Energy Services of America (ESOA) - 2025 Q3 - Quarterly Results

Third Quarter Summary 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 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] - Strong revenue growth from the prior-year quarter primarily driven by the Gas & Water Distribution business line[5] - Backlog increased by $24 million sequentially, partly due to increased opportunities for water and wastewater projects[5] - Optimistic outlook for fiscal 2025 and 2026, with strong opportunities in electrical, mechanical, general construction, and ongoing water/wastewater pipe replacement projects[5] Key Financial Highlights 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 This section details Energy Services of America's Q3 2025 financial performance, including revenue, profitability, expenses, and backlog, with comparative data Revenue Analysis 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] - Increase more than offset a decline in Gas & Petroleum Transmission[7] Profitability Analysis 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] - Prior-year quarter net income included approximately $11.4 million, or $0.69 per diluted share, from a legal judgment[10] Selling and Administrative Expenses 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] - Increase also due to the acquisition of Tribute in December 2024 and increased consulting and audit fees from becoming an an accelerated filer[9] 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) 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) 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 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 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] - Adjusted EBITDA is considered a relevant indicator of trends relating to the cash generating activity of operations and facilitates comparison with other companies[12] - 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] About Energy Services This section provides an overview of Energy Services of America Corporation, including its operations, service areas, and core values Company Profile 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] - Operates primarily in the mid-Atlantic and Central regions of the United States[13] - Provides services to customers in the natural gas, petroleum, water distribution, automotive, chemical, and power industries[13] - Employs 1,000+ employees on a regular basis, with core values of safety, quality, and production[13] Forward-Looking Statements 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 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] - Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[14] - Factors include general economic and business conditions, changes in business strategy, integration of acquired businesses, and risks related to financial statement restatement[14] - Prospective investors are cautioned not to place undue reliance on forward-looking statements, and the Company disclaims any obligation to update them[14] Contact Information This section provides essential contact details for investor relations inquiries Investor Relations Contact 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] - Contact phone number: (214) 872-2710[15]