Compared to the March 2020 quarter, the March 2021 quarter improved, in part due to the December 2020 acquisition of West Virginia Pipeline (WVP). As typical during the winter, EBITDA was negative at $0.8 million, but it was an improvement over the 2Q2020 EBITDA loss of $1.2 million due to higher revenue and gross profit, which more than offset higher G&A expense. Compared to our estimate, revenue was lower by $0.9 million and costs were slightly lower by $0.5 million so gross profit was $0.4 million lower than expected and EBITDA was $0.7 million lower than expected.Moving FY2021 EBITDA to $8.0 million from $9.1 million to reflect quarterly results. Our estimate is based on total revenue of $133.6 million and gross profit of $17.3 million. We estimate that gross margin will approximate 12.9% with EBITDA margin of 6.0%. Current backlog of $61.2 million supports our outlook.Virtual non-deal roadshow (VNDR) last week covered broad themes of recovery from COVID-19, growth through acquisition and maintaining solid financials.PPP loan forgiveness and pending litigation could boost liquidity in FY2021. If all or part of the PPP loan of $9.8 million is forgiven and pending litigation is settled, liquidity could materially expand. While the timing on the PPP loan forgiveness and litigation are difficult to predict, we expect clarity on both issues to develop over the next few quarters. Maintaining Outperform rating and price target of $2.58/share. While the stock is up 106% this year, recent performance has been mixed with a 7% gain in April offset by a 6% loss in May. Given recent moves to expand, like the WVP acquisition, and improve operating visibility, we believe that the shift toward a more sustainable business model should help the multiple expand. Currently, ESOA is trading at an enterprise value multiple of 5.8x FY2021E EBITDA, compared to an average multiple of ~11x for a universe of larger E&C comps, and we believe that the current discount of about 50% should narrow into the 35-40%% range. Read More >>