Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Jan. 04, 2021 | Mar. 31, 2020 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2020 | ||
Entity Registrant Name | Energy Services of America CORP | ||
Entity Central Index Key | 0001357971 | ||
Trading Symbol | esoa | ||
Title of 12(g) Security | Common Stock, par value $0.0001 per share | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Interactive Data Current | Yes | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6,493,066 | ||
Entity Common Stock, Shares Outstanding | 13,621,406 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets | ||
Cash and cash equivalents | $ 11,216,820 | $ 4,578,275 |
Accounts receivable-trade | 18,246,989 | 21,678,622 |
Allowance for doubtful accounts | (70,310) | (70,310) |
Retainages receivable | 2,483,809 | 3,521,561 |
Other receivables | 9,458 | 10,008 |
Contract assets | 6,545,863 | 6,659,707 |
Prepaid expenses and other | 3,338,943 | 2,734,974 |
Total current assets | 41,771,572 | 39,112,837 |
Property, plant and equipment, at cost | 53,324,843 | 51,268,358 |
less accumulated depreciation | (36,933,129) | (34,453,157) |
Total fixed assets | 16,391,714 | 16,815,201 |
Total assets | 58,163,286 | 55,928,038 |
Current liabilities | ||
Current maturities of long-term debt | 4,028,900 | 4,403,573 |
Lines of credit and short term borrowings | 509,843 | 4,025,710 |
Accounts payable | 5,222,222 | 2,919,618 |
Accrued expenses and other current liabilities | 4,237,172 | 3,509,373 |
Contract liabilities | 4,851,900 | 3,455,288 |
Total current liabilities | 18,850,037 | 18,313,562 |
Long-term debt, less current maturities | 11,233,705 | 11,024,296 |
Deferred income taxes payable | 2,255,515 | 1,925,823 |
Total liabilities | 32,339,257 | 31,263,681 |
Shareholders' equity | ||
Preferred stock, $.0001 par value Authorized 1,000,000 shares, 206 issued at September 30, 2020 and 2019 | ||
Common stock, $.0001 par value Authorized 50,000,000 shares 14,839,836 issued and 13,621,406 outstanding at September 30, 2020 and 14,839,836 issued and 13,924,789 outstanding at September 30, 2019 | 1,484 | 1,484 |
Treasury stock, 1,218,430 shares at September 30, 2020 and 915,047 at September 30, 2019 | (122) | (91) |
Additional paid in capital | 60,670,699 | 60,938,896 |
Retained earnings (deficit) | (34,848,032) | (36,275,932) |
Total shareholders' equity | 25,824,029 | 24,664,357 |
Total liabilities and shareholders' equity | $ 58,163,286 | $ 55,928,038 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 206 | 206 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,839,836 | 14,839,836 |
Common stock, shares outstanding | 13,621,406 | 13,924,789 |
Treasury stock, shares | 1,218,430 | 915,047 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF INCOME | ||
Revenue | $ 119,194,440 | $ 174,541,155 |
Cost of revenues | 105,693,209 | 161,861,357 |
Gross profit | 13,501,231 | 12,679,798 |
Selling and administrative expenses | 9,831,578 | 8,857,386 |
Income from operations | 3,669,653 | 3,822,412 |
Other income (expense) | ||
Other nonoperating expense | (239,862) | (112,814) |
Interest income | 53,332 | 58,023 |
Interest expense | (486,246) | (1,064,222) |
Gain on sale of equipment | 579,326 | 258,082 |
Other income (expense), Total | (93,450) | (860,931) |
Income before income taxes | 3,576,203 | 2,961,481 |
Income tax expense | 1,143,186 | 968,571 |
Net income | 2,433,017 | 1,992,910 |
Dividends on preferred stock | 309,000 | 309,000 |
Net income available to common shareholders | $ 2,124,017 | $ 1,683,910 |
Weighted average shares outstanding-basic | 13,804,835 | 14,064,871 |
Weighted average shares-diluted | 17,238,168 | 17,498,204 |
Earnings per share available to common shareholders | $ 0.154 | $ 0.120 |
Earnings per share-diluted available to common shareholders | $ 0.123 | $ 0.096 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 2,433,017 | $ 1,992,910 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation expense | 4,395,362 | 4,157,849 |
Gain on sale of equipment | (579,326) | (258,082) |
Provision for deferred taxes | 329,692 | 597,448 |
Decrease in contracts receivable | 3,431,633 | 535,358 |
Decrease in retainage receivable | 1,037,752 | 1,397,790 |
Decrease in other receivables | 550 | 256,171 |
Decrease (increase) in contract assets | 113,844 | (1,306,332) |
(Increase) decrease in prepaid expenses | (603,969) | 1,382,302 |
Increase (decrease) in accounts payable | 2,302,604 | (3,285,252) |
Increase (decrease) in accrued expenses | 727,799 | (792,142) |
Increase in contract liabilities | 1,396,612 | 194,087 |
Decrease in income taxes payable | (545,237) | |
Net cash provided by operating activities | 14,985,570 | 4,326,870 |
Cash flows from investing activities: | ||
Investment in property and equipment | (3,534,821) | (3,364,985) |
Proceeds from sales of property and equipment | 768,656 | 629,228 |
Net cash used in investing activities | (2,766,165) | (2,735,757) |
Cash flows from financing activities: | ||
Dividends on common stock | (696,117) | |
Preferred dividends paid | (309,000) | (309,000) |
Treasury stock purchased by company | (268,228) | (300,600) |
Borrowings on lines of credit and short term debt, net of (repayments) | (3,515,867) | 7,956,463 |
Proceeds from long term debt | 13,139,100 | |
Principal payments on long term debt | (13,930,748) | (5,425,251) |
Net cash (used in) provided by financing activities | (5,580,860) | 1,921,612 |
Increase in cash and cash equivalents | 6,638,545 | 3,512,725 |
Cash and cash equivalents beginning of period | 4,578,275 | 1,065,550 |
Cash and cash equivalents end of period | 11,216,820 | 4,578,275 |
Supplemental schedule of noncash investing and financing activities: | ||
Purchases of property & equipment under financing agreements | 626,384 | 1,163,222 |
Insurance premiums financed | 3,063,543 | 3,159,083 |
Accrued dividends on preferred stock | 77,250 | 77,250 |
Line of credit refinanced to long-term debt | 10,000,000 | |
Cash paid during the year for: | ||
Interest | 486,246 | 1,064,222 |
Income taxes | $ 785,630 | $ 798,430 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid in Capital | Retained Earnings (deficit) | Treasury Stock | Total |
Balance at Sep. 30, 2018 | $ 1,484 | $ 61,239,470 | $ (37,959,842) | $ (65) | $ 23,281,047 |
Balance (in shares) at Sep. 30, 2018 | 14,194,517 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 1,992,910 | 1,992,910 | |||
Accrued preferred dividends | (309,000) | (309,000) | |||
Treasury stock purchased by company | (300,574) | (26) | (300,600) | ||
Treasury stock purchased by company (in shares) | (269,728) | ||||
Balance at Sep. 30, 2019 | $ 1,484 | 60,938,896 | (36,275,932) | (91) | 24,664,357 |
Balance (in shares) at Sep. 30, 2019 | 13,924,789 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 2,433,017 | 2,433,017 | |||
Accrued preferred dividends | (309,000) | (309,000) | |||
Dividends on common stock ($0.05 per share on 13,922,336 shares; 317,500 common shares are part of preferred units and were not eligible for the common dividend) | (696,117) | (696,117) | |||
Treasury stock purchased by company | (268,197) | (31) | (268,228) | ||
Treasury stock purchased by company (in shares) | (303,383) | ||||
Balance at Sep. 30, 2020 | $ 1,484 | $ 60,670,699 | $ (34,848,032) | $ (122) | $ 25,824,029 |
Balance (in shares) at Sep. 30, 2020 | 13,621,406 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Sep. 30, 2020$ / sharesshares | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |
Dividends on common stock, per share | $ / shares | $ 0.05 |
Common stock, shares eligible for dividend (in shares) | 13,922,336 |
Common stock, shares not eligible for dividend (in shares) | 317,500 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 12 Months Ended |
Sep. 30, 2020 | |
BUSINESS AND ORGANIZATION | |
BUSINESS AND ORGANIZATION | 1. Energy Services of America Corporation (“Energy Services” or the “Company”) operates primarily in the mid-Atlantic region of the United States and provides services to customers in the natural gas, petroleum, water distribution, automotive, chemical and power industries. C.J. Hughes Construction Company, Inc. (“C.J. Hughes”), a wholly owned subsidiary of the Company, is a general contractor primarily engaged in pipeline construction for utility companies. Contractors Rental Corporation (“Contractors Rental”), a wholly owned subsidiary of C.J. Hughes, provides union building trade employees for projects managed by C.J. Hughes. Nitro Construction Services, Inc. (“Nitro”), a wholly owned subsidiary of C. J. Hughes, provides electrical, mechanical , HVAC/R and fire protection services to customers primarily in the automotive, chemical and power industries. Pinnacle Technical Solutions, Inc. (“Pinnacle”), a wholly owned subsidiary of Nitro, operates as a data storage facility within Nitro’s office building. Pinnacle is supported by Nitro and has no employees of its own. All of the C.J. Hughes, Nitro, and Contractors Rental production personnel are union members of various related construction trade unions and are subject to collective bargaining agreements that expire at varying time intervals. The Company’s stock is quoted under the symbol “ESOA” on the OTC QB marketplace operated by the OTC Markets Group. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Revenue Recognition On October 1, 2018, the Company adopted an Accounting Standard Update, Revenue from Contracts with Customers (Topic 606) . The core principle of Topic 606 is that revenue will be recognized when promised goods or services are transferred to customers in an amount that reflects consideration for which entitlement is expected in exchange for those goods or services. We adopted Topic 606 using a modified retrospective transition approach and elected to apply Topic 606 to contracts with customers that are not substantially complete, i.e. less than 90% complete, as of October 1, 2018. The Company recognizes revenue as performance obligations are satisfied and control of the promised good and service is transferred to the customer. For Lump Sum and Unit Price contracts, revenue is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward complete satisfaction of the performance obligation(s) using an input (i.e., “cost to cost”) method. For Cost Plus and Time and Material (“T&M”) contracts, revenue is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward satisfaction of the performance obligation(s) using an output method. The Company does have certain service and maintenance contracts in which each customer purchase order is considered its own performance obligation recognized over time and would be recognized depending on the type of contract mentioned above. The Company also does certain T&M service work that is generally completed in a short duration and is recognized at a point in time. All contract costs, including those associated with affirmative claims, change orders and back charges, are recorded as incurred and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Contract costs consist of direct costs on contracts, including labor and materials, amounts payable to subcontractors and outside equipment providers, direct overhead costs and internal equipment expense (primarily depreciation, fuel, maintenance and repairs). The company recognizes revenue, but not profit, on certain uninstalled materials. Revenue on these uninstalled materials is recognized when the cost is incurred (when control is transferred), but the associated profit is not recognized until the end of the project. The costs of uninstalled materials will be tracked separately within the Company’s accounting software. Pre-contract and bond costs, if required, on projects are generally immaterial to the total value of the Company’s contracts and are expensed when incurred. Project mobilization costs are also generally immaterial and charged to project costs as incurred. As a practical expedient, the Company recognizes these incremental costs as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. For projects expected to last greater than one year, mobilization costs will be capitalized as incurred and amortized over the expected duration of the project. For these projects, mobilization costs will be tracked separately in the Company’s accounting software. This includes costs associated with setting up a project lot or lay-down yard, equipment, tool and supply transportation, temporary facilities and utilities and worker qualification and safety training. Contracts may require the Company to warranty that work is performed in accordance with the contract; however, the warranty is not priced separately, and the Company does not offer customers an option to purchase a warranty. As of September 30, 2020, the Company does not have a material amount of costs expensed that would otherwise be capitalized and amortized. Principles of Consolidation The consolidated financial statements of Energy Services include the accounts of Energy Services and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, references to Energy Services include Energy Services and its consolidated subsidiaries. Use of Estimates and Assumptions The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and loss during the reporting period. Actual results could differ materially from those estimates. Cash and Cash Equivalents Energy Services considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Fair Value Measurements The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. Under the FASB’s authoritative guidance on fair value measurements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. As noted above, there is a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 — Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Level 2 — Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. Level 3 — Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amount for borrowings under the Company’s revolving credit facility approximates fair value because of the variable market interest rate charged to the Company for these borrowings. The fair value of the Company’s long term fixed-rate debt to unrelated parties 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 $15.8 million at September 30, 2020 was $14.8 million. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $16.0 million at September 30, 2019 was $16.0 million. All receivables and payables are carried at net realizable value which approximates fair value because of their short duration to maturity. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable consists of amounts that have billed to customers. Collateral is generally not required. A majority of the Company’s contracts have monthly billing terms and payment terms within 30 to 45 days after invoices have been issued. The Company attempts to negotiate two-week billing terms and 15-day payment terms on larger projects. The timing of billings to customers may generate contract assets or contract liabilities. Certain construction contracts include retention provisions to provide assurance to our customers that we will perform in accordance with the contract terms and are therefore not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work or products by the customer. We have determined there are no significant financing components in our contracts for the year ended September 20, 2020. Retainage billed but not paid pursuant to contract provisions will be due upon completion of the contracts. Based on the Company’s experience management considers all amounts classified as retainage receivable to be collectible. All retainage receivable amounts are expected to be collected within the next fiscal year. The Company provides an allowance for doubtful accounts when collection of an account or note receivable is considered doubtful, and receivables are written off against the allowance when deemed uncollectible. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s access to capital, the customer’s willingness or ability to pay, general economic conditions and the ongoing relationship with the customer. Property and Equipment Property and equipment are recorded at cost. Costs which extend the useful lives or increase the productivity of the assets are capitalized, while normal repairs and maintenance that do not extend the useful life or increase productivity of the asset are expensed as incurred. Property and equipment are depreciated principally on the straight-line method over the estimated useful lives of the assets: buildings 39 years; operating equipment and vehicles 5-7 years; and office equipment, furniture and fixtures 5-7 years. Impairment of Long-Lived Assets A long-lived asset shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write-down to market value is required. Claims Claims are amounts in excess of the agreed contract price that a contractor seeks to collect from customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs. The Company records revenue on claims that have a high probability of success. Revenue from a claim is recorded only to the extent that contract costs relating to the claim have been incurred. Self -Insurance The Company has its workers compensation, general liability and auto insurance through a captive insurance company. While the Company believes that this arrangement has been very beneficial in reducing and stabilizing insurance costs the Company does have to maintain a surety deposit to guarantee payments of premiums. The surety deposit had a balance of $1.9 million as of September 30, 2020, which is in “Prepaid expenses and other” on the Company’s Consolidated Balance Sheets. The surety deposit had a balance of $1.9 million as of September 30, 2019. Should the captive experience severe losses over an extended period, it could have a detrimental effect on the Company. Advertising All advertising costs are expensed as incurred. Total advertising expense was $72,000 and $71,000 for the years ended September 30, 2020 and 2019, respectively. Stock Compensation Plans The Company has issued restricted stock under its Long-Term Incentive Plan; however, there were no issuances in fiscal years 2020 or 2019. The Company accounts for its equity-based compensation as prescribed by U.S. Generally Accepted Accounting Principles for share-based payments. The Company has adopted a fair value-based method of accounting for employee equity-based plans, whereby compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. As a result, compensation expense relating to stock compensation plans will be reflected in net income as part of “Salaries and employee benefits” on the Consolidated Statements of Income. Income Taxes The Company and all subsidiaries file a consolidated federal and various state income tax returns on a fiscal year basis. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years ending prior to September 30, 2017. The Company follows the liability method of accounting for income taxes in accordance with U.S. Generally Accepted Accounting Principles. Under this method, deferred tax assets and liabilities are recorded for future tax consequences of temporary differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the underlying assets or liabilities are recovered or settled. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. U.S. GAAP also prescribes a comprehensive model for how companies should recognize, measure, present and disclose in their financial statements uncertain tax positions taken or to be taken on a tax return. This evaluation is a two-step process. First, the recognition process determines if it is more likely than not that a tax position will be sustained based on the merits of the tax position upon examination by the appropriate taxing authority. Second, a measurement process is calculated to determine the amount of benefit/expense to recognize in the financial statements if a tax position meets the more likely than not recognition threshold. The tax position is measured at the greatest amount of benefit/expense that is more likely than not of being realized upon ultimate settlement. Any interest and penalty related to the unrecognized tax benefits, as the result of recognition of tax obligations resulting from uncertain tax positions, are included in the provision for income taxes. The Company had not recognized any uncertain tax positions at September 30, 2020. Earnings Per Common Share Basic earnings per share is computed using the weighted average number of common shares outstanding during the year, and diluted earnings per share is computed using the weighted average number of common shares outstanding during the year adjusted for all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive. Collective Bargaining Agreements Certain Energy Services subsidiaries are party to collective bargaining agreements with unions representing certain of their employees. The agreements require such subsidiaries to pay specified wages and provide certain benefits to the union employees. These agreements expire at various times and have typically been renegotiated and renewed on terms that are similar to the ones contained in the expiring agreements. Under certain collective bargaining agreements, the applicable Energy Services subsidiary is required to make contributions to multi-employer pension plans. If the subsidiary were to cease participation in one or more of these plans, a liability could potentially be assessed related to any underfunding of these plans. The amount of such assessment, were one to be made, cannot be reasonably estimated. Litigation Costs The Company reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Litigation costs are expensed as incurred. New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 is effective for public business entities for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Among other things, lessees are required to recognize the following for all leases (except for short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. It is the Company’s preference to acquire equipment needed for long-term use through purchase, by cash or finance. For equipment needed on a short-term basis, the Company will enter into short-term rental agreements with the equipment provider where the agreement is cancellable at any time. The adoption of ASU 2016-02 had an immaterial impact, if any, on its consolidated financial statements. The Company rents equipment for use on construction projects with rental agreements being week to week or month to month. Rental expense can vary by fiscal year due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expense was $4.2 million and $10.0 million for fiscal years ended September 30, 2020 and 2019, respectively. Subsequent Events On December 16, 2020, Energy Services of America Corporation's (the "Company") newly formed wholly owned subsidiary, West Virginia Pipeline Acquisition Company ("West Virginia Pipeline"), a West Virginia corporation, entered into an Asset Purchase Agreement (the "Agreement") with WV Pipeline, Inc. ("WV Pipeline"), a West Virginia corporation located in Princeton, West Virginia. Pursuant to the Agreement, West Virginia Pipeline will acquire substantially all the assets of WV Pipeline for $3.5 million in cash and a $3.0 million seller note. The transaction closed on December 31, 2020. David Bolton and Daniel Bolton will continue their roles as President and Vice President, respectively, of the Company's new subsidiary. Management has evaluated subsequent events through January 4, 2021, the date which the financial statements were available for issue. There have been no material events noted during the period that would either impact the results reflected in the report or the Company’s results going forward. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Sep. 30, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. The discussion and analysis of the Company’s financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates. Management believes the following accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. As the adoption of Topic 606 did not have a material impact on the Company’s financial statements, there were no adjustments to previously stated balances. Revenue Recognition : As of October 1, 2018, we began to separately present contract assets and liabilities on the Company’s consolidated balance sheet. Contract assets include costs and estimated earnings in excess of billings that were previously separately presented. Contract liabilities include billings in excess of costs and estimated earnings that were previously separately presented as well as provisions for losses, when occurred, that were previously included in accrued expenses and other current liabilities. The accounting policies that were affected by Topic 606 and the changes thereto are as follows: Revenue Recognition: Our revenue is primarily derived from construction contracts that can span several quarters. We recognize revenue in accordance with Topic 606. Topic 606 provides for a five-step model for recognizing revenue from contracts with customers as follows: 1. Identify the contract 2. Identify performance obligations 3. Determine the transaction price 4. Allocate the transaction price 5. Recognize revenue The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our estimates of the cost to complete each project. We believe our experience allows us to create materially reliable estimates. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include: - - - - - - - - - - - - The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins may cause fluctuations in gross profit from period to period. Significant changes in cost estimates, particularly in our larger, more complex projects have had, and can in future periods have, a significant effect on our profitability. The transaction price is the amount of consideration to which we expect to be entitled in exchange for transferring goods and services to the customer. The consideration promised in a contract with customers may include both fixed amounts and variable amounts (e.g. bonuses/incentives or penalties/liquidated damages) to the extent that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved (i.e., probable and estimable). When a contract has a single performance obligation, the entire transaction price is attributed to that performance obligation. When a contract has more than one performance obligation, the transaction price is allocated to each performance obligation based on estimated relative standalone selling prices of the goods or services at the inception of the contract, which typically is determined using cost plus an appropriate margin. Subsequent to the inception of a contract, the transaction price could change for various reasons, including the executed or estimated amount of change orders and unresolved contract modifications and claims to or from owners. Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at contract inception. Otherwise, changes are accounted for as separate performance obligation(s) and the separate transaction price is allocated as discussed above. Changes are made to the transaction price from unapproved change orders to the extent the amount can be reasonably estimated, and recovery is probable. On certain projects we have submitted and have pending unresolved contract modifications and affirmative claims ("affirmative claims") to recover additional costs and the associated profit, if applicable, to which the Company believes it is entitled under the terms of contracts with customers, subcontractors, vendors or others. The owners or their authorized representatives and/or other third parties may be in partial or full agreement with the modifications or affirmative claims or may have rejected or disagree entirely or partially as to such entitlement. Costs to obtain our contracts ("pre-bid costs") that are not expected to be recovered from the customer are expensed as incurred and included in selling and administrative expenses on our consolidated statements of income. Costs to mobilize equipment and labor to a job site prior to substantive work beginning ("mobilization costs") are capitalized as incurred and amortized over the expected duration of the contract. As of September 30, 2019, we had no material capitalized mobilization costs. Contract Assets: Our contract assets include cost and estimated earnings in excess of billings that represent amounts earned and reimbursable under contracts, including claim recovery estimates, but have a conditional right for billing and payment such as achievement of milestones or completion of the project. With the exception of customer affirmative claims, generally, such unbilled amounts will become billable according to the contract terms and generally will be billed and collected over the next three months. 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. When events or conditions indicate that it is probable that the amounts outstanding become unbillable, the transaction price and associated contract asset is reduced. Contract Liabilities: Our contract liabilities consist of provisions for losses and billings in excess of costs and estimated earnings. Provisions for losses are recognized in the consolidated statements of income at the uncompleted performance obligation level for the amount of total estimated losses in the period that evidence indicates that the estimated total cost of a performance obligation exceeds its estimated total revenue. Billings in excess of costs and estimated earnings are billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months. |
DISAGGREGATION OF REVENUE
DISAGGREGATION OF REVENUE | 12 Months Ended |
Sep. 30, 2020 | |
DISAGGREGATION OF REVENUE | |
DISAGGREGATION OF REVENUE | 4. We disaggregate our revenue based on our operating groups and contract types as it is the format that is regularly reviewed by management. Our reportable operating groups are: Petroleum and Gas, Water, Sewer and other services, and Electrical and Mechanical services. Our contract types are: Lump Sum, Unit Price, and Cost Plus and T&M. The following tables present our disaggregated revenue for the twelve months ended September 30, 2020 and 2019: Twelve Months Ended September 30, 2020 Petroleum & Water, Sewer and Electrical and Total revenue Gas Other Mechanical from contracts Lump sum contracts $ — $ — $ 36,954,269 $ 36,954,269 Unit price contracts 56,844,783 10,571,255 67,416,038 Cost plus and T&M contracts 116,428 — 14,707,705 14,824,133 Total revenue from contracts $ 56,961,211 $ 10,571,255 $ 51,661,974 $ 119,194,440 Earned over time $ 45,566,234 $ 10,571,255 $ 50,776,446 $ 106,913,935 Earned at point in time 11,394,977 — 885,528 12,280,505 Total revenue from contracts $ 56,961,211 $ 10,571,255 $ 51,661,974 $ 119,194,440 Twelve Months Ended September 30, 2019 Petroleum & Water, Sewer and Electrical and Total revenue Gas Other Mechanical from contracts Lump sum contracts $ — $ — $ 34,948,884 $ 34,948,884 Unit price contracts 100,449,760 11,033,356 — 111,483,116 Cost plus and T&M contracts 5,057,866 1,100,052 21,951,237 28,109,155 Total revenue from contracts $ 105,507,626 $ 12,133,408 $ 56,900,121 $ 174,541,155 Earned over time $ 98,500,056 $ 12,133,408 $ 55,727,239 $ 166,360,703 Earned at point in time 7,007,570 — 1,172,882 8,180,452 Total revenue from contracts $ 105,507,626 $ 12,133,408 $ 56,900,121 $ 174,541,155 |
CONTRACT BALANCES
CONTRACT BALANCES | 12 Months Ended |
Sep. 30, 2020 | |
CONTRACT BALANCES | |
CONTRACT BALANCES | 5. Accounts receivable, net of allowance for doubtful accounts, which are included in current assets on the Consolidated Balance Sheets, totaled $18.2 million at September 30, 2020, a $3.4 million decrease from $21.6 million at September 30, 2019. The decrease was mainly due to timing of billings and receipts. Contract assets, which are included in current assets on the Consolidated Balance Sheets, totaled $6.5 million at September 30, 2020, a $114,000 decrease from $6.7 million at September 30, 2019. This was due to an increase in costs and estimated earnings in excess of billings on uncompleted projects. Contract liabilities, which are included in current liabilities on the Consolidated Balance Sheets, totaled $4.9 million at September 30, 2020, a $1.4 million increase from $3.5 million at September 30, 2019. This was due to an increase in billings in excess of costs and estimated earnings on uncompleted projects. During the twelve months ended September 30, 2020, we recognized revenue of $3.3 million that was included in the contract liability balance at September 30, 2019. Accounts receivable, net of allowance for doubtful accounts, contract assets and contract liabilities consisted of the following: September 30, 2019 September 2020 Change Accounts receivable-trade, net of allowance for doubtful accounts $ 21,608,312 $ 18,176,679 $ (3,431,633) Contract assets Cost and estimated earnings in excess of billings $ 6,659,707 $ 6,545,863 $ (113,844) Contract liabilities Billings in excess of cost and estimated earnings $ 3,455,288 $ 4,851,900 $ 1,396,612 |
PERFORMANCE OBLIGATIONS
PERFORMANCE OBLIGATIONS | 12 Months Ended |
Sep. 30, 2020 | |
PERFORMANCE OBLIGATIONS | |
PERFORMANCE OBLIGATIONS | 6. For the year ended September 30, 2020, we recognized revenue of $936,000 a result of changes in contract transaction price related to performance obligations that were satisfied prior to September 30, 2019. The changes in contract transaction price were from items such as changes in projected profit, executed or estimated change orders, and unresolved contract modifications and claims. At September 30, 2020, the Company had $16.3 million in remaining unsatisfied performance obligations, in which revenue is expected to be recognized in less than twelve months. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended |
Sep. 30, 2020 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 7. Activity in the Company’s allowance for doubtful accounts consists of the following: Year Ended September 30, 2020 2019 Balance at beginning of year $ 70,310 $ 83,885 Deductions for uncollectible receivables written off, net of recoveries — (13,575) Balance at end of year $ 70,310 $ 70,310 |
UNCOMPLETED CONTRACTS
UNCOMPLETED CONTRACTS | 12 Months Ended |
Sep. 30, 2020 | |
UNCOMPLETED CONTRACTS. | |
UNCOMPLETED CONTRACTS | 8. Costs and estimated earnings in excess of billings on uncompleted contracts are included in contract assets on the consolidated balance sheet. Billings in excess of costs and estimated earnings on uncompleted contracts are included in contract liabilities on the consolidated balance sheets. Costs, estimated earnings, and billings on uncompleted contracts are summarized as follows: Year Ended September 30, 2020 2019 Costs incurred on contracts in progress $ 74,996,405 $ 163,768,655 Estimated earnings, net of estimated losses 16,067,668 18,215,388 91,064,073 181,984,043 Less billings to date 89,370,110 178,779,624 $ 1,693,963 $ 3,204,419 Costs and estimated earnings in excess of billed on uncompleted contracts $ 6,545,863 $ 6,659,707 Less billings in excess of costs and estimated earnings on uncompleted contracts 4,851,900 3,455,288 $ 1,693,963 $ 3,204,419 |
CLAIMS
CLAIMS | 12 Months Ended |
Sep. 30, 2020 | |
CLAIMS | |
CLAIMS | 9. The Company does not have any claims receivable as of September 30, 2020. Claims receivable is a component of contract assets. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2020 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 10. Property, plant and equipment consist of the following: Year Ended September 30, 2020 2019 Land $ 2,571,575 $ 2,464,512 Buildings and leasehold improvements 5,921,587 5,348,851 Operating equipment and vehicles 44,030,879 42,703,353 Office equipment, furniture and fixtures 800,802 751,642 53,324,843 51,268,358 Less accumulated depreciation 36,933,129 34,453,157 Property, plant and equipment, net $ 16,391,714 $ 16,815,201 |
SHORT-TERM DEBT
SHORT-TERM DEBT | 12 Months Ended |
Sep. 30, 2020 | |
SHORT-TERM DEBT | |
SHORT-TERM DEBT | 11. Short-term debt consists of the following: On July 30, 2020, the Company received a one-year extension on its line of credit (“Operating Line of credit (2020)”) effective June 28, 2020. The $15.0 million revolving line of credit has a $12.5 million component and a $2.5 million component, each with separate borrowing requirements. The interest rate on the line of credit is the “Wall Street Journal” Prime Rate (the index) with a floor of 4.99%. The line of credit expires on June 28, 2021. Based on the borrowing base calculation, the Company was able to borrow up to $11.1 million as of September 30, 2020. The Company had no borrowings on the line of credit, leaving $11.1 million available on the line of credit as of September 30, 2020. Based on the borrowing base calculation, the Company was able to borrow up to $11.5 million as of September 30, 2019. The Company had borrowed $3.5 million on the line of credit, leaving $8.0 million available on the line of credit as of September 30, 2019. Major items excluded from the borrowing base calculation are receivables from bonded jobs and retainage as well as all items greater than ninety (90) days old. Line of credit borrowings are collateralized by the Company’s accounts receivable. Cash available under the line is calculated based on 70.0% of the Company’s eligible accounts receivable. Under the terms of the agreement, the Company must meet the following loan covenants to access the first $12.5 million: 1. Minimum tangible net worth of $19.0 million to be measured quarterly 2. Minimum traditional debt service coverage of 1.25x to be measured quarterly on a rolling twelve- month basis 3. Minimum current ratio of 1.50x to be measured quarterly 4. Maximum debt to tangible net worth ratio (“TNW”) of 2.0x to be measured semi-annually 5. Full review of accounts receivable aging report and work in progress. The results of the review shall be satisfactory to the lender in its sole and unfettered discretion. Under the terms of the agreement, the Company must meet the following additional requirements for draw requests causing the borrowings to exceed $12.5 million: 1. Minimum traditional debt service coverage of 2.0x to be measured quarterly on a rolling twelve-month basis 2. Minimum tangible net worth of $21.0 million to be measured quarterly The Company was in compliance with all covenants for the $12.5 million component of Operating Line of Credit (2020) at September 30, 2020. The Company also finances insurance policy premiums on a short-term basis through a financing company. These insurance policies include workers’ compensation, general liability, automobile, umbrella, and equipment policies. It is typical that the Company makes a down payment in January and finances the remaining premium amount over eleven monthly payments. In January 2020, The Company financed $3.1 million in insurance premium policies. At September 30, 2020, the balance of the remaining premiums to be paid was $510,000. |
SHORT-TERM AND LONG-TERM DEBT
SHORT-TERM AND LONG-TERM DEBT | 12 Months Ended |
Sep. 30, 2020 | |
SHORT-TERM AND LONG-TERM DEBT | |
SHORT-TERM AND LONG-TERM DEBT | 12. A summary of short-term and long-term debt as of September 30, 2020 and 2019 is as follows: 2020 2019 Line of credit payable to bank, monthly interest at 4.99%, final payment due by June 28, 2021. $ — $ 3,500,000 Notes payable to finance companies, due in monthly installments totaling $44,781 including interest ranging from 0.00% to 6.03%, final payments due October 2020 through August 2026, secured by equipment. 1,334,566 1,691,991 Note payable to finance company for insurance premiums financed, due in monthly installments totaling $254,922 in FY 2020 and $267,677 in FY 2019, including interest rate at 3.50%, final payment due November 2020. 509,843 525,710 Notes payable to bank, due in monthly installments totaling $7,799, including interest at 4.82%, final payment due November 2034 secured by building and property. 967,665 1,012,126 Notes payable to bank, due in monthly installments totaling $11,602, including interest at 4.25%, final payment due November 2025 secured by building and property. 644,172 751,987 Notes payable to bank for $9.8 million in Paycheck Protection Program ("PPP") loan funds. Payments on the five-year note are expected to begin in January 2021 if PPP loan repayment is not forgiven, due in monthly installments totaling $168,187, including interest at 1.0%, final payment due December 2025. 9,839,100 — Notes payable to bank, due in monthly installments totaling $98,865, including interest at 4.99%, final payment due September 2022 secured by equipment. 1,983,911 3,040,600 Notes payable to bank, due in monthly installments totaling $46,482, including interest at 5.00%, final payment due September 2021 secured by equipment. 493,191 1,011,160 Notes payable to bank, due in monthly installments totaling $191,012, including interest at 5.50%, final payment due September 2021 secured by equipment. — 7,920,005 Total debt 15,772,448 19,453,579 Less current maturities 4,538,743 8,429,283 Total long term debt $ 11,233,705 $ 11,024,296 Future expected payments due on long-term debt are as follows: 2021 $ 4,538,743 2022 3,417,031 2023 2,287,389 2024 2,259,381 2025 2,278,986 Thereafter 990,918 $ 15,772,448 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | 13. The components of income taxes are as follows: Year Ended September 30, 2020 2019 Federal Current $ 634,539 $ 289,476 Deferred 257,160 466,009 Total 891,699 755,485 State Current 178,955 81,647 Deferred 72,532 131,439 Total 251,487 213,086 Total income tax expense $ 1,143,186 $ 968,571 The provision for income taxes was computed by applying a federal rate of 21.0% and a state rate of 6.0% to income before tax for fiscal years 2020 and 2019. The meals, a component of per diem paid to employees on construction projects, is not fully tax deductible and creates a permanent tax difference. The tax rate for meals and other was computed as 5.0% and 5.7% for fiscal years 2020 and 2019, respectively. Year Ended September 30, 2020 2019 Statutory rate 21.00 % 21.00 % State income taxes 6.00 % 6.00 % Meals and other 5.00 % 5.70 % Effective tax rate 32.00 % 32.70 % Deferred income taxes provide for significant differences between the basis of assets and liabilities for financial reporting and income tax reporting. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax effects of temporary differences giving rise to the deferred tax assets and liabilities are as follows: Year Ended September 30, 2020 2019 Deferred income tax liabilities Long-term Property and equipment $ 2,746,331 $ 2,539,639 Other (19,805) (19,805) Total deferred income tax liabilities $ 2,726,526 $ 2,519,834 Deferred income tax assets Long-term Other $ 471,011 $ 594,011 Total deferred income tax assets 471,011 594,011 Total net deferred income tax liabilities $ 2,255,515 $ 1,925,823 The Company does not believe that it has any unrecognized tax benefits included in its consolidated financial statements that require recognition. The Company has not had any settlements in the current period with taxing authorities, nor has it recognized tax benefits as a result of a lapse of the applicable statute of limitations. The Company recognizes interest and penalties accrued related to unrecognized tax benefits, if applicable, in general and administrative expenses. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 14. Earnings per share for the years ended September 30, 2020 and 2019 are as follow: Twelve Months Ended Twelve Months Ended September 30, September 30, 2020 2019 Net income $ 2,433,017 $ 1,992,910 Dividends on preferred stock 309,000 309,000 Income available to common shareholders $ 2,124,017 $ 1,683,910 Weighted average shares outstanding 13,804,835 14,064,871 Weighted average shares outstanding-diluted 17,238,168 17,498,204 Earnings per share available to common shareholders $ 0.154 $ 0.120 Earnings per share available to common shareholders-diluted $ 0.123 $ 0.096 |
STOCK PURCHASE PLAN
STOCK PURCHASE PLAN | 12 Months Ended |
Sep. 30, 2020 | |
STOCK PURCHASE PLAN | |
STOCK PURCHASE PLAN | 15. At the annual meeting of the shareholders on November 19, 2008 the shareholders approved the establishment of an employee stock purchase plan. The stock purchase plan authorizes the issuance of up to 1,200,000 shares of common stock for purchase by eligible employees. A participant’s stock purchased during a calendar year may not exceed the lesser of (a) a percentage of the participant’s compensation or a total amount as specified by the compensation committee of the Board, or (b) $25,000. The stock will be offered at a purchase price of at least 85% of its fair market value on the date of purchase. The major plan provisions cover the purposes of the plan, effective date and duration, administration, eligibility, stock type, stock purchase limitations, price of stock, participation election, payroll deductions, payment for stock, date of purchase, termination of agreement, termination of employment, recapitalization, change of control, assignability, Stockholder rights, compliance with Internal Revenue Code Section 423, amendment and termination, application of funds, tax withholdings, governing laws, employment at will and arbitration. There have been no agreements with any employees made under this plan as of the year ended September 30, 2020. On August 3, 2018, the Company announced that the Board of Directors authorized a stock repurchase program under which the Company would purchase up to 10%, or approximately 1,423,984 shares, of the Company’s issued and outstanding stock. The repurchase program started on August 15,2018 and expired on August 15, 2019. The program resulted in the repurchase of 305,908 shares. On August 22, 2019, the Company announced that the Board of Directors authorized a stock repurchase program under which the Company would purchase up to 10%, or approximately 1,393,393 shares, of the Company’s issued and outstanding stock. The purchase program started on August 26, 2019 and expired on August 26, 2020. The Company suspended the stock repurchase program on April 27, 2020. Accordingly, there were no repurchases in the Company’s fourth fiscal quarter in 2020. The program resulted in the repurchase of 312,522 shares through September 30, 2020. |
LONG TERM INCENTIVE PLAN
LONG TERM INCENTIVE PLAN | 12 Months Ended |
Sep. 30, 2020 | |
LONG TERM INCENTIVE PLAN | |
LONG TERM INCENTIVE PLAN | 16. At the annual meeting of the shareholders on August 11, 2010, the shareholders approved the Energy Services of America Corporation Long Term Incentive Plan (the “LTIP”), to provide employees and directors of the Company with additional incentives to promote the growth and performance of the Company. At September 30, 2011, future awards of 1,149,000 shares could be made under the plan. On August 11, 2010, a total of 51,000 shares were granted to six officers of the Company at a grant date fair value per share of $4.22. These grants vested over a period of three years. Market value of the grants was $215,220 and was recognized as compensation expense over the vesting period. For the years ended September 30, 2019 and 2018, respectively, $0 and $0 were recognized as compensation expense and $0 and $0 as deferred tax benefit as a result of these grants. All stock grants have vested or been forfeited as of September 30, 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 17. We intend that all transactions between us and our executive officers, directors, holders of 10% or more of the shares of any class of our common stock and affiliates thereof, will be on terms no less favorable than those terms given to unaffiliated third parties and will be approved by a majority of our independent outside directors not having any interest in the transaction. On December 16, 2014, the Company’s Nitro subsidiary entered into a 20‑year $1.2 million loan agreement with First Bank of Charleston, Inc. (West Virginia) to purchase the office building and property it had previously been leasing for $6,300 each month. Mr. Douglas Reynolds, President of Energy Services, was a director and secretary of First Bank of Charleston. Mr. Samuel Kapourales, a director of Energy Services, was also a director of First Bank of Charleston. On October 15, 2018, First Bank of Charleston was merged into Premier Bank, Inc., a wholly owned subsidiary of Premier Financial Bancorp, Inc. Mr. Marshall Reynolds, Chairman of the Board of Energy Services, holds the same position with Premier Financial Bancorp Inc. Mr. Neal Scaggs is a director of Energy Services and holds the same position with Premier Financial Bancorp, Inc. Mr. Douglas Reynolds is the president and a director of Energy Services and a director of Premier Financial Bancorp, Inc. The interest rate on the loan agreement is 4.82% with monthly payments of $7,800. As of September 30, 2020, we have paid approximately $232,000 in principal and approximately $306,000 in interest since the beginning of the loan. There were no new material related party transactions entered into during the fiscal year ended September 30, 2020. Certain Energy Services subsidiaries routinely engage in transactions in the normal course of business with each other, including sharing employee benefit plan coverage, payment for insurance and other expenses on behalf of other affiliates, and other services incidental to business of each of the affiliates. All revenue and related expense transactions, as well as the related accounts payable and accounts receivable have been eliminated. |
LEASE OBLIGATIONS
LEASE OBLIGATIONS | 12 Months Ended |
Sep. 30, 2020 | |
LEASE OBLIGATIONS | |
LEASE OBLIGATIONS | 18. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 is effective for public business entities for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Among other things, lessees are required to recognize the following for all leases (except for short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. It is the Company’s preference to acquire equipment needed for long-term use through purchase, by cash or finance. For equipment needed on a short-term basis, the Company will enter into short-term rental agreements with the equipment provider where the agreement is cancellable at any time. The adoption of ASU 2016-02 had an immaterial impact, if any, on its consolidated financial statements. Total operating lease payments were $118,000 and $169,000 for fiscal years ended September 30, 2020 and 2019, respectively. The Company rents equipment for use on construction projects with rental agreements being week to week or month to month. Rental expense can vary by fiscal year due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expense was $4.2 million and $10.0 million for fiscal years ended September 30, 2020 and 2019, respectively. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Sep. 30, 2020 | |
MAJOR CUSTOMERS | |
MAJOR CUSTOMERS | 19. The Company had two customers that exceeded 10.0% of revenues for the year ended September 30, 2020. The two customers, TransCanada Corporation and Marathon Petroleum, represented 24.7% and 11.1% of revenues, respectively. The Company had three customers that exceeded 10.0% of receivables net of retention. These three customers, Marathon Petroleum, TransCanada Corporation, and Shimizu North America represented 19.7%, 18.4% and 11.9% of receivables net of retention, respectively. The Company had two customers that exceeded 10.0% of revenues for the year ended September 30, 2019. The two customers, Full Stream Goff Connector, LLC and TransCanada Corporation, represented 29.0% and 11.8% of revenues, respectively. The Company had two customers that exceeded 10.0% of receivables net of retention. These two customers, Full Stream Goff Connector, LLC and TransCanada Corporation, represented 22.0% and 12.2% of receivables net of retention, respectively. Virtually all work performed for major customers was awarded under competitive bid fixed price or unit price arrangements. The loss of a major customer could have a severe impact on the profitability of operations of the Company. However, due to the nature of the Company’s operations, the major customers and sources of revenues may change from year to year. |
RETIREMENT AND EMPLOYEE BENEFIT
RETIREMENT AND EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Sep. 30, 2020 | |
RETIREMENT AND EMPLOYEE BENEFIT PLANS | |
RETIREMENT AND EMPLOYEE BENEFIT PLANS | 20. In 2020 and 2019, C. J. Hughes Construction Company, Inc., maintained a tax-qualified 401(k) retirement plan for union employees. Employees can contribute up to 15% of eligible wages, provided the compensation deferred for a plan year did not exceed the indexed dollar amount set by the Internal Revenue Service which was $19,500 for 2020 and $19,000 for 2019. C. J. Hughes matches $0.25 on each dollar contributed up to 6% of eligible wages. C. J. Hughes contributed $13,300 and $12,390 to the union plan for fiscal years September 30, 2020 and 2019, respectively. Additionally, each plan year, C. J. Hughes may make a discretionary profit-sharing contribution for participants who are actively employed on the last day of the plan year. No discretionary profit-sharing contribution was made for the 2020 or 2019 plan year. Effective January 1, 2010, Energy Services of America became the successor plan sponsor of the C. J. Hughes Construction Company, Inc. 401(k) Plan for non-union employees (the “Plan”). The Plan was renamed the Energy Services of America Staff Retirement Plan. Employees are eligible to participate in the Plan upon completion of six months of service but must wait until a quarterly entry to join the Plan. Employees may contribute eligible wages up to the maximum indexed dollar amount set by the Internal Revenue Service which was $19,500 for 2020 and $19,000 for 2019. Energy Services may make annual discretionary matching contributions and/or profit-sharing contributions to the Plan. The matching contribution formula for the Plan was 100% of each dollar contributed for the first 3% of eligible wages and 50% of each dollar contributed for the next 3% of eligible wages. The Company’s matching contribution is used by the Plan’s third-party administrator to purchase Energy Services of America stock from the open market. No restrictions on the match exist after it has been contributed. No profit-sharing contribution was made for the 2020 or 2019 plan year. Energy Services of America and its wholly owned subsidiaries contributed $271,000 and $281,000, respectively, for the fiscal years ended September 30, 2020 and 2019 to the Plan. The Company contributes to a number of multi-employers defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects: · Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. · If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The following table presents our participation in these plans: Contibutions of Pension Protection Act ("PPA") Energy Services of America Certified Zone Status (1) FIP/RP Status Companies Expiration Date of EIN/Pension Pending/ Surcharge Collective Bargaining Pension Fund Plan Number 2020 2019 Implemented (2) 2020 2019 2018 Imposed Agreement Central States, Southeast and Southwest Areas Pension Fund 36-6044243/001 Red Red Implemented $ — $ 189,644 $ — no Various Employer-Teamsters Local Nos. 175 and 505 55-6021850/001 Red Red Implemented $ — $ 169,483 $ 88,527 no Various Laborers National Pension Fund 75-1280827/001 Red Red Implemented $ 356,548 $ 1,202,310 $ 608,206 no Various National Automatic Sprinkler Industry Pension Fund 52-6054620/001 Red Red Implemented 124,863 131,141 99,731 no Various Iron Workers District Council of Southern Ohio &Vicinity Pension Trust 31-6038516/001 Yellow Yellow Implemented 86,998 122,683 57,960 no Various Carpenters Pension Fund of WV 55-6027998/001 Red Red Implemented 542,659 746,743 444,455 no Various Plumbers & Pipefitters National Pension Fund 52-6152779/001 Yellow Yellow Implemented 594,364 786,940 1,929,939 no Various Sheet Metal Workers' National Pension Fund 52-6112463/001 Yellow Yellow Implemented 169,018 125,982 153,542 no Various Sheet Metal Workers Local Pension Fund 34-6666753/001 Red Red Implemented — 71,143 11,483 no Various Plumbers and Pipefitters Local 152 Pension Fund 55-6029095/001 Red Red Implemented — 19,511 — no Various All Other Green Green 1,480,139 4,941,831 3,391,194 no Various $ 3,354,588 $ 8,507,411 $ 6,785,037 (1) The most recent PPA zone status available in 2020 and 2019 is the the plan's year-end during 2019 and 2018, respectively. The zone status is based on information that we received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the orange zone are less than 80 percent funded and have an Accumulated Funding Deficiency in the current year or projected into the next six years, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. (2) Indicates whether the plan has a financial improvement plan ("FIP") or a rehabilitation plan ("RP") which is either pending or has been implemented. The Company currently does not have intentions of withdrawing from any of the multi-employer pension plans in which it participates. |
CREDIT RISK
CREDIT RISK | 12 Months Ended |
Sep. 30, 2020 | |
CREDIT RISK | |
CREDIT RISK | 21. Financial instruments which potentially subject the Company to credit risk consist primarily of cash, cash equivalents and contract receivables. The Company places its cash with high quality financial institutions. At times, the balances in such institutions may exceed the FDIC insurance limit of $250,000 per depositor, per insured bank, for each account ownership category. FDIC insurance covers all deposit accounts, including checking accounts, savings accounts, money market deposit accounts, and certificates of deposit. As of September 30, 2020, the Company had $11.1 million of uninsured deposits. The Company performs periodic credit evaluations of its customer’s financial condition and generally does not require collateral. Credit losses consistently have been within management’s expectations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 22. During the normal course of operations, the companies are subject to certain subcontractor claims, mechanic’s liens, and other litigation. Management is of the opinion that no material obligations will arise from any pending legal proceedings. Accordingly, no provision has been made in the financial statements for such litigation. Some customers, particularly new ones or governmental agencies require the Company to post bid bonds, performance bonds and payment bonds (collectively, performance bonds). These bonds are obtained through insurance carriers and guarantee to the customer that we will perform under the terms of a contract and that we will pay subcontractors and vendors. If the Company fails to perform under a contract or to pay subcontractors and vendors, the customer may demand that the insurer make payments or provide services under the bond. The Company must reimburse the insurer for any expenses or outlays it is required to make. In February 2014, the Company entered into an agreement with a surety company to provide bonding which will suit the Company’s immediate needs. The ability to obtain bonding for future contracts is an important factor in the contracting industry with respect to the type and value of contracts that can be bid. Depending upon the size and conditions of a particular contract, the Company may be required to post letters of credit or other collateral in favor of the insurer. Posting of these letters or other collateral will reduce our borrowing capabilities. The Company does not anticipate any claims in the foreseeable future. At September 30, 2020, the Company had $3.2 million in performance bonds outstanding. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Sep. 30, 2020 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | 23. Quarterly financial data for continuing operations for 2020 and 2019 are summarized below: 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 25,843,307 $ 18,072,400 $ 30,762,725 $ 44,516,008 $ 119,194,440 Operating (loss) income (239,030) (2,275,040) 294,036 5,889,687 3,669,653 Net (loss) income (74,114) (1,694,611) (17,955) 4,219,697 2,433,017 Dividends on preferred stock 77,250 77,250 77,250 77,250 309,000 Net (loss) income available to common shareholders $ (151,364) $ (1,771,861) $ (95,205) $ 4,142,447 $ 2,124,017 Weighted-basic shares outstanding 13,911,610 13,783,546 13,627,293 13,621,406 13,804,835 Weighted-diluted shares outstanding 13,911,610 13,783,546 13,627,293 17,054,739 17,238,168 (Loss) earnings per share available to common shareholders $ (0.011) $ (0.129) $ (0.007) $ 0.304 $ 0.154 (Loss) earnings per share-diluted available to common shareholders $ (0.011) $ (0.129) $ (0.007) $ 0.243 $ 0.123 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 49,114,139 $ 46,955,444 $ 40,187,978 $ 38,283,594 $ 174,541,155 Operating income (loss) 1,078,454 (1,420,888) 1,229,693 2,935,153 3,822,412 Net income (loss) 631,384 (1,124,458) 485,757 2,000,227 1,992,910 Dividends on preferred stock 77,250 77,250 77,250 77,250 309,000 Net income (loss) available to common shareholders $ 554,134 $ (1,201,708) $ 408,507 $ 1,922,977 $ 1,683,910 Weighted-basic shares outstanding 14,135,900 14,060,456 13,985,579 13,934,720 14,064,871 Weighted-diluted shares outstanding 17,569,233 14,060,456 17,418,912 17,368,053 17,498,204 Earnings (loss) per share available to common shareholders $ 0.039 $ (0.085) $ 0.029 $ 0.138 $ 0.120 Earnings (loss) per share-diluted available to common shareholders $ 0.032 $ (0.085) $ 0.023 $ 0.111 $ 0.096 |
CONDENSED PARENT COMPANY ONLY F
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS | 12 Months Ended |
Sep. 30, 2020 | |
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS | |
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS | 24. ENERGY SERVICES OF AMERICA CORPORATION (Parent Only) BALANCE SHEETS As of September 30, 2020 and 2019 2020 2019 Assets Current assets Cash and cash equivalents $ 177,485 $ 59,831 Other receivables (307) (307) Prepaid expenses and other 3,145,446 2,412,348 Total current assets 3,322,624 2,471,872 Property, plant and equipment, at cost 265,200 248,402 less accumulated depreciation (236,690) (230,628) 28,510 17,774 Due from subsidiaries — 8,343,282 Deferred tax asset 139,307 218,093 Investment in subsidiaries 34,090,094 30,530,562 Total assets $ 37,580,535 $ 41,581,583 Liabilities and shareholders' equity Current liabilities Current maturities of long-term debt $ 1,728,120 $ 3,504,301 Lines of credit and short term borrowings 509,843 4,025,710 Accounts payable 23,771 68,921 Accrued expenses and other current liabilities — 98,843 Total current liabilities 2,261,734 7,697,775 Due to subsidiaries 8,061,618 — Long-term debt, less current maturities 1,433,154 9,219,451 Total liabilities 11,756,506 16,917,226 Shareholders' equity Preferred stock, $.0001 par value Authorized 1,000,000 shares, 206 issued at September 30, 2020 and 2019 — — Common stock, $.0001 par value Authorized 50,000,000 shares 14,839,836 issued and 13,621,406 outstanding at September 30, 2020 and 14,239,836 issued and 13,924,789 outstanding at September 30, 2019 1,484 1,484 Treasury stock, 1,218,430 shares at September 30, 2020 and 915,047 shares at September 30, 2019 (122) (91) Additional paid in capital 60,670,699 60,938,896 Retained earnings (deficit) (34,848,032) (36,275,932) Total shareholders' equity 25,824,029 24,664,357 Total liabilities and shareholders' equity $ 37,580,535 $ 41,581,583 ENERGY SERVICES OF AMERICA CORPORATION (Parent Only) STATEMENTS OF INCOME For the years ended September 30, 2020 and 2019 2020 2019 Selling and administrative expenses $ 1,502,575 $ 1,399,725 Net loss from operations before taxes (1,502,575) (1,399,725) Other nonoperating expense (189) (1,043) Interest income 53,249 58,023 Interest expense (341,312) (960,068) Interest allocation to subsidiaries 323,258 885,316 Net loss before tax (1,467,569) (1,417,497) Income tax benefit (341,054) (346,232) Net loss from parent (1,126,515) (1,071,265) Equity in undistributed income income of subsidiaries 3,559,532 3,064,175 Dividends on preferred stock (309,000) (309,000) Net income available to common shareholders $ 2,124,017 $ 1,683,910 Weighted average shares outstanding- basic 13,804,835 14,064,871 Weighted average shares-diluted 17,238,168 17,498,204 Earnings per share-basic available to common shareholders $ 0.154 $ 0.120 Earnings per share-diluted available to common shareholders $ 0.123 $ 0.096 ENERGY SERVICES OF AMERICA CORPORATION (Parent Only) CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended September 30, 2020 and 2019 2020 2019 Cash flows form operating activities: Net income $ 2,433,017 $ 1,992,910 Adjustments to reconcile net income to net cash provided by (used in) operating activities Provision for deferred taxes 78,786 111,057 Depreciation expense 6,062 4,343 Equity in undistributed income of subsidiaries (3,559,532) (3,064,175) Advances from (to) subsidiaries 16,404,900 (3,812,109) Changes in: (Increase) decrease in prepaid expenses (733,098) 1,493,939 (Decrease) increase in accounts payable (45,150) 35,082 (Decrease) increase in accrued expenses and other current liabilities (98,843) 31,076 Net cash provided by (used in) operating activities 14,486,142 (3,207,877) Cash flows from investing activities: Investment in property & equipment (16,798) — Net cash used in investing activities (16,798) — Cash flows from financing activities: Borrowings on lines of credit and short-term debt, net of (repayments) (3,515,867) 7,956,463 Principal payments on long term debt (9,628,578) (4,578,905) Dividends on common stock (696,117) — Preferred dividends paid (309,000) (309,000) Treasury stock purchased by company (268,228) (300,600) Proceeds from long term debt 66,100 — Net cash (used in) provided by financing activities (14,351,690) 2,767,958 Increase (decrease) in cash and cash equivalents 117,654 (439,919) Cash beginning of period 59,831 499,750 Cash end of period $ 177,485 $ 59,831 Supplemental schedule of noncash investing and financing activities: Insurance premiums financed $ 3,063,543 $ 3,159,083 Accrued dividends on preferred stock $ 77,250 $ 77,250 Line of credit refinanced to long-term debt $ — $ 10,000,000 Supplemental disclosures of cash flows information: Cash paid during the year for: Interest $ 486,246 $ 1,064,222 Income taxes $ 785,630 $ 798,430 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Revenue Recognition | Revenue Recognition On October 1, 2018, the Company adopted an Accounting Standard Update, Revenue from Contracts with Customers (Topic 606) . The core principle of Topic 606 is that revenue will be recognized when promised goods or services are transferred to customers in an amount that reflects consideration for which entitlement is expected in exchange for those goods or services. We adopted Topic 606 using a modified retrospective transition approach and elected to apply Topic 606 to contracts with customers that are not substantially complete, i.e. less than 90% complete, as of October 1, 2018. The Company recognizes revenue as performance obligations are satisfied and control of the promised good and service is transferred to the customer. For Lump Sum and Unit Price contracts, revenue is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward complete satisfaction of the performance obligation(s) using an input (i.e., “cost to cost”) method. For Cost Plus and Time and Material (“T&M”) contracts, revenue is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward satisfaction of the performance obligation(s) using an output method. The Company does have certain service and maintenance contracts in which each customer purchase order is considered its own performance obligation recognized over time and would be recognized depending on the type of contract mentioned above. The Company also does certain T&M service work that is generally completed in a short duration and is recognized at a point in time. All contract costs, including those associated with affirmative claims, change orders and back charges, are recorded as incurred and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Contract costs consist of direct costs on contracts, including labor and materials, amounts payable to subcontractors and outside equipment providers, direct overhead costs and internal equipment expense (primarily depreciation, fuel, maintenance and repairs). The company recognizes revenue, but not profit, on certain uninstalled materials. Revenue on these uninstalled materials is recognized when the cost is incurred (when control is transferred), but the associated profit is not recognized until the end of the project. The costs of uninstalled materials will be tracked separately within the Company’s accounting software. Pre-contract and bond costs, if required, on projects are generally immaterial to the total value of the Company’s contracts and are expensed when incurred. Project mobilization costs are also generally immaterial and charged to project costs as incurred. As a practical expedient, the Company recognizes these incremental costs as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. For projects expected to last greater than one year, mobilization costs will be capitalized as incurred and amortized over the expected duration of the project. For these projects, mobilization costs will be tracked separately in the Company’s accounting software. This includes costs associated with setting up a project lot or lay-down yard, equipment, tool and supply transportation, temporary facilities and utilities and worker qualification and safety training. Contracts may require the Company to warranty that work is performed in accordance with the contract; however, the warranty is not priced separately, and the Company does not offer customers an option to purchase a warranty. As of September 30, 2020, the Company does not have a material amount of costs expensed that would otherwise be capitalized and amortized. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of Energy Services include the accounts of Energy Services and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, references to Energy Services include Energy Services and its consolidated subsidiaries. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and loss during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Energy Services considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Fair Value Measurements | Fair Value Measurements The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. Under the FASB’s authoritative guidance on fair value measurements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. As noted above, there is a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 — Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Level 2 — Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. Level 3 — Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amount for borrowings under the Company’s revolving credit facility approximates fair value because of the variable market interest rate charged to the Company for these borrowings. The fair value of the Company’s long term fixed-rate debt to unrelated parties 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 $15.8 million at September 30, 2020 was $14.8 million. The fair value of the aggregate principal amount of the Company’s fixed-rate debt of $16.0 million at September 30, 2019 was $16.0 million. All receivables and payables are carried at net realizable value which approximates fair value because of their short duration to maturity. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable consists of amounts that have billed to customers. Collateral is generally not required. A majority of the Company’s contracts have monthly billing terms and payment terms within 30 to 45 days after invoices have been issued. The Company attempts to negotiate two-week billing terms and 15-day payment terms on larger projects. The timing of billings to customers may generate contract assets or contract liabilities. Certain construction contracts include retention provisions to provide assurance to our customers that we will perform in accordance with the contract terms and are therefore not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work or products by the customer. We have determined there are no significant financing components in our contracts for the year ended September 20, 2020. Retainage billed but not paid pursuant to contract provisions will be due upon completion of the contracts. Based on the Company’s experience management considers all amounts classified as retainage receivable to be collectible. All retainage receivable amounts are expected to be collected within the next fiscal year. The Company provides an allowance for doubtful accounts when collection of an account or note receivable is considered doubtful, and receivables are written off against the allowance when deemed uncollectible. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s access to capital, the customer’s willingness or ability to pay, general economic conditions and the ongoing relationship with the customer. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Costs which extend the useful lives or increase the productivity of the assets are capitalized, while normal repairs and maintenance that do not extend the useful life or increase productivity of the asset are expensed as incurred. Property and equipment are depreciated principally on the straight-line method over the estimated useful lives of the assets: buildings 39 years; operating equipment and vehicles 5-7 years; and office equipment, furniture and fixtures 5-7 years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets A long-lived asset shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write-down to market value is required. |
Claims | Claims Claims are amounts in excess of the agreed contract price that a contractor seeks to collect from customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs. The Company records revenue on claims that have a high probability of success. Revenue from a claim is recorded only to the extent that contract costs relating to the claim have been incurred. |
Self-Insurance | Self -Insurance The Company has its workers compensation, general liability and auto insurance through a captive insurance company. While the Company believes that this arrangement has been very beneficial in reducing and stabilizing insurance costs the Company does have to maintain a surety deposit to guarantee payments of premiums. The surety deposit had a balance of $1.9 million as of September 30, 2020, which is in “Prepaid expenses and other” on the Company’s Consolidated Balance Sheets. The surety deposit had a balance of $1.9 million as of September 30, 2019. Should the captive experience severe losses over an extended period, it could have a detrimental effect on the Company. |
Advertising | Advertising All advertising costs are expensed as incurred. Total advertising expense was $72,000 and $71,000 for the years ended September 30, 2020 and 2019, respectively. |
Stock Compensation Plans | Stock Compensation Plans The Company has issued restricted stock under its Long-Term Incentive Plan; however, there were no issuances in fiscal years 2020 or 2019. The Company accounts for its equity-based compensation as prescribed by U.S. Generally Accepted Accounting Principles for share-based payments. The Company has adopted a fair value-based method of accounting for employee equity-based plans, whereby compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. As a result, compensation expense relating to stock compensation plans will be reflected in net income as part of “Salaries and employee benefits” on the Consolidated Statements of Income. |
Income Taxes | Income Taxes The Company and all subsidiaries file a consolidated federal and various state income tax returns on a fiscal year basis. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years ending prior to September 30, 2017. The Company follows the liability method of accounting for income taxes in accordance with U.S. Generally Accepted Accounting Principles. Under this method, deferred tax assets and liabilities are recorded for future tax consequences of temporary differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the underlying assets or liabilities are recovered or settled. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. U.S. GAAP also prescribes a comprehensive model for how companies should recognize, measure, present and disclose in their financial statements uncertain tax positions taken or to be taken on a tax return. This evaluation is a two-step process. First, the recognition process determines if it is more likely than not that a tax position will be sustained based on the merits of the tax position upon examination by the appropriate taxing authority. Second, a measurement process is calculated to determine the amount of benefit/expense to recognize in the financial statements if a tax position meets the more likely than not recognition threshold. The tax position is measured at the greatest amount of benefit/expense that is more likely than not of being realized upon ultimate settlement. Any interest and penalty related to the unrecognized tax benefits, as the result of recognition of tax obligations resulting from uncertain tax positions, are included in the provision for income taxes. The Company had not recognized any uncertain tax positions at September 30, 2020. |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per share is computed using the weighted average number of common shares outstanding during the year, and diluted earnings per share is computed using the weighted average number of common shares outstanding during the year adjusted for all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive. |
Collective Bargaining Agreements | Collective Bargaining Agreements Certain Energy Services subsidiaries are party to collective bargaining agreements with unions representing certain of their employees. The agreements require such subsidiaries to pay specified wages and provide certain benefits to the union employees. These agreements expire at various times and have typically been renegotiated and renewed on terms that are similar to the ones contained in the expiring agreements. Under certain collective bargaining agreements, the applicable Energy Services subsidiary is required to make contributions to multi-employer pension plans. If the subsidiary were to cease participation in one or more of these plans, a liability could potentially be assessed related to any underfunding of these plans. The amount of such assessment, were one to be made, cannot be reasonably estimated. |
Litigation Costs | Litigation Costs The Company reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Litigation costs are expensed as incurred. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 is effective for public business entities for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Among other things, lessees are required to recognize the following for all leases (except for short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. It is the Company’s preference to acquire equipment needed for long-term use through purchase, by cash or finance. For equipment needed on a short-term basis, the Company will enter into short-term rental agreements with the equipment provider where the agreement is cancellable at any time. The adoption of ASU 2016-02 had an immaterial impact, if any, on its consolidated financial statements. The Company rents equipment for use on construction projects with rental agreements being week to week or month to month. Rental expense can vary by fiscal year due to equipment requirements on construction projects and the availability of Company owned equipment. Rental expense was $4.2 million and $10.0 million for fiscal years ended September 30, 2020 and 2019, respectively. |
Subsequent Events | Subsequent Events On December 16, 2020, Energy Services of America Corporation's (the "Company") newly formed wholly owned subsidiary, West Virginia Pipeline Acquisition Company ("West Virginia Pipeline"), a West Virginia corporation, entered into an Asset Purchase Agreement (the "Agreement") with WV Pipeline, Inc. ("WV Pipeline"), a West Virginia corporation located in Princeton, West Virginia. Pursuant to the Agreement, West Virginia Pipeline will acquire substantially all the assets of WV Pipeline for $3.5 million in cash and a $3.0 million seller note. The transaction closed on December 31, 2020. David Bolton and Daniel Bolton will continue their roles as President and Vice President, respectively, of the Company's new subsidiary. Management has evaluated subsequent events through January 4, 2021, the date which the financial statements were available for issue. There have been no material events noted during the period that would either impact the results reflected in the report or the Company’s results going forward. |
DISAGGREGATION OF REVENUE (Tabl
DISAGGREGATION OF REVENUE (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
DISAGGREGATION OF REVENUE | |
Schedule of disaggregation of revenue | Twelve Months Ended September 30, 2020 Petroleum & Water, Sewer and Electrical and Total revenue Gas Other Mechanical from contracts Lump sum contracts $ — $ — $ 36,954,269 $ 36,954,269 Unit price contracts 56,844,783 10,571,255 67,416,038 Cost plus and T&M contracts 116,428 — 14,707,705 14,824,133 Total revenue from contracts $ 56,961,211 $ 10,571,255 $ 51,661,974 $ 119,194,440 Earned over time $ 45,566,234 $ 10,571,255 $ 50,776,446 $ 106,913,935 Earned at point in time 11,394,977 — 885,528 12,280,505 Total revenue from contracts $ 56,961,211 $ 10,571,255 $ 51,661,974 $ 119,194,440 Twelve Months Ended September 30, 2019 Petroleum & Water, Sewer and Electrical and Total revenue Gas Other Mechanical from contracts Lump sum contracts $ — $ — $ 34,948,884 $ 34,948,884 Unit price contracts 100,449,760 11,033,356 — 111,483,116 Cost plus and T&M contracts 5,057,866 1,100,052 21,951,237 28,109,155 Total revenue from contracts $ 105,507,626 $ 12,133,408 $ 56,900,121 $ 174,541,155 Earned over time $ 98,500,056 $ 12,133,408 $ 55,727,239 $ 166,360,703 Earned at point in time 7,007,570 — 1,172,882 8,180,452 Total revenue from contracts $ 105,507,626 $ 12,133,408 $ 56,900,121 $ 174,541,155 |
CONTRACT BALANCES (Tables)
CONTRACT BALANCES (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
CONTRACT BALANCES | |
Schedule of accounts receivable-trade, net of allowance for doubtful accounts, retainages receivable, contract assets and contract liabilities | September 30, 2019 September 2020 Change Accounts receivable-trade, net of allowance for doubtful accounts $ 21,608,312 $ 18,176,679 $ (3,431,633) Contract assets Cost and estimated earnings in excess of billings $ 6,659,707 $ 6,545,863 $ (113,844) Contract liabilities Billings in excess of cost and estimated earnings $ 3,455,288 $ 4,851,900 $ 1,396,612 |
ALLOWANCE FOR DOUBTFUL ACCOUN_2
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Schedule of allowance for doubtful accounts receivable | Year Ended September 30, 2020 2019 Balance at beginning of year $ 70,310 $ 83,885 Deductions for uncollectible receivables written off, net of recoveries — (13,575) Balance at end of year $ 70,310 $ 70,310 |
UNCOMPLETED CONTRACTS (Tables)
UNCOMPLETED CONTRACTS (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
UNCOMPLETED CONTRACTS. | |
Schedule of costs, estimated earnings and billings on uncompleted contracts | Year Ended September 30, 2020 2019 Costs incurred on contracts in progress $ 74,996,405 $ 163,768,655 Estimated earnings, net of estimated losses 16,067,668 18,215,388 91,064,073 181,984,043 Less billings to date 89,370,110 178,779,624 $ 1,693,963 $ 3,204,419 Costs and estimated earnings in excess of billed on uncompleted contracts $ 6,545,863 $ 6,659,707 Less billings in excess of costs and estimated earnings on uncompleted contracts 4,851,900 3,455,288 $ 1,693,963 $ 3,204,419 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of property, plant and equipment | Year Ended September 30, 2020 2019 Land $ 2,571,575 $ 2,464,512 Buildings and leasehold improvements 5,921,587 5,348,851 Operating equipment and vehicles 44,030,879 42,703,353 Office equipment, furniture and fixtures 800,802 751,642 53,324,843 51,268,358 Less accumulated depreciation 36,933,129 34,453,157 Property, plant and equipment, net $ 16,391,714 $ 16,815,201 |
SHORT-TERM AND LONG-TERM DEBT (
SHORT-TERM AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
SHORT-TERM AND LONG-TERM DEBT | |
Schedule of summary of short-term and long-term debt | 2020 2019 Line of credit payable to bank, monthly interest at 4.99%, final payment due by June 28, 2021. $ — $ 3,500,000 Notes payable to finance companies, due in monthly installments totaling $44,781 including interest ranging from 0.00% to 6.03%, final payments due October 2020 through August 2026, secured by equipment. 1,334,566 1,691,991 Note payable to finance company for insurance premiums financed, due in monthly installments totaling $254,922 in FY 2020 and $267,677 in FY 2019, including interest rate at 3.50%, final payment due November 2020. 509,843 525,710 Notes payable to bank, due in monthly installments totaling $7,799, including interest at 4.82%, final payment due November 2034 secured by building and property. 967,665 1,012,126 Notes payable to bank, due in monthly installments totaling $11,602, including interest at 4.25%, final payment due November 2025 secured by building and property. 644,172 751,987 Notes payable to bank for $9.8 million in Paycheck Protection Program ("PPP") loan funds. Payments on the five-year note are expected to begin in January 2021 if PPP loan repayment is not forgiven, due in monthly installments totaling $168,187, including interest at 1.0%, final payment due December 2025. 9,839,100 — Notes payable to bank, due in monthly installments totaling $98,865, including interest at 4.99%, final payment due September 2022 secured by equipment. 1,983,911 3,040,600 Notes payable to bank, due in monthly installments totaling $46,482, including interest at 5.00%, final payment due September 2021 secured by equipment. 493,191 1,011,160 Notes payable to bank, due in monthly installments totaling $191,012, including interest at 5.50%, final payment due September 2021 secured by equipment. — 7,920,005 Total debt 15,772,448 19,453,579 Less current maturities 4,538,743 8,429,283 Total long term debt $ 11,233,705 $ 11,024,296 |
Schedule of maturities of long-term debt | 2021 $ 4,538,743 2022 3,417,031 2023 2,287,389 2024 2,259,381 2025 2,278,986 Thereafter 990,918 $ 15,772,448 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
Schedule of components of income taxes | Year Ended September 30, 2020 2019 Federal Current $ 634,539 $ 289,476 Deferred 257,160 466,009 Total 891,699 755,485 State Current 178,955 81,647 Deferred 72,532 131,439 Total 251,487 213,086 Total income tax expense $ 1,143,186 $ 968,571 |
Schedule of provision for income taxes differs from the amount computed by applying the federal statutory rate on income from operations | Year Ended September 30, 2020 2019 Statutory rate 21.00 % 21.00 % State income taxes 6.00 % 6.00 % Meals and other 5.00 % 5.70 % Effective tax rate 32.00 % 32.70 % |
Schedule of income tax effects to deferred tax assets and liabilities | Year Ended September 30, 2020 2019 Deferred income tax liabilities Long-term Property and equipment $ 2,746,331 $ 2,539,639 Other (19,805) (19,805) Total deferred income tax liabilities $ 2,726,526 $ 2,519,834 Deferred income tax assets Long-term Other $ 471,011 $ 594,011 Total deferred income tax assets 471,011 594,011 Total net deferred income tax liabilities $ 2,255,515 $ 1,925,823 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
Schedule to compute (loss) earnings per share | Twelve Months Ended Twelve Months Ended September 30, September 30, 2020 2019 Net income $ 2,433,017 $ 1,992,910 Dividends on preferred stock 309,000 309,000 Income available to common shareholders $ 2,124,017 $ 1,683,910 Weighted average shares outstanding 13,804,835 14,064,871 Weighted average shares outstanding-diluted 17,238,168 17,498,204 Earnings per share available to common shareholders $ 0.154 $ 0.120 Earnings per share available to common shareholders-diluted $ 0.123 $ 0.096 |
RETIREMENT AND EMPLOYEE BENEF_2
RETIREMENT AND EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
RETIREMENT AND EMPLOYEE BENEFIT PLANS | |
Schedule of multi-employer defined benefit pension plans | Contibutions of Pension Protection Act ("PPA") Energy Services of America Certified Zone Status (1) FIP/RP Status Companies Expiration Date of EIN/Pension Pending/ Surcharge Collective Bargaining Pension Fund Plan Number 2020 2019 Implemented (2) 2020 2019 2018 Imposed Agreement Central States, Southeast and Southwest Areas Pension Fund 36-6044243/001 Red Red Implemented $ — $ 189,644 $ — no Various Employer-Teamsters Local Nos. 175 and 505 55-6021850/001 Red Red Implemented $ — $ 169,483 $ 88,527 no Various Laborers National Pension Fund 75-1280827/001 Red Red Implemented $ 356,548 $ 1,202,310 $ 608,206 no Various National Automatic Sprinkler Industry Pension Fund 52-6054620/001 Red Red Implemented 124,863 131,141 99,731 no Various Iron Workers District Council of Southern Ohio &Vicinity Pension Trust 31-6038516/001 Yellow Yellow Implemented 86,998 122,683 57,960 no Various Carpenters Pension Fund of WV 55-6027998/001 Red Red Implemented 542,659 746,743 444,455 no Various Plumbers & Pipefitters National Pension Fund 52-6152779/001 Yellow Yellow Implemented 594,364 786,940 1,929,939 no Various Sheet Metal Workers' National Pension Fund 52-6112463/001 Yellow Yellow Implemented 169,018 125,982 153,542 no Various Sheet Metal Workers Local Pension Fund 34-6666753/001 Red Red Implemented — 71,143 11,483 no Various Plumbers and Pipefitters Local 152 Pension Fund 55-6029095/001 Red Red Implemented — 19,511 — no Various All Other Green Green 1,480,139 4,941,831 3,391,194 no Various $ 3,354,588 $ 8,507,411 $ 6,785,037 (1) The most recent PPA zone status available in 2020 and 2019 is the the plan's year-end during 2019 and 2018, respectively. The zone status is based on information that we received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the orange zone are less than 80 percent funded and have an Accumulated Funding Deficiency in the current year or projected into the next six years, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. (2) Indicates whether the plan has a financial improvement plan ("FIP") or a rehabilitation plan ("RP") which is either pending or has been implemented. |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of quarterly financial information | 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 25,843,307 $ 18,072,400 $ 30,762,725 $ 44,516,008 $ 119,194,440 Operating (loss) income (239,030) (2,275,040) 294,036 5,889,687 3,669,653 Net (loss) income (74,114) (1,694,611) (17,955) 4,219,697 2,433,017 Dividends on preferred stock 77,250 77,250 77,250 77,250 309,000 Net (loss) income available to common shareholders $ (151,364) $ (1,771,861) $ (95,205) $ 4,142,447 $ 2,124,017 Weighted-basic shares outstanding 13,911,610 13,783,546 13,627,293 13,621,406 13,804,835 Weighted-diluted shares outstanding 13,911,610 13,783,546 13,627,293 17,054,739 17,238,168 (Loss) earnings per share available to common shareholders $ (0.011) $ (0.129) $ (0.007) $ 0.304 $ 0.154 (Loss) earnings per share-diluted available to common shareholders $ (0.011) $ (0.129) $ (0.007) $ 0.243 $ 0.123 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenue $ 49,114,139 $ 46,955,444 $ 40,187,978 $ 38,283,594 $ 174,541,155 Operating income (loss) 1,078,454 (1,420,888) 1,229,693 2,935,153 3,822,412 Net income (loss) 631,384 (1,124,458) 485,757 2,000,227 1,992,910 Dividends on preferred stock 77,250 77,250 77,250 77,250 309,000 Net income (loss) available to common shareholders $ 554,134 $ (1,201,708) $ 408,507 $ 1,922,977 $ 1,683,910 Weighted-basic shares outstanding 14,135,900 14,060,456 13,985,579 13,934,720 14,064,871 Weighted-diluted shares outstanding 17,569,233 14,060,456 17,418,912 17,368,053 17,498,204 Earnings (loss) per share available to common shareholders $ 0.039 $ (0.085) $ 0.029 $ 0.138 $ 0.120 Earnings (loss) per share-diluted available to common shareholders $ 0.032 $ (0.085) $ 0.023 $ 0.111 $ 0.096 |
CONDENSED PARENT COMPANY ONLY_2
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS | |
Schedule of balance sheet | ENERGY SERVICES OF AMERICA CORPORATION (Parent Only) BALANCE SHEETS As of September 30, 2020 and 2019 2020 2019 Assets Current assets Cash and cash equivalents $ 177,485 $ 59,831 Other receivables (307) (307) Prepaid expenses and other 3,145,446 2,412,348 Total current assets 3,322,624 2,471,872 Property, plant and equipment, at cost 265,200 248,402 less accumulated depreciation (236,690) (230,628) 28,510 17,774 Due from subsidiaries — 8,343,282 Deferred tax asset 139,307 218,093 Investment in subsidiaries 34,090,094 30,530,562 Total assets $ 37,580,535 $ 41,581,583 Liabilities and shareholders' equity Current liabilities Current maturities of long-term debt $ 1,728,120 $ 3,504,301 Lines of credit and short term borrowings 509,843 4,025,710 Accounts payable 23,771 68,921 Accrued expenses and other current liabilities — 98,843 Total current liabilities 2,261,734 7,697,775 Due to subsidiaries 8,061,618 — Long-term debt, less current maturities 1,433,154 9,219,451 Total liabilities 11,756,506 16,917,226 Shareholders' equity Preferred stock, $.0001 par value Authorized 1,000,000 shares, 206 issued at September 30, 2020 and 2019 — — Common stock, $.0001 par value Authorized 50,000,000 shares 14,839,836 issued and 13,621,406 outstanding at September 30, 2020 and 14,239,836 issued and 13,924,789 outstanding at September 30, 2019 1,484 1,484 Treasury stock, 1,218,430 shares at September 30, 2020 and 915,047 shares at September 30, 2019 (122) (91) Additional paid in capital 60,670,699 60,938,896 Retained earnings (deficit) (34,848,032) (36,275,932) Total shareholders' equity 25,824,029 24,664,357 Total liabilities and shareholders' equity $ 37,580,535 $ 41,581,583 |
Schedule of statement of income | ENERGY SERVICES OF AMERICA CORPORATION (Parent Only) STATEMENTS OF INCOME For the years ended September 30, 2020 and 2019 2020 2019 Selling and administrative expenses $ 1,502,575 $ 1,399,725 Net loss from operations before taxes (1,502,575) (1,399,725) Other nonoperating expense (189) (1,043) Interest income 53,249 58,023 Interest expense (341,312) (960,068) Interest allocation to subsidiaries 323,258 885,316 Net loss before tax (1,467,569) (1,417,497) Income tax benefit (341,054) (346,232) Net loss from parent (1,126,515) (1,071,265) Equity in undistributed income income of subsidiaries 3,559,532 3,064,175 Dividends on preferred stock (309,000) (309,000) Net income available to common shareholders $ 2,124,017 $ 1,683,910 Weighted average shares outstanding- basic 13,804,835 14,064,871 Weighted average shares-diluted 17,238,168 17,498,204 Earnings per share-basic available to common shareholders $ 0.154 $ 0.120 Earnings per share-diluted available to common shareholders $ 0.123 $ 0.096 |
Schedule of consolidated statement of cash flow | ENERGY SERVICES OF AMERICA CORPORATION (Parent Only) CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended September 30, 2020 and 2019 2020 2019 Cash flows form operating activities: Net income $ 2,433,017 $ 1,992,910 Adjustments to reconcile net income to net cash provided by (used in) operating activities Provision for deferred taxes 78,786 111,057 Depreciation expense 6,062 4,343 Equity in undistributed income of subsidiaries (3,559,532) (3,064,175) Advances from (to) subsidiaries 16,404,900 (3,812,109) Changes in: (Increase) decrease in prepaid expenses (733,098) 1,493,939 (Decrease) increase in accounts payable (45,150) 35,082 (Decrease) increase in accrued expenses and other current liabilities (98,843) 31,076 Net cash provided by (used in) operating activities 14,486,142 (3,207,877) Cash flows from investing activities: Investment in property & equipment (16,798) — Net cash used in investing activities (16,798) — Cash flows from financing activities: Borrowings on lines of credit and short-term debt, net of (repayments) (3,515,867) 7,956,463 Principal payments on long term debt (9,628,578) (4,578,905) Dividends on common stock (696,117) — Preferred dividends paid (309,000) (309,000) Treasury stock purchased by company (268,228) (300,600) Proceeds from long term debt 66,100 — Net cash (used in) provided by financing activities (14,351,690) 2,767,958 Increase (decrease) in cash and cash equivalents 117,654 (439,919) Cash beginning of period 59,831 499,750 Cash end of period $ 177,485 $ 59,831 Supplemental schedule of noncash investing and financing activities: Insurance premiums financed $ 3,063,543 $ 3,159,083 Accrued dividends on preferred stock $ 77,250 $ 77,250 Line of credit refinanced to long-term debt $ — $ 10,000,000 Supplemental disclosures of cash flows information: Cash paid during the year for: Interest $ 486,246 $ 1,064,222 Income taxes $ 785,630 $ 798,430 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Fair Value Measurements (Details) - USD ($) $ in Millions | Oct. 01, 2018 | Sep. 30, 2020 | Sep. 30, 2019 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Percentage compellation of contracts with customers related to topic 606 | 90.00% | ||
Aggregate principal amount of fixed-rate debt | $ 15.8 | $ 16 | |
Fair value of aggregate principal amount of debt | $ 14.8 | $ 16 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Doubtful Accounts and Property and Equipment (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 39 years |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Billing and payment term | 30 days |
Minimum | Operating equipment and vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | P5Y |
Minimum | Office equipment, furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | P5Y |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Billing and payment term | 45 days |
Maximum | Operating equipment and vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | P7Y |
Maximum | Office equipment, furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | P7Y |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Self-Insurance, Advertising (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Surety deposit balance | $ 1,900,000 | $ 1,900,000 |
Advertising expense | 72,000 | 71,000 |
Rental expense | $ 4,200,000 | $ 10,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Subsequent events (Details) - West Virginia Pipeline - WV Pipeline, Inc - Subsequent event $ in Millions | Dec. 16, 2020USD ($) |
Asset Acquisition [Line Items] | |
Cash consideration for acquiring assets | $ 3.5 |
Seller note as consideration for acquiring assets | $ 3 |
DISAGGREGATION OF REVENUE (Deta
DISAGGREGATION OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | $ 119,194,440 | $ 174,541,155 |
Earned over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 106,913,935 | 166,360,703 |
Earned at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 12,280,505 | 8,180,452 |
Lump sum contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 36,954,269 | 34,948,884 |
Unit price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 67,416,038 | 111,483,116 |
Cost plus and T&M contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 14,824,133 | 28,109,155 |
Petroleum and Gas | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 56,961,211 | 105,507,626 |
Petroleum and Gas | Earned over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 45,566,234 | 98,500,056 |
Petroleum and Gas | Earned at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 11,394,977 | 7,007,570 |
Petroleum and Gas | Unit price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 56,844,783 | 100,449,760 |
Petroleum and Gas | Cost plus and T&M contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 116,428 | 5,057,866 |
Water, Sewer and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 10,571,255 | 12,133,408 |
Water, Sewer and Other | Earned over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 10,571,255 | 12,133,408 |
Water, Sewer and Other | Unit price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 10,571,255 | 11,033,356 |
Water, Sewer and Other | Cost plus and T&M contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 1,100,052 | |
Electrical and Mechanical | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 51,661,974 | 56,900,121 |
Electrical and Mechanical | Earned over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 50,776,446 | 55,727,239 |
Electrical and Mechanical | Earned at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 885,528 | 1,172,882 |
Electrical and Mechanical | Lump sum contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | 36,954,269 | 34,948,884 |
Electrical and Mechanical | Cost plus and T&M contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts | $ 14,707,705 | $ 21,951,237 |
CONTRACT BALANCES (Details)
CONTRACT BALANCES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONTRACT BALANCES | ||
Accounts receivable-trade, net of allowance for doubtful accounts | $ 18,176,679 | $ 21,608,312 |
Change in accounts receivable-trade | (3,431,633) | (535,358) |
Contract assets | ||
Cost and estimated earnings in excess of billings | 6,545,863 | 6,659,707 |
Change in cost and estimated earnings in excess of billings | (113,844) | 1,306,332 |
Contract liabilities | ||
Billings in excess of cost and estimated earnings | 4,851,900 | 3,455,288 |
Change in billings in excess of cost and estimated earnings | $ 1,396,612 | $ 194,087 |
CONTRACT BALANCES - Additional
CONTRACT BALANCES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONTRACT BALANCES | ||
Accounts receivable-trade, net of allowance for doubtful accounts | $ 18,200,000 | $ 21,600,000 |
Decrease in contract assets | 114,000 | |
Contract assets | 6,545,863 | 6,659,707 |
Contract liabilities | 4,851,900 | 3,455,288 |
Increase in contract liabilities | $ 1,400,000 | |
Recognized revenue included in contract liability | $ 3,300,000 |
PERFORMANCE OBLIGATIONS (Detail
PERFORMANCE OBLIGATIONS (Details) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
PERFORMANCE OBLIGATIONS | |
Recognized revenue | $ 936,000 |
Amount of remaining unsatisfied performance obligations | $ 16,300,000 |
ALLOWANCE FOR DOUBTFUL ACCOUN_3
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) | 12 Months Ended |
Sep. 30, 2019USD ($) | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |
Balance at beginning of year | $ 83,885 |
Deductions for uncollectible receivables written off, net of recoveries | (13,575) |
Balance at end of year | $ 70,310 |
UNCOMPLETED CONTRACTS - Summary
UNCOMPLETED CONTRACTS - Summary of costs, estimated earnings, and billings on uncompleted contracts (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
UNCOMPLETED CONTRACTS. | ||
Costs incurred on contracts in progress | $ 74,996,405 | $ 163,768,655 |
Estimated earnings, net of estimated losses | 16,067,668 | 18,215,388 |
Costs of uncompleted contracts including net estimated earnings | 91,064,073 | 181,984,043 |
Less billings to date | 89,370,110 | 178,779,624 |
Contract assets: Costs and estimated earnings in excess of billed on uncompleted contracts | 6,545,863 | 6,659,707 |
Less contract liabilities: billings in excess of costs and estimated earnings on uncompleted contracts | 4,851,900 | 3,455,288 |
Unbilled Contracts Receivable | $ 1,693,963 | $ 3,204,419 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 53,324,843 | $ 51,268,358 |
Less accumulated depreciation | 36,933,129 | 34,453,157 |
Total fixed assets | 16,391,714 | 16,815,201 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 2,571,575 | 2,464,512 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 5,921,587 | 5,348,851 |
Operating equipment and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 44,030,879 | 42,703,353 |
Office equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 800,802 | $ 751,642 |
SHORT-TERM DEBT (Details)
SHORT-TERM DEBT (Details) - USD ($) | Jul. 30, 2020 | Jan. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Line of Credit Facility [Line Items] | ||||
Insurance policy amount | $ 3,100,000 | |||
Insurance policy premium outstanding | $ 510,000 | |||
Financing agreement "Operating Line of Credit (2020)" | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 3,500,000 | |||
Amount available to borrowing | 8,000,000 | |||
Financing agreement "Operating Line of Credit (2020)" | United Bank, Inc. | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 15,000,000 | |||
Interest rate on the line of credit description | "Wall Street Journal" Prime Rate (the index) with a floor of 4.99% | |||
Interest rate on line of credit | 4.99% | |||
Amount repaid against the line of credit | $ 11,100,000 | |||
Percentage of eligible accounts receivable | 70.00% | |||
Amount of loan covenants | $ 12,500,000 | |||
Minimum tangible net worth | $ 19,000,000 | |||
Minimum traditional debt service coverage ratio | 1.25x | |||
Minimum current ratio | 1.50x | |||
Maximum Debt To Tangible Net Worth Ratio To Be Measured Semi Annually | 2.0x | |||
Amount of minimum tangible net worth | $ 21,000,000 | |||
Traditional debt service coverage ratio | 2.0x | |||
Financing agreement "Operating Line of Credit (2020)" | United Bank, Inc. | 12.5 million component | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 12,500,000 | |||
Amount borrowed against the line of credit | $ 11,100,000 | |||
Amount repaid against the line of credit | $ 11,500,000 | |||
Financing agreement "Operating Line of Credit (2020)" | United Bank, Inc. | 2.5 million component | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 2,500,000 |
SHORT-TERM AND LONG-TERM DEBT -
SHORT-TERM AND LONG-TERM DEBT - Summary of short-term and long-term debt (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Total debt | $ 15,772,448 | $ 19,453,579 |
Less current maturities | 4,538,743 | 8,429,283 |
Total long term debt | 11,233,705 | 11,024,296 |
Line of credit payable to bank, final payment due by June 28, 2021 | ||
Debt Instrument [Line Items] | ||
Total debt | 3,500,000 | |
Notes payable to finance companies, final payments due October 2020 through August 2026 | ||
Debt Instrument [Line Items] | ||
Total debt | 1,334,566 | 1,691,991 |
Note payable to finance company for insurance premiums financed due November 2020 in monthly installments | ||
Debt Instrument [Line Items] | ||
Total debt | 509,843 | 525,710 |
Note Payable To Bank Due November 2034 | ||
Debt Instrument [Line Items] | ||
Total debt | 967,665 | 1,012,126 |
Notes Payable To Banks Due November 2025 | ||
Debt Instrument [Line Items] | ||
Total debt | 644,172 | 751,987 |
Notes payable to bank in Paycheck Protection Program ("PPP") loan funds due December 2025 | ||
Debt Instrument [Line Items] | ||
Total debt | 9,839,100 | |
Note Payable To Bank Due September 2022 | ||
Debt Instrument [Line Items] | ||
Total debt | 1,983,911 | 3,040,600 |
Notes payable to bank, at interest at 5.50%, final payment due September 2021 | ||
Debt Instrument [Line Items] | ||
Total debt | $ 493,191 | 1,011,160 |
Notes payable to bank, at interest at 5.00%, final payment due September 2021 | ||
Debt Instrument [Line Items] | ||
Total debt | $ 7,920,005 |
SHORT-TERM AND LONG-TERM DEBT_2
SHORT-TERM AND LONG-TERM DEBT - Summary of short-term and long-term debt (Parentheticals) (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 15,800,000 | $ 16,000,000 |
Line of credit payable to bank, final payment due by June 28, 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.99% | |
Notes payable to finance companies, final payments due October 2020 through August 2026 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 44,781 | |
Notes payable to finance companies, final payments due October 2020 through August 2026 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.00% | |
Notes payable to finance companies, final payments due October 2020 through August 2026 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.03% | |
Note payable to finance company for insurance premiums financed due November 2020 in monthly installments | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 254,922 | $ 267,677 |
Interest rate | 3.50% | |
Note Payable To Bank Due November 2034 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 7,799 | |
Interest rate | 4.82% | |
Notes Payable To Banks Due November 2025 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 11,602 | |
Interest rate | 4.25% | |
Notes payable to bank in Paycheck Protection Program ("PPP") loan funds due December 2025 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 168,187 | |
Interest rate | 1.00% | |
Debt Instrument, Face Amount | $ 9,800,000 | |
Term of debt | 5 years | |
Note Payable To Bank Due September 2022 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 98,865 | |
Interest rate | 4.99% | |
Notes payable to bank, at interest at 5.50%, final payment due September 2021 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 46,482 | |
Interest rate | 5.00% | |
Notes payable to bank, at interest at 5.00%, final payment due September 2021 | ||
Debt Instrument [Line Items] | ||
Note payable in monthly installments | $ 191,012 | |
Interest rate | 5.50% |
SHORT-TERM AND LONG-TERM DEBT_3
SHORT-TERM AND LONG-TERM DEBT - Maturities of debt (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
SHORT-TERM AND LONG-TERM DEBT | ||
2021 | $ 4,538,743 | |
2022 | 3,417,031 | |
2023 | 2,287,389 | |
2024 | 2,259,381 | |
2025 | 2,278,986 | |
Thereafter | 990,918 | |
Total debt | $ 15,772,448 | $ 19,453,579 |
INCOME TAXES - Components of in
INCOME TAXES - Components of income taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Federal | ||
Current | $ 634,539 | $ 289,476 |
Deferred | 257,160 | 466,009 |
Total | 891,699 | 755,485 |
State and Local Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Current | 178,955 | 81,647 |
Deferred | 72,532 | 131,439 |
Total | 251,487 | 213,086 |
Total income tax benefit | $ 1,143,186 | $ 968,571 |
INCOME TAXES - Summary of provi
INCOME TAXES - Summary of provision for income taxes differs from amount computed by applying federal statutory rate (Details) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
INCOME TAXES | ||
Statutory rate | 21.00% | 21.00% |
State income taxes | 6.00% | 6.00% |
Meals and other | 5.00% | 5.70% |
Effective tax rate | 32.00% | 32.70% |
INCOME TAXES - Summary of incom
INCOME TAXES - Summary of income tax effects of temporary differences giving rise to deferred tax liabilities (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Deferred income tax liabilities | ||
Property and equipment | $ 2,746,331 | $ 2,539,639 |
Other | (19,805) | (19,805) |
Total deferred income tax liabilities | 2,726,526 | 2,519,834 |
Deferred income tax assets | ||
Other | 471,011 | 594,011 |
Total deferred income tax assets | 471,011 | 594,011 |
Total net deferred income tax liabilities | $ 2,255,515 | $ 1,925,823 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
INCOME TAXES | ||
Federal rate | 21.00% | 21.00% |
State rate | 6.00% | 6.00% |
Tax rate for meals and other | 5.00% | 5.70% |
Amount borrowed | $ 15,772,448 | $ 19,453,579 |
EARNINGS PER SHARE - Summary of
EARNINGS PER SHARE - Summary of amounts used to compute earnings per share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
EARNINGS PER SHARE | ||||||||||
Net (loss) income | $ 4,219,697 | $ (17,955) | $ (1,694,611) | $ (74,114) | $ 2,000,227 | $ 485,757 | $ (1,124,458) | $ 631,384 | $ 2,433,017 | $ 1,992,910 |
Dividends on preferred stock | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 309,000 | 309,000 |
Income available to common shareholders | $ 4,142,447 | $ (95,205) | $ (1,771,861) | $ (151,364) | $ 1,922,977 | $ 408,507 | $ (1,201,708) | $ 554,134 | $ 2,124,017 | $ 1,683,910 |
Weighted average shares outstanding (in shares) | 13,621,406 | 13,627,293 | 13,783,546 | 13,911,610 | 13,934,720 | 13,985,579 | 14,060,456 | 14,135,900 | 13,804,835 | 14,064,871 |
Weighted average shares outstanding-diluted (in shares) | 17,054,739 | 13,627,293 | 13,783,546 | 13,911,610 | 17,368,053 | 17,418,912 | 14,060,456 | 17,569,233 | 17,238,168 | 17,498,204 |
Earnings per share available to common shareholders | $ 0.304 | $ (0.007) | $ (0.129) | $ (0.011) | $ 0.138 | $ 0.029 | $ (0.085) | $ 0.039 | $ 0.154 | $ 0.120 |
Earnings per share available to common shareholders-diluted | $ 0.243 | $ (0.007) | $ (0.129) | $ (0.011) | $ 0.111 | $ 0.023 | $ (0.085) | $ 0.032 | $ 0.123 | $ 0.096 |
STOCK PURCHASE PLAN (Details)
STOCK PURCHASE PLAN (Details) - USD ($) | Aug. 03, 2018 | Nov. 19, 2008 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Aug. 22, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | $ 0 | $ 0 | ||||
Common stock, shares outstanding | 13,621,406 | 13,924,789 | ||||
Common stock, shares issued | 14,839,836 | 14,839,836 | ||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of common stock shares authorized | 1,200,000 | |||||
Compensation expense | $ 25,000 | |||||
Percentage stock offered at a purchase price least of fair market value | 85.00% | |||||
Participant's stock purchased description | A participant's stock purchased during a calendar year may not exceed the lesser of (a) a percentage of the participant's compensation or a total amount as specified by the compensation committee of the Board, or (b) $25,000. | |||||
Common stock, shares outstanding | 1,423,984 | 1,393,393 | ||||
Percentage of common stock issued and outstanding | 10.00% | 10.00% | ||||
Common stock, shares issued | 312,522 | |||||
Repurchase of shares | 305,908 | 0 |
LONG TERM INCENTIVE PLAN (Detai
LONG TERM INCENTIVE PLAN (Details) | Aug. 11, 2010USD ($)item$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2011shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 0 | $ 0 | ||
Deferred tax benefit | $ 0 | $ 0 | ||
Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common stock shares issued | shares | 1,149,000 | |||
Long Term Incentive Plan | Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | shares | 51,000 | |||
Number of officer | item | 6 | |||
Fair value per share (in dollars per share) | $ / shares | $ 4.22 | |||
Vesting period | 3 years | |||
Market value of shares granted | $ 215,220 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Dec. 16, 2014 | Sep. 30, 2020 | Sep. 30, 2019 |
Related Party Transaction [Line Items] | |||
Percentage of shares of common stock transaction between executive, officers, directors and holders | 10% or more | ||
Aggregate principal amount of fixed-rate debt | $ 15,800,000 | $ 16,000,000 | |
Loan agreement | Nitro Electric | |||
Related Party Transaction [Line Items] | |||
Term of loan agreement | 20 years | ||
Aggregate principal amount of fixed-rate debt | $ 1,200,000 | ||
Monthly rent | $ 6,300 | ||
Interest rate | 4.82% | ||
Monthly payments | $ 7,800 | ||
Principal payment | 232,000 | ||
Interest payment | $ 306,000 |
LEASE OBLIGATIONS (Details)
LEASE OBLIGATIONS (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
LEASE OBLIGATIONS | ||
Operating lease payments | $ 118,000 | $ 169,000 |
Rental expense | $ 4,200,000 | $ 10,000,000 |
MAJOR CUSTOMERS (Details)
MAJOR CUSTOMERS (Details) | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($)customer | |
Concentration Risk [Line Items] | ||||||||||
Revenue | $ | $ 44,516,008 | $ 30,762,725 | $ 18,072,400 | $ 25,843,307 | $ 38,283,594 | $ 40,187,978 | $ 46,955,444 | $ 49,114,139 | $ 119,194,440 | $ 174,541,155 |
Revenues | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Number of major customers | 2 | |||||||||
Concentration risk description | exceeded 10.0% | exceeded 10.0% | ||||||||
Revenues | Customer Concentration Risk | Customer One | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Percentage of revenue | 24.70% | 29.00% | ||||||||
Revenues | Customer Concentration Risk | Customer Two | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Percentage of revenue | 11.10% | 11.80% | ||||||||
Receivables | Customer Concentration Risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Number of major customers | 2 | |||||||||
Concentration risk description | exceeded 10.0% | |||||||||
Percentage of revenue | 11.90% | |||||||||
Receivables | Customer Concentration Risk | Customer One | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Percentage of revenue | 19.70% | 22.00% | ||||||||
Receivables | Customer Concentration Risk | Customer Two | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Percentage of revenue | 18.40% | 12.20% |
RETIREMENT AND EMPLOYEE BENEF_3
RETIREMENT AND EMPLOYEE BENEFIT PLANS - Summary of Participation in Pension Fund Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Multiemployer Plans [Line Items] | |||
Multiemployer Plan, Employer Contribution, Cost | $ 3,354,588 | $ 8,507,411 | $ 6,785,037 |
Central States, Southeast and Southwest Areas Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 36-6044243/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 189,644 | $ 0 | |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Employer-Teamsters Local Nos. 175 and 505 | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 55-6021850/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 169,483 | $ 88,527 | |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Laborers National Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 75-1280827/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 356,548 | $ 1,202,310 | $ 608,206 |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
National Automatic Sprinkler Industry Pension Fund Automatic Sprinkler Industry Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 52-6054620/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 124,863 | $ 131,141 | $ 99,731 |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Iron Workers District Council of Southern Ohio &Vicinity Pension Trust | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 31-6038516/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Yellow | Yellow | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 86,998 | $ 122,683 | $ 57,960 |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Carpenters Pension Fund of WV | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 55-6027998/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 542,659 | $ 746,743 | $ 444,455 |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Plumbers & Pipefitters National Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 52-6152779/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Yellow | Yellow | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 594,364 | $ 786,940 | $ 1,929,939 |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Sheet Metal Workers' National Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 52-6112463/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Yellow | Yellow | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 169,018 | $ 125,982 | $ 153,542 |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Sheet Metal Workers Local Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 34-6666753/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 71,143 | $ 11,483 | |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
Plumbers and Pipefitters Local 152 Pension Fund | |||
Multiemployer Plans [Line Items] | |||
EIN/Pension Plan Number | 55-6029095/001 | ||
Pension Protection Act ("PPA") Certified Zone Status | Red | Red | |
FIP/RP Status | Implemented | Implemented | Implemented |
Contributions of Energy Services of America Companies | $ 19,511 | $ 0 | |
Surcharge Imposed | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
All Other | |||
Multiemployer Plans [Line Items] | |||
Pension Protection Act ("PPA") Certified Zone Status | Green | Green | |
Multiemployer Plan, Pension, Insignificant, Employer Contribution, Cost | $ 1,480,139 | $ 4,941,831 | $ 3,391,194 |
Multiemployer Plan, Pension, Insignificant, Surcharge [Fixed List] | No | No | No |
Expiration Date of Collective Bargaining Agreement | Various | Various | Various |
RETIREMENT AND EMPLOYEE BENEF_4
RETIREMENT AND EMPLOYEE BENEFIT PLANS - C.J. Hughes retirement plan (Details) - Union Employees Retirement Plan - C J Hughes Construction Company - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of employees contribution to retirement compensation plan | 15.00% | |
Maximum amount of employees contribution | $ 19,500 | $ 19,000 |
Amount of contribution matched per dollar | $ 0.25 | |
Percentage of contribution of eligible wages | 6.00% | |
Amount of contribution to union plan | $ 13,300 | $ 12,390 |
RETIREMENT AND EMPLOYEE BENEF_5
RETIREMENT AND EMPLOYEE BENEFIT PLANS - Energy Services of America retirement plan (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Non Union Employees Retirement Plan | Nitro Electric And C. J. Hughes Construction Company merger | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Maximum amount of employees contribution | $ 19,500 | $ 19,000 |
Defined contribution plan employer matching contribution percent of each dollar contributed for the first 3% | 100.00% | |
Defined contribution plan employer matching contribution percent of each dollar contributed for the next 3% | 50.00% | |
Retirement Plan | Energy Services of America | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Amount of contribution to union plan | $ 271,000 | $ 281,000 |
CREDIT RISK (Details)
CREDIT RISK (Details) | Sep. 30, 2020USD ($) |
CREDIT RISK | |
FDIC insurance limit | $ 250,000 |
Uninsured deposits | $ 11,100,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Sep. 30, 2020USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Performance bonds outstanding amount | $ 3.2 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
Continuing operations | ||||||||||
Revenue | $ 44,516,008 | $ 30,762,725 | $ 18,072,400 | $ 25,843,307 | $ 38,283,594 | $ 40,187,978 | $ 46,955,444 | $ 49,114,139 | $ 119,194,440 | $ 174,541,155 |
Operating Income (loss) | 5,889,687 | 294,036 | (2,275,040) | (239,030) | 2,935,153 | 1,229,693 | (1,420,888) | 1,078,454 | 3,669,653 | 3,822,412 |
Net (loss) income | 4,219,697 | (17,955) | (1,694,611) | (74,114) | 2,000,227 | 485,757 | (1,124,458) | 631,384 | 2,433,017 | 1,992,910 |
Dividends on preferred stock | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 77,250 | 309,000 | 309,000 |
Net income (loss) available to common shareholders | $ 4,142,447 | $ (95,205) | $ (1,771,861) | $ (151,364) | $ 1,922,977 | $ 408,507 | $ (1,201,708) | $ 554,134 | $ 2,124,017 | $ 1,683,910 |
Weighted-basic shares outstanding (in shares) | 13,621,406 | 13,627,293 | 13,783,546 | 13,911,610 | 13,934,720 | 13,985,579 | 14,060,456 | 14,135,900 | 13,804,835 | 14,064,871 |
Weighted-diluted shares outstanding (in shares) | 17,054,739 | 13,627,293 | 13,783,546 | 13,911,610 | 17,368,053 | 17,418,912 | 14,060,456 | 17,569,233 | 17,238,168 | 17,498,204 |
Earnings (loss) per share available to common shareholders (in dollars per share) | $ 0.304 | $ (0.007) | $ (0.129) | $ (0.011) | $ 0.138 | $ 0.029 | $ (0.085) | $ 0.039 | $ 0.154 | $ 0.120 |
Earnings (loss) per share-diluted available to common shareholders (in dollars per share) | $ 0.243 | $ (0.007) | $ (0.129) | $ (0.011) | $ 0.111 | $ 0.023 | $ (0.085) | $ 0.032 | $ 0.123 | $ 0.096 |
CONDENSED PARENT COMPANY ONLY_3
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS - BALANCE SHEETS (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets | |||
Cash and cash equivalents | $ 11,216,820 | $ 4,578,275 | |
Other receivables | 9,458 | 10,008 | |
Prepaid expenses and other | 3,338,943 | 2,734,974 | |
Total current assets | 41,771,572 | 39,112,837 | |
Property, plant and equipment, at cost | 53,324,843 | 51,268,358 | |
less accumulated depreciation | (36,933,129) | (34,453,157) | |
Total fixed assets | 16,391,714 | 16,815,201 | |
Total assets | 58,163,286 | 55,928,038 | |
Current liabilities | |||
Current maturities of long-term debt | 4,028,900 | 4,403,573 | |
Accounts payable | 5,222,222 | 2,919,618 | |
Total current liabilities | 18,850,037 | 18,313,562 | |
Long-term debt, less current maturities | 11,233,705 | 11,024,296 | |
Total liabilities | 32,339,257 | 31,263,681 | |
Shareholders' equity | |||
Treasury stock, 1,218,430 shares at September 30, 2020 and 915,047 at September 30, 2019 | (122) | (91) | |
Additional paid in capital | 60,670,699 | 60,938,896 | |
Retained earnings (deficit) | (34,848,032) | (36,275,932) | |
Total shareholders' equity | 25,824,029 | 24,664,357 | $ 23,281,047 |
Total liabilities and shareholders' equity | 58,163,286 | 55,928,038 | |
Parent Company | Reportable legal entities | |||
Current assets | |||
Cash and cash equivalents | 177,485 | 59,831 | |
Other receivables | (307) | (307) | |
Prepaid expenses and other | 3,145,446 | 2,412,348 | |
Total current assets | 3,322,624 | 2,471,872 | |
Property, plant and equipment, at cost | 265,200 | 248,402 | |
less accumulated depreciation | (236,690) | (230,628) | |
Total fixed assets | 28,510 | 17,774 | |
Due from subsidiaries | 8,343,282 | ||
Deferred tax asset | 139,307 | 218,093 | |
Investment in subsidiaries | 34,090,094 | 30,530,562 | |
Total assets | 37,580,535 | 41,581,583 | |
Current liabilities | |||
Current maturities of long-term debt | 1,728,120 | 3,504,301 | |
Lines of credit and short term borrowings | 509,843 | 4,025,710 | |
Accounts payable | 23,771 | 68,921 | |
Accrued expenses and other current liabilities | 98,843 | ||
Total current liabilities | 2,261,734 | 7,697,775 | |
Due to subsidiaries | 8,061,618 | ||
Long-term debt, less current maturities | 1,433,154 | 9,219,451 | |
Total liabilities | 11,756,506 | 16,917,226 | |
Shareholders' equity | |||
Preferred stock, $.0001 par value Authorized 1,000,000 shares, 206 issued at September 30, 2020 and 2019 | 0 | 0 | |
Common stock, $.0001 par value Authorized 50,000,000 shares 14,839,836 issued and 13,621,406 outstanding at September 30, 2020 and 14,239,836 issued and 13,924,789 outstanding at September 30, 2019 | 1,484 | 1,484 | |
Treasury stock, 1,218,430 shares at September 30, 2020 and 915,047 at September 30, 2019 | (122) | (91) | |
Additional paid in capital | 60,670,699 | 60,938,896 | |
Retained earnings (deficit) | (34,848,032) | (36,275,932) | |
Total shareholders' equity | 25,824,029 | 24,664,357 | |
Total liabilities and shareholders' equity | $ 37,580,535 | $ 41,581,583 |
CONDENSED PARENT COMPANY ONLY_4
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS - BALANCE SHEETS (Parenthetical) (Details) - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 206 | 206 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,839,836 | 14,839,836 |
Common stock, shares outstanding | 13,621,406 | 13,924,789 |
Treasury stock, shares | 1,218,430 | 915,047 |
Parent Company | Reportable legal entities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 206 | 206 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,839,836 | 14,239,836 |
Common stock, shares outstanding | 13,621,406 | 13,924,789 |
Treasury stock, shares | 1,218,430 | 915,047 |
CONDENSED PARENT COMPANY ONLY_5
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS - STATEMENTS OF INCOME (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Income Statements, Captions [Line Items] | ||||||||||
Selling and administrative expenses | $ 9,831,578 | $ 8,857,386 | ||||||||
Net loss from operations before taxes | $ 5,889,687 | $ 294,036 | $ (2,275,040) | $ (239,030) | $ 2,935,153 | $ 1,229,693 | $ (1,420,888) | $ 1,078,454 | 3,669,653 | 3,822,412 |
Interest expense | (486,246) | (1,064,222) | ||||||||
Net loss before tax | 3,576,203 | 2,961,481 | ||||||||
Income tax benefit | 1,143,186 | 968,571 | ||||||||
Net income available to common shareholders | $ 2,124,017 | $ 1,683,910 | ||||||||
Weighted average shares outstanding-basic | 13,621,406 | 13,627,293 | 13,783,546 | 13,911,610 | 13,934,720 | 13,985,579 | 14,060,456 | 14,135,900 | 13,804,835 | 14,064,871 |
Weighted average shares-diluted | 17,054,739 | 13,627,293 | 13,783,546 | 13,911,610 | 17,368,053 | 17,418,912 | 14,060,456 | 17,569,233 | 17,238,168 | 17,498,204 |
Earnings per share-basic available to common shareholders | $ 0.154 | $ 0.120 | ||||||||
Earnings per share-diluted available to common shareholders | $ 0.123 | $ 0.096 | ||||||||
Parent Company | Reportable legal entities | ||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||
Selling and administrative expenses | $ 1,502,575 | $ 1,399,725 | ||||||||
Net loss from operations before taxes | (1,502,575) | (1,399,725) | ||||||||
Other nonoperating expense | (189) | (1,043) | ||||||||
Interest income | 53,249 | 58,023 | ||||||||
Interest expense | (341,312) | (960,068) | ||||||||
Interest allocation to subsidiaries | 323,258 | 885,316 | ||||||||
Net loss before tax | (1,467,569) | (1,417,497) | ||||||||
Income tax benefit | (341,054) | (346,232) | ||||||||
Net loss from parent | (1,126,515) | (1,071,265) | ||||||||
Equity in undistributed income of subsidiaries | 3,559,532 | 3,064,175 | ||||||||
Dividends on preferred stock | (309,000) | (309,000) | ||||||||
Net income available to common shareholders | $ 2,124,017 | $ 1,683,910 | ||||||||
Weighted average shares outstanding-basic | 13,804,835 | 14,064,871 | ||||||||
Weighted average shares-diluted | 17,238,168 | 17,498,204 | ||||||||
Earnings per share-basic available to common shareholders | $ 0.154 | $ 0.120 | ||||||||
Earnings per share-diluted available to common shareholders | $ 0.123 | $ 0.096 |
CONDENSED PARENT COMPANY ONLY_6
CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS - CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | ||
Provision for deferred taxes | $ 329,692 | $ 597,448 |
Depreciation expense | 4,395,362 | 4,157,849 |
Changes in: | ||
(Increase) decrease in prepaid expenses | (603,969) | 1,382,302 |
(Decrease) increase in accounts payable | 2,302,604 | (3,285,252) |
Net cash provided by (used in) operating activities | 14,985,570 | 4,326,870 |
Cash flows from investing activities: | ||
Investment in property & equipment | (3,534,821) | (3,364,985) |
Net cash used in investing activities | (2,766,165) | (2,735,757) |
Cash flows from financing activities: | ||
Borrowings on lines of credit and short-term debt, net of (repayments) | (3,515,867) | 7,956,463 |
Principal payments on long term debt | (13,930,748) | (5,425,251) |
Dividends on common stock | (696,117) | |
Preferred dividends paid | (309,000) | (309,000) |
Treasury stock purchased by company | (268,228) | (300,600) |
Proceeds from long term debt | 13,139,100 | |
Net cash (used in) provided by financing activities | (5,580,860) | 1,921,612 |
Increase (decrease) in cash and cash equivalents | 6,638,545 | 3,512,725 |
Cash and cash equivalents beginning of period | 4,578,275 | 1,065,550 |
Cash and cash equivalents end of period | 11,216,820 | 4,578,275 |
Supplemental schedule of noncash investing and financing activities: | ||
Insurance premiums financed | 3,063,543 | 3,159,083 |
Line of credit refinanced to long-term debt | 10,000,000 | |
Cash paid during the year for: | ||
Interest | 486,246 | 1,064,222 |
Income taxes | 785,630 | 798,430 |
Parent Company | Reportable legal entities | ||
Cash flows from operating activities: | ||
Net (loss) income | 2,433,017 | 1,992,910 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | ||
Provision for deferred taxes | 78,786 | 111,057 |
Depreciation expense | 6,062 | 4,343 |
Equity in undistributed income of subsidiaries | (3,559,532) | (3,064,175) |
Advances from (to) subsidiaries | 16,404,900 | (3,812,109) |
Changes in: | ||
(Increase) decrease in prepaid expenses | (733,098) | 1,493,939 |
(Decrease) increase in accounts payable | (45,150) | 35,082 |
(Decrease) increase in accrued expenses and other current liabilities | (98,843) | 31,076 |
Net cash provided by (used in) operating activities | 14,486,142 | (3,207,877) |
Cash flows from investing activities: | ||
Investment in property & equipment | (16,798) | |
Net cash used in investing activities | (16,798) | |
Cash flows from financing activities: | ||
Borrowings on lines of credit and short-term debt, net of (repayments) | (3,515,867) | 7,956,463 |
Principal payments on long term debt | (9,628,578) | (4,578,905) |
Dividends on common stock | (696,117) | |
Preferred dividends paid | (309,000) | (309,000) |
Treasury stock purchased by company | (268,228) | (300,600) |
Proceeds from long term debt | 66,100 | |
Net cash (used in) provided by financing activities | (14,351,690) | 2,767,958 |
Increase (decrease) in cash and cash equivalents | 117,654 | (439,919) |
Cash and cash equivalents beginning of period | 59,831 | 499,750 |
Cash and cash equivalents end of period | 177,485 | 59,831 |
Supplemental schedule of noncash investing and financing activities: | ||
Insurance premiums financed | 3,063,543 | 3,159,083 |
Accrued dividends on preferred stock | 77,250 | 77,250 |
Line of credit refinanced to long-term debt | 10,000,000 | |
Cash paid during the year for: | ||
Interest | 486,246 | 1,064,222 |
Income taxes | $ 785,630 | $ 798,430 |