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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 12, 2024

 

Energy Services of America Corporation

(Exact Name of Registrant as Specified in its Charter)

 

Delaware 001-32998 20-4606266
(State or other Jurisdiction
of Incorporation)
(Commission File Number) (I.R.S. Employer
Identification No.)

 

75 West 3rd Ave., Huntington, West Virginia 25701
(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (304) 522-3868

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Ticker symbol(s) Name of each exchange on which registered
Common Stock, Par Value $0.0001 ESOA The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 2.02 Results of Operations

 

On August 12, 2024, Energy Services of America Corporation issued a press release disclosing its results of operations and financial condition at and for the three and nine months ended June 30, 2024.

 

A copy of the press release dated August 12, 2024, is included as Exhibit 99.1 to this report and is being furnished to the SEC and shall not be deemed filed for any purpose.

 

Item 9.01 Financial Statements and Exhibits

 

(c) Exhibits

 

Exhibit 99.1 Press Release dated August 12, 2024

 

104 Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the inline XBRL document.

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

  ENERGY SERVICES OF AMERICA CORPORATION
   
DATE: August 12, 2024 By: /s/ Charles Crimmel
    Charles Crimmel
    Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

Energy Services of America Reports Fiscal Third Quarter 2024 Results

Records 510 Basis Point Improvement in Gross Margin and 13 Percent Sequential Increase in Backlog

 

HUNTINGTON, W.Va., August 12, 2024 /PRNewswire/ -- Energy Services of America Corporation (the "Company" or "Energy Services") (Nasdaq: ESOA), today announced its results for its fiscal third quarter ended June 30, 2024.

 

Third Quarter Summary (1)

 

·Revenue of $85.9 million versus $85.5 million
  
·Gross profit of $15.3 million, a 41% increase
  
·Net income of $17.5 million, or $1.06 per diluted share, compared to $3.4 million, or $0.21 per diluted share. This quarter’s results include approximately $11.4 million net of estimated income tax expense, or $0.69 per diluted share, from a legal judgement
  
·Adjusted EBITDA of $10.8 million compared to $7.5 million
  
·Backlog of $250.9 million compared to $222.8 million as of March 31, 2024

 

(1) All comparisons are versus the comparable prior year period, unless otherwise stated.

 

"Our third quarter results, particularly our improved gross profit, reflect the underlying strength of the business and our ability to focus on projects with more favorable margin profiles," said Doug Reynolds, President. "We added $28 million to our backlog compared to the second quarter and continue to identify and hire the right employees to effectively manage these additional projects.”

 

“We continue to experience very favorable tailwinds across the industries we serve and believe this trend will continue well into fiscal 2025. We reduced our debt by almost $14 million in the quarter and our strong balance sheet will allow us to continue to be opportunistic with acquisitions. Overall, we are very optimistic about the prospects for our business over the coming quarters and believe we are well-positioned to deliver long-term value to our shareholders,” Mr. Reynolds concluded."

 

 

 

 

Third Quarter Fiscal 2024 Financial Results

 

Total revenues for the period were $85.9 million, compared to $85.5 million in the third quarter of fiscal 2023. Increased work within the Gas & Water Distribution and Electrical, Mechanical and General business lines was mostly offset by lower revenue within the Gas & Petroleum Transmission segment.

 

Gross profit was $15.3 million, compared to $10.9 million in the prior-year quarter. Gross margin was 17.8% of revenues, compared to 12.7% of revenues in the third quarter of fiscal 2023. The increase is related to sales mix and timing of projects across the business.

 

Selling and administrative expenses were $6.8 million, compared to $5.3 million in the prior-year quarter. The increase is primarily related to additional personnel hired to secure and manage work for expected growth.

 

Net income was $17.5 million, or $1.06 per diluted share, compared to net income of $3.4 million or $0.21 per diluted share in the third quarter of fiscal 2023. This quarter’s results include approximately $11.4 million, or $0.69 per diluted share, related to proceeds from a legal judgement.

 

Backlog as of June 30, 2024 was $250.9 million, compared to $222.8 million as of March 31, 2024 and $185.9 million as of June 30, 2023.  Backlog at June 30, 2024 was comprised of approximately 30% water projects and 20% in new construction projects in the electric vehicle battery and steel manufacturing industries. The remaining backlog consisted of the Company’s normal mix of business.

 

 

 

 

Below is a comparison of the Company's operating results for the three and nine months ended June 30, 2024 and 2023 (unaudited):

 

   Three Months Ended   Three Months Ended   Nine Months Ended   Nine Months Ended 
   June 30,   June 30,   June 30,   June 30, 
   2024   2023   2024   2023 
Revenue  $85,923,760   $85,529,892   $247,214,602   $199,245,920 
                     
Cost of revenues   70,615,936    74,650,897    214,828,263    178,480,010 
                     
Gross profit   15,307,824    10,878,995    32,386,339    20,765,910 
                     
Selling and administrative expenses   6,815,191    5,283,617    21,335,862    16,487,502 
Income from operations   8,492,633    5,595,378    11,050,477    4,278,408 
                     
Other income (expense)                    
Interest income   -    -    -    196 
Other nonoperating expense   (27,446)   (72,338)   (33,935)   (163,525)
Income from lawsuit judgement   15,634,499    -    15,634,499    - 
Interest expense   (546,960)   (639,888)   (1,771,560)   (1,713,862)
Gain on sale of equipment   571    30,136    292,166    47,073 
    15,060,664    (682,090)   14,121,170    (1,830,118)
                     
Income before income taxes   23,553,297    4,913,288    25,171,647    2,448,290 
                     
Income tax expense   6,039,670    1,497,742    6,724,653    767,970 
                     
Net income  $17,513,627   $3,415,546   $18,446,994   $1,680,320 
                     
Weighted average shares outstanding-basic   16,565,827    16,602,556    16,567,034    16,659,169 
                     
Weighted average shares-diluted   16,597,982    16,602,556    16,602,903    16,659,169 
                     
Earnings per share-basic  $1.06   $0.21   $1.11   $0.10 
                     
Earnings per share-diluted  $1.06   $0.21   $1.11   $0.10 

 

Please refer to the table below that reconciles adjusted EBITDA with net income (unaudited):

 

   Three Months Ended   Three Months Ended   Nine Months Ended   Nine Months Ended 
   June 30,   June 30,   June 30,   June 30, 
   2024   2023   2024   2023 
Net income  $17,513,627   $3,415,546   $18,446,994   $1,680,320 
                     
Add: Income tax expense   6,039,670    1,497,742    6,724,653    767,970 
Add:  Interest expense, net of interest income   546,960    639,888    1,771,560    1,713,666 
Add: Non-operating expense   27,446    72,338    33,935    163,525 
Less: Income from lawsuit judgement   (15,634,499)   -    (15,634,499)   - 
Less:  Gain on sale of equipment   (571)   (30,136)   (292,166)   (47,073)
Add: Depreciation and intangible asset amortization expense   2,264,418    1,862,875    6,662,650    5,757,387 
Adjusted EBITDA  $10,757,051   $7,458,253   $17,713,127   $10,035,795 

 

 

 

 

Use of Non-GAAP Financial Measures

 

In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures. The reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures and other information relating to these measures are included herein. We include these measurements to enhance the understanding of our operating performance. We believe that Adjusted EBITDA as presented herein, considered along with net income (loss), is a relevant indicator of trends relating to the cash generating activity of our operations. We believe that excluding the costs herein provides a consistent comparison of the cash generating activity of our operations. We believe that Adjusted EBITDA is useful to investors as they facilitate a comparison of our operating performance to other companies who also use Adjusted EBITDA as supplemental operating measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

 

About Energy Services

 

Energy Services of America Corporation (NASDAQ: ESOA), headquartered in Huntington, WV, is a contractor and service company that operates primarily in the mid-Atlantic and Central regions of the United States and provides services to customers in the natural gas, petroleum, water distribution, automotive, chemical, and power industries. Energy Services employs 1,000+ employees on a regular basis. The Company's core values are safety, quality, and production.

 

Certain statements contained in the release including, without limitation, the words "believes," "anticipates," "intends," "expects" or words of similar import, constitute "forward-looking statements" within the meaning of section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements of the Company expressed or implied by such forward-looking statements. Such factors include, among others, general economic and business conditions, changes in business strategy or development plans, the effect of the COVID-19 pandemic, the integration of acquired business and other factors referenced in this release, risks and uncertainties related to the restatement of certain of our historical consolidated financial statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

 

Contact

 

Steven Hooser or John Beisler

Three Part Advisors

(214) 872-2710

 

 

 

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