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 and nine months ended September 30, 2019. 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
our third-quarter we continued to achieve strong revenue growth in
our electrical construction operations. Our revenue increased
almost 52% over the same quarter last year and we achieved positive
operating income of $2.1 million. With the productivity
improvements in our Texas-Southwest operations, we are well
positioned to capitalize on the growing infrastructure needs in
Texas.”
NINE MONTHS ENDED SEPTEMBER 30, 2019
For the nine months ended September 30, 2019, compared to
the same period in 2018:
- Consolidated revenue increased 34.6% to $136.6 million from
$101.5 million, attributable to increased electrical construction
operations and real estate development operations.
- Electrical construction revenue increased 24.0% to $123.8
million from $99.8 million, primarily due to continued growth in
master service agreements (“MSA”), including service line
expansion, and to a lesser extent, non-MSA customer project
activity.
- Real estate development revenue increased to $12.8 million from
$1.6 million, mainly due to the increase in the number of units
sold and the timing of completion of units available for sale.
- Gross margin on electrical construction declined to 14.7% from
17.7%, attributable to project losses in our Texas-Southwest
operations resulting from weather and project productivity issues,
as well as start-up costs related to the substation service line
expansion in the Texas-Southwest region. Also contributing to the
decrease in gross margin were non-productive crew expenses, which
resulted in an under absorption of our fixed costs in our
Texas-Southwest region. These decreases were partially offset by
margin improvements in our Southeast operations in the third
quarter and expansion efforts in the mid-Atlantic operations.
- Gross margin on real estate development decreased to 27.0% from
37.7%, primarily due to the amount and type of units sold.
- Operating income remained relatively unchanged at $6.6 million
from $6.7 million. For the nine months ended September 30,
2019, compared to the same period in 2018, there was an increase in
depreciation expense and higher selling, general and administrative
expenses, partially offset by higher real estate development and
electrical construction gross profit.
- Net income decreased to $3.8 million, or $0.15 per share,
compared to $4.4 million, or $0.17 per share.
- EBITDA (a non-GAAP measure (1)) was $14.8
million compared to $12.8 million. This increase was primarily due
to the increase in real estate development and electrical
construction operations gross profit, partially offset by the
increase in selling, general and administrative expenses.
THREE MONTHS ENDED SEPTEMBER 30, 2019
For the three months ended September 30, 2019, compared to
the same period in 2018:
- Consolidated revenue increased 51.6% to $44.7 million from
$29.5 million, attributable to increased revenue in electrical
construction and to a lesser extent, real estate development
operations.
- Electrical construction revenue increased 46.3% to $43.2
million from $29.5 million, primarily due to increased revenue
across all regions. The increase in revenue was attributable to
increases in transmission project volume, service line expansion
and continued growth in both MSA and non-MSA customer project
activity.
- Real estate development revenue increased $1.6 million mainly
due to the increase in the number of units sold and the timing of
completion of units available for sale.
- Gross margin on electrical construction grew to 14.8% from
11.5%, attributable to the increase in revenue in the
Texas-Southwest and Southeast operations. The increase in revenue
provided improved coverage of fixed costs for the three months
ended September 30, 2019.
- Gross margin on real estate development increased to 33.5% from
(10.1)%, due to the amount and type of units sold.
- Operating income increased to $2.1 million from an operating
loss of $0.1 million, mainly due to higher electrical construction
and real estate development gross profit, partially offset by
higher selling, general and administrative expenses and
depreciation expenses.
- Net income increased to $1.2 million, or $0.05 per share,
compared to a net loss of $0.2 million, or $0.01 loss per
share.
- EBITDA (a non-GAAP measure (1)) was $4.9
million compared to $2.1 million. This increase was primarily due
to the increase in electrical construction and real estate
development operations gross profit, partially offset by the
increase in selling, general and administrative expenses.
Backlog (a non-GAAP measure
(1))
At September 30, 2019, total backlog increased $7.0
million, or 3.9%, to $187.5 million from $180.6 million at the same
date last year, primarily due to the increase in project specific
firm MSA projects. 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
$3.2 million, or 3.2%, to $96.0 million from $99.2 million at the
same date last year, mainly due to the MSA backlog runoff partially
offset by the award of new MSAs. 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 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 Thursday, November 7, 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/32694/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 Goldfield
Goldfield 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 2019
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 measures used in this
earnings release are more fully described in the accompanying
supplemental data and reconciliation of the non-GAAP financial
measures to the reported GAAP measures. The EBITDA 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. EBITDA should be used to supplement, and not in lieu
of, results prepared in conformity with GAAP. Because not all
companies use identical calculations, the presentations of EBITDA
and Backlog 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
Operations(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
$ |
43,182,197 |
|
|
$ |
29,514,965 |
|
|
$ |
123,773,883 |
|
|
$ |
99,842,651 |
|
Real estate development |
|
|
1,550,684 |
|
|
|
1,777 |
|
|
|
12,819,473 |
|
|
|
1,620,031 |
|
Total revenue |
|
|
44,732,881 |
|
|
|
29,516,742 |
|
|
|
136,593,356 |
|
|
|
101,462,682 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
|
36,789,515 |
|
|
|
26,122,915 |
|
|
|
105,597,926 |
|
|
|
82,192,792 |
|
Real estate development |
|
|
1,031,373 |
|
|
|
1,956 |
|
|
|
9,360,449 |
|
|
|
1,009,061 |
|
Selling, general and administrative |
|
|
2,162,360 |
|
|
|
1,444,983 |
|
|
|
7,033,244 |
|
|
|
5,673,506 |
|
Depreciation and amortization |
|
|
2,728,988 |
|
|
|
2,141,684 |
|
|
|
8,048,549 |
|
|
|
6,031,426 |
|
Gain on sale of property and equipment |
|
|
(45,504 |
) |
|
|
(89,846 |
) |
|
|
(77,571 |
) |
|
|
(155,062 |
) |
Total costs and expenses |
|
|
42,666,732 |
|
|
|
29,621,692 |
|
|
|
129,962,597 |
|
|
|
94,751,723 |
|
Total operating income (loss) |
|
|
2,066,149 |
|
|
|
(104,950 |
) |
|
|
6,630,759 |
|
|
|
6,710,959 |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
28,311 |
|
|
|
12,020 |
|
|
|
71,082 |
|
|
|
28,861 |
|
Interest expense, net of amount capitalized |
|
|
(367,244 |
) |
|
|
(205,203 |
) |
|
|
(1,130,798 |
) |
|
|
(602,502 |
) |
Other income, net |
|
|
27,199 |
|
|
|
23,128 |
|
|
|
91,736 |
|
|
|
60,495 |
|
Total other expense, net |
|
|
(311,734 |
) |
|
|
(170,055 |
) |
|
|
(967,980 |
) |
|
|
(513,146 |
) |
Income before income taxes |
|
|
1,754,415 |
|
|
|
(275,005 |
) |
|
|
5,662,779 |
|
|
|
6,197,813 |
|
Income tax provision |
|
|
592,413 |
|
|
|
(81,851 |
) |
|
|
1,902,034 |
|
|
|
1,833,800 |
|
Net income (loss) |
|
$ |
1,162,002 |
|
|
$ |
(193,154 |
) |
|
$ |
3,760,745 |
|
|
$ |
4,364,013 |
|
Net income (loss) per share of
common stock — basic and diluted |
|
$ |
0.05 |
|
|
$ |
(0.01 |
) |
|
$ |
0.15 |
|
|
$ |
0.17 |
|
Weighted average shares
outstanding — basic and diluted |
|
|
24,522,534 |
|
|
|
25,451,354 |
|
|
|
24,523,731 |
|
|
|
25,451,354 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
|
September 30, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,619,343 |
|
|
$ |
11,376,373 |
|
Accounts receivable and accrued billings, net |
|
|
23,168,109 |
|
|
|
22,236,071 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
|
13,188,343 |
|
|
|
12,030,000 |
|
Income taxes receivable |
|
|
1,484,034 |
|
|
|
1,220,527 |
|
Residential properties under construction |
|
|
1,405,876 |
|
|
|
8,244,995 |
|
Prepaid expenses |
|
|
1,122,788 |
|
|
|
634,069 |
|
Other current assets |
|
|
165,684 |
|
|
|
1,835,743 |
|
Total current assets |
|
|
61,154,177 |
|
|
|
57,577,778 |
|
Property, buildings and
equipment, at cost, net |
|
|
55,034,429 |
|
|
|
48,927,055 |
|
Deferred charges and other
assets |
|
|
12,146,772 |
|
|
|
6,043,642 |
|
Total assets |
|
$ |
128,335,378 |
|
|
$ |
112,548,475 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
16,144,324 |
|
|
$ |
15,999,157 |
|
Current portion of notes payable, net |
|
|
7,615,041 |
|
|
|
7,161,890 |
|
Accrued remediation costs |
|
|
70,528 |
|
|
|
60,101 |
|
Other current liabilities |
|
|
3,094,372 |
|
|
|
1,278,857 |
|
Total current liabilities |
|
|
26,924,265 |
|
|
|
24,500,005 |
|
Deferred income taxes |
|
|
7,746,552 |
|
|
|
6,061,042 |
|
Accrued remediation costs, less
current portion |
|
|
404,036 |
|
|
|
436,982 |
|
Notes payable, less current
portion, net |
|
|
26,360,490 |
|
|
|
21,731,024 |
|
Other accrued liabilities |
|
|
3,695,143 |
|
|
|
213,990 |
|
Total liabilities |
|
|
65,130,486 |
|
|
|
52,943,043 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
2,781,377 |
|
|
|
2,781,377 |
|
Capital surplus |
|
|
18,481,683 |
|
|
|
18,481,683 |
|
Retained earnings |
|
|
45,381,936 |
|
|
|
41,621,191 |
|
Common stock in treasury, at cost |
|
|
(3,440,104 |
) |
|
|
(3,278,819 |
) |
Total stockholders’ equity |
|
|
63,204,892 |
|
|
|
59,605,432 |
|
Total liabilities and
stockholders’ equity |
|
$ |
128,335,378 |
|
|
$ |
112,548,475 |
|
The Goldfield Corporation and
SubsidiariesReconciliation of Non-GAAP Financial
Measures(Unaudited)
EBITDA
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 |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income (loss) (GAAP as reported) |
|
$ |
1,162,002 |
|
|
$ |
(193,154 |
) |
|
$ |
3,760,745 |
|
|
$ |
4,364,013 |
|
Interest expense, net of amount capitalized |
|
|
367,244 |
|
|
|
205,203 |
|
|
|
1,130,798 |
|
|
|
602,502 |
|
Provision for income taxes |
|
|
592,413 |
|
|
|
(81,851 |
) |
|
|
1,902,034 |
|
|
|
1,833,800 |
|
Depreciation and amortization (1) |
|
|
2,728,988 |
|
|
|
2,141,684 |
|
|
|
8,048,549 |
|
|
|
6,031,426 |
|
EBITDA |
|
$ |
4,850,647 |
|
|
$ |
2,071,882 |
|
|
$ |
14,842,126 |
|
|
$ |
12,831,741 |
|
______________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Depreciation and
amortization includes depreciation on property, plant and equipment
and amortization of finite-lived intangible assets. |
|
Backlog
The following table presents a reconciliation of our total
backlog as of September 30, 2019 to our remaining unsatisfied
performance obligation as defined under U.S. GAAP:
|
September 30,
2019 |
|
Total backlog |
$ |
187,511,546 |
|
Estimated MSAs |
|
(134,645,726 |
) |
Estimated firm
(1) |
|
(4,525,506 |
) |
Total unsatisfied performance obligation |
$ |
48,340,314 |
|
______________________________________ |
|
|
|
(1) Represents estimated backlog contract value as
of September 30, 2019, on projects awarded. |
|
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