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

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Last update: Feb 16, 2021

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.

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SOURCE Energy Services of America