Energy Services of America Announces Financial Results for the Three Months Ended December 31, 2023

Rhea-AI Summary

Energy Services of America Corporation (ESOA) reported strong financial results for the first fiscal quarter of 2023, with net income of $2.0 million, fully diluted earnings per share of $0.12, revenues of $90.2 million, and adjusted EBITDA of $5.8 million. The Company's backlog stood at $185.9 million, showing a slight decrease from the previous year. President Douglas Reynolds expressed satisfaction with the performance and highlighted the historical significance of the results.

Insights

Financial Analyst

The reported financial metrics for Energy Services of America Corporation indicate a solid performance for the first fiscal quarter. The net income of $2.0 million and fully diluted earnings per share of $0.12 are critical figures that investors scrutinize to assess the company's profitability. Moreover, the revenues of $90.2 million reflect the company's ability to generate sales and maintain operational efficiency. The adjusted EBITDA of $5.8 million, a measure of a company's operating performance free from irregularities and the day-to-day costs of business, suggests a healthy cash flow position. However, the decrease in backlog from $206.9 million to $185.9 million year-over-year could signal a potential slowdown in future revenue, which warrants a cautious outlook. Investors should consider both the positive earnings report and the declining backlog in their analyses, as the latter could affect future financial performance.

Market Research Analyst

An essential aspect of this earnings report is the context within the industry. Energy Services' performance, particularly the claim of it being the best first fiscal quarter in history, must be weighed against industry trends. The energy sector has been subject to volatility due to fluctuating commodity prices, regulatory changes and shifts in demand. The company's ability to achieve record revenues during such a period could indicate strong operational management and a competitive edge. However, the backlog reduction needs to be contextualized. If this is an industry-wide phenomenon due to, for example, a shift towards renewable energy sources, it may not be as concerning. But if it is company-specific, it could suggest a loss of market share or reduced contract acquisition, which could impact long-term growth. Stakeholders should monitor industry reports and competitor performance for a more comprehensive understanding.

Economist

The financial results of Energy Services of America Corporation also have implications from an economic standpoint. The company's growth, as evidenced by the reported earnings, suggests an expanding operation which could contribute positively to economic indicators such as employment and investment within the region it operates. The backlog, which represents future work that is expected to generate revenue, is a forward-looking indicator that analysts use to predict economic activity. A decreasing backlog might be indicative of a broader economic slowdown or decreased capital spending in the energy sector. Given the strategic importance of energy services in the economy, this could have ripple effects on related industries and should be monitored as an indicator of economic health. The company's performance and backlog trends could thus provide insights into the sector's current state and its trajectory.

HUNTINGTON, W.Va., Feb. 12, 2024 /PRNewswire/ -- Energy Services of America Corporation (the "Company" or "Energy Services") (Nasdaq: ESOA), generated net income of $2.0 million, fully diluted earnings per share of $0.12, revenues of $90.2 million, and adjusted EBITDA of $5.8 million for the three months ended December 31, 2023.  The Company had a backlog of $185.9 million (unaudited) at December 31, 2023, as compared to $206.9 million (unaudited) at December 31, 2022.

Douglas Reynolds, President, commented on the announcement. "The financial results for the three months ended December 31, 2023 mark the best first fiscal quarter in the history of Energy Services.  We continue to be impressed by our employees' performance and are excited about the construction opportunities being received."  Reynolds continued, "Fiscal year 2024 is off to a great start and we are looking forward to providing superior services to our customers and maximizing shareholder value into the future."

Below is a comparison of the Company's operating results for the three months ended December 31, 2023 and 2022 (unaudited): 

			Three Months Ended		Three Months Ended
			December 31, 2023		December 31, 2022
Revenue			$              90,163,187		$              60,042,585
Cost of revenues			79,324,226		54,056,323
	Gross profit		10,838,961		5,986,262
Selling and administrative expenses			7,198,720		5,316,138
	Income from operations		3,640,241		670,124
Other income (expense)
	Interest income		-		72
	Other nonoperating income (expense)		75,001		(80,663)
	Interest expense		(601,684)		(499,428)
	Loss on sale of equipment		(13,328)		(31,343)
			(540,011)		(611,362)
	Income before income taxes		3,100,230		58,762
	Income tax expense (benefit)		1,058,035		(79,612)
	Net income		$                2,042,195		$                   138,374
	Weighted average shares outstanding-basic		16,567,185		16,667,185
	Weighted average shares-diluted		16,607,185		16,667,185
	Earnings per share		$                         0.12		$                         0.01
	Earnings per share-diluted		$                         0.12		$                         0.01

 

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

		Three Months Ended		Three Months Ended
		December 31, 2023		December 31, 2022
Net income		$                      2,042,195		$                       138,374
Add (less): Income tax expense (benefit)		1,058,035		(79,612)
Add:  Interest expense, net of interest income		601,684		499,356
(Less) add: Non-operating (income) expense		(75,001)		80,663
Add:  Loss on sale of equipment		13,328		31,343
Add: Depreciation and intangible asset amortization expense		2,176,621		1,895,102
Adjusted EBITDA		$                      5,816,862		$                    2,565,226

 

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.

View original content:https://www.prnewswire.com/news-releases/energy-services-of-america-announces-financial-results-for-the-three-months-ended-december-31-2023-302059596.html

SOURCE Energy Services of America Corporation

FAQ

What was Energy Services of America Corporation's net income for the three months ended December 31, 2023?

Energy Services of America Corporation reported a net income of $2.0 million for the three months ended December 31, 2023.

What were the fully diluted earnings per share for Energy Services of America Corporation in the first fiscal quarter of 2023?

Energy Services of America Corporation had fully diluted earnings per share of $0.12 in the first fiscal quarter of 2023.

What was the Company's backlog at December 31, 2023?

Energy Services of America Corporation had a backlog of $185.9 million (unaudited) at December 31, 2023.

Who commented on the financial results for Energy Services of America Corporation?

President Douglas Reynolds commented on the financial results for Energy Services of America Corporation.