own other debt of IES, you might eventually get paid off, maybe. S&P's "D" rating, translated into plain English, means -- in essence -- "you should live so long!"

Today's lesson: Don't buy the debt of a roll-up company, unless you can stomach the possibility of ending up owning a piece of the thing (instead of being repaid).

# # #

15 Feb, 2006

Integrated Electrical Services yesterday (2/14) filed for bankruptcy yesterday -- a filing classified as a "prepack," which stands for "prepackaged bankruptcy."

Bottom line: Holders of the company's common stock, who on 2/13 in theory owned 100% of IES, will now own, together, 15% of the company that emerges from bankruptcy.

See the full IES press release here. Be sure to see the bullet points in the release, which repeat the previously released restructuring plan.

A key bullet point for DISTRIBUTORS who might be doing business with IES:

"the company's other obligations under trade credit extended to the company 

by its vendors and suppliers will be unimpaired and will all be paid in full, 

on regular terms, whether such obligations relate to pre-or post-filing periods."

13 Feb, 2006

Integrated Electrical Services remains a company “on hold.” In its Q1 financial release (dated 2/9 – find it here), the company included this information:

Going concern note: Ernst & Young, the company’s auditor, “included a going concern modification in its audit opinion on the company’s consolidated financial statements for the fiscal year ending Sept. 30, 2005.” The inclusion of a “going concern” note in financial statements indicates the auditor thinks there is a significant likelihood that the company has a good chance of failing.

Restructuring isn’t a sure thing: “There is no assurance that IES will successfully complete the Restructuring or any other restructuring. At this time neither the agreement in principle nor any other proposed restructuring terms have been agreed to by the requisite holders of the senior subordinated notes, or any other creditor constituency.”

Risks to holders: “Any restructuring could cause the holders of the company’s outstanding securities, including its common stock, senior subordinated notes, and senior convertible notes, to lose some or all of the value of their investment in IES’ securities.”

Risks until the Restructuring happens: “The company’s liquidity may not improve or may be adversely affected, however, until its restructuring is consummated. There is no certainty as to when or if any restructuring will be consummated.”

 

SOMETHING ELSE OF NOTE

Back in mid-December, IES announced the final sale of one of its business units in a divestiture program that it began in November of 2004. I hadn’t looked at what the company had sold, or who bought it – as most of this is fairly routine.

IES has been selling off commercial/industrial electrical contracting companies that it bought in its roll-up days (1998-2001). In general, these C/I contractors were unprofitable.

But this last sale is INTERESTING.

First, here’s what IES said about the final company its disposed, in a 12/14 press release:

IES has completed its divestiture program with the sale of the majority of the assets of one of its commercial and industrial business units based in South Carolina for a sales price of approximately $7.1 million, including accounts receivable of approximately $1.3 million retained by IES, the collections of which are guaranteed by the buyer. This unit had net revenues of $39.6 million and operating income of $0.2 million in fiscal 2005.

I went looking for more facts. Here’s what the company said about that sale in an SEC filing on 12/13:

On December 13, 2005 Integrated Electrical Services, Inc. (the “Company”), H. R. Allen, Inc., Allen Services, Inc., and Herbert R. Allen, Jr., as guarantor, entered into an Asset Purchase Agreement (the “Agreement”), providing for the sale of substantially all of the assets of H. R. Allen, Inc. (the “Seller”) to Allen Services, Inc. (the “Buyer”) for a purchase price of approximately $7,100,000, subject to adjustment, including accounts receivable of approximately $1.3 million retained by the Seller, the collection of which are guaranteed by the Buyer.

The closing of the transactions contemplated by the Agreement was consummated on December 14, 2005.

Herbert R. Allen Jr. was formerly the President of the Buyer. The Buyer is owned by Herbert R. Allen Jr. and Miriam Allen. Herbert R. Allen Jr. is also the son of Herbert R. Allen, the former Chief Executive Officer and member of the Board of Directors of the Company. Miriam Allen is the wife of Herbert R. Allen and the mother of Herbert R. Allen, Jr.

So the final company in the IES sell-off was sold off to the son of the company’s immediate past CEO. I don’t think there’s anything wrong with this, necessarily – it’s just interesting.

# # #

08 Feb, 2006

I've posted a 140-page PDF, a filing with the Securities & Exchange Commission by Hughes Supply. Page 25-31 detail how Hughes did the deal -- and seem to indicate that The Home Depot (which has agreed to purchase Hughes) overpaid by 16% or more.

To download the PDF, go here.

To see a brief blow-by-blow digest of what's in those seven pages (written by me) -- go to TEDMAG.com's D-News, here (page down past the Anixter + Wesco financial report to the 2nd item on the page).

14 Jan, 2006

I’ve attended (and moderated a panel at) the Western Region meeting of the National Association of Electrical Distributors this past week. Adding some spice to the event was Tuesday's news that Home Depot will buy Hughes Supply.

Background: Home Depot’s electrical sales to smaller electrical contractors (and others) have been eating into the market share of the nation’s electrical distributors for years. Hughes Supply’s roots are in electrical distribution (altho the co. has gone waaaaay beyond that).

Details: First, Hughes has 50 electrical branches in five states. The company also sells electrical materials via its utility division (84 branches in 29 states) and probably through it’s MRO operation (which reportedly focuses on apartment house maintenance/repair needs) – 51 branches in 27 states.

Here are Hughes Supply’s electrical sales: Fiscal year 2003 = $375.5 million. FY04 = $362.8M. FY05 = $425.3M. FY06 (first three quarters) = $361.6M.

Hughes had $4.066 billion in sales in the first three quarters of FY06. Water, sewer, and plumbing operations accounted for nearly one-half of that $1.94B.

HOME DEPOT – how about HD? How much of its $73B in FY05 sales were in electrical? No one outside of the company knows for sure, but here’s a summary of what I think we CAN know:

1. HD’s 10K (annual report) filing with the SEC lists “plumbing, electrical, and kitchen” sales for 2005 as 29% of the company’s total.

2A. We don’t know anything for sure but that electrical is LESS than 29% -- it’s some fraction of the total P-E-K sales.

2B. Let’s make some intelligent guesses. Here are stabs at electrical sales:

If electrical is 40% of P-E-K sales, then FY05 electrical sales at HD were $8.5B.

If 33%, then FY05 electrical sales at HD were $7B.

If 30%, then FY05 electrical sales at HD were $6.375B

If 25%, then FY05 electrical sales at HD were $5.3B.

If 20%, then FY05 electrical sales at HD were $4.25B.

I believe the answer is, approximately, in there somewhere. Let’s say, for argument’s sake, that the 30% figure is correct – that is, electrical sales are 30% of the plumbing, electrical, and kitchens total.

If that’s the case, electrical sales in FY05 at Home Depot were roughly $6.4 billion. The addition of Hughes Supply’s electrical segment – headed for roughly $480 million in FY06 electrical segment sales – will certainly ADD to HD’s buying clout with electrical manufacturers . . . but not dramatically.

02 Jan, 2006

An awful lot of information has come out in the past month on the situation of Integrated Electrical Services, the big electrical contractor. I've put some of it together here. If you're interested, you might find the following links of use:

Situation Analysis, 1-2-06, by Joe Salimando -- 44K PDF (7 pages) -- access from here.

10-K (annual report) filing with the SEC -- by IES, 12/21/05 -- 1.2MB PDF (149 pages) -- download here.

Form DEF 14A (who owns the company) filing with the SEC -- by IES, 1/19/05 -- 276K PDF (38 pages) -- download here.

Press release announcing the Reorg + a release on IES that followed from Standard & Poor's -- posted to this site 12/15, see it here.

30 Dec, 2005

I've downloaded a bunch of reports from Stifel, Nicolaus & Co. -- a brokerage firm -- about various companies in our industry. You can do it, too, by going  to the Research tab at www.stifel.com. Here are excerpts I thought you might need to read:

Belden CDT (11/9) – "We are forecasting a strong 36% increase in [earnings per share] in 2006, with 75% of the increase coming from plant restructuring and the completion of its share buyback. We foreast another 20% EPS increase in 2007." The SN estimate is that costs could decline by as much as $20 million – which would be about 20 cents/share – in 2006. Before Belden merged with CDT, the industry rumor-mongers said one of those two companies was in dire straits. The merger apparently created time for "someone" to deal with those problems.

Another note: "North American networking volume was up over 20% [compared to Q3 2004]. BDC stated that it began to re-gain networking market share in the quarter.”

CommScope (10/27) – "We expect CTV's balance sheet to become a major positive during 2006. We forecast cash to reach $350 million at yearend 2006 and nearly $500 million by yearend 2007. CTV will never call its 1% converts, which comprise a majority of its debt."

General Cable (11/01, 11/02, 11/09) – "BGE remains one of our top Infrastructure ideas in our universe." "BGC has achieved the highest profit margin in several years, overcoming copper, plastic compounds, and other rising cost. This is the result of higher volume, plant rationalizations, and cost cutting, and higher pricing."

Also: "The rising price of copper and plastic compounds have become so visible to customers that price increases have become easier to justify and rising plant utilization rates are making implementation easier."

And: "We forecast a 6.3% sales increase in 2006 . . . [with[ BGC's operating profit margin to [improve to] 6.3% from an esitmated 5.0% in 2005."

The net: "Shares of General Cable Corp. are best suited to aggressive growth investors tolerant of near-term volatility. This is a highly leveraged company."

Genlyte Group (10/25) – “GLYT management states that they have still not seen a pick-up in the nonresidential construction market. We track Department of Commerce construction spending data and have seen a consistent increase in nonresidential spending throughout the course of the year . . . GLYT management believes that some of the disconnect . . . is that some larger construction projects may have not yet reached the later stages of completion during which lighting is awarded and installed."

30 Dec, 2005

I've downloaded a bunch of reports from Stifel, Nicolaus & Co. -- a brokerage firm -- about various companies in our industry. You can do it, too, by going  to the Research tab atop the site at www.stifel.com. Here are excerpts I thought you might need to read:

Black Box Corp. (11/1) – "We believe that BBOX will be able to finance additional voice services acquisitions with its significant [Free Cash Flow] while also improving its balance sheet. We are upgrading our opinion on BBOX to Market Outperform from Market Perform with a price target of $51."

Also: "Phase II [of the company's growth strategy] involved buying Data Services companies that BBOX believed would compliment existing Hotline Services companies. During the 5 years of Phase II, the company acquired 90 data companies."

And: "BBOX management is looking to acquire telephony operations that have high gross profit margins (which reflect proper pricing in the market) but have a corporate cost structure that is much higher than BBOX in comparison. This allows BBOX to identify areas of excess cost and quickly improve the profitability of acquired operations."

InfraSource Services (analysis dated 11/3/05) – "While IFS is seeing increased bidding activity for larger transmission projects, it has yet to see a win."

Also: ""We are reducing our 2006 EPS forecast to $0.60 from $0.68. The reduction reflects much lower revenues that originally anticipated based on IFS' planned reduction of low-margin work."

EMCOR Group (10/28) – "Commercial work in EME's backlog is at its highest level since 2000 in $ amount and in % of total backlog. The pace at which EME is adding high-margin commercial work is accelerating. This is a key factor to produce higher profit margins in 2006." Elsewhere, SN said that "commercial work made up . . . nearly 35% of the total" backlog.

Future: SN sees EMCOR's revenue hitting $4.9 billion in 2006. "It appears that backlog will begin building in 2006 and that this and increased small project activity, which does not flow through backlog or does quickly, will produce moderate revenue growth in 2006 and stronger growth in 2007.

    *  It has reached a non-binding agreement in principle with an ad hoc
       committee, whose members hold a majority of the company's 9-3/8% senior
       subordinated notes due 2009, for a proposed consensual restructuring of
       the company's capital structure
    *  It has divested the majority of the assets of one of its commercial and
       industrial business units based in South Carolina for a gross sales
       price of $7.1 million
    *  It expects to file a Form 12b-25 with the SEC, which provides for a
       fifteen day extension on filing its Form 10-K for its fiscal year ended
       September, 30, 2005.
    *  It has rescheduled the release of its fiscal 2005 fourth quarter and
       year end results.

    RESTRUCTURING AGREEMENT IN PRINCIPLE