ESOA Energy Services of America Corporation

 

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

 

 

v3.24.2.u1

Cover	Aug. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 12, 2024
Entity File Number	001-32998
Entity Registrant Name	Energy Services of America Corporation
Entity Central Index Key	0001357971
Entity Tax Identification Number	20-4606266
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	75 West 3rd Ave.
Entity Address, City or Town	Huntington
Entity Address, State or Province	WV
Entity Address, Postal Zip Code	25701
City Area Code	304
Local Phone Number	522-3868
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, Par Value $0.0001
Trading Symbol	ESOA
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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