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
three months and full year ended December 31, 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. To a lesser extent, Goldfield is also engaged in
real estate operations focused on the development of residential
properties on the east coast of Central Florida.
President and Chief Executive Officer John H. Sottile said, “In
2018 Goldfield achieved record revenue of $138.1 million, an
increase of 21.2% from 2017. While we are encouraged by our strong
revenue growth, our results were impacted by lower profit margins
resulting from escalating costs and competitive pressures in our
electrical construction segment. We are in the process of bidding
certain substantial MSA contracts with some of our largest
customers with the goal of improving future profit margins.”
Sottile concluded, “As we look ahead to 2019, we see the
potential for significant growth in both our customer base and
services across our Texas-Southwest and mid-Atlantic regions, with
particular focus on increasing EPC (engineering, procurement and
construction) opportunities. Our labor force remains strong, and we
believe we have the right team in place to execute our projects and
to build on our momentum in 2019. In our real estate development
operations, we expect to see a positive impact on both revenue and
profit in the first half of 2019 associated with the closing of
sales from recently completed real estate projects.”
Year Ended December 31, 2018
For the year ended December 31, 2018, compared to 2017:
- Consolidated revenue increased 21.2% to a record $138.1 million
from $114.0 million, attributable to increased electrical
construction operations.
- Electrical construction revenue increased 25.1% to $136.5
million from $109.2 million primarily due to increases in both
master service agreements (“MSA”) and non-MSA customer project
activity.
- Real estate development revenue decreased to $1.6 million from
$4.8 million mainly due to the reduced number of completed units
available for sale through year-end.
- Gross margin on electrical construction decreased to 16.5% from
20.6%, attributable to a change in project mix, resulting in a
higher volume of lower margin projects mainly due to increased
competition.
- Gross margin on real estate development was 37.6% compared to
34.4%.
- Operating income decreased to $7.6 million from $10.2 million,
mainly due to an increase in depreciation expense, a decrease in
real estate development activity and lower margins on electrical
construction projects.
- Net income decreased to $5.0 million, or $0.20 per share,
compared to $8.3 million, or $0.33 per share.
- EBITDA (a non-GAAP measure)(1) was $16.1
million compared to $17.1 million. This decrease was primarily due
to the decrease in real estate development segment margin, and
higher SG&A expenses, partially offset by an increase in gain
on sale of property and equipment.
Quarter Ended December 31, 2018
For the quarter ended December 31, 2018, compared to the same
period in 2017:
- Total revenue increased 23.9% to $36.7 million from $29.6
million, due to the increases in electrical construction
operations.
- Electrical construction revenue increased 34.4% to $36.7
million from $27.3 million, primarily due to increases in both MSA
and storm work project activity.
- Real estate development revenue was not significant for the
quarter ended December 31, 2018. In 2017 such revenue was $2.3
million. The decrease in revenue was due to the reduced number of
completed units available for sale through year-end.
- Gross margin on electrical construction decreased to 13.4% from
15.7%, attributable to a change in project mix, resulting in a
higher volume of lower margin projects mainly due to increased
competition.
- Gross margin on real estate development was (32.0)% compared to
37.4%, mainly due to the decline in the number of completed units
available for sale through year-end.
- Operating income decreased to $853,000 from $1.6 million,
mainly due to a decrease in real estate development activity and an
increase in depreciation expense.
- Net income decreased to $664,000, or $0.03 per share, from $3.3
million, or $0.13 per share. Net income for the three months ended
December 31, 2017, included a one-time $2.5 million, or $0.10 per
share, income tax benefit primarily due to the enactment of the Tax
Cuts and Jobs Act in 2017.
- EBITDA (a non-GAAP measure)(1) was $3.3
million compared to $3.2 million. This increase was primarily due
to higher gross margin for electrical construction and an increase
in gain on sale of property and equipment, partially offset by
lower gross margin in our real estate development.
Backlog
At December 31, 2018, total backlog of $214.5 million
remained approximately unchanged from December 31, 2017. Total
backlog includes total revenue estimated over the remaining life of
the MSAs plus estimated revenue from fixed-price contracts.
The Company’s 12-month electrical construction backlog decreased
7.6% to $101.8 million from $110.2 million in 2017, mainly due to
MSA backlog run-off and adjustments to existing MSA backlog
estimates. The impact 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.
Stock Buy Back Program
The Company’s Board of Directors has extended the Company’s
Stock Repurchase plan from September 30, 2019 until September 30,
2020 and has increased the number of shares available for purchase
under the plan. The plan previously authorized the repurchase of up
to 3,500,000 shares, of which 3,273,880 have been repurchased to
date. The revised plan will permit an additional 2,500,000 shares
to be repurchased, increasing the amount available for repurchase
to 2,726,120 shares.
Stock repurchases may be made through a variety of methods,
including open market or privately negotiated transactions. The
timing and number of shares repurchased will depend on a variety of
factors, including price, general business and market conditions,
and alternative investment opportunities. Goldfield’s stock
repurchase program does not obligate it to repurchase any specific
dollar value or number of shares of stock, and may be suspended,
increased, extended, or discontinued by the Company’s Board of
Directors at any time.
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, March 13, 2019. 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/28407/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 fourth-quarter 2018 results, please refer to our
report on Form 10-K 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
CorporationRobert Winters or Josh LittmanPhone: (312)
445-2870Email: gv@alpha-ir.com
The Goldfield Corporation and
SubsidiariesConsolidated Statements of
Income(Unaudited)
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
|
|
|
|
|
|
|
Electrical construction |
$ |
36,683,860 |
|
|
$ |
27,284,989 |
|
|
$ |
136,526,511 |
|
|
$ |
109,154,476 |
|
Real
estate development |
2,300 |
|
|
2,327,569 |
|
|
1,622,331 |
|
|
4,799,043 |
|
Total revenue |
36,686,160 |
|
|
29,612,558 |
|
|
138,148,842 |
|
|
113,953,519 |
|
Costs and expenses |
|
|
|
|
|
|
|
Electrical construction |
31,783,364 |
|
|
22,995,464 |
|
|
113,976,157 |
|
|
86,714,412 |
|
Real
estate development |
3,037 |
|
|
1,456,189 |
|
|
1,012,098 |
|
|
3,147,791 |
|
Selling,
general and administrative |
1,662,970 |
|
|
1,651,533 |
|
|
7,336,475 |
|
|
6,611,315 |
|
Depreciation and amortization |
2,405,545 |
|
|
1,831,537 |
|
|
8,436,972 |
|
|
7,217,901 |
|
(Gain)
loss on sale of property and equipment |
(21,501 |
) |
|
46,652 |
|
|
(176,564 |
) |
|
76,810 |
|
Total costs and expenses |
35,833,415 |
|
|
27,981,375 |
|
|
130,585,138 |
|
|
103,768,229 |
|
Total operating income |
852,745 |
|
|
1,631,183 |
|
|
7,563,704 |
|
|
10,185,290 |
|
Other income (expense),
net |
|
|
|
|
|
|
|
Interest
income |
23,427 |
|
|
8,187 |
|
|
52,288 |
|
|
31,696 |
|
Interest
expense, net of amount capitalized |
(273,144 |
) |
|
(190,756 |
) |
|
(875,646 |
) |
|
(665,268 |
) |
Other
income, net |
23,856 |
|
|
12,376 |
|
|
84,351 |
|
|
57,654 |
|
Total other expense, net |
(225,861 |
) |
|
(170,193 |
) |
|
(739,007 |
) |
|
(575,918 |
) |
Income before income
taxes |
626,884 |
|
|
1,460,990 |
|
|
6,824,697 |
|
|
9,609,372 |
|
Income tax
provision |
(36,854 |
) |
|
(1,982,864 |
) |
|
1,796,946 |
|
|
1,035,997 |
|
Income from continuing
operations |
663,738 |
|
|
3,443,854 |
|
|
5,027,751 |
|
|
8,573,375 |
|
Loss from discontinued
operations, net of income taxbenefit of $0, $102,679, $0 and
$164,235, respectively |
— |
|
|
(172,137 |
) |
|
— |
|
|
(275,624 |
) |
Net income |
$ |
663,738 |
|
|
$ |
3,271,717 |
|
|
$ |
5,027,751 |
|
|
$ |
8,297,751 |
|
Net income per share of
common stock — basic and diluted |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.03 |
|
|
$ |
0.14 |
|
|
$ |
0.20 |
|
|
$ |
0.34 |
|
Discontinued operations |
— |
|
|
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
Net income per share of
common stock — basic and diluted |
$ |
0.03 |
|
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
0.33 |
|
Weighted average shares
outstanding — basic and diluted |
25,293,725 |
|
|
25,451,354 |
|
|
25,411,623 |
|
|
25,451,354 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
11,376,373 |
|
|
$ |
18,529,757 |
|
Accounts
receivable and accrued billings, net |
22,236,071 |
|
|
21,566,842 |
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts |
12,030,000 |
|
|
6,074,346 |
|
Income
taxes receivable |
1,220,527 |
|
|
619,552 |
|
Residential properties under construction |
8,244,995 |
|
|
2,412,202 |
|
Prepaid
expenses |
634,069 |
|
|
993,668 |
|
Other
current assets |
1,835,743 |
|
|
1,532,110 |
|
Total current assets |
57,577,778 |
|
|
51,728,477 |
|
|
|
|
|
Property, buildings and
equipment, at cost, net |
48,927,055 |
|
|
36,072,300 |
|
Deferred charges and
other assets |
6,043,642 |
|
|
5,831,163 |
|
Total assets |
$ |
112,548,475 |
|
|
$ |
93,631,940 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable and accrued liabilities |
$ |
15,999,157 |
|
|
$ |
9,379,535 |
|
Current
portion of notes payable, net |
7,161,890 |
|
|
6,099,787 |
|
Accrued
remediation costs |
60,101 |
|
|
87,553 |
|
Other
current liabilities |
1,278,857 |
|
|
166,268 |
|
Total current liabilities |
24,500,005 |
|
|
15,733,143 |
|
|
|
|
|
Deferred income
taxes |
6,061,042 |
|
|
4,698,720 |
|
Accrued remediation
costs, less current portion |
436,982 |
|
|
434,164 |
|
Notes payable, less
current portion, net |
21,731,024 |
|
|
16,151,567 |
|
Other accrued
liabilities |
213,990 |
|
|
66,033 |
|
Total liabilities |
52,943,043 |
|
|
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 |
41,621,191 |
|
|
36,593,440 |
|
Common
stock in treasury, at cost |
(3,278,819 |
) |
|
(1,308,187 |
) |
Total stockholders’ equity |
59,605,432 |
|
|
56,548,313 |
|
Total liabilities and
stockholders’ equity |
$ |
112,548,475 |
|
|
$ |
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 |
|
Twelve Months Ended |
|
|
December 31, |
|
December 31, |
EBITDA |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income (GAAP as
reported) |
|
$ |
663,738 |
|
|
$ |
3,271,717 |
|
|
$ |
5,027,751 |
|
|
$ |
8,297,751 |
|
Interest
expense, net of amount capitalized |
|
273,144 |
|
|
190,756 |
|
|
875,646 |
|
|
665,268 |
|
Provision
for income taxes, net (1) |
|
(36,854 |
) |
|
(2,085,543 |
) |
|
1,796,946 |
|
|
871,762 |
|
Depreciation and amortization (2) |
|
2,405,545 |
|
|
1,831,537 |
|
|
8,436,972 |
|
|
7,217,901 |
|
EBITDA |
|
$ |
3,305,573 |
|
|
$ |
3,208,467 |
|
|
$ |
16,137,315 |
|
|
$ |
17,052,682 |
|
___________ |
|
|
|
|
|
|
|
|
(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 include
depreciation on property, plant and equipment and amortization of
finite-lived intangible assets. |
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