UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 13, 2018
Energy Services of America Corporation
(Exact Name of Registrant as Specified in its Charter)
|
Delaware (State or Other Jurisdiction of Incorporation) |
001-32998 (Commission File Number) |
20-4606266 (I.R.S. Employer Identification No.)
|
| 75 West 3rd Ave., Huntington, West Virginia | 25701 |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (304) 522-3868
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations
On February 13, 2018, Energy Services of America, Inc. (the “Company”) issued a press release disclosing its results of operations and financial condition at and for the three months ended December 31, 2017.
A copy of the press release dated February 13, 2018 is included as Exhibit 99.1 to this report and is being furnished to the SEC and shall not be deemed filed for any purpose.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
| Exhibit 99.1 | Press Release dated February 13, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| ENERGY SERVICES OF AMERICA CORPORATION | |
| DATE: February 13, 2018 | By: /s/ Charles Crimmel |
| Charles Crimmel | |
| Chief Financial Officer |
Exhibit 99.1
ENERGY SERVICES OF AMERICA FILES QUARTERLY REPORT
Huntington, WV February 13, 2018- Energy Services of America (the “Company” or “Energy Services”) (OTC QB: ESOA), parent company of C.J. Hughes Construction Company (“C.J. Hughes”) and Nitro Electric Company (“Nitro Electric”), announced the filing of the Company’s quarterly report on Form 10-Q for the quarter ended December 31, 2017. Energy Services earned revenues of $32.5 million for the three months ended December 31, 2017. Gross profit and net income available to common shareholders were $2.0 million and $71,000, respectively, for the three months ended December 31, 2017. The Company had adjusted EBITDA of $1.0 million ($0.07 per share) for the three months ended December 31, 2017. The backlog at December 31, 2017 was $54.2 million.
Below is a comparison of the Company’s operating results for the three months ended December 31, 2017 and 2016:
| Three Months Ended | Three Months Ended | |||||||
| December 31, 2017 | December 31, 2016 | |||||||
| Unaudited | Unaudited | |||||||
| Revenue | $ | 32,547,603 | $ | 37,496,872 | ||||
| Cost of revenues | 30,572,149 | 32,812,085 | ||||||
| Gross profit | 1,975,454 | 4,684,787 | ||||||
| Selling and administrative expenses | 2,009,091 | 2,195,610 | ||||||
| Income (loss) from operations | (33,637 | ) | 2,489,177 | |||||
| Other income (expense) | ||||||||
| Interest income | 132,281 | - | ||||||
| Other nonoperating income expense | (55,124 | ) | (71,429 | ) | ||||
| Interest expense | (295,844 | ) | (230,969 | ) | ||||
| Gain on sale of equipment | 368,705 | 26,990 | ||||||
| 150,018 | (275,408 | ) | ||||||
| Income from continuing operations | ||||||||
| before income taxes | 116,381 | 2,213,769 | ||||||
| Income tax expense (benefit) | (32,119 | ) | 975,112 | |||||
| Income from continuing operations | 148,500 | 1,238,657 | ||||||
| Dividends on preferred stock | 77,250 | 77,250 | ||||||
| Income from continuing operations | ||||||||
| available to common shareholders | 71,250 | 1,161,407 | ||||||
| Income from discontinued operations | ||||||||
| net of tax benefit | - | - | ||||||
| Net income available to common shareholders | $ | 71,250 | $ | 1,161,407 | ||||
Revenues for the three months ended December 31, 2017 decreased $5.0 million compared to the same period in 2016. The decrease was primarily due to an $8.8 million revenue decrease in petroleum and gas work, partially offset by a $3.7 million revenue increase in electrical and mechanical services, and a $100,000 revenue increase in water and sewer and other ancillary projects. The gross profit percentage for the three months ended December 31, 2017 was 6.1%, as compared to 12.5% for the same period in 2016. The revenue and gross profit percentage decreases for the three months ended December 31, 2017 as compared to the same period in 2016 was primarily due to finishing two major projects with losses in fiscal year 2017.
Douglas Reynolds, President, commented on the announcement. “In the first quarter of fiscal year 2018, we were primarily finishing projects that started in the prior fiscal year. Due to an overall labor shortage in the pipeline construction industry last year, we suffered production inefficiencies and schedule overruns on two major projects. This prevented us from securing additional work in the quarters ended September 30, 2017 and December 31, 2017. It also had a negative effect on our gross margin percentage for the quarter ended December 31, 2017.” Reynolds continued, “To help expand our customer base and improve our performance on pipeline work, we have made a new hire to help bolster our sales and marketing efforts in the Marcellus and Utica Shale regions as well as added an experienced industry professional to assist our construction management team. We are working very hard to improve operating results in fiscal year 2018.”
Please refer to the table below that reconciles adjusted EBITDA and adjusted EBITDA per share with net income available to common shareholders:
| Three Months Ended | Three Months Ended | |||||||
| December 31, 2017 | December 31, 2016 | |||||||
| Unaudited | Unaudited | |||||||
| Net income available to | ||||||||
| common shareholders | $ | 71,250 | $ | 1,161,407 | ||||
| Add: Income tax expense (benefit) | (32,119 | ) | 975,112 | |||||
| Add: Dividends on preferred stock | 77,250 | 77,250 | ||||||
| Add: Interest expense | 295,844 | 230,969 | ||||||
| Less: Non-operating (income) expense | (445,862 | ) | 44,439 | |||||
| Add: Depreciation expense | 1,049,688 | 678,331 | ||||||
| Adjusted EBITDA | $ | 1,016,051 | $ | 3,167,508 | ||||
| Common shares outstanding | 14,239,836 | 14,239,836 | ||||||
| Adjusted EBITDA per common share | $ | 0.07 | $ | 0.22 | ||||
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.
Source: Energy Services of America
Contact: Douglas Reynolds, President
304-522-3868