Company Achieves Record Nine Month
Revenues
The Goldfield Corporation (NYSE American: GV), a leading provider
of electrical construction services for the utility industry and
industrial customers, today announced its financial results for the
nine and three months ended September 30, 2018. Through its
subsidiaries, Power Corporation of America, C and C Power Line,
Inc., Southeast Power Corporation and Precision Foundations, Inc.,
Goldfield provides electrical construction services primarily in
the Southeast, mid-Atlantic, and Texas-Southwest regions of the
United States.
President and Chief Executive Officer John H. Sottile said, “We
are pleased to announce record nine-month revenue. We
experienced increased bidding and project activity, and ended the
third quarter with a strong backlog. Our results for the first nine
months benefited from a higher volume of both MSA and non-MSA
projects. Although work completed in the Texas-Southwest and
mid-Atlantic regions produced strong revenue growth, we experienced
lower margins in a healthy but very competitive market. Overall,
the robust economy and strong industry outlook continue to present
opportunities for us to increase the number of customers we service
and projects available to bid. We maintain a consistent focus
on expanding our geographic reach, service offerings and customer
base.”
Nine Months Ended September 30, 2018
For the nine months ended September 30, 2018, compared to the
same period in 2017:
- Total revenue increased 20.3% to a record $101.5 million from
$84.3 million attributable primarily to master service agreement
(“MSA”) electrical construction projects awarded and work completed
in the Texas-Southwest and mid-Atlantic regions.
- Gross margin on electrical construction operations remained
healthy at 17.7% compared to 22.2%.
- Operating income decreased to $6.7 million from $8.6 million
due to changes in project mix which resulted in a higher volume of
lower margin work, mainly attributable to competitive pressures,
lower volume of storm work and project delays in Texas. Also
contributing to the decrease were increases in selling, general and
administrative expenses (“SG&A”) expenses and higher
depreciation.
- Net income declined to $4.4 million, or $0.17 per share,
compared to $5.0 million, or $0.20 per share.
- EBITDA (a non-GAAP measure)(1) was $12.8
million compared to $13.8 million. This decrease was primarily due
to higher SG&A expenses and lower gross margins for both
electrical construction and Other operations, partially offset by
no discontinued operation expenses and an increase in gain on sale
of property and equipment.
Three Months Ended September 30, 2018
For the three months ended September 30, 2018, compared to the
same period in 2017:
- Total revenue increased 20.4% to $29.5 million from $24.5
million, primarily from non-MSA and MSA customer project activity
in the mid-Atlantic, Texas-Southwest, and Southeast regions,
partially offset by a decrease in other electrical construction
revenue, mainly due to decreased storm work.
- Gross margin on electrical construction operations was 11.5%
compared to 14.0%, mainly due to lower margins on a higher volume
of electrical construction projects.
- Operating loss was $105,000 compared to operating income of
$139,000 in the 2017 period due to the change in electrical
construction project mix to a higher volume of lower margin work.
This change was due to competitive pressures, lower volume of storm
work and project delays in Texas. Also contributing to the decrease
in operating income was the decline in gross margin in Other
operations and an increase in depreciation expense.
- Net loss increased to $193,000, or $(0.01) loss per share, from
$157,000, or $(0.01) loss per share.
- EBITDA (a non-GAAP measure)(1) was $2.1
million compared to $1.8 million. This increase was primarily due
to lower SG&A expenses, no discontinued operation expenses and
an increase in gain on sale of property and equipment, partially
offset by lower gross margin in our Other operations.
Backlog
As of September 30, 2018, the Company’s 12-month electrical
construction backlog increased 6.1% to $99.2 million from $93.6
million one year ago, while 12-month estimated MSA backlog
increased slightly to $59.8 million from $59.5 million. Total
backlog, which includes total revenue estimated over the remaining
life of the MSAs plus estimated revenue from fixed-price contracts,
decreased 11.0% to $180.6 million compared to $202.9 million as of
September 30, 2017. The size and amount of future projects
awarded under MSAs cannot be determined with certainty and revenue
from such contracts may vary substantially from current
estimates.
Backlog is estimated at a particular point in time and is not
determinative of total revenue in any particular period. It does
not reflect future revenue from a significant number of short-term
projects undertaken and completed between the estimated dates.
Conference Call
The Company’s President and Chief Executive Officer John H.
Sottile and Chief Financial Officer Stephen R. Wherry will host a
conference call and webcast to discuss results at 10 a.m. Eastern
time on Wednesday, November 7, 2018. To participate in the
conference call via telephone, please dial (866) 373-3407
(domestic) or (412) 902-1037 (international) at least five minutes
prior to the start of the event. Goldfield will also webcast the
conference call live via the internet. Interested parties may
access the webcast at
https://78449.themediaframe.com/dataconf/productusers/gv/mediaframe/26425/indexl.html
or through the Investor Relations section of the Company’s website
at http://www.goldfieldcorp.com. Please access the website at least
15 minutes prior to the start of the call to register and download
and install any necessary audio software. The webcast will be
archived at this link or through the Investor Relations section of
the Company’s website for six months.
About GoldfieldGoldfield is a leading provider
of electrical construction services engaged in the construction of
electrical infrastructure for the utility industry and industrial
customers, primarily in the Southeast, mid-Atlantic, and
Texas-Southwest regions of the United States. For additional
information on our third-quarter 2018 results, please refer to our
report on Form 10-Q being filed with the Securities and Exchange
Commission and visit the Company’s website at
http://www.goldfieldcorp.com.
(1) Represents Non-GAAP Financial Measure - The
non-GAAP financial measure used in this earnings release is more
fully described in the accompanying supplemental data and
reconciliation of the non-GAAP financial measure to the reported
GAAP measure. The non-GAAP measure in this press release and on The
Goldfield Corporation’s website is provided to enable investors and
analysts to evaluate the Company’s performance excluding the
effects of certain items that impact the comparability of operating
results between reporting periods and compare the Company’s
operating results with those of its competitors. This measure
should be used to supplement, and not in lieu of, results prepared
in conformity with GAAP. Because not all companies use identical
calculations, this presentation of EBITDA may not be comparable to
other similarly-titled measures of other companies.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the “safe harbor” provision of the Private
Securities Litigation Reform Act of 1995 throughout this
document. You can identify these statements by
forward-looking words such as “may,” “will,” “expect,”
“anticipate,” “believe,” “estimate,” “plan,” and “continue” or
similar words. We have based these statements on our current
expectations about future events. Although we believe that our
expectations reflected in or suggested by our forward-looking
statements are reasonable, we cannot assure you that these
expectations will be achieved. Our actual results may differ
materially from what we currently expect. Factors that may affect
the results of our operations include, among others: the level of
construction activities by public utilities; the concentration of
revenue from a limited number of utility customers; the loss of one
or more significant customers; the timing and duration of
construction projects for which we are engaged; our ability to
estimate accurately with respect to fixed price construction
contracts; and heightened competition in the electrical
construction field, including intensification of price competition.
Other factors that may affect the results of our operations
include, among others: adverse weather; natural disasters; effects
of climate changes; changes in generally accepted accounting
principles; ability to obtain necessary permits from regulatory
agencies; our ability to maintain or increase historical revenue
and profit margins; general economic conditions, both nationally
and in our region; adverse legislation or regulations; availability
of skilled construction labor and materials and material increases
in labor and material costs; and our ability to obtain additional
and/or renew financing. Other important factors which could cause
our actual results to differ materially from the forward-looking
statements in this press release are detailed in the Company’s Risk
Factors and Management’s Discussion and Analysis of Financial
Condition and Results of Operation sections of our Annual Report on
Form 10-K and Goldfield’s other filings with the Securities and
Exchange Commission, which are available on Goldfield’s website:
http://www.goldfieldcorp.com. We may not update these
forward-looking statements, even in the event that our situation
changes in the future, except as required by law.
For further information, please contact:The Goldfield
CorporationSteve CarrPhone: (312) 780-7211Email:
scarr@dresnerco.com
The Goldfield Corporation and
SubsidiariesConsolidated Statements of
Operations(Unaudited)
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30, |
|
September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
|
|
|
|
|
|
|
Electrical construction |
$ |
29,514,965 |
|
|
$ |
23,616,373 |
|
|
$ |
99,842,651 |
|
|
$ |
81,869,487 |
|
Other |
1,777 |
|
|
890,842 |
|
|
1,620,031 |
|
|
2,471,473 |
|
Total revenue |
29,516,742 |
|
|
24,507,215 |
|
|
101,462,682 |
|
|
84,340,960 |
|
Costs and expenses |
|
|
|
|
|
|
|
Electrical construction |
26,122,915 |
|
|
20,299,375 |
|
|
82,192,792 |
|
|
63,718,948 |
|
Other |
1,956 |
|
|
600,597 |
|
|
1,009,061 |
|
|
1,691,601 |
|
Selling,
general and administrative |
1,444,983 |
|
|
1,625,027 |
|
|
5,673,506 |
|
|
4,959,782 |
|
Depreciation and amortization |
2,141,684 |
|
|
1,824,875 |
|
|
6,031,426 |
|
|
5,386,364 |
|
(Gain)
loss on sale of property and equipment |
(89,846 |
) |
|
18,594 |
|
|
(155,062 |
) |
|
30,158 |
|
Total
costs and expenses |
29,621,692 |
|
|
24,368,468 |
|
|
94,751,723 |
|
|
75,786,853 |
|
Total operating (loss) income |
(104,950 |
) |
|
138,747 |
|
|
6,710,959 |
|
|
8,554,107 |
|
Other income (expense), net |
|
|
|
|
|
|
|
Interest
income |
12,020 |
|
|
10,320 |
|
|
28,861 |
|
|
23,509 |
|
Interest
expense, net of amount capitalized |
(205,203 |
) |
|
(202,054 |
) |
|
(602,502 |
) |
|
(474,512 |
) |
Other
income, net |
23,128 |
|
|
14,810 |
|
|
60,495 |
|
|
45,277 |
|
Total
other expense, net |
(170,055 |
) |
|
(176,924 |
) |
|
(513,146 |
) |
|
(405,726 |
) |
(Loss) income before income taxes |
(275,005 |
) |
|
(38,177 |
) |
|
6,197,813 |
|
|
8,148,381 |
|
Income tax provision |
(81,851 |
) |
|
15,345 |
|
|
1,833,800 |
|
|
3,018,861 |
|
(Loss) income from continuing operations |
(193,154 |
) |
|
(53,522 |
) |
|
4,364,013 |
|
|
5,129,520 |
|
Loss from discontinued operations, net of income tax benefit of $0,
$61,556, $0 and $61,556, respectively |
— |
|
|
(103,487 |
) |
|
— |
|
|
(103,487 |
) |
Net (loss) income |
$ |
(193,154 |
) |
|
$ |
(157,009 |
) |
|
$ |
4,364,013 |
|
|
$ |
5,026,033 |
|
Net (loss) income per share of common stock — basic and
diluted |
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
0.17 |
|
|
$ |
0.20 |
|
Discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net (loss) income per share of common stock — basic and
diluted |
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.17 |
|
|
$ |
0.20 |
|
Weighted average shares outstanding — basic and diluted |
$ |
25,451,354 |
|
|
$ |
25,451,354 |
|
|
25,451,354 |
|
|
25,451,354 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
13,554,099 |
|
|
$ |
18,529,757 |
|
Accounts receivable and accrued billings, net |
17,639,436 |
|
|
21,566,842 |
|
Costs and estimated earnings in excess of billings
on uncompleted contracts |
15,003,984 |
|
|
6,074,346 |
|
Income taxes receivable |
720,221 |
|
|
619,552 |
|
Residential properties under construction |
6,804,309 |
|
|
2,412,202 |
|
Prepaid expenses |
1,201,772 |
|
|
993,668 |
|
Other current assets |
975,453 |
|
|
1,532,110 |
|
Total current assets |
55,899,274 |
|
|
51,728,477 |
|
|
|
|
|
Property, buildings and equipment, at cost, net |
47,466,464 |
|
|
36,072,300 |
|
Deferred charges and other assets |
6,469,811 |
|
|
5,831,163 |
|
Total assets |
$ |
109,835,549 |
|
|
$ |
93,631,940 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
$ |
16,601,639 |
|
|
$ |
9,379,535 |
|
Current portion of notes payable, net |
6,897,725 |
|
|
6,099,787 |
|
Accrued remediation costs |
69,283 |
|
|
87,553 |
|
Other current liabilities |
441,618 |
|
|
166,268 |
|
Total current liabilities |
24,010,265 |
|
|
15,733,143 |
|
|
|
|
|
Deferred income taxes |
5,687,507 |
|
|
4,698,720 |
|
Accrued remediation costs, less current portion |
428,976 |
|
|
434,164 |
|
Notes payable, less current portion, net |
18,521,537 |
|
|
16,151,567 |
|
Other accrued liabilities |
274,938 |
|
|
66,033 |
|
Total liabilities |
48,923,223 |
|
|
37,083,627 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity |
|
|
|
Common stock |
2,781,377 |
|
|
2,781,377 |
|
Capital surplus |
18,481,683 |
|
|
18,481,683 |
|
Retained earnings |
40,957,453 |
|
|
36,593,440 |
|
Common stock in treasury, at cost |
(1,308,187 |
) |
|
(1,308,187 |
) |
Total stockholders’ equity |
60,912,326 |
|
|
56,548,313 |
|
Total liabilities and stockholders’ equity |
$ |
109,835,549 |
|
|
$ |
93,631,940 |
|
The Goldfield Corporation and
SubsidiariesReconciliation of Non-GAAP Financial
Measures(Unaudited)
EBITDA, a non-GAAP performance measure used by management, is
defined as net income (loss) plus: interest expense, provision
(benefit) for income taxes and depreciation and amortization, as
shown in the table below. EBITDA, a non-GAAP financial measure,
does not purport to be an alternative to net income (loss) as a
measure of operating performance. Because not all companies use
identical calculations, this presentation of EBITDA may not be
comparable to other similarly-titled measures of other companies.
We use, and we believe investors benefit from the presentation of,
EBITDA in evaluating our operating performance because it provides
us and our investors with an additional tool to compare our
operating performance on a consistent basis by removing the impact
of certain items that management believes do not directly reflect
our core operations. We believe that EBITDA is useful to investors
and other external users of our financial statements in evaluating
our operating performance because EBITDA is widely used by
investors to measure a company’s operating performance without
regard to items such as interest expense, taxes, and depreciation
and amortization, which can vary substantially from company to
company depending upon accounting methods and book value of assets,
capital structure and the method by which assets were acquired.
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
September 30, |
|
September 30, |
EBITDA |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (loss) income (GAAP as reported) |
|
$ |
(193,154 |
) |
|
$ |
(157,009 |
) |
|
$ |
4,364,013 |
|
|
$ |
5,026,033 |
|
Interest expense, net of amount capitalized |
|
205,203 |
|
|
202,054 |
|
|
602,502 |
|
|
474,512 |
|
Provision for income taxes, net
(1) |
|
(81,851 |
) |
|
(46,211 |
) |
|
1,833,800 |
|
|
2,957,305 |
|
Depreciation and amortization
(2) |
|
2,141,684 |
|
|
1,824,875 |
|
|
6,031,426 |
|
|
5,386,364 |
|
EBITDA |
|
$ |
2,071,882 |
|
|
$ |
1,823,709 |
|
|
$ |
12,831,741 |
|
|
$ |
13,844,214 |
|
___________ |
|
|
|
|
|
|
|
|
(1) Provision for income tax, net
is equal to the total amount of tax provision, which includes the
tax benefit for discontinued operations. (2)
Depreciation and amortization includes depreciation on property,
plant and equipment and amortization of finite-lived intangible
assets. |
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