What changed in this filing

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Item 1. Financial Statements

2025-02-10 compared with 2024-08-12 · 148 added, 192 removed, 435 unchanged (44% of the section changed)

7 unchanged sentences

Allowance for doubtful accounts

Retainages receivable

Retainage receivable

Other receivables

6 unchanged sentences

( 53,749,907 )

Total property and equipment, net

Total fixed assets

Right-of-use assets-operating leases

3 unchanged sentences

Current maturities of long-term debt

Lines of credit and short-term borrowings

Current maturities of lines of credit and short term borrowings

Current maturities of operating lease liabilities

9 unchanged sentences

Shareholders’ equity

Common stock, $ .0001 par value Authorized 50,000,000 shares, 17,896,016 issued and 16,570,685 outstanding at June 30, 2024 and 17,885,615 issued and 16,567,185 outstanding at September 30, 2023

Treasury stock, 1,325,331 shares at June 30, 2024 and 1,318,430 shares at September 30, 2023

Common stock, $ .0001 par value Authorized 50,000,000 shares, 17,995,185 issued and 16,705,457 outstanding at December 31, 2024 and 17,860,413 issued and 16,570,685 outstanding at September 30, 2024

Treasury stock, 1,289,728 shares at December 31, 2024 and September 30, 2024

Additional paid in capital

9 unchanged sentences

Three Months Ended

Nine Months Ended

Cost of revenues

Cost of revenue

Selling and administrative expenses

1 unchanged sentence

Other income (expense)

Interest income

Other nonoperating expense

Income from lawsuit judgement

Other nonoperating (expense) income

Interest expense

( 1,771,560 )

( 1,713,862 )

Gain on sale of equipment

( 1,830,118 )

Gain (loss) on sale of equipment

Income before income taxes

2 unchanged sentences

Weighted average shares-diluted

Earnings per share-basic

Earnings per share-diluted

Earnings per share available to common shareholders

Earnings per share-diluted available to common shareholders

The Accompanying Notes are an Integral Part of These Financial Statements

1 unchanged sentence

Consolidated Statements of Cash Flows

Nine Months Ended

Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Accreted interest on PPP loans

Depreciation expense

Gain on sale of equipment

Accreted interest on PPP loans

(Gain) loss on sale of equipment

Provision for deferred taxes

Amortization of intangible assets

Accreted interest on notes payable

Vested restricted stock award compensation expense

Decrease (increase) in accounts receivable

( 9,369,616 )

Accreted interest on note payable

(Increase) decrease in accounts receivable-trade

Increase in retainage receivable

( 2,101,964 )

( 2,881,285 )

Increase in other receivables

(Increase) decrease in contract assets

Decrease (increase) in contract assets

( 5,840,372 )

(Increase) decrease in prepaid expenses and other

Decrease in accounts payable

Decrease in prepaid expenses and other

(Decrease) increase in accounts payable

Decrease in accrued expenses and other current liabilities

( 3,956,671 )

( 2,522,882 )

Increase (decrease) in accrued expenses and other current liabilities

Increase in contract liabilities

Increase (decrease) in contract liabilities

Net cash provided by operating activities

3 unchanged sentences

( 1,385,883 )

Acquistion of Tribute Contracting & Consultants

( 20,783,224 )

Proceeds from sales of property and equipment

3 unchanged sentences

Cash flows from financing activities:

Dividends on common stock

Treasury stock purchased

Proceeds from long-term debt

Borrowings on lines of credit and short term debt, net of (repayments)

( 4,963,150 )

Proceeds from long-term debt

Principal payments on long-term debt

1 unchanged sentence

( 2,056,926 )

Net cash used in financing activities

Net cash provided by (used in) financing activities

( 7,020,076 )

(Decrease) increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

( 5,176,552 )

3 unchanged sentences

Purchases of property & equipment under financing agreements

Prepaid insurance premiums financed

Operating lease right-of-use asset disposals, net of acquisitions in exchange for operating liabilities

Net operating lease right-of-use assets received in exchange for operating lease liabilities

Common dividends declared but not paid

Common stock issued in Tribute Contracting & Consultants acquisition

Supplemental disclosures of cash flows information:

3 unchanged sentences

Consolidated Statements of Changes in Shareholders’ Equity

For the three and nine months ended June 30, 2024 and 2023

For the three months ended December 31, 2024 and 2023

Additional Paid

3 unchanged sentences

Dividends on common stock ($ 0.03 per share on 16,705,457 shares)

Common shares issued as part of acquisition

Balance at December 31, 2024

( 1,237,865 )

( 1,108,828 )

Vested restricted stock award

Balance at March 31, 2024

( 25,762,077 )

Treasury stock purchased by company

Balance at June 30, 2024

( 8,248,450 )

Additional Paid

2 unchanged sentences

( 25,701,413 )

Balance at December 31, 2022

( 32,131,099 )

( 1,873,600 )

Dividends on common stock ($ 0.06 per share on 16,567,185 shares)

Treasury stock purchased by company

Balance at March 31, 2023

( 34,838,059 )

Treasury stock purchased by company

Balance at June 30, 2023

Balance at December 31, 2023

( 24,653,249 )

37 unchanged sentences

Ryan Construction Services Inc.

(“Ryan Construction” or “RCS”), a wholly owned subsidiary of Energy Services, formed in August 2022 in connection with the acquisition of substantially all the assets of Ryan Environmental, LLC and Ryan Environmental Transport, LLC (collectively “Ryan Environmental”), provides directional drilling services for broadband service providers along with offering natural gas distribution services, cathodic protection and corrosion prevention services, and civil construction services.

Ryan Construction operates primarily in West Virginia and Pennsylvania.

(“Ryan Construction” or “RCS”), a wholly owned subsidiary of Energy Services, provides directional drilling services for broadband service providers along with offering natural gas distribution services, cathodic protection and corrosion prevention services, and civil construction services.

Ryan Construction operates primarily in West Virginia, Tennessee, and Pennsylvania.

The employees of RCS are non-union and are managed independently of the Company’s union subsidiaries.

Tribute Contracting & Consultants, Inc.

(“Tribute” or “TCC”), a wholly owned subsidiary of Energy Services, was formed in October 2024 in connection with the acquisition of substantially all the assets of Tribute Contracting & Consultants, LLC (“Tribute LLC”).

The acquisition of Tribute LLC closed on December 2, 2024.

Tribute constructs water distribution and wastewater systems primarily for public municipalities in West Virginia, Ohio, and Kentucky.

The employees of TCC are non-union and are managed independently of the Company’s union subsidiaries.

Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the years ended September 30, 2023, and 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on January 16, 2024.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the years ended September 30, 2024, and 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on December 19, 2024.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

1 unchanged sentence

The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations.

The operating results for the three and nine months ended June 30, 2024 and 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.

The operating results for the three months ended December 31, 2024 and 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Principles of Consolidation

The consolidated financial statements of Energy Services include the accounts of Energy Services, its wholly owned subsidiaries West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J.

Hughes and its subsidiaries.

All significant intercompany accounts and transactions have been eliminated in the consolidation.

Unless the context requires otherwise, references to Energy Services include Energy Services, West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J.

Unless the context requires otherwise, references to Energy Services include Energy Services, West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving, Tribute, and C.J.

Hughes and its subsidiaries.

5 unchanged sentences

Please refer to Note 2 “ Summary of Significant Accounting Policies ” of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended September 30, 2024, for a more detailed discussion of our significant accounting policies.

There were no material changes to these significant accounting policies during the three and nine months ended June 30, 2024.

There were no material changes to these significant accounting policies during the three months ended December 31, 2024.

ACCOUNTING FOR PAYCHECK PROTECTION PROGRAM LOANS

11 unchanged sentences

The Company recognizes that there is a possibility that the SBA could reverse its previous determination on the forgiveness of the PPP Loans.

As a result of this uncertainty, the Company restated the previously issued audited financial statements of the Company for the fiscal years 2022 and 2021.

As a result of this uncertainty,

the Company restated the previously issued audited financial statements of the Company for the fiscal years 2022 and 2021.

The Company has recorded a short-term borrowing due to the SBA inquiry for the full $ 9.8 million, plus accrued interest for all periods presented.

3 unchanged sentences

Borrowers must retain PPP documentation for at least six years after the date the loan is forgiven or paid in full, and the SBA and SBA Inspector General must be granted these files upon request.

The SBA could revisit its forgiveness decision and determine that the Company does not qualify in whole or in part for loan forgiveness and demand repayment of the loans.

The SBA could revisit its forgiveness decision and determine that the Company does not qualify as a whole or in part for loan forgiveness and demand repayment of the loans.

In addition, it is unknown what type of penalties could be assessed against the Company if the SBA disagrees with the Company’s certification.

29 unchanged sentences

Settlement with the customer of outstanding affirmative claims is dependent on the claims resolution process and could extend beyond one year.

Based on our historical experience, we generally consider the collection risk related to billable amounts to be low.

on our historical experience, we generally consider the collection risk related to billable amounts to be low.

When events or conditions indicate that it is probable that the amounts outstanding become unbillable, the transaction price and associated contract asset is reduced.

8 unchanged sentences

Lump Sum, Unit Price, Cost Plus and Time and Materials (“T&M”).

The following tables present our disaggregated revenue for the three and nine months ended June 30, 2024 and 2023:

Three Months Ended June 30, 2024

Gas & Petroleum

Mechanical, &

Total revenue

from contracts

Lump sum contracts

Unit price contracts

Cost plus and T&M contracts

Total revenue from contracts

Earned over time

Earned at point in time

Total revenue from contracts

Nine Months Ended June 30, 2024

Gas & Petroleum

Mechanical, &

Total revenue

from contracts

Lump sum contracts

Unit price contracts

Cost plus and T&M contracts

Total revenue from contracts

Earned over time

Earned at point in time

Total revenue from contracts

Three Months Ended June 30, 2023

The following tables present our disaggregated revenue for the three months ended December 31, 2024 and 2023:

Three Months Ended December 31, 2024

Gas & Petroleum

9 unchanged sentences

Total revenue from contracts

Nine Months Ended June 30, 2023

Three Months Ended December 31, 2023

Gas & Petroleum

16 unchanged sentences

The timing of billings to customers may generate contract assets or contract liabilities.

During the three and nine months ended June 30, 2024, we recognized revenue of $ 0.6 million and $ 16.0 million, respectively, that was included in the contract liability balance at September 30, 2023.

During the three months ended December 31, 2024, we recognized revenue of $ 13.1 million that was included in the contract liability balance at September 30, 2024.

Accounts receivable-trade, net of allowance for doubtful accounts, contract assets and contract liabilities consisted of the following:

June 30, 2024

December 31, 2024

September 30, 2024

Accounts receivable-trade, net of allowance for doubtful accounts

( 1,046,178 )

Contract assets

3 unchanged sentences

PERFORMANCE OBLIGATIONS

For the three and nine months ended June 30, 2024, there was no significant revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2023.

For the three months ended December 31, 2024, there was no significant revenue recognized as a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2024.

Changes in contract transaction price can result from items such as executed or estimated change orders, and unresolved contract modifications and claims.

At June 30, 2024, the Company had $ 182.9 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized over the next twelve months.

At December 31, 2024, the Company had $ 197.8 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized over the next twelve months.

UNCOMPLETED CONTRACTS

Costs, estimated earnings, and billings on uncompleted contracts as of June 30, 2024 and September 30, 2023, are summarized as follows:

June 30, 2024

Costs, estimated earnings, and billings on uncompleted contracts as of December 31, 2024 and September 30, 2024, are summarized as follows:

December 31, 2024

September 30, 2024

6 unchanged sentences

( 3,030,054 )

The Company’s unaudited backlog at June 30, 2024 and September 30, 2023 was $ 250.9 million and $ 229.8 million, respectively.

The Company’s unaudited backlog at December 31, 2024 and September 30, 2024 was $ 260.2 million and $ 243.2 million, respectively.

FAIR VALUE MEASUREMENTS

12 unchanged sentences

The fair value of the Company’s long term fixed-rate debt was estimated using a discounted cash flow analysis and a yield rate that was estimated based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities.

The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 30.6 million at June 30, 2024 was $ 29.2 million.

The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 43.9 million at December 31, 2024 was $ 42.5 million.

The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $ 25.6 million at September 30, 2024 was $ 24.7 million.

1 unchanged sentence

EARNINGS PER SHARE

The amounts used to compute the earnings per share for the three and nine months ended June 30, 2024 and 2023 are summarized below.

The amounts used to compute the earnings per share for the three months ended December 31, 2024 and 2023 are summarized below.

Three Months Ended

Nine Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

December 31, 2024

December 31, 2023

Weighted average shares outstanding-basic

4 unchanged sentences

Three Months Ended

Nine Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Total income tax expense (benefit)

December 31, 2024

December 31, 2023

Total income tax expense

The Company’s income tax expense and deferred tax assets and liabilities reflect management’s best estimate of current and future taxes to be paid.

Significant judgments and estimates are required in the determination of the consolidated income tax expense.

The Company’s provision for income taxes is computed by applying a federal rate of 21.0 % and a state rate of 6.0 % to taxable income or loss after consideration of non-taxable and non-deductible items.

The effective income tax rate for the three and nine months ended June 30, 2024 was 25.6 % and 30.5 %, respectively, as compared to 26.7 % and 31.4 %, respectively, for the same period in 2023.

The Company’s provision for income taxes is computed by applying a federal rate of 21.0 % and a blended state rate of approximately 5.0 % to 6.0 % to taxable income or loss after consideration of non-taxable and non-deductible items.

The effective income tax rate for the three months ended December 31, 2024 was 34.8 %, as compared to 34.1 %, for the same period in 2023.

Effective income tax rates are estimates and may vary from period to period due to changes in the amount of taxable income and non-deductible expenses.

1 unchanged sentence

The income tax effects of temporary differences giving rise to the deferred tax assets and liabilities are as follows:

June 30, 2024

December 31, 2024

September 30, 2024

4 unchanged sentences

Accruals & Other

Net operating loss carryforward

Net operating loss carry forward-Federal

Net operating loss carryforward-States

Net operating loss valuation allowance-States

Total deferred tax assets

2 unchanged sentences

A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company had $ 0 and $ 3.0 million of federal net operating loss carryforwards at June 30, 2024 and September 30, 2023, respectively.

The Company had state net operating loss carryforwards at June 30, 2024 and September 30, 2023, respectively that begin to expire in 2025, that were not significant.

The Company had $ 6.5 million and $ 0 million of federal net operating loss carryforwards at December 31, 2024 and September 30, 2024, respectively.

The Company had $ 30.4 million and $ 20.5 million of state net operating loss carryforwards at December 31, 2024 and September 30, 2024, respectively.

The state net operating loss carryforwards begin to expire in 2025.

The increases in federal and state NOL carryforwards were primarily due to a temporary difference resulting from bonus depreciation on equipment obtained as part of the Tribute acquisition.

The Company does not believe that it has any unrecognized tax benefits included in its consolidated financial statements that require recognition.

3 unchanged sentences

Operating Line of Credit

On January 19, 2023, the Company received an amendment to its $ 15.0 million operating line of credit which increased the line of credit to $ 30.0 million with a maturity date of June 28, 2023.

On August 8, 2024, the Company renewed its $ 30.0 million line of credit with a maturity date of June 28, 2026.

The interest rate on the line of credit is the “ Wall Street Journal ” Prime Rate (the index) with a floor of 4.99 %.

On June 1, 2023, the agreement was renewed through June 28, 2024.

The Company is working with its lender and expects the operating line of credit to be extended in the Company’s fourth quarter of fiscal year 2024.

The line of credit is limited to a borrowing base calculation as summarized below:

June 30, 2024

December 31, 2024

September 30, 2024

3 unchanged sentences

Interest rate

The modified financial covenants for the quarter ended June 30, 2023, and all subsequent quarters, are below:

The Company’s $ 12.0 million and $ 4.5 million line of credit borrowings are recorded as a long-term debt as of December 31, 2024 and September 30, 2024, respectively.

The financial covenants required by the Company’s lender are below:

● Minimum tangible net worth of $ 28.0 million,

7 unchanged sentences

The Company’s lender has agreed to omit the effect of the PPP loan restatement from the Company’s covenant compliance calculations while a final decision on PPP loan forgiveness remains in question.

Thus, the Company was in compliance with all covenants at June 30, 2024.

The Company was in compliance with all covenants at December 31, 2024.

The Company projects to meet all covenant requirements for the next twelve months.

Insurance Premiums Financed

The Company financed its captive insurance policy premiums on a short-term basis through a financing company for the calendar year ended December 31, 2023.

These insurance policies include workers’ compensation, general liability, automobile, umbrella, and equipment policies.

The Company made a down payment in January 2023 and financed the remaining premium amount over eleven monthly payments.

At June 30, 2024 and September 30, 2023, the remaining balance of the insurance premiums was $ 0 and $ 950,000 , respectively.

For the calendar year beginning January 1, 2024, the Company’s insurance company is accepting quarterly payments on certain insurance policies and the Company has prepaid the balance of the remaining policies as of June 30, 2024.

The Company has no insurance premiums financed as of June 30, 2024.

Paycheck Protection Program Loans

17 unchanged sentences

Borrowers must retain PPP documentation for at least six years after the date the loan is forgiven or paid in full, and the SBA and SBA Inspector General must be granted these files upon request.

The SBA could revisit its forgiveness decision and determine that the Company does not qualify in whole or in part for loan forgiveness and demand repayment of the loans.

The SBA could revisit its forgiveness decision and determine that the Company does not qualify as a whole or in part for loan forgiveness and demand repayment of the loans.

In addition, it is unknown what type of penalties could be assessed against the Company if the SBA disagrees with the Company’s certification.

Any penalties in addition to the potential repayment of the PPP Loans could negatively impact the Company’s business, financial condition and results of operations and prospects.

A summary of short-term and long-term debt as of June 30, 2024 and September 30, 2023 is as follows:

June 30, 2024

A summary of short-term and long-term debt as of December 31, 2024 and September 30, 2024 is as follows:

December 31, 2024

September 30, 2024

Line of credit payable to bank, monthly interest at 7.5 %, final payment due by June 28, 2026, guaranteed by certain directors of the Company.

Equipment line of credit with a total of $ 9.3 million and $ 8.5 million of $ 9.3 million available borrowed at June 30, 2024 and September 30, 2023, respectively, fixed interest at 7.25 % of outstanding balance due in monthly installments between June 1, 2023 and December 1, 2023.

Payments of $ 202,809 due in monthly installments, including fixed interest at 7.25 % , beginning January 2024 with final payment due February 2028, secured by equipment, guaranteed by certain directors of the Company.

Equipment line of credit with a total of $ 9.3 million with payments of $ 202,809 due in monthly installments, including fixed interest at 7.25 % and final payment due February 2028, secured by equipment, guaranteed by certain directors of the Company.

Paycheck Protection Program loans from Small Business Administration, 1.0 % simple interest, initially forgiven in the fiscal year ended September 30, 2021.

Final forgiveness decision has not been determined.

Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $ 64,853 interest at 4.25 %, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company.

Notes payable to finance companies, due in monthly installments totaling $ 77,000 at June 30, 2024 and $ 50,000 at September 30, 2023, including interest ranging from 0.00 % to 6.0 %, final payments due July 2024 through August 2026, secured by equipment.

Note payable to finance company for insurance premiums financed, due in monthly installments totaling $ 327,000 in calendar year 2023 and $ 282,000 in calendar year 2022, including interest rate at 6.70 %, final payment due December 2023.

Term note payable to United Bank, WV Pipeline acquisition, due in monthly installments of $ 64,853 , including fixed interest at 4.25 %, final payment due by March 25, 2026, secured by receivables and equipment, guaranteed by certain directors of the Company.

Notes payable to finance companies, due in monthly installments totaling $ 191,000 at December 31, 2024 and $ 76,000 at September 30, 2024, including interest ranging from 0.00 % to 6.0 %, final payments due January 2025 through August 2026, secured by equipment.

Notes payable to United Bank, Tribute acquisition finance, due in monthly installments totaling $ 272,016 , including fixed interest at 6.9 % , final payment due December 2030 secured by receivables and equipment, guaranteed by certain directors of the Company.

Notes payable to bank, due in monthly installments totaling $ 7,848 , including interest at 4.82 %, final payment due November 2034 secured by building and property.

Notes payable to bank, due in monthly installments totaling $ 12,580 , including interest at 9.5 %, final payment due November 2025 secured by building and property, guaranteed by certain directors of the Company.

Notes payable to bank, due in monthly installments totaling $ 59,932 , including fixed interest at 6.0 %, final payment due October 2027 secured by receivables and equipment, guaranteed by certain directors of the Company.

Notes payable to David Bolton and Daniel Bolton, due in annual installments totaling $ 500,000 , including interest at 3.25 %, final payment due December 31, 2026, unsecured.

Notes payable to bank, interest at 4.25 % of outstanding balance due in monthly installments between January 2021 and January 2022 with note payments beginning February 2022.

Payments due in monthly installments totaling $ 68,150 , including interest at 9.5 % , final payment due January 2026, secured by equipment, guaranteed by certain directors of the Company.

Term note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $ 129,910 , including interest at 4.50 %, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company.

Note payable to United Bank, Tri-State Paving acquisition, due in monthly installments of $ 129,910 , including fixed interest at 4.50 %, final payment due by June 1, 2027, secured by receivables and equipment, guaranteed by certain directors of the Company.

Notes payable to Corns Enterprises, $ 1,000,000 with fair value of $ 936,000 , due in annual installments totaling $ 250,000 , including interest at 3.50 %, final payment due April 29, 2026, unsecured.

Less current maturities

Total long term debt, less current maturities

Total long term debt

On December 2, 2024, the Company completed the acquisition of Tribute Contracting & Consultants, LLC (“Tribute LLC”), located in South Point, Ohio.

Pursuant to the Asset Purchase Agreement (“Agreement”) signed on October 31, 2024, the Company acquired substantially all the assets (including but not limited to customer contracts, employees, account receivable and equipment) of Tribute LLC for $ 22.0 million in cash at closing, less an initial $ 1.2 million working capital adjustment, and $ 2.0 million in Energy Services Common Stock (“Stock”).

Of the $ 20.8 million paid in cash, $ 16.0 million was funded by a loan from United Bank, Inc., Huntington, West Virginia.

The final working capital adjustment was reduced by $ 296,000 , which was deducted from the approximately $ 2.0 million receivable for cash due to the Company.

Todd Harrah and Tom Enyart (the “Sellers”) continued their employment with the Company’s new subsidiary, Tribute Contracting & Consultants, Inc.

The Sellers each received $ 1.0 million in Stock pursuant to an exemption under The Securities Act of 1933.

Based on the market value calculation in the Agreement, the Sellers each received 67,386 shares of Stock.

Tribute earned revenues of $ 1.6 million between December 2, 2024 and December 31, 2024.

Energy Services accounts for business combinations under the acquisition method in accordance with ASC Topic 805, Business Combinations .

Accordingly, for the transaction, the purchase price is allocated to the fair value of the assets acquired and liabilities assumed as of the date of the acquisition.

In conjunction with ASC 805, upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition date, Energy Services records any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined.

The Company is continuing to finalize the purchase price allocations related to the Tribute LLC acquisition.

The purchase price for the Tribute LLC acquisition is allocated in the table below:

Accounts Receivable and Retainages acquired from seller

Receivable for cash due to buyer

Contract assets acquired from seller

Land and Building

Intangible assets

Accounts payable assumed

( 3,476,871 )

Long-term debt assumed

( 3,789,962 )

Contract liabilities assumed

ASC 805-10-50-2 requires public companies that present comparative financial statements to present pro forma financial statements as though the business combination that occurred during the current fiscal year had occurred as of the beginning of the comparable prior annual reporting period.

As allowed under ASC 805-10-50-2, the Company finds this information impracticable to provide for the interim periods presented due to the lack of availability of meaningful financial statements of the acquired company that comply with U.S.

GOODWILL AND INTANGIBLE ASSETS

2 unchanged sentences

If a company fails this test or decides to bypass this step, it must proceed with a quantitative assessment of goodwill impairment.

The Company did no t have a goodwill impairment at June 30, 2024 or September 30, 2023.

A table of the Company’s goodwill as of and for the nine months ended June 30, 2024 and as of and for the twelve months ended September 30, 2023 is below:

June 30, 2024

The Company did no t have a goodwill impairment at December 31, 2024 or September 30, 2024.

A table of the Company’s goodwill as of December 31, 2024 and September 30, 2024 is below:

December 31, 2024

September 30, 2024

7 unchanged sentences

and Impairment

(in months) at

4 unchanged sentences

September 30,

Ended June 30,

Ended December 31,

at December 31,

at September 30,

Intangible assets:

Original Cost

Intangible assets:

West Virginia Pipeline:

2 unchanged sentences

Employment agreement/non-compete

Heritage Painting

Customer relationships

Tri-State Paving:

Customer relationships

Tribute Contracting & Consultants

Customer relationships

Total intangible assets

The amortization on identifiable intangible assets for the three months ended June 30, 2024 and 2023 was $ 108,142 and $ 135,820 , respectively.

The amortization on identifiable intangible assets for the nine months ended June 30, 2024 and 2023 was $ 324,426 and $ 401,221 , respectively.

The amortization on identifiable intangible assets for the three months ended December 31, 2024 and 2023 was $ 130,863 and $ 108,142 , respectively.

Amortization expense associated with the identifiable intangible assets is expected to be as follows:

Amortization Expense

July 2024 to June 2025

July 2025 to June 2026

July 2026 to June 2027

July 2027 to June 2028

July 2028 to June 2029

January 2025 to December 2025

January 2026 to December 2026

January 2027 to December 2027

January 2028 to December 2028

January 2029 to December 2029

LEASE OBLIGATIONS

2 unchanged sentences

The Company has only committed to a one-year renewal and is evaluating the intent to renew for additional periods.

The Company had two lease agreements for construction equipment with a combined amount of $ 160,000 that were paid in full as of June 30, 2024.

The leases had a term of twenty-two months with a stated interest rate of 0 %, combined monthly installment payments of $ 6,645 and were cancellable at any time without penalty.

The Company exercised the right to purchase the equipment at

the expiration of the leases by applying the two-month deposit paid.

The related assets and finance lease obligations associated with these lease agreements had been included in the consolidated balance sheets within property, plant and equipment and long-term debt.

The Company has two right-of-use operating leases acquired on April 29, 2022, as part of the Tri-State Paving, LLC transaction.

The first operating lease, for the Hurricane, West Virginia facility, had a net present value of $ 236,000 at inception, and a carrying value of $ 69,000 at June 30, 2024.

The second operating lease, for the Chattanooga, Tennessee facility, had a net present value of $ 144,000 at inception, and a carrying value of $ 6,000 at June 30, 2024.

The first operating lease, for the Hurricane, West Virginia facility, had a net present value of $ 236,000 at inception, and a carrying value of $ 25,000 at December 31, 2024.

The 4.5 % interest rate on the operating leases is based on the Company’s incremental borrowing rate at inception.

The second operating lease, for the Chattanooga, Tennessee facility, had a net present value of $ 144,000 at inception, and expired on August 31, 2024.

The lease was renewed for a two - year period with a net present value of $ 140,000 and had a carrying value of $ 105,000 at December 31, 2024.

The 8.5 % interest rate on the operating leases is based on the Company’s incremental borrowing rate at inception.

The Company has a right-of-use operating lease with Enterprise Fleet Management, Inc.

(Enterprise) acquired on August 11, 2022, as part of the Ryan Environmental acquisition.

This lease agreement was initially for thirty-one vehicles with a net present value of $ 1.2 million.

The Company had seventy-one vehicles on lease at June 30, 2024.

The right-of-use operating lease has a carrying value of $ 2.2 million at June 30, 2024.

The Company had eighty vehicles on lease at December 31, 2024.

The right-of-use operating lease has a carrying value of $ 2.4 million at December 31, 2024.

Each vehicle leased under the master lease program has its own implicit rate ranging from 12.8 % to 15.6 %.

The Company has a right-of-use operating lease with RICA Developers, LLC acquired on August 12, 2022 and renewed for one year effective October 1, 2023.

This lease, for the Bridgeport, West Virginia facility, had a net present value of $ 125,000 at inception and a carrying value of $ 21,000 at June 30, 2024.

The 8.5 % interest rate on the operating lease was based on the Company’s incremental borrowing rate at renewal.

The Company leases office and shop space for Ryan Construction’s headquarters in Bridgeport, West Virginia.

The Company renewed the lease for one year effective October 1, 2024 through September 30, 2025.

The Company has only committed to a one-year renewal and is evaluating the intent to renew for additional periods.

The Company has a right-of-use operating lease acquired on March 28, 2023.

This lease, for the Winchester, Kentucky facility, had a net present value of $ 290,000 at inception and a carrying value of $ 169,000 at June 30, 2024.

This lease, for the Winchester, Kentucky facility, had a net present value of $ 290,000 at inception and a carrying value of $ 136,000 at December 31, 2024.

The 7.75 % interest rate on the operating lease is based on the Company’s incremental borrowing rate at inception.

1 unchanged sentence

Rental expense can vary by reporting period due to equipment requirements on construction projects and the availability of Company owned equipment.

Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $ 3.3 million and $ 2.5 million, respectively, for the three months ended June 30, 2024 and 2023.

Rental expenses were $ 12.0 million and $ 6.8 million, respectively, for the nine months ended June 30, 2024 and 2023.

Schedules related to the Company’s operating leases at June 30, 2024 can be found below:

Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $ 5.0 million and $ 5.4 million, respectively, for the three months ended December 31, 2024 and 2023.

Schedules related to the Company’s operating leases at December 31, 2024 can be found below:

Operating Lease-Weighted Average Remaining Term

Present value of

Fiscal year end

Operating lease 1

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Operating Lease Maturity Schedule

July 2024 to June 2025

July 2025 to June 2026

July 2026 to June 2027

July 2027 to June 2028

January 2025 to December 2025

January 2026 to December 2026

January 2027 to December 2027

January 2028 to December 2028

Less amounts representing interest

1 unchanged sentence

Three Months Ended

Nine Months Ended

Three Months Ended

Nine Months Ended

Operating Lease Expense

13 unchanged sentences

Three Months Ended

Nine Months Ended

Three Months Ended

Nine Months Ended

Cash Paid for Operating Leases

5 unchanged sentences

SUBSEQUENT EVENTS

On July 11, 2024, the Company’s Nitro subsidiary completed the acquisition of substantially all the physical assets of Heritage Painting, LLC, a West Virginia corporation located in Poca, West Virginia for $ 300,000 cash.

On January 2, 2025, the Company paid a quarterly dividend of $ 0.03 per common share totaling $ 501,164 .

Management has evaluated all subsequent events for accounting and disclosure.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements