Energy Services of America Announces Financial Results for the Quarter Ended December 31, 2020

Rhea-AI Summary

Energy Services of America (OTC QB: ESOA) reported fiscal Q1 2021 revenues of $32.0 million but incurred a net loss of ($725,000), resulting in a loss per share of ($0.053). The adjusted EBITDA stood at $331,000. The company acquired West Virginia Pipeline, contributing $5.5 million to its $60.7 million backlog, although it had a limited impact on Q1 results. The CEO expressed optimism about future growth in water and natural gas markets.

Positive

• Revenue increased by 24% year-over-year from $25.8 million to $32.0 million.
• Adjusted EBITDA of $331,000 despite a net loss.

Negative

• Net loss available to common shareholders of ($725,000), widening from ($151,364) year-over-year.
• Increased selling and administrative expenses rising to $3.6 million from $2.6 million.

HUNTINGTON, W.Va., Feb. 16, 2021 /PRNewswire/ -- Energy Services of America Corporation (the "Company" or "Energy Services") (OTC QB: ESOA) announced fiscal first quarter financial results for the quarter ended December 31, 2020.  Energy Services earned revenues of $32.0 million with a net loss available to common shareholders of ($725,000) for the first quarter and generated adjusted EBITDA of $331,000 during the period. 

On December 31, 2020, Energy Services completed the acquisition of West Virginia Pipeline, Inc.  The acquisition is reflected in the Company's first quarter financial statements, but it did not have a significant impact on the Company's operating results for the period.  The Company's $60.7 million backlog at December 31, 2020 includes $5.5 million as a result of the acquisition.

Douglas Reynolds, President, commented on the announcement.  "We are excited to welcome West Virginia Pipeline to Energy Services and view the acquisition an important step in our strategy of increasing our exposure in the water and natural gas distribution markets."  Reynolds continued, "At the same time, we are investing in the people and equipment needed to expand our existing business and we hope that the benefits of all these investments are clearer during the second half of fiscal year 2021."

Below is a comparison of the Company's unaudited operating results for the three months ended December 31, 2020 and 2019: 

			Three Months Ended		Three Months Ended
			December 31,		December 31,
			2020		2019
			(Unaudited)
Revenue			$            32,009,796		$             25,843,307
Cost of revenues			29,166,737		23,486,565
	Gross profit		2,843,059		2,356,742
Selling and administrative expenses			3,595,830		2,595,772
	Loss income from operations		(752,771)		(239,030)
Other income (expense)
	Interest income		151,765		53,249
	Other nonoperating expense		(52,623)		(33,938)
	Interest expense		(76,517)		(186,845)
	Gain on sale of equipment		13,042		295,991
			35,667		128,457
	Loss income before income taxes		(717,104)		(110,573)
	Income tax benefit		(69,442)		(36,459)
	Net loss		(647,662)		(74,114)
	Dividends on preferred stock		77,250		77,250
Net loss available to common shareholders			$               (724,912)		$                (151,364)
	Weighted average shares outstanding-basic		13,621,406		13,911,610
	Weighted average shares-diluted		13,621,406		13,911,610
	Loss earnings per share
		available to common shareholders	$                   (0.053)		$                    (0.011)
	Loss earnings per share-diluted
		available to common shareholders	$                   (0.053)		$                    (0.011)

Below is a comparison of the Company's Consolidated Balance Sheets for December 31, 2020 and September 30, 2020. Please see the Company's Form 10-Q for December 31, 2020 for a more detailed comparison:

			December 31,		September 30,
Assets			2020		2020
			(Unaudited)
Current assets
	Cash and cash equivalents		$           12,345,745		$          11,216,820
	Accounts receivable-trade		17,096,770		18,246,989
	Allowance for doubtful accounts		(70,310)		(70,310)
	Retainages receivable		1,658,513		2,483,809
	Other receivables		6,677		9,458
	Contract assets		4,418,599		6,545,863
	Prepaid expenses and other		2,763,189		3,338,943
		Total current assets	38,219,183		41,771,572
Property, plant and equipment, at cost			56,679,946		53,324,843
	less accumulated depreciation		(37,706,313)		(36,933,129)
		Total fixed assets	18,973,633		16,391,714
	Acquired intangible assets, net		300,000		-
	Goodwill		4,220,829		-
	Total assets		$           61,713,645		$          58,163,286
Liabilities and shareholders' equity
Current liabilities
	Current maturities of long-term debt		$             4,645,254		$            4,028,900
	Lines of credit and short term borrowings		3,500,000		509,843
	Accounts payable		5,783,559		5,222,222
	Accrued expenses and other current liabilities		3,255,740		4,237,172
	Contract liabilities		3,721,385		4,851,900
		Total current liabilities	20,905,938		18,850,037
	Long-term debt, less current maturities		13,496,506		11,233,705
	Deferred income taxes payable		2,212,084		2,255,515
		Total liabilities	36,614,528		32,339,257
Shareholders' equity
	Preferred stock, $.0001 par value
		Authorized 1,000,000 shares, 206 issued at December 31, 2020
		and September 30, 2020	-		-
	Common stock, $.0001 par value
		Authorized 50,000,000 shares 14,839,836 issued and 13,621,406
		outstanding at December 31, 2020 and September 30, 2020	1,484		1,484
	Treasury stock, 1,218,430 shares at December 31, 2020 and		(122)		(122)
		September 30, 2020
	Additional paid in capital		60,670,699		60,670,699
	Retained deficit		(35,572,944)		(34,848,032)
	Total shareholders' equity		25,099,117		25,824,029
	Total liabilities and shareholders' equity		$           61,713,645		$          58,163,286

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

	Three Months Ended		Three Months Ended
	December 31, 2020		December 31, 2019
	Unaudited		Unaudited
Net loss income available to
common shareholders	$         (724,912)		$            (151,364)
Add: Income benefit expense	(69,442)		(36,459)
Add: Dividends on preferred stock	77,250		77,250
Add:  Interest expense	76,517		186,845
Less: Non-operating income	(112,184)		(315,302)
Add: Depreciation expense	1,083,853		1,095,282
Adjusted EBITDA	$          331,082		$              856,252

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.

View original content:http://www.prnewswire.com/news-releases/energy-services-of-america-announces-financial-results-for-the-quarter-ended-december-31-2020-301229274.html

SOURCE Energy Services of America

FAQ

What were the Q1 2021 earnings for ESOA?

Energy Services of America reported Q1 2021 revenues of $32.0 million and a net loss of $725,000.

What is the adjusted EBITDA for ESOA in Q1 2021?

The adjusted EBITDA for the first quarter of 2021 was $331,000.

How did the acquisition of West Virginia Pipeline impact ESOA's financial results?

The acquisition contributed $5.5 million to ESOA's backlog but had a limited impact on Q1 financial results.

What is the net loss per share for ESOA in Q1 2021?

The net loss per share for Energy Services of America for Q1 2021 was ($0.053).

How does ESOA's revenue compare to the previous year?

ESOA's revenue increased by 24% year-over-year, from $25.8 million to $32.0 million.