Summary of Energy Services of America Corporation (ESOA) FY Conference Call Company Overview - **Company Name**: Energy Services of America Corporation (ESOA) - **Ticker**: ESOA - **Industry**: General contracting and construction, HVAC electrical work - **Primary Region**: Appalachian region - **Revenue**: $352 million in the last fiscal year - **Adjusted EBITDA**: $29 million [5][6] Core Business Segments - **Natural Gas and Petroleum Transmission**: Main focus area - **Water and Natural Gas Distribution**: Significant operations - **Industrial Services**: Involves power, automotive, chemical, and steel manufacturing [3][4] Financial Performance - **Employee Count**: Approximately 1,400 employees [6] - **Backlog**: Increased to $304 million as of June, with $125 million in water services and $100 million in industrial services [7][43] - **Quarterly Dividend**: $0.03 per share [10][48] Growth Strategies - **Geographical Expansion**: Active in expanding reach, particularly in Michigan and other states based on customer demand [8][11] - **Mergers and Acquisitions**: Completed four acquisitions to enhance service offerings and geographical presence [9][12] - **Diversification**: Shifted focus from solely gas transmission to include water distribution and industrial services to mitigate risks [15][16] Customer Relationships - **Key Customers**: American Water, Toyota, Mountaineer Gas, Dow, and TC Energy [12][13] - **Importance of Relationships**: Strong customer relationships are crucial for securing contracts and expanding operations [7][11] Safety and Operational Focus - **Safety as a Core Value**: Emphasis on safety to maintain customer trust and employee well-being [36][37] - **Quality Production**: Aiming for high standards in service delivery to ensure shareholder returns [38] Market Outlook - **Future Opportunities**: Anticipation of growth in water distribution services due to aging infrastructure and increasing demand for clean water [42][43] - **Challenges**: Weather-related disruptions and customer spending delays have impacted profitability [46][47] Capital Allocation and Stock Management - **Active in Acquisitions**: Continues to seek acquisition opportunities to enhance service capabilities [47] - **Stock Repurchase Plan**: Approximately 786,000 shares remaining for repurchase [48] Conclusion - **Overall Sentiment**: Optimistic about future growth despite recent challenges, with a focus on diversifying services and maintaining strong customer relationships [44][45]

Company Overview - Energy Services of America Corporation is headquartered in Huntington, WV and operates primarily in the mid-Atlantic and Central regions of the United States [4] - The company provides services to customers in various industries including natural gas, petroleum, water distribution, automotive, chemical, and power [4] - Energy Services employs over 1,000 employees on a regular basis, emphasizing core values of safety, quality, and production [4] Event Announcement - Energy Services of America will present at the Midwest IDEAS Investor Conference on August 27, 2025, at The InterContinental in Chicago, IL [1] - The presentation is scheduled to begin at 9:15 am CT and will be webcast, accessible through the conference host's main website [1]

Part I: Financial Information This section presents the unaudited consolidated financial statements and management's discussion and analysis for the period ended June 30, 2025 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q3 2025 show increased assets and revenue, but a net loss of $3.9 million due to lower margins and no prior-year lawsuit judgment [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $189.1 million, driven by an acquisition, while liabilities increased to $134.6 million and equity decreased to $54.5 million Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2025 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $121,617,498 | $110,426,929 | | **Total Fixed Assets** | $54,090,651 | $38,135,714 | | **Goodwill** | $7,428,761 | $4,087,554 | | **Total Assets** | **$189,121,088** | **$158,247,000** | | **Total Current Liabilities** | $91,001,964 | $74,248,552 | | **Long-Term Debt** | $37,600,186 | $17,187,992 | | **Total Liabilities** | **$134,579,565** | **$99,552,856** | | **Total Shareholders' Equity** | **$54,541,523** | **$58,694,144** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Nine-month revenue rose to $280.9 million, but gross profit declined, resulting in a net loss of $3.9 million compared to prior year's $18.4 million net income Consolidated Income Statement Summary (Unaudited) | Metric | Nine Months Ended June 30, 2025 ($) | Nine Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | **Revenue** | $280,926,850 | $247,214,602 | | **Gross Profit** | $22,324,040 | $32,386,339 | | **Income (Loss) from Operations** | ($3,278,213) | $11,050,477 | | **Proceeds from Lawsuit Judgement** | $0 | $15,634,499 | | **Net Income (Loss)** | **($3,863,056)** | **$18,446,994** | | **Diluted EPS** | **($0.23)** | **$1.11** | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $13.4 million, investing activities used $29.2 million for an acquisition, and financing provided $18.2 million, increasing cash by $2.4 million Consolidated Cash Flow Summary (Unaudited) | Cash Flow Activity | Nine Months Ended June 30, 2025 ($) | Nine Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $13,421,957 | $19,524,533 | | **Net Cash from Investing Activities** | ($29,159,985) | ($5,670,815) | | **Net Cash from Financing Activities** | $18,150,226 | ($15,747,423) | | **Increase (Decrease) in Cash** | $2,412,198 | ($1,893,705) | | **Cash at End of Period** | $15,338,234 | $14,537,867 | [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity decreased to $54.5 million due to net loss, dividends, and treasury stock purchases, partially offset by stock issuance for an acquisition - Key changes in shareholders' equity for the nine months ended June 30, 2025 include a net loss, payment of dividends, issuance of **$2.0 million** in common stock for the Tribute acquisition, and purchase of treasury stock[15](index=15&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail business, accounting policies, the $24 million Tribute acquisition, PPP loan uncertainty, revenue breakdown, and debt covenant non-compliance with waiver - The company provides construction and repair services for the natural gas, petroleum, water distribution, automotive, chemical, and power industries, primarily in the mid-Atlantic and central U.S.[19](index=19&type=chunk) - On December 2, 2024, the company acquired Tribute Contracting & Consultants, LLC for **$22.0 million in cash** and **$2.0 million in stock**, adding water distribution and wastewater system construction capabilities[27](index=27&type=chunk)[77](index=77&type=chunk) - The company restated prior financial statements due to an ongoing SBA review of its **$9.8 million** in previously forgiven PPP loans, recording a short-term borrowing liability for the full amount plus interest due to outcome uncertainty[33](index=33&type=chunk)[34](index=34&type=chunk)[71](index=71&type=chunk) - At June 30, 2025, the company had **$258.2 million** in remaining unsatisfied performance obligations (backlog), expected to be recognized as revenue over the next twelve months[48](index=48&type=chunk) - The company was not in compliance with all financial covenants at June 30, 2025, but received a waiver from its lender, who agreed to omit the effect of the PPP loan restatement from covenant calculations[69](index=69&type=chunk)[163](index=163&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 13.6% revenue growth to $280.9 million, a $3.9 million net loss due to lower gross profit, balance sheet expansion from acquisition, and a $304.4 million backlog [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Revenue increased 13.6% to $280.9 million, but gross profit declined 31.1% to $22.3 million, leading to a $3.9 million net loss due to weather and project mix Revenue by Segment (Nine Months Ended June 30) | Segment | 2025 Revenue ($) | 2024 Revenue ($) | % Change | | :--- | :--- | :--- | :--- | | Gas & Water Distribution | $96,967,546 | $53,892,952 | 79.9% | | Gas & Petroleum Transmission | $37,177,225 | $55,465,127 | -33.0% | | Electrical, Mechanical, & General | $146,782,079 | $137,856,523 | 6.5% | | **Total** | **$280,926,850** | **$247,214,602** | **13.6%** | Gross Profit Analysis (Nine Months Ended June 30) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Gross Profit** | $22,324,040 | $32,386,339 | -31.1% | | **Gross Margin** | 7.9% | 13.1% | -5.2 p.p. | - The decrease in gross profit was primarily due to less efficient performance, significant impacts from inclement weather in Q2, and a later start for Gas & Petroleum Transmission work compared to the prior year[130](index=130&type=chunk) - Selling and administrative expenses increased by **$4.3 million**, driven by additional personnel, increased consulting and audit fees from becoming an accelerated filer, and costs from the newly acquired Tribute subsidiary[136](index=136&type=chunk) [Comparison of Financial Condition](index=28&type=section&id=Comparison%20of%20Financial%20Condition) Total assets grew to $189.1 million and liabilities to $134.6 million, primarily due to the Tribute acquisition, while shareholders' equity decreased to $54.5 million - Net property, plant and equipment increased by **$16.0 million**, primarily due to **$14.9 million** in assets from the Tribute acquisition[145](index=145&type=chunk) - Goodwill increased by **$3.3 million** to **$7.4 million** due to the Tribute acquisition[148](index=148&type=chunk) - Total debt (current and long-term) increased by **$25.2 million**, mainly due to **$16.0 million** in financing for the Tribute acquisition and the assumption of **$3.8 million** of its debt[153](index=153&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company has a $30.0 million credit line, received a waiver for debt covenant non-compliance, faces uncertainty regarding $9.8 million in PPP loans, and has $86.9 million in performance bonds - The company renewed its **$30.0 million** line of credit in July 2025, with an outstanding balance of **$11.6 million** at June 30, 2025[161](index=161&type=chunk)[162](index=162&type=chunk) - The company was not in compliance with all debt covenants at June 30, 2025, and received a waiver, with the lender agreeing to exclude the impact of the PPP loan restatement from covenant calculations[163](index=163&type=chunk) - The SBA is reviewing the forgiveness of **$9.8 million** in PPP loans, creating uncertainty and a potential repayment liability that could negatively impact financial condition[166](index=166&type=chunk)[168](index=168&type=chunk) - As of June 30, 2025, the company had **$86.9 million** in performance bonds outstanding to guarantee project performance and payments to subcontractors[188](index=188&type=chunk) [Outlook](index=39&type=section&id=Outlook) Management reports a strong backlog of $304.4 million, with significant bid opportunities in water, wastewater, electrical, and mechanical projects Backlog Comparison | Date | Unaudited Backlog ($) | | :--- | :--- | | June 30, 2025 | $304.4 million | | June 30, 2024 | $250.9 million | | September 30, 2024 | $243.2 million | - The company is seeing significant bid opportunities for water, wastewater, electrical, and mechanical projects, with backlogs of **$125.0 million** and **$133.0 million** in these areas, respectively[233](index=233&type=chunk) - Bidding and awards for natural gas projects are occurring later than in previous years, but bid opportunities increased in the third fiscal quarter, with the backlog for transmission projects at **$30.0 million**[234](index=234&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Disclosure about market risk is not required as the company qualifies as a smaller reporting company - Disclosure about market risk is not required as the company qualifies as a smaller reporting company[236](index=236&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal controls, and the Tribute subsidiary is within its SOX compliance grace period - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[237](index=237&type=chunk) - The recently acquired Tribute subsidiary has a one-year grace period before needing to fully comply with Sarbanes-Oxley (SOX) regulations[239](index=239&type=chunk) Part II: Other Information This section provides information on legal proceedings, risk factors, equity security sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is negotiating a disputed pension withdrawal liability claim, with no future liability expected, and other legal proceedings are not material - The company is negotiating a disputed pension withdrawal liability claim for work that ended in 2011, with payments suspended and no future liability expected[242](index=242&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the filing of the Annual Report on Form 10-K - No material changes to risk factors have occurred since the filing of the Annual Report on Form 10-K[244](index=244&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered equity sales and repurchased 106,392 shares of common stock for $844,230 during Q3 FY2025 Issuer Purchases of Equity Securities (Q3 FY2025) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | Total Value of Shares Purchased ($) | | :--- | :--- | :--- | :--- | | April 2025 | — | — | — | | May 2025 | 106,392 | $7.94 | $844,230 | | June 2025 | — | — | — | | **Total** | **106,392** | **$7.94** | **$844,230** | [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the third fiscal quarter of 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the third fiscal quarter of 2025[246](index=246&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including SOX certifications and XBRL data files - Exhibits filed include Sarbanes-Oxley certifications (302 and 906) and XBRL interactive data files[250](index=250&type=chunk) [Signatures](index=43&type=section&id=Signatures) The report is duly signed by the Chief Executive Officer and Chief Financial Officer on August 11, 2025

[Third Quarter Summary](index=1&type=section&id=Third%20Quarter%20Summary) Energy Services of America's Q3 2025 showed significant sequential improvement, driven by strong Gas & Water Distribution revenue growth and an increased backlog, with an optimistic outlook for future projects [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Energy Services of America reported significant sequential improvement in Q3 2025, driven by strong Gas & Water Distribution revenue and increased backlog, with an optimistic outlook for future projects - Third quarter results show **significant sequential improvement**, entering more favorable spring and summer weather[5](index=5&type=chunk) - Strong revenue growth from the prior-year quarter primarily driven by the **Gas & Water Distribution business line**[5](index=5&type=chunk) - Backlog increased by **$24 million sequentially**, partly due to increased opportunities for water and wastewater projects[5](index=5&type=chunk) - Optimistic outlook for fiscal 2025 and 2026, with strong opportunities in electrical, mechanical, general construction, and ongoing water/wastewater pipe replacement projects[5](index=5&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) For the fiscal third quarter ended June 30, 2025, Energy Services of America reported a 21% increase in revenue, while gross profit and net income decreased, and backlog saw a substantial increase | Metric | Q3 FY25 | Q3 FY24 (YoY Change) | | :----- | :------ | :------------------- | | Revenue | $103.6 million | +21% | | Gross profit | $12.0 million | vs. $15.3 million | | Net income | $2.1 million | ($0.12 per diluted share) | | Backlog | $304.4 million | vs. $250.9 million | [Fiscal Third Quarter 2025 Financial Results](index=2&type=section&id=Third%20Quarter%20Fiscal%202025%20Financial%20Results) This section details Energy Services of America's Q3 2025 financial performance, including revenue, profitability, expenses, and backlog, with comparative data [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Total revenues for the third quarter of fiscal 2025 increased by 21% year-over-year, primarily driven by increased work in the Gas & Water Distribution and Electrical, Mechanical and General business lines, which offset a decline in Gas & Petroleum Transmission | Metric | Q3 FY25 | Q3 FY24 | YoY Change | | :----- | :------ | :------ | :--------- | | Total Revenues | $103.6 million | $85.9 million | +21% | - Year-over-year increase primarily driven by increased work within the **Gas & Water Distribution** and **Electrical, Mechanical and General business lines**[7](index=7&type=chunk) - Increase more than offset a decline in **Gas & Petroleum Transmission**[7](index=7&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross profit decreased to $12.0 million, resulting in a lower gross margin of 11.6% due to reduced operational efficiency, while net income significantly declined to $2.1 million, or $0.12 per diluted share, compared to $17.5 million, or $1.06 per diluted share in the prior-year quarter, which had benefited from a substantial legal judgment | Metric | Q3 FY25 | Q3 FY24 | | :----- | :------ | :------ | | Gross profit | $12.0 million | $15.3 million | | Gross margin | 11.6% | 17.8% | | Net income | $2.1 million | $17.5 million | | Diluted EPS | $0.12 | $1.06 | - Decrease in gross margin related to **lower operational efficiency** resulting in less fixed cost coverage[8](index=8&type=chunk) - Prior-year quarter net income included approximately **$11.4 million**, or **$0.69 per diluted share**, from a legal judgment[10](index=10&type=chunk) [Selling and Administrative Expenses](index=2&type=section&id=Selling%20and%20Administrative%20Expenses) Selling and administrative expenses increased to $8.8 million from $6.8 million in the prior-year quarter, primarily attributed to additional personnel hired for expected growth, the acquisition of Tribute in December 2024, and increased consulting and audit fees due to the company becoming an accelerated filer | Metric | Q3 FY25 | Q3 FY24 | | :----- | :------ | :------ | | S&A Expenses | $8.8 million | $6.8 million | - Increase primarily related to **additional personnel hired** to secure and manage work for expected growth[9](index=9&type=chunk) - Increase also due to the **acquisition of Tribute in December 2024** and increased consulting and audit fees from becoming an an accelerated filer[9](index=9&type=chunk) [Backlog](index=2&type=section&id=Backlog) The company's backlog as of June 30, 2025, reached $304.4 million, demonstrating a sequential increase from $280.7 million as of March 31, 2025, and a year-over-year increase from $250.9 million as of June 30, 2024 | Date | Backlog | | :--- | :------ | | June 30, 2025 | $304.4 million | | March 31, 2025 | $280.7 million | | June 30, 2024 | $250.9 million | [Consolidated Statements of Operations (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) This section presents the unaudited consolidated statements of operations, offering a detailed comparison of financial performance for the three and nine months ended June 30, 2025, versus 2024, covering key line items from revenue to net income | | Three Months | | Three Months | | Nine Months | | Nine Months | | --- | --- | --- | --- | --- | --- | --- | --- | | | Ended | | Ended | | Ended | | Ended | | | June 30, | | June 30, | | June 30, | | June 30, | | | 2025 | | 2024 | | 2025 | | 2024 | | Revenue | $ 103,601,585 | | $ 85,923,760 | | $ 280,926,850 | | $ 247,214,602 | | Cost of revenues | 91,618,987 | | 70,615,936 | | 258,602,810 | | 214,828,263 | | Gross profit | 11,982,598 | | 15,307,824 | 22,324,040 | | 32,386,339 | | Selling and administrative expenses | 8,814,545 | | 6,815,191 | 25,602,253 | | 21,335,862 | | Income (loss) from operations | 3,168,053 | | 8,492,633 | (3,278,213) | | 11,050,477 | | Other income (expense) | | | | | | | | | Proceeds from lawsuit judgement | - | | 15,634,499 | | - | 15,634,499 | | Other nonoperating expense | (38,529) | | (27,446) | (107,407) | | (33,935) | | Interest expense | (781,198) | | (546,960) | (2,140,686) | | (1,771,560) | | (Loss) gain on sale of equipment | (128,710) | | 571 | 50,532 | | 292,166 | | | (948,437) | | 15,060,664 | (2,197,561) | | 14,121,170 | | Income (loss) before income taxes | 2,219,616 | | 23,553,297 | (5,475,774) | | 25,171,647 | | Income tax expense (benefit) | 137,987 | | 6,039,670 | (1,612,718) | | 6,724,653 | | Net income (loss) | $ 2,081,629 | $ 17,513,627 | $ (3,863,056) | | $ 18,446,994 | | Weighted average shares outstanding-basic | 16,625,761 | | 16,565,827 | 16,644,028 | | 16,567,034 | | Weighted average shares-diluted | 16,666,135 | | 16,597,982 | 16,644,028 | | 16,602,903 | | Earnings (loss) per share-basic | $ 0.13 | $ 1.06 | $ (0.23) | | $ 1.11 | | Earnings (loss) per share-diluted | $ 0.12 | $ 1.06 | $ (0.23) | | $ 1.11 | [Adjusted EBITDA Reconciliation (Unaudited)](index=3&type=section&id=Adjusted%20EBITDA%20Reconciliation%20(Unaudited)) This section provides a reconciliation of net income (loss) to Adjusted EBITDA for the three and nine months ended June 30, 2025, and 2024, detailing adjustments for income tax, interest, non-operating expenses, lawsuit income, gain/loss on equipment sale, and depreciation/amortization | | Three Months | | Three Months | | Nine Months | | Nine Months | | --- | --- | --- | --- | --- | --- | --- | --- | | | Ended | | Ended | | Ended | | Ended | | | June 30, | | June 30, | | June 30, | | June 30, | | | 2025 | | 2024 | | 2025 | | 2024 | | Net income (loss) | $ 2,081,629 | $ 17,513,627 | $ (3,863,056) | $ 18,446,994 | | Add (less): Income tax expense (benefit) | 137,987 | 6,039,670 | (1,612,718) | 6,724,653 | | Add: Interest expense, net of interest income | 781,198 | 546,960 | 2,140,686 | 1,771,560 | | Add: Non-operating expense | 38,529 | 27,446 | 107,407 | 33,935 | | Less: Income from lawsuit judgement | - | (15,634,499) | - | (15,634,499) | | Add (less): Loss (gain) on sale of equipment | 128,710 | (571) | (50,532) | (292,166) | | Add: Depreciation and intangible asset amortization expense | 3,291,414 | 2,264,418 | 9,172,704 | 6,662,650 | | Adjusted EBITDA | $ 6,459,467 | $ 10,757,051 | $ 5,894,491 | $ 17,713,127 | [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures, particularly Adjusted EBITDA, to provide additional insights into operational performance [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Energy Services of America utilizes non-GAAP financial measures, specifically Adjusted EBITDA, to provide additional insight into its operating performance and cash-generating activities, believing these measures offer a consistent comparison and are useful to investors, while also acknowledging their limitations as analytical tools and emphasizing that they should not replace GAAP results - Non-GAAP financial measures, such as **Adjusted EBITDA**, are included to enhance the understanding of operating performance[12](index=12&type=chunk) - Adjusted EBITDA is considered a relevant indicator of trends relating to the **cash generating activity of operations** and facilitates comparison with other companies[12](index=12&type=chunk) - Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP financial results[12](index=12&type=chunk) [About Energy Services](index=4&type=section&id=About%20Energy%20Services) This section provides an overview of Energy Services of America Corporation, including its operations, service areas, and core values [Company Profile](index=4&type=section&id=Company%20Profile) Energy Services of America Corporation is a contractor and service company based in Huntington, WV, operating primarily in the mid-Atlantic and Central United States, serving various industries including natural gas, petroleum, water distribution, automotive, chemical, and power, employing over 1,000 individuals with core values of safety, quality, and production - Energy Services of America Corporation (NASDAQ: ESOA) is headquartered in **Huntington, WV**[13](index=13&type=chunk) - Operates primarily in the **mid-Atlantic and Central regions** of the United States[13](index=13&type=chunk) - Provides services to customers in the **natural gas, petroleum, water distribution, automotive, chemical, and power industries**[13](index=13&type=chunk) - Employs **1,000+ employees** on a regular basis, with core values of safety, quality, and production[13](index=13&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ [Disclaimer Regarding Future Performance](index=4&type=section&id=Disclaimer%20Regarding%20Future%20Performance) This section contains a standard disclaimer for forward-looking statements, indicating that such statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied, cautioning investors against undue reliance and stating that the company disclaims any obligation to update these statements - Statements using words like 'believes,' 'anticipates,' 'intends,' 'expects' are considered **forward-looking statements**[14](index=14&type=chunk) - Such statements involve known and unknown risks, uncertainties, and other factors that may cause **actual results to differ materially**[14](index=14&type=chunk) - Factors include general economic and business conditions, changes in business strategy, integration of acquired businesses, and risks related to financial statement restatement[14](index=14&type=chunk) - Prospective investors are cautioned not to place undue reliance on forward-looking statements, and the Company disclaims any obligation to update them[14](index=14&type=chunk) [Contact Information](index=4&type=section&id=Contact) This section provides essential contact details for investor relations inquiries [Investor Relations Contact](index=4&type=section&id=Investor%20Relations%20Contact) This section provides the contact details for investor relations inquiries, handled by Three Part Advisors - Contact persons: **Steven Hooser or John Beisler** at Three Part Advisors[15](index=15&type=chunk) - Contact phone number: **(214) 872-2710**[15](index=15&type=chunk)

Core Viewpoint - Energy Services of America Corporation reported significant revenue growth in the third quarter of fiscal 2025, driven by its Gas & Water Distribution business line and an optimistic outlook for future projects [3][4]. Financial Performance - Total revenues for the third quarter reached $103.6 million, a 21% increase from $85.9 million in the same quarter of fiscal 2024 [4][9]. - Gross profit was $12.0 million, down from $15.3 million in the prior-year quarter, resulting in a gross margin of 11.6% compared to 17.8% [5][9]. - Net income was $2.1 million, or $0.12 per diluted share, a significant decrease from $17.5 million or $1.06 per diluted share in the third quarter of fiscal 2024 [7][10]. Operational Highlights - The company increased its backlog by $24 million sequentially, totaling $304.4 million as of June 30, 2025, compared to $250.9 million a year earlier [3][7]. - Selling and administrative expenses rose to $8.8 million from $6.8 million in the prior-year quarter, attributed to hiring additional personnel and increased consulting fees [6][9]. Market Outlook - The company remains optimistic about the business outlook entering the final quarter of fiscal 2025 and into fiscal 2026, citing strong opportunities in electrical, mechanical, and general construction projects [3][4].

Group 1 - Energy Services of America (NASDAQ: ESOA) experienced significant exogenous headwinds in Q2'25 due to adverse weather conditions in its serviced region, leading to a substantial net loss [1] - Despite the near-term challenges, the market served by the company remains robust with substantial investment outlay [1] - The analyst, Michael Del Monte, has over 5 years of experience in the investment management industry and has worked across various sectors including Oil & Gas, Oilfield Services, Midstream, Industrials, Information Technology, EPC Services, and consumer discretionary [1]

Core Viewpoint - Energy Services of America has been added to the Russell 2000 and Russell 3000 indexes, marking a significant milestone for the company and enhancing its visibility among small-cap investors [1][2]. Company Overview - Energy Services of America Corporation is headquartered in Huntington, WV, and operates primarily in the mid-Atlantic and Central regions of the United States, providing services in various industries including natural gas, petroleum, water distribution, automotive, chemical, and power [3]. - The company employs over 1,000 employees and emphasizes core values of safety, quality, and production [3]. Industry Context - The Russell 2000 index is a key benchmark for small-cap focused investors, and being included in this index allows the company to present its investment thesis to a broader audience [2]. - As of June 2024, approximately $10.6 trillion in assets are benchmarked against the Russell US indexes, indicating the significant influence and recognition of these indexes in the investment community [2].

Summary of Energy Services of America Corporation (ESOA) FY Conference Company Overview - **Company Name**: Energy Services of America Corporation (ESOA) - **Ticker Symbol**: ESOA on Nasdaq - **Industry**: Construction, General Contracting, Utility Services, Water and Gas Distribution, Transmission - **Location**: Primarily based in Huntington, West Virginia - **Employee Count**: Approximately 1,200 employees, expected to increase to 1,600-1,700 during peak construction season [15][19] Key Financial Highlights - **Fiscal Year 2024 Revenue**: $352 million [15] - **Adjusted EBITDA**: Approximately $29 million [15] - **Backlog Growth**: Increased from $72 million in FY21 to $280 million as of March 31, 2025 [17] - **Dividend**: Recently doubled from annual to quarterly, currently at $0.12 per share [18] Strategic Focus and Growth Areas - **Utility Services**: Emphasis on water distribution services, viewed as a low-risk and profitable venture [43] - **Acquisitions**: Successful integration of several acquisitions since February 2020, including Tribute Contracting, which focuses on wastewater projects [18][36] - **Market Demand**: Notable increase in inquiries for new capacity in gas and industrial sectors post-COVID [10] Operational Insights - **Customer Base**: Diverse clientele including American Water, TransCanada, NiSource, and Toyota [24] - **Service Areas**: Operations span across 15-17 states, with a focus on West Virginia, Ohio, and Kentucky for water and gas distribution [19] - **Project Types**: Engaged in both fixed contracts and time-and-material contracts, with a preference for unit-based pricing in utility services [55][57] Challenges and Risks - **Weather Impact**: Adverse weather conditions in early 2025 led to a significant loss of operational days, affecting quarterly performance [48] - **Debt Management**: Total debt around $50 million, with a portion related to acquisitions and equipment financing [61] Environmental and Safety Commitment - **Safety Standards**: Emphasis on safety as a core value, crucial for maintaining customer relationships and project continuity [38] - **Environmental Projects**: Involvement in projects related to electric vehicle battery plants and other environmentally friendly initiatives [39] Future Outlook - **Growth Strategy**: Focus on organic growth and strategic acquisitions, particularly in water distribution and industrial services [43] - **Market Position**: Positioned to benefit from increased infrastructure spending and a growing backlog of projects [17][46] Additional Insights - **Technological Advancements**: Adoption of horizontal directional drilling (HDD) to minimize environmental disruption during water projects [51][53] - **Shareholder Engagement**: Company management emphasizes shareholder-friendly practices, including stock buybacks and dividends [11][50]

Company Announcement - Energy Services of America (Nasdaq: ESOA) will have its President Doug Reynolds and CFO Charles Crimmel present at the East Coast IDEAS Investor Conference on June 11, 2025 [1] - The presentation is scheduled to begin at 8:35am ET and will be available via webcast [1] Company Overview - Energy Services of America Corporation is headquartered in Huntington, WV, and operates primarily in the mid-Atlantic and Central regions of the United States [3] - The company provides services to various industries including natural gas, petroleum, water distribution, automotive, chemical, and power [3] - Energy Services employs over 1,000 employees regularly and emphasizes core values of safety, quality, and production [3]

Part I [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)%3A) The company reported a **$5.9 million** net loss for the six months ended March 31, 2025, a significant downturn from prior-year net income, driven by decreased gross profit despite a 9.9% revenue increase, with total assets growing to **$170.2 million** due to an acquisition [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$170.2 million** as of March 31, 2025, primarily due to the Tribute acquisition, while total liabilities rose to **$116.4 million** and shareholders' equity decreased to **$53.8 million** Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$170,225,716** | **$158,247,000** | | Total Current Assets | $104,204,211 | $110,426,929 | | Total Fixed Assets, net | $52,321,577 | $38,135,714 | | Goodwill | $7,428,761 | $4,087,554 | | **Total Liabilities** | **$116,446,167** | **$99,552,856** | | Total Current Liabilities | $79,800,395 | $74,248,552 | | Long-term debt, less current maturities | $30,614,888 | $17,187,992 | | **Total Shareholders' Equity** | **$53,779,549** | **$58,694,144** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Revenues increased 9.9% to **$177.3 million** for the six months ended March 31, 2025, but a faster rise in cost of revenues led to a 39.4% decrease in gross profit to **$10.3 million** and a net loss of **$5.7 million** Income Statement Summary (Unaudited) | Metric | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenue | $177,325,265 | $161,290,842 | | Gross Profit | $10,341,442 | $17,078,515 | | (Loss) Income from Operations | $(6,446,266) | $2,557,844 | | Net (Loss) Income | $(5,944,685) | $933,367 | | Diluted (Loss) Earnings Per Share | $(0.36) | $0.06 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to **$10.0 million** for the six months ended March 31, 2025, while investing activities used **$25.3 million** primarily for the Tribute acquisition, resulting in a **$3.0 million** decrease in cash and cash equivalents Cash Flow Summary (Unaudited, Six Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,989,308 | $183,114 | | Net cash used in investing activities | $(25,274,011) | $(2,642,168) | | Net cash provided by (used in) financing activities | $12,284,900 | $(1,881,052) | | **Decrease in cash and cash equivalents** | **$(2,999,803)** | **$(4,340,106)** | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity decreased by **$4.9 million** to **$53.8 million** as of March 31, 2025, primarily due to the net loss and dividend payments, partially offset by stock issued for the Tribute acquisition - Shareholders' equity decreased by **$4.9 million** over the six-month period to **$53,779,549**[15](index=15&type=chunk) - The decrease was driven by a net loss for the period and dividends on common stock, partially offset by **$2.0 million** in common stock issued for an acquisition[15](index=15&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail the Tribute acquisition, the reinstatement of **$9.8 million** in previously forgiven PPP loans as a liability, revenue recognition policies, a **$223.2 million** backlog, increased debt for the acquisition, and compliance with debt covenants - The company completed the acquisition of Tribute Contracting & Consultants, LLC on December 2, 2024, for **$22.0 million** in cash and **$2.0 million** in stock[74](index=74&type=chunk) - The company has recorded a short-term borrowing of **$9.8 million** plus accrued interest for previously forgiven PPP loans that are now under review by the SBA[32](index=32&type=chunk)[68](index=68&type=chunk) - At March 31, 2025, the company had **$223.2 million** in remaining unsatisfied performance obligations expected to be recognized as revenue over the next twelve months[45](index=45&type=chunk) - Goodwill increased by **$3.3 million** to **$7.4 million** due to the Tribute acquisition[80](index=80&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes 9.9% revenue growth to increased Gas & Water Distribution services, offset by declines in Gas & Petroleum Transmission, while gross profit fell by **$6.7 million** due to productivity issues and reduced margins, with the Tribute acquisition impacting financial condition and increasing backlog to **$280.7 million** [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Revenues increased 9.9% to **$177.3 million** for the six months ended March 31, 2025, but a faster rise in cost of revenues led to a 39.4% decrease in gross profit to **$10.3 million** and a net loss of **$5.7 million** Revenue by Segment (Six Months Ended March 31) | Segment | 2025 Revenue | 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Gas & Water Distribution | $58,401,124 | $31,356,586 | 86.2% | | Gas & Petroleum Transmission | $21,851,275 | $38,326,321 | -43.0% | | Electrical, Mechanical, & General | $97,072,866 | $91,607,935 | 6.0% | | **Total** | **$177,325,265** | **$161,290,842** | **9.9%** | Gross Profit (Loss) by Segment (Six Months Ended March 31) | Segment | 2025 Gross Profit | 2024 Gross Profit | % Change | | :--- | :--- | :--- | :--- | | Gas & Water Distribution | $4,252,404 | $6,387,439 | -33.4% | | Gas & Petroleum Transmission | $(271,277) | $3,627,153 | -107.5% | | Electrical, Mechanical, & General | $8,593,292 | $8,177,317 | 5.1% | | **Total (after unallocated expenses)** | **$10,341,442** | **$17,078,515** | **-39.4%** | - Gross profit decreases in Gas & Water Distribution and Gas & Petroleum Transmission were primarily attributed to lower productivity from inclement weather and project timing issues[126](index=126&type=chunk)[127](index=127&type=chunk) - Selling and administrative expenses increased by **$2.3 million**, partly due to the Tribute acquisition (**$553,000**) and increased consulting/audit fees from becoming an accelerated filer[132](index=132&type=chunk) [Comparison of Financial Condition](index=39&type=section&id=Comparison%20of%20Financial%20Condition) Total assets grew by **$12.0 million** to **$170.2 million** due to the Tribute acquisition, while total liabilities increased by **$16.9 million** to **$116.4 million** and shareholders' equity decreased by **$4.9 million** - Net property, plant and equipment increased by **$14.2 million** to **$52.3 million**, largely due to **$14.9 million** in assets from the Tribute acquisition[140](index=140&type=chunk) - Total debt (current and long-term) increased by **$16.8 million** to **$40.4 million**, primarily due to **$16.0 million** in financing for the Tribute acquisition and the assumption of **$3.8 million** of its debt[151](index=151&type=chunk) - Shareholders' equity decreased by **$4.9 million** to **$53.8 million**, reflecting a net loss of **$5.9 million** and dividends, partially offset by **$2.0 million** in stock issued for the acquisition[158](index=158&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a **$30.0 million** line of credit with **$12.5 million** available, was in compliance with all debt covenants, and faces a significant contingency regarding the potential repayment of **$9.8 million** in PPP loans under SBA review - The company has a **$30.0 million** line of credit, with **$5.75 million** drawn and **$12.5 million** available as of March 31, 2025[160](index=160&type=chunk) - The company was in compliance with all debt covenants at March 31, 2025, after the lender agreed to exclude the impact of the PPP loan restatement from calculations[161](index=161&type=chunk) - A major uncertainty is the potential repayment of **$9.8 million** in PPP loans, which were previously forgiven but are now under SBA review[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) [Outlook](index=59&type=section&id=Outlook) The company's outlook is supported by a strong backlog, which increased to **$280.7 million** at March 31, 2025, with significant bid opportunities in water, wastewater, electrical, and mechanical projects, and expected increases in natural gas project opportunities - The unaudited backlog increased to **$280.7 million** at March 31, 2025, compared to **$243.2 million** at September 30, 2024[235](index=235&type=chunk) - The company is seeing significant bid opportunities in water, wastewater, electrical, and mechanical projects, with natural gas project opportunities delayed but expected to increase[234](index=234&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Disclosure is not required for this section as the company is classified as a smaller reporting company - Disclosure is not required for a smaller reporting company[236](index=236&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls, and the newly acquired Tribute subsidiary is within its one-year SOX compliance grace period - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[238](index=238&type=chunk) - There were no material changes to internal controls over financial reporting during the second quarter of fiscal year 2025[239](index=239&type=chunk) - The recently acquired Tribute subsidiary has a one-year grace period before needing to fully comply with Sarbanes-Oxley (SOX) regulations[240](index=240&type=chunk) Part II [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is negotiating a disputed pension plan withdrawal liability claim, believing it is exempt and expecting no future liabilities, while other legal proceedings are considered ordinary course of business - The company is negotiating a withdrawal liability claim from a pension plan for which it received a demand for quarterly payments of **$41,000** starting in December 2021[243](index=243&type=chunk) - The company disputes the claim and believes no withdrawal liability exists, with payments suspended during negotiations and no future liabilities expected[243](index=243&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the filing of the Annual Report on Form 10-K on December 19, 2024 - No material changes to risk factors have occurred since the filing of the Annual Report on Form 10-K on December 19, 2024[245](index=245&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no common stock repurchases during the three months ended March 31, 2025 - There were no unregistered sales of equity securities during the reporting period[247](index=247&type=chunk) - The company did not repurchase any shares of its common stock during the three months ended March 31, 2025[247](index=247&type=chunk) [Other Information](index=62&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second fiscal quarter of 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second fiscal quarter of 2025[246](index=246&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) Exhibits filed with the Form 10-Q include CEO and CFO certifications and XBRL data files - Exhibits filed include certifications from the CEO and CFO and XBRL Interactive Data Files[248](index=248&type=chunk)