#USA #Energy Services #Huntington #ESOA #Gas Water Distribution

Energy Services of America Reports Fiscal Q3 2025 Performance

Energy Services of America Corporation, identified on Nasdaq as ESOA, has recently disclosed its fiscal results for the third quarter ending June 30, 2025. This announcement highlights significant improvements and an optimistic outlook as the company embraces new opportunities and continues to adapt to the market's demands.

Key Financial Highlights

In the third quarter of fiscal 2025, Energy Services reported total revenues reaching $103.6 million, marking a significant increase of 21% compared to $85.9 million during the same period the previous year. This growth can be largely attributed to the favorable performance of their Gas and Water Distribution business line, alongside contributions from Electrical, Mechanical, and General construction projects. Moreover, their backlog expanded to $304.4 million, up from $250.9 million in the same quarter last year, indicating an influx of ongoing and upcoming projects.

Profitability Insights

Despite the rise in revenue, the gross profit saw a reduction to $12.0 million, down from $15.3 million in the prior-year quarter. This decline reflects lower operational efficiencies, which adversely impacted the gross margin, resulting in a gross margin of 11.6% compared to 17.8% the previous year. Additionally, the selling and administrative expenses increased to $8.8 million from $6.8 million, primarily because of hiring additional personnel to manage anticipated growth and the acquisition of Tribute, finalized in December 2024.

Net Income Analysis

The net income for the quarter settled at $2.1 million or $0.12 per diluted share, a stark contrast to the prior year's substantial net income of $17.5 million or $1.06 per diluted share, which included approximately $11.4 million from a favorable legal judgment. This notable drop was expected, as the previous fiscal period's results were significantly influenced by extraordinary gains.

Future Outlook and Strategic Initiatives

Doug Reynolds, President of Energy Services, expressed optimism regarding the company’s future. He remarked on the encouraging revenue growth aligning with the onset of the more favorable spring and summer seasons. There is a continual rise in opportunities for water and wastewater projects, further boosted by ongoing private utility initiatives. Reynolds emphasized that the robust inflow of projects allows the company to pursue those that promise better margins while efficiently managing staffing needs. As we move toward the final quarter of fiscal 2025, he foresees strong potential for continued growth, particularly in electrical and mechanical fields, reflecting the overall market demand.

Conclusion

In summary, Energy Services of America stands at a pivotal moment with its solid fiscal third-quarter performance, characterized by revenue growth and a strategic focus on profitable project selections. The company aims to leverage these advantages to deliver sustained growth and value for shareholders. This adaptive strategy positions Energy Services as a resilient player in the energy services sector, prepared to meet evolving market demands and capitalize on upcoming opportunities.

Energy Services of America continues its commitment to safety, quality, and production excellence while navigating through competitive industry landscapes. The advancements in operational strategy and increased backlog are anticipated to pave the way for robust earnings moving forward.

This announcement is a testament to the company's capacity to thrive amidst challenges and adjust effectively to industry needs, ensuring its role as a pivotal force in energy services across the mid-Atlantic and Central U.S.