Energy Services of America (ESOA) 16th Annual Midwest Ideas Conference summary

Business overview and operations

• Operates as a contractor in natural gas, petroleum, water, and industrial sectors, with services including electrical, mechanical, HVAC, and fire protection across multiple subsidiaries.

• Reported $352 million in revenue and $28–29 million in adjusted EBITDA for the last fiscal year, with a September 30th fiscal year-end.

• Employs about 1,400 people and maintains a strong customer relationship focus, with a $304 million backlog as of June, including $125 million in water and $100 million in industrial services.

• Expanded geographic reach from New York to Alabama, with operations in the Carolinas, Tennessee, Indiana, Illinois, and Michigan, driven by customer and contractor relationships.

• Core values emphasize safety, quality, and production, aiming to maximize shareholder returns.

Growth strategy and acquisitions

• Pursued organic growth and completed four acquisitions since 2020, including West Virginia Pipeline, Tri-State Paving, and Tribute Contracting.

• Acquisitions are typically structured with a mix of cash, stock, and seller's notes to keep sellers engaged; no earnout provisions are used.

• Tribute Contracting, acquired in December 2024, is expected to generate $40–45 million in annual revenue and fills a gap in wastewater services.

• Tri-State Paving acquisition supports water services by providing paving restoration for water line projects, enhancing value to key customers.

• Bryan Construction Services is being right-sized and integrated with CJ Hughes to focus on boring and fiber broadband work.

Financial performance and capital allocation

• Backlog has steadily increased, with a focus on growing water distribution and maintaining gas transmission at about one-third of business.

• Fiscal year 2024 EBITDA was around $28–29 million, but trailing 12-month EBITDA dropped to $17 million due to weather-related delays and customer spending slowdowns.

• Maintains a 10% EBITDA margin target; profitability was hindered by a three-month project delay and inclement weather.

• Pays a quarterly dividend of $0.03 per share and has a stock repurchase plan with about 786,000 shares remaining.

• Capital allocation remains opportunistic, with a focus on strategic acquisitions and share repurchases during price dips.