IES Holdings (IESC) risk factors, FY2025 10-K

Risks Relating to the Operations of our Business

1. 01Demand for our services is cyclical and vulnerable to economic downturns affecting the industries we serve
2. 02We could be adversely impacted by changes in general economic conditions, including the effects of inflation, supply chain constraints, and an economic downturn or recession
3. 03The highly competitive nature of our industries could affect our profitability by reducing our revenues or profit margins
4. 04We generate a significant portion of our revenues under fixed price contracts. The estimates we use in placing bids and changes in commodity and labor costs could have an adverse effect on our ability to maintain our profitability
5. 05A failure to secure new contracts may adversely affect our cash flows and financial results
6. 06We derive a meaningful portion of our revenues from a small number of customers, and the loss of one or more of these customers could adversely affect our revenues, results of operations, and financial condition36% rewritten
7. 07We rely on third parties, including subcontractors and suppliers, in connection with many of our projects and a failure to retain subcontractors or obtain supplies, or increased costs as a result of using these third parties, could adversely impact our revenues, results of operations, and financial condition85% rewritten
8. 08for the materials necessary to complete our projects, and if a supplier fails to provide supplies when scheduled or at a higher price than expected, project delays and additional costs could have an adverse effect on our operating resultsNew
9. 09Acquisitions, dispositions and other strategic transactions that we may pursue could have a negative effect on our results of operations
10. 10Backlog may not be realized or may not result in profits
11. 11We may fail to adequately recover on contract change orders
12. 12We may incur significant charges or be adversely impacted by the closure or sale of facilities or assets
13. 13Epidemics, pandemics, and other potential public health emergencies could have a future materially adverse impact on our business, including our financial condition, cash flows and results of operations
14. 14The availability and cost of surety bonds affect our ability to enter into new contracts and our margins on those engagements
15. 15We are subject to risks associated with seasonality, adverse weather conditions, and climate change
16. 16Our results may fluctuate from period to period due to cyclicality, regional economic conditions, or other factors
17. 17We may experience difficulties in managing our billings and collections
18. 18Our operations are subject to numerous physical hazards. If an accident occurs, it could result in an adverse effect on our business
19. 19Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all
20. 20Litigation and claims can cause unexpected losses
21. 21Regulatory requirements could result in significant compliance costs and liabilities
22. 22Disruptions to the proper functioning of our information technology systems or security breaches of our critical data, sensitive information or information technology systems could disrupt operations and cause increases in costs, decreases in revenues and/or harm to our reputation
23. 23We may be required to conduct environmental remediation activities, which could be expensive and inhibit the growth of our business and our ability to maintain profitability, particularly in our Infrastructure Solutions business
24. 24Compliance with current and future environmental laws and regulations, including those relating to climate change, could adversely impact our business
25. 25The loss of a group or several key personnel, either at the corporate or operating level, or general labor constraints could adversely affect our business

Risks Relating to our Financial Results, Financing and Liquidity

1. 26The impact on our customers of negative conditions in the credit and capital markets may adversely affect our business
2. 27To fund our working capital requirements, complete acquisitions and service any debt we may incur, we may require a significant amount of cash. Our ability to generate cash from operations or to access the capital markets for required funding depends on many factors that are beyond our control
3. 28Changes in tax positions or changes in tax laws may adversely affect our results
4. 29We have restrictions and covenants under our credit agreement and the failure to meet these covenants could result in a default under our credit agreement
5. 30The preparation of our financial statements requires management to make certain estimates and assumptions that may differ from actual results, and we may be adversely impacted by new accounting, control and operating procedures
6. 31Our use of percentage-of-completion accounting could result in a reduction or elimination of previously reported profits
7. 32Our reported operating results could be adversely affected as a result of goodwill impairment charges

Risks Relating to Our Common Stock

1. 33Existence of a controlling shareholder
2. 34Our common stock has less liquidity than many other stocks listed on the Nasdaq Global Market
3. 35We may issue additional shares of common stock, preferred stock or convertible securities that will dilute the percentage ownership interest of existing stockholders and may dilute the book value per share of our common stock
4. 36Substantial sales of our common stock could adversely affect our stock price
5. 37Increasing scrutiny and changing expectations with respect to our approach to climate related risks may expose us to reputational or other risksNew