What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2025-02-10 · 179 added, 89 removed, 494 unchanged (35% of the section changed)

34 unchanged sentences

Shareholders’ equity

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

Common stock, $ .0001 par value Authorized 50,000,000 shares, 18,006,537 issued and 16,716,809 outstanding at March 31, 2025 and 17,860,413 issued and 16,570,685 outstanding at September 30, 2024

Treasury stock, 1,289,728 shares at March 31, 2025 and September 30, 2024

Additional paid in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenue

Selling and administrative expenses

Income from operations

(Loss) income from operations

( 8,092,227 )

( 1,082,397 )

( 6,446,266 )

Other income (expense)

Other nonoperating (expense) income

Other nonoperating expense

Interest expense

Gain (loss) on sale of equipment

Income before income taxes

Income tax expense

( 1,359,488 )

( 1,224,600 )

(Loss) gain on sale of equipment

( 1,249,124 )

(Loss) gain before income taxes

( 9,005,153 )

( 1,481,880 )

( 7,695,390 )

Income tax (benefit) expense

( 2,206,735 )

( 1,750,705 )

Net (loss) income

( 6,798,418 )

( 1,108,828 )

( 5,944,685 )

Weighted average shares outstanding-basic

Weighted average shares-diluted

Earnings per share available to common shareholders

Earnings per share-diluted available to common shareholders

(Loss) earnings per share available to common shareholders

(Loss) 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

Three Months Ended

Six Months Ended

Cash flows from operating activities:

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

Net (loss) income

( 5,944,685 )

Adjustments to reconcile net (loss) Income to net cash provided by operating activities:

Depreciation expense

Accreted interest on PPP loans

(Gain) loss on sale of equipment

Gain on sale of equipment

Provision for deferred taxes

( 1,839,881 )

Amortization of intangible assets

Accreted interest on note payable

(Increase) decrease in accounts receivable-trade

Increase in retainage receivable

Vested stock grants

Decrease in accounts receivable-trade

Decrease (increase) in retainage receivable

( 2,511,449 )

Increase in other receivables

Decrease (increase) in contract assets

Decrease (increase) in other receivables

Decrease in contract assets

Increase in prepaid expenses and other

( 1,020,822 )

Decrease in prepaid expenses and other

(Decrease) increase in accounts payable

( 1,586,692 )

Decrease in accounts payable

( 4,561,534 )

( 3,357,277 )

Decrease in accrued expenses and other current liabilities

2 unchanged sentences

Increase (decrease) in contract liabilities

( 1,434,485 )

Net cash provided by operating activities

3 unchanged sentences

( 3,586,106 )

Acquistion of Tribute Contracting & Consultants

Acquistion of Tribute Contracting & Consultants, net of cash aquired

( 20,783,224 )

6 unchanged sentences

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

( 4,963,150 )

Cash dividend on common stock

Principal payments on long-term debt

3 unchanged sentences

( 1,881,052 )

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

( 2,999,803 )

( 4,340,106 )

Cash and cash equivalents beginning of period

6 unchanged sentences

Supplemental disclosures of cash flows information:

Cash paid during the year for:

Cash paid during the period for:

The Accompanying Notes are an Integral Part of These Financial Statements

1 unchanged sentence

Consolidated Statements of Changes in Shareholders’ Equity

For the three months ended December 31, 2024 and 2023

For the three and six months ended March 31, 2025 and 2024

Additional Paid

6 unchanged sentences

( 1,237,865 )

( 6,798,418 )

Dividends on common stock ($ 0.03 per share on 16,716,809 shares)

Vested restricted stock award

Balance at March 31, 2025

( 8,537,787 )

Additional Paid

5 unchanged sentences

( 24,653,249 )

( 1,108,828 )

Vested restricted stock award

Balance at March 31, 2024

( 25,762,077 )

The Accompanying Notes are an Integral Part of These Financial Statements

8 unchanged sentences

Energy Services’ other pipeline services include corrosion protection services, horizontal drilling services, liquid pipeline construction, pump station construction, production facility construction, water and sewer pipeline installations, various maintenance and repair services and other services related to pipeline construction.

The Company has also added the ability to install broadband and solar electric systems and perform civil and general contracting services.

The Company has also added the ability to install broadband and perform civil and general contracting services.

Hughes Construction Company, Inc.

5 unchanged sentences

Hughes, provides electrical, mechanical, HVAC/R, and fire protection services to customers primarily in the automotive, chemical, and power industries.

Revolt Energy, LLC (“Revolt”), a wholly owned subsidiary of NCS, performs residential solar installation projects.

Nitro Electric Company, LLC (“Nitro Electric”), a wholly owned subsidiary of NCS, performs industrial electrical work and has a satellite office registered in Michigan.

3 unchanged sentences

NCS and its subsidiaries will collectively be referred to “Nitro”.

Revolt Energy, LLC (“Revolt”), formerly a wholly owned subsidiary of NCS, that performed residential solar installations projects, was sold for a nominal consideration on March 1, 2025 in a transaction that was not material to the Company’s Consolidated Financial Statements.

Hughes, Nitro, and Contractors Rental construction personnel are union members of various related construction trade unions and are subject to collective bargaining agreements that expire at varying time intervals.

25 unchanged sentences

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 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.

The operating results for the three and six months ended March 31, 2025 and 2024 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Principles of Consolidation

10 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 months ended December 31, 2024.

There were no material changes to these significant accounting policies during the three and six months ended March 31, 2025.

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.

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.

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.

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.

During July 2023, management received notification from the SBA that two additional forgiveness applications related to the PPP Loans were under review.

34 unchanged sentences

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

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

Based 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 months ended December 31, 2024 and 2023:

Three Months Ended December 31, 2024

The following tables present our disaggregated revenue for the three and six months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025

Gas & Petroleum

9 unchanged sentences

Total revenue from contracts

Three Months Ended December 31, 2023

Six Months Ended March 31, 2025

Gas & Petroleum

9 unchanged sentences

Total revenue from contracts

Three Months Ended March 31, 2024

Gas & Petroleum

Electrical, 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

Six Months Ended March 31, 2024

Gas & Petroleum

Electrical, 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

CONTRACT BALANCES

5 unchanged sentences

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

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.

During the three and six months ended March 31, 2025, we recognized revenue of $ 6.8 million and $ 16.9 million, respectively, 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:

December 31, 2024

March 31, 2025

September 30, 2024

Accounts receivable-trade, net of allowance for doubtful accounts

( 4,573,066 )

Contract assets

Cost and estimated earnings in excess of billings

( 1,865,111 )

Contract liabilities

1 unchanged sentence

PERFORMANCE OBLIGATIONS

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.

For the three and six months ended March 31, 2025, 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 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.

At March 31, 2025, the Company had $ 223.2 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 December 31, 2024 and September 30, 2024, are summarized as follows:

December 31, 2024

Costs, estimated earnings, and billings on uncompleted contracts as of March 31, 2025 and September 30, 2024, are summarized as follows:

March 31, 2025

September 30, 2024

2 unchanged sentences

Less billings to date

( 3,030,054 )

Costs and estimated earnings in excess of billed on uncompleted contracts

Less billings in excess of costs and estimated earnings on uncompleted contracts

( 3,030,054 )

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

The Company’s unaudited backlog at March 31, 2025 and September 30, 2024 was $ 280.7 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 $ 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 $ 41.2 million at March 31, 2025 was $ 40.0 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 months ended December 31, 2024 and 2023 are summarized below.

The amounts used to compute the earnings per share for the three and six months ended March 31, 2025 and 2024 are summarized below.

Three Months Ended

December 31, 2024

December 31, 2023

Six Months Ended

March 31, 2025

March 31, 2024

March 31, 2025

March 31, 2024

Net (loss) income

( 6,798,418 )

( 1,108,828 )

( 5,944,685 )

Weighted average shares outstanding-basic

Weighted average shares outstanding-diluted

Earnings per share available to common shareholders

Earnings per share available to common shareholders-diluted

(Loss) Earnings per share available to common shareholders

(Loss) earnings per share available to common shareholders-diluted

The components of income taxes are as follows:

Three Months Ended

December 31, 2024

December 31, 2023

Total income tax expense

Six Months Ended

March 31, 2025

March 31, 2024

March 31, 2025

March 31, 2024

( 1,687,935 )

( 1,392,961 )

( 1,687,935 )

( 1,392,961 )

Total income tax (benefit) expense

( 2,206,735 )

( 1,750,705 )

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.

1 unchanged sentence

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.

The effective income tax rate for the three months ended March 31, 2025 was ( 24.5 )%, as compared to ( 25.2 )%, for the same period in 2024.

The effective income tax rate for the six months ended March 31, 2025 was ( 22.8 )%, as compared to 42.3 %, for the same period in 2024.

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:

December 31, 2024

March 31, 2025

September 30, 2024

11 unchanged sentences

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

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 Company had $ 12.8 million and $ 0 million of federal net operating loss carryforwards at March 31, 2025 and September 30, 2024, respectively.

The Company had $ 52.0 million and $ 20.5 million of state net operating loss carryforwards at March 31, 2025 and September 30, 2024, respectively.

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

8 unchanged sentences

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

December 31, 2024

March 31, 2025

September 30, 2024

3 unchanged sentences

Interest rate

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 Company’s $ 5.8 million and $ 4.5 million line of credit borrowings are recorded as a long-term debt as of March 31, 2025 and September 30, 2024, respectively.

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

8 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.

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

The Company was in compliance with all covenants at March 31, 2025.

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

21 unchanged sentences

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 December 31, 2024 and September 30, 2024 is as follows:

December 31, 2024

Short and Long - Term Debt

A summary of short-term and long-term debt as of March 31, 2025 and September 30, 2024 is as follows:

March 31, 2025

September 30, 2024

4 unchanged sentences

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 finance companies, due in monthly installments totaling $ 192,000 at March 31, 2025 and $ 76,000 at September 30, 2024, including interest ranging from 0.00 % to 6.0 %, final payments due April 2025 through September 2028, 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.

13 unchanged sentences

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.

Tribute earned revenues of $ 6.2 million and $ 7.9 million for the three and six months ended March 31, 2025, respectively.

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

2 unchanged sentences

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:

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

Accounts Receivable and Retainages acquired from seller

14 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 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

The Company did no t have a goodwill impairment at March 31, 2025 or September 30, 2024.

A table of the Company’s goodwill as of March 31, 2025 and September 30, 2024 is below:

March 31, 2025

September 30, 2024

7 unchanged sentences

and Impairment

(in months) at

4 unchanged sentences

September 30,

Ended December 31,

at December 31,

Ended March 31,

at September 30,

12 unchanged sentences

Total intangible assets

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

The amortization on identifiable intangible assets for the three months ended March 31, 2025 and 2024 was $ 164,197 and $ 108,142 , respectively.

The amortization on identifiable intangible assets for the six months ended March 31, 2025 and 2024 was $ 295,060 and $ 216,284 , respectively.

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

Amortization Expense

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

April 2025 to March 2026

April 2026 to March 2027

April 2027 to March 2028

April 2028 to March 2029

April 2029 to March 2030

LEASE OBLIGATIONS

3 unchanged sentences

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 $ 25,000 at December 31, 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 $ 7,000 at March 31, 2025.

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 lease was renewed for a two - year period with a net present value of $ 140,000 and had a carrying value of $ 87,900 at March 31, 2025.

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.

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.

The Company had eighty - three vehicles on lease at March 31, 2025.

The right-of-use operating lease has a carrying value of $ 2.3 million at March 31, 2025.

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

3 unchanged sentences

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 $ 136,000 at December 31, 2024.

This lease, for the Winchester, Kentucky facility, had a net present value of $ 290,000 at inception and a carrying value of $ 111,500 at March 31, 2025.

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 $ 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:

Rental expense, which is included in cost of goods sold on the consolidated statements of income, was $ 3.9 million and $ 3.3 million, respectively, for the three months ended March 31, 2025 and 2024.

Rental expense was $ 9.0 million and $ 8.7 million, respectively, for the six months ended March 31, 2025 and 2024.

Schedules related to the Company’s operating leases at March 31, 2025 can be found below:

Operating Lease-Weighted Average Remaining Term

7 unchanged sentences

Operating Lease Maturity Schedule

January 2025 to December 2025

January 2026 to December 2026

January 2027 to December 2027

January 2028 to December 2028

April 2025 to March 2026

April 2026 to March 2027

April 2027 to March 2028

April 2028 to March 2029

April 2029 to March 2030

Less amounts representing interest

1 unchanged sentence

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

Operating Lease Expense

13 unchanged sentences

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

Cash Paid for Operating Leases

5 unchanged sentences

SUBSEQUENT EVENTS

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

On April 15, 2025, the Company paid $ 502,000 in quarterly dividends to holders of record as of March 31, 2025.

In April 2025, the Company repurchased 106,392 common shares of stock at an average price of $ 7.99 .

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