Energy Services Of America Announces Financial Results
HUNTINGTON, W.V., Dec. 11, 2020 /PRNewswire/ -- Energy Services of America Corporation (the "Company" or "Energy Services") (OTC QB: ESOA), parent company of C.J. Hughes Construction Company and Nitro Construction Services, announced financial results for the fiscal year ended September 30, 2020. Energy Services earned revenues of $119.2 million with an income before tax of $3.6 million for fiscal year 2020. The Company's income tax expense was $3.8 million, of which $2.7 million related to non-deductible Paycheck Protection Program (PPP) qualified expenses resulting in a net loss available to common shareholders of ($533,000) for the fiscal year 2020. The Company had adjusted EBITDA of $8.1 million for fiscal year ended September 30, 2020.
In April 2020, due to the uncertain economic impact of the COVID-19 pandemic, the Company borrowed $9.8 million in PPP funds. The Company believed applying for the PPP funds was necessary to ensure its continued operations as an essential business. The entirety of the $9.8 million was spent on qualified PPP expenses in fiscal year 2020 and the Company is in the process of filing for loan forgiveness with its lender. Recent Internal Revenue Service guidelines note that qualified PPP expenses are not tax deductible in the tax year spent for loan recipients that believe forgiveness is "reasonably certain", but not yet received. Due to these guidelines, the Company recognized an additional $2.7 million in tax expense related to the PPP qualified expenses.
Douglas Reynolds, President, commented on the announcement. "The COVID-19 pandemic had a significant effect on fiscal year 2020 as the uncertain environment led many of our customers to suspend or cancel projects. When coupled with depressed demand for new transmission pipeline projects, this led to a $55.3 million revenue decrease in fiscal year 2020 compared to 2019." Reynolds continued, "In spite of these challenges, our dedicated workforce operated efficiently during this period and I appreciate their continued efforts. More recently, we have seen a modest improvement in bidding opportunities for calendar year 2021 and had a backlog of $63.8 million at September 30, 2020."
Below is a comparison of the Company's unaudited operating results for fiscal years ended September 30, 2020 and 2019:
Year Ended | Year Ended | ||||
September 30, 2020 | September 30, 2019 | ||||
Revenue | $ 119,194,440 | $ 174,541,155 | |||
Cost of revenues | 105,693,209 | 161,861,357 | |||
Gross profit | 13,501,231 | 12,679,798 | |||
Selling and administrative expenses | 9,831,578 | 8,857,386 | |||
Income from operations | 3,669,653 | 3,822,412 | |||
Other income (expense) | |||||
Interest income | 53,332 | 58,023 | |||
Other nonoperating expense | (239,862) | (112,814) | |||
Interest expense | (486,246) | (1,064,222) | |||
Gain on sale of equipment | 579,326 | 258,082 | |||
(93,450) | (860,931) | ||||
Income before income taxes | 3,576,203 | 2,961,481 | |||
Income tax expense | 3,799,758 | 968,571 | |||
Net (loss) income | (223,555) | 1,992,910 | |||
Dividends on preferred stock | 309,000 | 309,000 | |||
Net (loss) income available to common shareholders | $ (532,555) | $ 1,683,910 | |||
Weighted average shares outstanding-basic | 13,804,835 | 14,064,871 | |||
Weighted average shares-diluted | 13,804,835 | 17,498,204 | |||
(Loss) earnings per share | |||||
available to common shareholders | $ (0.039) | $ 0.120 | |||
(Loss) earnings per share-diluted | |||||
available to common shareholders | $ (0.039) | $ 0.096 | |||
Please refer to the table below that reconciles adjusted EBITDA and adjusted EBITDA per common share with net (loss) income available to common shareholders:
2020 | 2019 | |||
Net (loss) income available to | ||||
common shareholders | $ (532,555) | $ 1,683,910 | ||
Add: Income tax expense | 3,799,758 | 968,571 | ||
Add: Dividends on preferred stock | 309,000 | 309,000 | ||
Add: Interest expense | 486,246 | 1,064,222 | ||
Less: Non-operating income | (392,796) | (203,291) | ||
Add: Depreciation expense | 4,395,362 | 4,157,849 | ||
Adjusted EBITDA | $ 8,065,015 | $ 7,980,261 | ||
Weighted average shares outstanding-basic | 13,804,835 | 14,064,871 | ||
Adjusted EBITDA per common share | $ 0.58 | $ 0.57 |
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 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.
SOURCE Energy Services of America
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