Strategic Actions

9 Months Ended

Jun. 30, 2011

Strategic Actions

Strategic Actions

3. STRATEGIC ACTIONS

2011 Restructuring Plan

During the second quarter of our 2011 fiscal year, the Company determined that certain underperforming facilities within our Commercial & Industrial operations will be either sold or closed during the next six to twelve months (the "2011 Restructuring Plan"). This is one part of management's overall plan to return the Company to profitability. The facilities directly affected by this decision are in several locations throughout the country, including Arizona, Florida, Iowa, Massachusetts, Nevada and Texas. These facilities were selected due to current business prospects and the extended time frame needed to return to a profitable position. We expect that closure costs could range from $4,500 to $5,500 in the aggregate. Closure costs associated with the 2011 Restructuring Plan would include equipment and facility lease termination expenses, incremental management consulting expenses and severance costs for employees. The Company is in the process of winding down these facilities. As the Company concludes the wind-down and closure process for each of these facilities, their respective results of operations will be reclassified and presented within future statements of operations as "Discontinued Operations." US GAAP does not permit an earlier reclassification. Restructuring expenses for the three and nine months ended June 30, 2011 in respect of the 2011 Restructuring Plan were comprised of severance costs and external consulting and management services and totaled $1,667. At June 30, 2011 the estimated costs to complete the ninety-five projects remaining totaled $22,493; of which $8,530 have been subcontracted to other electrical contractors, and $7,527 have been assigned to other electrical contractors, leaving approximately $6,436 of contracts for which we will continue to execute. With respect to the assigned contracts we have obtained acknowledgement of our release responsibility on all but one contract, which we expect to receive by September 30, 2011. We expect the majority of the retained backlog of $6,436 to be completed by September 30, 2011. For the three and nine months ended June 30, 2011, these facilities had the following results:

	Three Months Ended			Three Months Ended
	June 30, 2011			June 30, 2010
Revenues	$	11,147		$	13,490
Gross profit (loss)		(4,300	)		(177	)
Selling, general, & administrative expenses		1,900			1,870
Restructuring		1,667			—
Loss / (gain) from sale of assets		(24	)		(36	)
Loss from operations	$	(7,843	)	$	(2,011	)

	Nine Months Ended			Nine Months Ended
	June 30, 2011			June 30, 2010
Revenues	$	36,758		$	50,588
Gross profit (loss)		(5,611	)		1,889
Selling, general, & administrative expenses		1,133			8,467
Restructuring		1,667			—
Loss / (gain) from sale of assets		(40	)		(38	)
Loss from operations	$	(8,371	)	$	(6,540	)
Other data:
Working capital	$	8,183		$	17,284
Total assets:	$	19,256		$	23,650

The following table summarizes the activities related to our restructuring activities by component:

	Severance			Consulting /
	Charges			Other Charges			Total
Restructuring liability at September 30, 2010	$	—		$	—		$	—
Restructuring charges incurred		749			918			1,667
Cash payments made		(16	)		(792	)		(808	)
Restructuring liability at June 30, 2011	$	733		$	126		$	859

2009 Restructuring Plan

In the first three months of our 2009 fiscal year, we began a restructuring program (the "2009 Restructuring Plan") that was designed to consolidate operations within our three segments at that time. Our plan was to streamline local project and support operations, which were managed through regional operating centers, and to capitalize on the investments we had made in the previous year to further leverage our resources. In addition, as a result of the continuing significant effects of the recession, during the third quarter of fiscal year 2009, we implemented a more expansive cost reduction program, by further reducing administrative personnel, primarily in the corporate office, and consolidating our Commercial and Industrial administrative functions into one shared service center. The 2009 Restructuring Plan was completed in our 2010 fiscal year. Costs incurred with respect to the 2009 Restructuring Plan for the three months and nine months ended June 30, 2010 are reflected within the Operating Segments, please refer to Note 6 "Operating Segments."