IES Integrated Elec Svcs

Integrated Electrical Services Announces Favorable Verdict in Lawsuit HOUSTON, April 25 /PRNewswire-FirstCall/ -- Integrated Electrical Services, Inc. (NYSE:IES) today announced the successful verdict handed down on April 22, 2005 in a case heard in the United States District Court, Northern District of California, San Francisco Division. The matter concerned a claim by a business unit of IES' that it had not been paid for work performed and the actions of Watkins Engineers & Constructors, Inc. ("Watkins") interfered with and disrupted their work on a cement plant in Victorville, California. The jury verdict was that Watkins breached its subcontract with the IES business unit and found damages in the amount of $4,877,097 on that breach. Watkins had brought a counterclaim of breach of contract, and the jury found that the involved business unit had not breached its subcontract to Watkins. On the Special Interrogatory, the jury found that Watkins did not have a good faith dispute over the amount due and owing to allow it to withhold progress payments on the project. This last finding will allow recovery of interest and attorney's fees. The expected judgment is $4,877,097 in damages plus interest and attorney's fees and could result in a total award of approximately $7.0 million. Though Watkins no longer exists as an operating entity, its surety bonding company and co-defendant Fireman's Fund Insurance Company is liable on the judgment. Roddy Allen, IES CEO commented, "I am very pleased to announce a favorable verdict in this case which will require this contractor to honor the terms of our contract. We feel justifiably happy that the counter claims were dismissed and that the costs incurred to defend ourselves from these charges should be recovered with the final judgment." Integrated Electrical Services, Inc. is a consolidated national provider of electrical solutions to the commercial and industrial, residential and service markets. The company provides electrical system design and installation, contract maintenance and service to large and small customers, including general contractors, developers and corporations of all sizes. This Press Release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's expectations and involve risks and uncertainties that could cause the Company's actual results to differ materially from those set forth in the statements. Such risks and uncertainties include, but are not limited to, the inherent uncertainties relating to estimating future operating results or our ability to generate sales, income, or cash flow, potential difficulty in addressing material weaknesses in the Company's internal controls that have been identified to the Company by its independent auditors, potential limitations on our ability to access the credit line under our credit facility, litigation risks and uncertainties, fluctuations in operating results because of downturns in levels of construction, incorrect estimates used in entering into and executing contracts, difficulty in managing the operation of existing entities, the high level of competition in the construction industry, changes in interest rates, the general level of the economy, increases in the level of competition from other major electrical contractors, increases in costs of labor, steel, copper and gasoline, limitations on the availability and the increased costs of surety bonds required for certain projects, inability to reach agreement with a surety company or a co-surety to provide sufficient bonding capacity, risk associated with failure to provide surety bonds on jobs where we have commenced work or are otherwise contractually obligated to provide surety bonds, loss of key personnel, changes in senior management, inability to reach agreement for planned sales of assets, business disruption and transaction costs attributable to the sale of business units, costs associated with the closing of business units, unexpected liabilities associated with warranties or other liabilities attributable to the retention of the legal structure of business units where we have sold substantially all of the assets of the business unit, inability to fulfill the terms of the required payments under the credit facility, inability to reach agreement on a new credit facility, disruption of business or costs resulting from an SEC investigation, difficulty in integrating new types of work into existing subsidiaries, errors in estimating revenues and percentage of completion on contracts, and weather and seasonality. The foregoing and other factors are discussed and should be reviewed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended September 30, 2004. Contacts: H. Roddy Allen, CEO Integrated Electrical Services, Inc. 713-860-1500 Ken Dennard / Karen Roan / DRG&E / 713-529-6600 DATASOURCE: Integrated Electrical Services, Inc. CONTACT: H. Roddy Allen, CEO of Integrated Electrical Services, Inc., +1-713-860-1500; or Ken Dennard, , or Karen Roan, both of DRG&E, +1-713-529-6600

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