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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2023.

Energy Services of America Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware

    

20-4606266

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification Number)

75 West 3rd Ave., Huntington, West Virginia

    

25701

(Address of Principal Executive Office)

 

(Zip Code)

(304) 522-3868

(Registrant’s Telephone Number Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

    

Trading Symbols

    

Name of Each Exchange
On Which Registered

Common Stock, Par Value $0.0001

ESOA

The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days. YES NO .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES NO .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   YES  NO 

As of June 11, 2023 there were 16,567,185 outstanding shares of the Registrant’s Common Stock.

Part 1. Financial Information

Item 1. Financial Statements (Unaudited):

Energy Services of America Corporation

Consolidated Balance Sheets

Unaudited

As Restated

June 30, 

September 30, 

    

2023

    

2022

Assets

Current assets

 

  

 

  

Cash and cash equivalents

$

9,038,562

$

7,427,474

Accounts receivable-trade

 

47,875,592

 

38,525,223

Allowance for doubtful accounts

 

(51,063)

 

(70,310)

Retainages receivable

 

7,324,964

 

4,443,679

Other receivables

 

567,031

 

10,866

Contract assets

 

12,198,918

 

16,109,593

Prepaid expenses and other

 

4,849,731

 

3,945,968

Total current assets

 

81,803,735

 

70,392,493

 

 

Property, plant and equipment, at cost

 

82,131,349

 

73,736,433

less accumulated depreciation

 

(45,933,846)

 

(41,074,646)

Total property and equipment, net

 

36,197,503

 

32,661,787

Right-of-use assets-operating lease

3,674,455

1,611,321

Intangible assets, net

3,472,469

3,873,690

Goodwill

4,087,554

4,087,554

Total assets

$

129,235,716

$

112,626,845

 

 

Liabilities and shareholders’ equity

 

 

Current liabilities

 

 

Current maturities of long-term debt

$

4,858,795

$

4,060,016

Lines of credit and short-term borrowings

 

28,248,900

 

23,164,851

Current maturities of operating lease liabilities

1,213,496

588,653

Accounts payable

 

18,833,990

 

20,314,408

Accrued expenses and other current liabilities

 

10,318,491

 

11,266,008

Contract liabilities

 

16,576,181

 

6,027,578

Total current liabilities

 

80,049,853

 

65,421,514

 

 

Long-term debt, less current maturities

 

12,731,183

 

13,494,084

Long-term operating lease liabilities, less current maturities

2,431,780

1,015,624

Deferred tax liability

 

5,155,011

 

4,455,079

Total liabilities

 

100,367,827

 

84,386,301

 

 

  

Shareholders’ equity

 

  

 

  

Common stock, $.0001 par value Authorized 50,000,000 shares, 17,885,615 issued and 16,567,185 outstanding at June 30, 2023 and 17,885,615 issued and 16,667,185 outstanding at September 30, 2022

 

1,789

 

1,789

Treasury stock, 1,318,430 shares at June 30, 2023 and 1,218,430 shares at September 30, 2022

 

(132)

 

(122)

Additional paid in capital

 

60,288,745

 

60,508,350

Retained deficit

 

(31,422,513)

 

(32,269,473)

Total shareholders’ equity

 

28,867,889

 

28,240,544

Total liabilities and shareholders’ equity

$

129,235,716

$

112,626,845

The Accompanying Notes are an Integral Part of These Financial Statements

1

Energy Services of America Corporation

Consolidated Statements of Income

Unaudited

As Restated

As Restated

Three Months Ended

Three Months Ended

Nine Months Ended

Nine Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

    

2023

    

2022

    

2023

    

2022

Revenue

$

85,529,892

$

51,171,939

$

199,245,920

$

129,223,642

 

 

 

 

Cost of revenues

 

74,650,897

 

44,754,346

 

178,480,010

 

114,632,057

 

 

 

 

Gross profit

 

10,878,995

 

6,417,593

 

20,765,910

 

14,591,585

 

 

 

 

Selling and administrative expenses

 

5,283,617

 

3,821,043

 

16,487,502

 

10,870,677

Income from operations

 

5,595,378

 

2,596,550

 

4,278,408

 

3,720,908

 

 

 

 

Other income (expense)

 

 

 

 

Interest income

 

 

 

196

 

576

Other nonoperating expense

 

(72,338)

 

(174,957)

 

(163,525)

 

(438,195)

Interest expense

(639,888)

(231,265)

(1,713,862)

(623,498)

Gain on sale of equipment

 

30,136

 

58,311

 

47,073

 

418,103

 

(682,090)

 

(347,911)

 

(1,830,118)

 

(643,014)

 

 

 

 

Income before income taxes

 

4,913,288

 

2,248,639

 

2,448,290

 

3,077,894

 

 

 

 

Income tax expense

 

1,497,742

 

651,396

 

767,970

 

945,216

 

 

 

 

Net income

$

3,415,546

$

1,597,243

$

1,680,320

$

2,132,678

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding-basic

 

16,602,556

 

16,449,829

 

16,659,169

 

16,270,499

 

 

 

 

Weighted average shares-diluted

 

16,602,556

 

16,449,829

 

16,659,169

 

16,270,499

 

 

 

 

Earnings per share-basic

$

0.21

$

0.10

$

0.10

$

0.13

Earnings per share-diluted

$

0.21

$

0.10

$

0.10

$

0.13

The Accompanying Notes are an Integral Part of These Financial Statements

2

Energy Services of America Corporation

Consolidated Statements of Cash Flows

Unaudited

As Restated

Nine Months Ended

Nine Months Ended

June 30, 

June 30, 

    

2023

    

2022

Cash flows from operating activities:

 

  

 

  

Net income

$

1,680,320

$

2,132,678

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

 

Accreted interest on PPP Loans

74,613

 

74,613

Depreciation expense

 

5,356,166

 

4,006,663

Gain on sale of equipment

 

(47,073)

 

(418,103)

Provision for deferred taxes

699,932

845,216

Amortization of intangible assets

401,221

307,698

Accreted interest on notes payable

31,200

27,326

Increase in accounts receivable

 

(9,369,616)

 

(3,086,194)

Increase in retainage receivable

(2,881,285)

(2,221,588)

(Increase) decrease in other receivables

(556,165)

489,771

Decrease (increase) in contract assets

3,910,675

(3,206,678)

Decrease in prepaid expenses and other

 

2,907,881

 

2,424,047

(Decrease) increase in accounts payable

 

(1,480,418)

 

4,050,532

(Decrease) increase in accrued expenses and other current liabilities

 

(969,652)

 

2,229,419

Increase in contract liabilities

 

10,548,603

 

2,961,585

Net cash provided by operating activities

 

10,306,402

 

10,616,985

 

 

  

Cash flows from investing activities:

 

 

Investment in property and equipment

 

(8,498,746)

 

(4,671,687)

Proceeds from sales of property and equipment

 

546,672

 

643,603

Net cash used in investing activities

 

(7,952,074)

 

(4,028,084)

  

Cash flows from financing activities:

 

 

Preferred stock redemption

(1,210,525)

Dividends on common stock

(833,360)

Treasury stock purchased

(219,615)

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

1,197,792

(4,884,880)

Proceeds from long-term debt

3,100,000

Principal payments on long-term debt

(3,988,057)

(3,324,838)

Net cash used in financing activities

 

(743,240)

 

(9,420,243)

Increase (decrease) in cash and cash equivalents

 

1,611,088

 

(2,831,342)

Cash and cash equivalents beginning of period

 

7,427,474

 

8,226,739

Cash and cash equivalents end of period

$

9,038,562

$

5,395,397

 

 

Supplemental schedule of noncash investing and financing activities:

 

 

Purchases of property & equipment under financing agreements

$

892,735

$

461,784

Prepaid insurance premiums financed

$

3,811,644

$

3,352,971

Debt assumed in acquisitions for equipment

$

$

390,445

Sellers’ note Tri-State Paving acquisition

$

$

936,000

Note payable to finance Tri-State Paving acquisition

$

$

7,500,000

Common stock issued to finance Tri-State Paving acquisition

$

$

1,048,218

Par value of common stock issued from preferred stock conversion

$

$

263

Operating lease right-of-use assets acquired in exchange for operating lease liabilities

$

2,618,530

$

365,379

 

 

Supplemental disclosures of cash flows information:

 

 

Cash paid during the year for:

 

 

Interest

$

1,636,404

$

548,885

Income taxes

$

$

6,706

The Accompanying Notes are an Integral Part of These Financial Statements

3

Energy Services of America Corporation

Consolidated Statements of Changes in Shareholders’ Equity

For the three and nine months ended June 30, 2023 and 2022

Unaudited

Total

Common Stock

Additional Paid

Retained

Treasury

Shareholders’

    

Shares

    

Amount

    

in Capital

    

Deficit

    

Stock

    

Equity

Balance at September 30, 2022, as restated

 

16,667,185

$

1,789

$

60,508,350

$

(32,269,473)

$

(122)

$

28,240,544

 

Net income, as restated

 

 

 

 

138,374

 

138,374

 

Balance at December 31, 2022, as restated

 

16,667,185

$

1,789

$

60,508,350

$

(32,131,099)

$

(122)

$

28,378,918

Net loss

 

(1,873,600)

(1,873,600)

Dividends on common stock ($0.05 per share on 16,667,185 shares)

(833,360)

(833,360)

Treasury stock purchased by company

(32,181)

(71,652)

(3)

(71,655)

Balance at March 31, 2023

 

16,635,004

$

1,789

$

60,436,698

$

(34,838,059)

$

(125)

$

25,600,303

Net income

 

3,415,546

3,415,546

Treasury stock purchased by company

 

(67,819)

(147,953)

(7)

(147,960)

Balance at June 30, 2023

 

16,567,185

$

1,789

$

60,288,745

$

(31,422,513)

$

(132)

$

28,867,889

Total

Common Stock

Additional Paid

Retained

Treasury

Shareholders’

    

Shares

    

Amount

    

in Capital

    

Deficit

    

Stock

    

Equity

Balance at September 30, 2021, as restated

13,621,406

$

1,484

$

60,670,699

$

(36,019,788)

$

(122)

$

24,652,273

Net income, as restated

1,145,836

1,145,836

Preferred share redemption, net of accrued dividends at September 30, 2021

(1,210,525)

(1,210,525)

Preferred share conversion

2,626,492

263

263

Balance at December 31, 2021, as restated

 

16,247,898

$

1,747

$

59,460,174

$

(34,873,952)

$

(122)

$

24,587,847

 

 

 

 

 

 

Net loss, as restated

(610,401)

(610,401)

Balance at March 31, 2022, as restated

 

16,247,898

$

1,747

$

59,460,174

$

(35,484,353)

$

(122)

$

23,977,446

Net income, as restated

1,597,243

1,597,243

Shares issued for Tri-State Paving acquisition

419,287

42

1,048,176

1,048,218

Balance at June 30, 2022, as restated

16,667,185

$

1,789

$

60,508,350

$

(33,887,110)

$

(122)

$

26,622,907

The Accompanying Notes are an Integral Part of These Financial Statements

4

ENERGY SERVICES OF AMERICA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  BUSINESS AND ORGANIZATION

Energy Services of America Corporation (“Energy Services” or the “Company”), formed in 2006, is a contractor and service company that operates primarily in the mid-Atlantic and central regions of the United States and provides services to customers in the natural gas, petroleum, water distribution, automotive, chemical, and power industries. For the gas industry, the Company is primarily engaged in the construction, replacement and repair of natural gas pipelines and storage facilities for utility companies and private natural gas companies. Energy Services is involved in the construction of both interstate and intrastate pipelines, with an emphasis on the latter. For the oil industry, the Company provides a variety of services relating to pipeline, storage facilities and plant work. For the power, chemical, and automotive industries, the Company provides a full range of electrical and mechanical installations and repairs including substation and switchyard services, site preparation, equipment setting, pipe fabrication and installation, packaged buildings, transformers, and other ancillary work with regards thereto. Energy Services’ other services include liquid pipeline construction, pump station construction, production facility construction, water and sewer pipeline installations, various maintenance and repair services and other services related to pipeline construction. The Company has also added the ability to install residential, commercial, and industrial solar systems and perform civil and general contracting services.

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. (“NCS”), 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. Revolt Energy, LLC (“Revolt”), a wholly owned subsidiary of NCS, performs residential solar installation projects. Nitro Electric Company, LLC (“Nitro Electric”), a wholly owned subsidiary of NCS, performs industrial electrical work and is a satellite office registered in Michigan.  Pinnacle Technical Solutions, Inc. (“Pinnacle”), a wholly owned subsidiary of NCS, operates as a data storage facility within Nitro’s office building. Pinnacle is supported by NCS and has no employees of its own. NCS and its subsidiaries will collectively be referred to “Nitro”.

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

West Virginia Pipeline, Inc. (“West Virginia Pipeline” or “WVP”), a wholly owned subsidiary of Energy Services, operates as a gas and water distribution contractor primarily in southern West Virginia. The employees of West Virginia Pipeline are non-union and are managed independently of the Company’s union subsidiaries.

SQP Construction Group, Inc. (“SQP”), a wholly owned subsidiary of Energy Services, operates as a general contractor primarily in West Virginia. SQP engages in the construction and renovation of buildings and other civil construction projects for state and local government agencies and commercial customers. As a general contractor, SQP manages the overall construction project and subcontracts most of the work. The employees of SQP are non-union and are managed independently of the Company’s union subsidiaries.

Tri-State Paving & Sealcoating, Inc. (“TSP” or “Tri-State Paving”), a wholly owned subsidiary of Energy Services, completed the acquisition of substantially all of the assets of Tri-State Paving & Sealcoating, LLC (“Tri-State Paving, LLC”) on April 29, 2022. Tri-State Paving provides utility paving services to water distribution customers in the Charleston, West Virginia, Lexington, Kentucky, and Chattanooga, Tennessee markets. The employees of TSP are non-union and are managed independently of the Company’s union subsidiaries.

Ryan Construction Services Inc. (“Ryan Construction” or “RCS”), a wholly owned subsidiary of Energy Services, formed in August 2022 in connection with the acquisition of substantially all the assets of Ryan Environmental, LLC and Ryan Environmental Transport, LLC (collectively “Ryan Environmental”), provides directional drilling services for broadband service providers along with offering natural gas distribution services, cathodic protection and corrosion prevention services, and civil construction services. Ryan Construction operates primarily in West Virginia and Pennsylvania. The employees of RCS are non-union and are managed independently of the Company’s union subsidiaries.

5

Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the years ended September 30, 2022, and 2021 included in the Company’s Amendment No. 1 to the Company’s Annual Report on Form 10-K/A filed with the SEC on May 31, 2023. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to the interim financial reporting rules and regulations of the SEC. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the three and nine months ended June 30, 2023 and 2022 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Principles of Consolidation

The consolidated financial statements of Energy Services include the accounts of Energy Services, its wholly owned subsidiaries West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J. Hughes and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation. Unless the context requires otherwise, references to Energy Services include Energy Services, West Virginia Pipeline, SQP, Ryan Construction, Tri-State Paving and C.J. Hughes and its subsidiaries.

Use of Estimates and Assumptions

The preparation of financial statements, in conformity with U.S. GAAP, 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.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Please refer to Note 2 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements in the Company’s Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended September 30, 2022 for a more detailed discussion of our significant accounting policies. There were no material changes to these significant accounting policies during the three and nine months ended June 30, 2023.

3. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

On May 12, 2023, the audit committee of the Board of Directors of Energy Services, after considering the recommendation of management, concluded: that (a) the Company’s previously issued audited consolidated financial statements for the fiscal years ended September 30, 2022 and 2021 included in the Company’s annual reports on Form 10-K for the fiscal years ended September 30, 2022 and 2021, and (b) the Company’s unaudited consolidated financial statements for the periods ended June 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022 and December 31, 2022 as reported in the Company’s quarterly reports on Form 10-Q for those periods (together, the “Reports”) should no longer be relied upon and have been restated.

Due to the economic uncertainties created by COVID-19 and limited operating funds available, the Company applied for loans under the Paycheck Protection Program (“PPP”). On April 15, 2020, the Company and its subsidiaries, C.J. Hughes, Contractors Rental, and Nitro, entered into separate PPP notes effective April 7, 2020, with United Bank as the lender (“Lender”) in an aggregate principal amount of $13.1 million pursuant to the PPP (collectively, the “PPP Loans”). In a special meeting held on April 27, 2020, the Board of Directors of the Company unanimously voted to return $3.3 million of the PPP Loans after discussing the financing needs of the Company and subsidiaries. That left the Company and subsidiaries with $9.8 million in PPP Loans to fund operations. During fiscal year 2021, the Company received notice that the Small Business Administration (the “SBA”) had granted forgiveness of the $9.8 million of PPP Loans and the SBA repaid the Lender in full. The forgiveness was recorded as other income for the fiscal year ended September 30, 2021.

6

During April 2023, management received notification from the SBA that one of the Company’s forgiveness applications related to the PPP Loans was under review. As part of the review, the SBA requested additional payroll information. Additionally, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits. The requested information was subsequently provided to the SBA through the Lender. The Company recognizes that there is a possibility that the SBA could reverse its previous determination on the forgiveness of the PPP Loans. As a result of this uncertainty, the Company restated the previously issued financial statements of the Company that were included in the Reports. The Company has recorded a short-term borrowing due to the SBA inquiry for the full $9.8 million, plus accrued interest for all periods presented.

During July 2023, management received notification from the SBA that two additional forgiveness applications related to the PPP Loans were under review. As part of the review, the SBA requested information regarding the ability of the Company’s affiliates to meet SBA size standards and/or PPP corporate maximum limits.  The requested information was subsequently provided to the SBA through the Lender.

Tables for the income statement impact “As previously reported” and “restated” for Paycheck Protection Program loan forgiveness and interest expense for the three and nine months ended June 30, 2022 are below:

Three Months Ended June 30, 2022

As Previously

    

Reported

    

Restated

    

Change

Interest expense

$

206,394

$

231,265

$

24,871

Net income

1,622,114

 

1,597,243

 

(24,871)

Nine Months Ended June 30, 2022

As Previously

    

Reported

    

Restated

    

Change

Interest expense

$

548,885

$

623,498

$

74,613

Net income

 

2,207,291

 

2,132,678

 

(74,613)

A table for the balance sheet impact “As previously reported” and “restated” for Paycheck Protection Program loan forgiveness and interest expense at September 30, 2022 is below:

September 30, 2022

 As Previously

    

Reported

    

Restated

    

Change

Lines of credit and short-term borrowings

$

13,080,320

$

23,164,851

$

10,084,531

Shareholders' equity

 

38,325,075

 

28,240,544

 

(10,084,531)

4.  REVENUE RECOGNITION

Our revenue is primarily derived from construction contracts that can span several quarters. We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606” or “Topic 606”) which provides for a five-step model for recognizing revenue from contracts with customers as follows:

Identify the contract
Identify performance obligations
Determine the transaction price
Allocate the transaction price
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 completeness and accuracy of the original bid;
costs associated with scope changes;
changes in costs of labor and/or materials;

7

extended overhead and other costs due to owner, weather and other delays;
subcontractor performance issues;
changes in productivity expectations;
site conditions that differ from those assumed in the original bid;
changes from original design on design-build projects;
the availability and skill level of workers in the geographic location of the project;
a change in the availability and proximity of equipment and materials;
our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; and
the customer’s ability to properly administer the contract.

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, could have a significant effect on our profitability.

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.

Our contract liabilities consist of provisions for losses and billings in excess of costs and estimated earnings. Provisions for losses, if incurred, are recognized in the consolidated statements of income at the uncompleted performance obligation level for 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.

5.  DISAGGREGATION OF REVENUE

The Company disaggregates revenue based on the following lines of service: (1) Gas & Water Distribution, (2) Gas & Petroleum Transmission, and (3) Electrical, Mechanical, & General services and construction. Our contract types are: Lump Sum, Unit Price, Cost Plus and Time and Materials (“T&M”). The following tables present our disaggregated revenue for the three and nine months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

Electrical,

Gas & Water

Gas & Petroleum

Mechanical, and

Total revenue

    

Distribution

    

Transmission

    

General

    

from contracts

Lump sum contracts

$

$

$

29,132,537

$

29,132,537

Unit price contracts

 

17,906,005

 

28,488,329

 

1,568,962

 

47,963,296

Cost plus and T&M contracts

 

 

 

8,434,059

 

8,434,059

Total revenue from contracts

$

17,906,005

$

28,488,329

$

39,135,558

$

85,529,892

 

 

 

 

Earned over time

$

7,738,419

$

28,488,329

$

35,991,934

$

72,218,682

Earned at point in time

 

10,167,586

 

 

3,143,624

 

13,311,210

Total revenue from contracts

$

17,906,005

$

28,488,329

$

39,135,558

$

85,529,892

8

Three Months Ended June 30, 2022

Electrical,

Gas &Water

Gas & Petroleum

Mechanical, and

Total revenue

    

Distribution

    

Transmission

    

General

    

from contracts

Lump sum contracts

$

$

$

13,033,786

$

13,033,786

Unit price contracts

 

13,667,005

 

15,443,917

 

 

29,110,922

Cost plus and T&M contracts

 

 

 

9,027,231

 

9,027,231

Total revenue from contracts

$

13,667,005

$

15,443,917

$

22,061,017

$

51,171,939

 

 

  

 

  

 

  

Earned over time

$

3,315,407

$

15,443,917

$

21,269,782

$

40,029,106

Earned at point in time

 

10,351,598

 

 

791,235

 

11,142,833

Total revenue from contracts

$

13,667,005

$

15,443,917

$

22,061,017

$

51,171,939

Nine Months Ended June 30, 2023

Electrical,

Gas & Water

Gas & Petroleum

Mechanical, and

Total revenue

    

Distribution

    

Transmission

    

General

    

from contracts

Lump sum contracts

$

$

$

68,633,633

$

68,633,633

Unit price contracts

 

43,825,957

 

50,718,004

 

4,368,041

 

98,912,002

Cost plus and T&M contracts

 

 

 

31,700,285

 

31,700,285

Total revenue from contracts

$

43,825,957

$

50,718,004

$

104,701,959

$

199,245,920