Energy Services of America Announces Financial Results for the Three and Six Months Ended March 31, 2021

Rhea-AI Summary

Energy Services of America Corporation (OTC QB: ESOA) reported Q2 financial results for 2021, achieving revenues of $25.6 million and $57.6 million for the three and six months ended March 31, respectively. The company experienced a net loss of $1.4 million for the quarter, with an adjusted EBITDA of ($798,399). Gross profit percentage improved from 0.4% to 7.3% for Q2 year-over-year. Increased demand for services and contributions from acquisitions led to positive revenue trends, with a backlog of $61.2 million.

Positive

• Increased revenue of $25.6 million for Q2, up from $18.1 million YoY.
• Gross profit margin improved from 0.4% to 7.3% for Q2 year-over-year.
• Acquisition of West Virginia Pipeline generated $1.2 million in revenue and $394,000 in gross profit for Q2.
• Backlog increased to $61.2 million, indicating strong future demand.

Negative

• Net loss of $1.4 million for Q2, up from $1.8 million YoY.
• Adjusted EBITDA remained negative at ($798,399) for Q2.
• Selling and administrative expenses rose to $3.8 million for Q2, compared to $2.3 million YoY.

HUNTINGTON, W.Va., May 12, 2021 /PRNewswire/ -- Energy Services of America Corporation (the "Company" or "Energy Services") (OTC QB: ESOA) announced financial results for the three and six months ended March 31, 2021.  Energy Services generated revenues of $25.6 million and $57.6 million for the three and six months ended March 31, 2021, respectively. Net loss available to common shareholders was $1.4 million and $2.1 million with an adjusted EBITDA of ($798,399) and ($467,317) for the three and six months ended March 31, 2021, respectively.  Gross profit percentage increased from 0.4% to 7.3% and from 5.5% to 8.2% for the three and six months ended March 31, 2021 as compared to 2020, respectively.   

Douglas Reynolds, President, commented on the announcement.  "We experienced an increased demand for our services across all our lines of business for the first and second quarters of fiscal year 2021, which resulted in increased revenue and gross profit when compared to the same periods in 2020.  Our December 31, 2020 acquisition, West Virginia Pipeline, contributed immediately with $1.2 million in revenue and $394,000 in gross profit for the three months ended March 31, 2021."  Reynolds continued, "Our efforts to increase distribution revenues are paying off and we are expecting to be busy in our gas & water distribution and electrical & mechanical services for the second half of fiscal year 2021.  At the same time, we have invested in growing the business by acquiring a solar installation company and establishing a general contractor subsidiary. Our backlog at March 31, 2021 was $61.2 million as compared to $60.7 million at December 31, 2020."

Below is a comparison of the Company's unaudited operating results for the three and six months ended March 31, 2021 and 2020: 

			Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
			March 31,		March 31,		March 31,		March 31,
			2021		2020		2021		2020
Revenue			$                 25,605,412		$            18,072,400		$        57,615,208		$        43,915,707
Cost of revenues			23,731,889		18,001,931		52,898,626		41,488,496
	Gross profit		1,873,523		70,469		4,716,582		2,427,211
Selling and administrative expenses			3,823,913		2,345,509		7,419,743		4,941,281
	Loss from operations		(1,950,390)		(2,275,040)		(2,703,161)		(2,514,070)
Other income (expense)
	Interest income		4		-		151,769		53,249
	Other nonoperating expense		(32,887)		(42,741)		(85,510)		(76,679)
	Interest expense		(142,993)		(112,017)		(219,510)		(298,862)
	Gain on sale of equipment		479,269		223,775		492,311		519,766
			303,393		69,017		339,060		197,474
	Loss before income taxes		(1,646,997)		(2,206,023)		(2,364,101)		(2,316,596)
	Income tax benefit		(335,526)		(511,412)		(404,968)		(547,871)
	Net loss		(1,311,471)		(1,694,611)		(1,959,133)		(1,768,725)
	Dividends on preferred stock		77,250		77,250		154,500		154,500
Loss available to common shareholders			$                 (1,388,721)		$            (1,771,861)		$        (2,113,633)		$        (1,923,225)
	Weighted average shares outstanding-basic		13,621,406		13,783,546		13,621,406		13,877,243
	Weighted average shares-diluted		13,621,406		13,783,546		13,621,406		13,877,243
	Loss per share
		available to common shareholders	$                        (0.102)		$                   (0.129)		$               (0.155)		$               (0.139)
	Loss per share-diluted
		available to common shareholders	$                        (0.102)		$                   (0.129)		$               (0.155)		$               (0.139)

Please refer to the table below that reconciles adjusted EBITDA with net loss available to common shareholders:

	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	March 31, 2021		March 31, 2020		March 31, 2021		March 31, 2020
	Unaudited		Unaudited		Unaudited		Unaudited
Net loss income available to
common shareholders	$         (1,388,721)		$         (1,771,861)		$         (2,113,633)		$         (1,923,225)
Less: Income benefit	(335,526)		(511,412)		(404,968)		(547,871)
Add: Dividends on preferred stock	77,250		77,250		154,500		154,500
Add:  Interest expense	142,993		112,017		219,510		298,862
Less: Non-operating income	(446,386)		(181,034)		(558,570)		(496,336)
Add: Depreciation expense	1,151,991		1,122,509		2,235,844		2,217,791
Adjusted EBITDA	$            (798,399)		$         (1,152,531)		$            (467,317)		$            (296,279)

Certain statements contained in the release, including without limitation statements including 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 and other factors referenced in this release. 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.

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SOURCE Energy Services of America

FAQ

What were Energy Services of America Corporation's revenues for Q2 2021?

Energy Services reported revenues of $25.6 million for the three months ended March 31, 2021.

How did the net loss for ESOA change in Q2 2021?

The net loss available to common shareholders for Q2 2021 was $1.4 million, compared to $1.8 million for the same period in 2020.

What is ESOA's backlog as of March 31, 2021?

As of March 31, 2021, Energy Services had a backlog of $61.2 million.

What was the adjusted EBITDA for ESOA in Q2 2021?

The adjusted EBITDA for Energy Services of America Corporation in Q2 2021 was ($798,399).

How did the gross profit margin for ESOA change in Q2 2021?

The gross profit margin for Q2 2021 increased from 0.4% to 7.3% compared to Q2 2020.