Energy Services of America (ESOA) - 2025 Q1 - Quarterly Results

First Quarter Highlights Q1 2025 saw Energy Services of America's revenue rise 12% to $100.6 million, but net income dropped to $854,000 due to weather and project timing, despite a growing $260.2 million backlog Key Financial Highlights | Metric | Q1 FY2025 ($) | Q1 FY2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $100.6 million | $90.2 million | +12% | | Gross Profit | $10.3 million | $10.8 million | -4.6% | | Net Income | $854,000 | $2.0 million | -58.2% | | Diluted EPS | $0.05 | $0.12 | -58.3% | | Adjusted EBITDA | $4.3 million | $5.8 million | -25.9% | | Backlog | $260.2 million | $185.9 million | +40.0% | - Management attributes the quarterly performance to continued growth in distribution and Electrical/Mechanical segments, offset by weather and project timing impacts on profitability, with demand remaining strong and an increasing backlog from both organic and inorganic growth[4] - The company acquired Tribute Contracting & Consultants on December 2, which partially contributed to the quarter's results[5] Detailed Financial Performance Q1 2025 revenue increased to $100.6 million, primarily from Gas & Water Distribution and Electrical/Mechanical lines, though gross margin contracted to 10.2% and net income dropped to $854,000 due to segment profitability and higher expenses - The 12% year-over-year revenue increase to $100.6 million was primarily driven by increased activity within the Gas & Water Distribution and Electrical, Mechanical and General business lines[6] - Gross profit decreased to $10.3 million, with gross margin falling to 10.2% from 12.0% in the prior-year quarter, attributed to lower profit within the Gas & Petroleum Transmission segment[7] - Selling and administrative expenses increased by 19.4% to $8.6 million, mainly due to hiring additional personnel to support and manage anticipated growth[7] - Backlog demonstrated strong growth, reaching $260.2 million as of December 31, 2024, an increase from $243.2 million at the end of the previous quarter and $185.9 million at the end of the prior-year quarter[8] Financial Statements This section provides the unaudited consolidated financial statements, including the statement of operations, for the fiscal first quarter of 2025 and 2024 Consolidated Statements of Operations (Unaudited) This unaudited comparative income statement details the components leading to a net income of $853,733 for Q1 2025, a significant decrease from $2,042,195 in the prior year, with diluted EPS falling from $0.12 to $0.05 Consolidated Statements of Operations | | Three Months Ended Dec 31, 2024 ($) | Three Months Ended Dec 31, 2023 ($) | | :--- | :--- | :--- | | Revenue | 100,646,114 | 90,163,187 | | Cost of revenues | 90,382,532 | 79,324,226 | | Gross profit | 10,263,582 | 10,838,961 | | Selling and administrative expenses | 8,618,188 | 7,198,720 | | Income from operations | 1,645,394 | 3,640,241 | | Other income (expense) | (336,198) | (540,011) | | Income before income taxes | 1,309,196 | 3,100,230 | | Income tax expense | 455,463 | 1,058,035 | | Net income | 853,733 | 2,042,195 | | Earnings per share-diluted | 0.05 | 0.12 | Non-GAAP Financial Measures This section presents non-GAAP financial measures, including a reconciliation of net income to Adjusted EBITDA, to provide additional insights into the company's operating performance Reconciliation of Net Income to Adjusted EBITDA This reconciliation details the calculation of Adjusted EBITDA, a non-GAAP measure, which decreased to $4.3 million in Q1 2025 from $5.8 million in the prior year, providing insight into the company's cash-generating activity Reconciliation of Net Income to Adjusted EBITDA | Reconciliation Item | Three Months Ended Dec 31, 2024 ($) | Three Months Ended Dec 31, 2023 ($) | | :--- | :--- | :--- | | Net income | 853,733 | 2,042,195 | | Add: Income tax expense | 455,463 | 1,058,035 | | Add: Interest expense, net | 483,718 | 601,684 | | Add (less): Non-operating expense (income) | 48,262 | (75,001) | | (Less) add: (gain) loss on sale of equipment | (195,782) | 13,328 | | Add: Depreciation and amortization | 2,698,828 | 2,176,621 | | Adjusted EBITDA | 4,344,222 | 5,816,862 | - The company includes Adjusted EBITDA to enhance the understanding of its operating performance, believing it is a relevant indicator of trends related to cash-generating activity and useful for comparison with other companies[11]