The Goldfield Corporation (NYSE American: GV), a leading provider
of electrical construction services for the utility industry and
industrial customers, today announced strongly improved financial
results for the three and twelve months ended December 31,
2019, over the same periods of 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
2019, we successfully executed the goals we set at the beginning of
the year, including growing our Texas-Southwest operations across
multiple service lines, expanding our substation business,
increasing bidding opportunities throughout our subsidiaries and
delivering cost savings in our electrical construction operations
through the purchase of equipment held under master lease
agreements. These initiatives, along with strong fourth-quarter
performance, produced record revenue in our electrical construction
operations and enabled us to improve our gross margins.”
Mr. Sottile concluded, “We believe the operational initiatives
we have implemented along with service line expansions will
continue to provide opportunities to grow our geographic customer
base while strengthening the services offered to existing
customers. We anticipate the momentum we have built will continue
through 2020. In January we were awarded multi-year MSA contracts
with an aggregate value exceeding $240 million. Work under these
contracts is expected to ramp up in the second-quarter of
2020.”
YEAR ENDED DECEMBER 31, 2019
For the year ended December 31, 2019, compared to 2018:
- Consolidated revenue increased $42.5 million, or 30.8%, to
$180.6 million from $138.1 million, attributable to improved
electrical construction and real estate development
operations.
- Electrical construction revenue increased $31.3 million, or
22.9%, to $167.8 million from $136.5 million, primarily due to
increases in both non-master service agreements and master service
agreements (“MSA”) transmission project volume in the Southeast
region, higher transmission project volume and service line
expansion in the Texas-Southwest region, as well as service line
expansion with existing MSA customers in the mid-Atlantic region,
partially offset by a decrease in storm work.
- Real estate development revenue improved to $12.9 million from
$1.6 million mainly due to an increase in the number of units sold
and the timing of completion of units available for sale.
- Gross margin on electrical construction improved to 16.7% from
16.5%.
- Gross margin on real estate development decreased to 27.2% from
37.6% primarily due to the number and type of units sold.
- Operating income grew 48.3% to $11.2 million from $7.6 million
mainly due to improved results in both electrical construction and
real estate development segments.
- Net income increased 33.8% to $6.7 million, or $0.27 per share,
from $5.0 million, or $0.20 per share.
- EBITDA (a non-GAAP measure (1)) was $22.3
million compared to $16.1 million. This increase was primarily due
to improved electrical construction and real estate development
operations gross profit, partially offset by higher selling,
general and administrative expenses.
Quarter Ended December 31, 2019
For the quarter ended December 31, 2019, compared to the
same period in 2018:
- Consolidated revenue increased 20.1% to $44.1 million from
$36.7 million, attributable to improved electrical construction
operations.
- Electrical construction revenue increased 20.0% to $44.0
million from $36.7 million primarily due to increased revenue in
both the Texas-Southwest and Southeast regions, which was
attributable to continued growth in both MSA and non-MSA customer
project activity, as well as service line expansion. These
increases were partially offset by a decrease in storm work.
- Real estate development revenue for both quarters was
insignificant.
- Gross margin on electrical construction grew to 22.2% from
13.4%, primarily attributable to the favorable close out of certain
projects in Texas and to a lesser extent improved margins in the
foundation operations as a result of higher volumes.
- Gross margin on real estate development for both quarters was
insignificant.
- Operating income increased to $4.6 million from $0.9 million,
mainly due to improved electrical construction gross profit.
- Net income increased to $3.0 million, or $0.12 per share, from
$0.7 million, or $0.03 per share.
- EBITDA (a non-GAAP measure (1)) increased to
$7.4 million compared to $3.3 million primarily due to improved
electrical construction gross profit, partially offset by higher
selling, general and administrative expenses.
Backlog (a non-GAAP measure
(1))
At December 31, 2019, total backlog increased 28.9% to
$276.4 million from $214.5 million at December 31, 2018,
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 increased
39.5% to $142.1 million from $101.8 million at December 31,
2018, mainly due to increases in MSA backlog.
Subsequent to December 31, 2019, the Company was awarded
multiple new MSAs with existing customers, amounting to
approximately $242.0 million in additional backlog. These new
awards increased the estimated total backlog to a record high of
approximately $502.0 million as of January 31, 2020. Approximately
$31.5 million of the backlog awarded subsequent to December 31,
2019 is estimated to be completed in 2020.
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, March 12, 2020. 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/35969/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 fourth quarter 2019
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 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; global pandemics; 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
CorporationKristine WalczakT:
312-898-3072kwalczak@effectivecorpcom.com
The Goldfield Corporation and
SubsidiariesConsolidated Statements of
Operations(Unaudited)
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
$ |
44,005,940 |
|
|
$ |
36,683,860 |
|
|
$ |
167,779,823 |
|
|
$ |
136,526,511 |
|
Real estate development |
|
|
46,423 |
|
|
|
2,300 |
|
|
|
12,865,895 |
|
|
|
1,622,331 |
|
Total revenue |
|
|
44,052,363 |
|
|
|
36,686,160 |
|
|
|
180,645,718 |
|
|
|
138,148,842 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
|
34,222,551 |
|
|
|
31,783,364 |
|
|
|
139,820,478 |
|
|
|
113,976,157 |
|
Real estate development |
|
|
2,514 |
|
|
|
3,037 |
|
|
|
9,362,963 |
|
|
|
1,012,098 |
|
Selling, general and administrative |
|
|
2,418,272 |
|
|
|
1,662,970 |
|
|
|
9,451,515 |
|
|
|
7,336,475 |
|
Depreciation and amortization |
|
|
2,797,785 |
|
|
|
2,405,545 |
|
|
|
10,846,334 |
|
|
|
8,436,972 |
|
Loss (gain) on sale of property and equipment |
|
|
26,448 |
|
|
|
(21,501 |
) |
|
|
(51,123 |
) |
|
|
(176,564 |
) |
Total costs and expenses |
|
|
39,467,570 |
|
|
|
35,833,415 |
|
|
|
169,430,167 |
|
|
|
130,585,138 |
|
Total operating income |
|
|
4,584,793 |
|
|
|
852,745 |
|
|
|
11,215,551 |
|
|
|
7,563,704 |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
26,967 |
|
|
|
23,427 |
|
|
|
98,048 |
|
|
|
52,288 |
|
Interest expense, net of amount capitalized |
|
|
(314,732 |
) |
|
|
(273,144 |
) |
|
|
(1,445,528 |
) |
|
|
(875,646 |
) |
Other income, net |
|
|
30,173 |
|
|
|
23,856 |
|
|
|
121,909 |
|
|
|
84,351 |
|
Total other expense, net |
|
|
(257,592 |
) |
|
|
(225,861 |
) |
|
|
(1,225,571 |
) |
|
|
(739,007 |
) |
Income before income taxes |
|
|
4,327,201 |
|
|
|
626,884 |
|
|
|
9,989,980 |
|
|
|
6,824,697 |
|
Income tax provision |
|
|
1,361,339 |
|
|
|
(36,854 |
) |
|
|
3,263,373 |
|
|
|
1,796,946 |
|
Net income |
|
$ |
2,965,862 |
|
|
$ |
663,738 |
|
|
$ |
6,726,607 |
|
|
$ |
5,027,751 |
|
Net income per share of common
stock — basic and diluted |
|
$ |
0.12 |
|
|
$ |
0.03 |
|
|
$ |
0.27 |
|
|
$ |
0.20 |
|
Weighted average shares
outstanding — basic and diluted |
|
|
24,522,534 |
|
|
|
25,293,725 |
|
|
|
24,523,429 |
|
|
|
25,411,623 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
23,272,156 |
|
|
$ |
11,376,373 |
|
Accounts receivable and accrued billings, net |
|
|
23,930,655 |
|
|
|
22,236,071 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
|
9,321,368 |
|
|
|
12,030,000 |
|
Income taxes receivable |
|
|
1,482,618 |
|
|
|
1,220,527 |
|
Residential properties under construction |
|
|
2,060,364 |
|
|
|
8,244,995 |
|
Prepaid expenses |
|
|
924,733 |
|
|
|
634,069 |
|
Other current assets |
|
|
46,186 |
|
|
|
1,835,743 |
|
Total current assets |
|
|
61,038,080 |
|
|
|
57,577,778 |
|
Property, buildings and
equipment, at cost, net |
|
|
55,073,579 |
|
|
|
48,927,055 |
|
Deferred charges and other
assets |
|
|
13,255,519 |
|
|
|
6,043,642 |
|
Total assets |
|
$ |
129,367,178 |
|
|
$ |
112,548,475 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
13,881,277 |
|
|
$ |
15,999,157 |
|
Current portion of notes payable, net |
|
|
7,769,497 |
|
|
|
7,161,890 |
|
Accrued remediation costs |
|
|
75,545 |
|
|
|
60,101 |
|
Other current liabilities |
|
|
2,612,449 |
|
|
|
1,278,857 |
|
Total current liabilities |
|
|
24,338,768 |
|
|
|
24,500,005 |
|
Deferred income taxes |
|
|
9,008,765 |
|
|
|
6,061,042 |
|
Accrued remediation costs, less
current portion |
|
|
398,877 |
|
|
|
436,982 |
|
Notes payable, less current
portion, net |
|
|
24,402,926 |
|
|
|
21,731,024 |
|
Other accrued liabilities |
|
|
5,047,088 |
|
|
|
213,990 |
|
Total liabilities |
|
|
63,196,424 |
|
|
|
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 |
|
|
48,347,798 |
|
|
|
41,621,191 |
|
Common stock in treasury, at cost |
|
|
(3,440,104 |
) |
|
|
(3,278,819 |
) |
Total stockholders’ equity |
|
|
66,170,754 |
|
|
|
59,605,432 |
|
Total liabilities and
stockholders’ equity |
|
$ |
129,367,178 |
|
|
$ |
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 |
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
EBITDA |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income (GAAP as reported) |
|
$ |
2,965,862 |
|
|
$ |
663,738 |
|
|
$ |
6,726,607 |
|
|
$ |
5,027,751 |
|
Interest expense, net of amount capitalized |
|
|
314,732 |
|
|
|
273,144 |
|
|
|
1,445,528 |
|
|
|
875,646 |
|
Provision for income taxes |
|
|
1,361,339 |
|
|
|
(36,854 |
) |
|
|
3,263,373 |
|
|
|
1,796,946 |
|
Depreciation and amortization (1) |
|
|
2,797,785 |
|
|
|
2,405,545 |
|
|
|
10,846,334 |
|
|
|
8,436,972 |
|
EBITDA |
|
$ |
7,439,718 |
|
|
$ |
3,305,573 |
|
|
$ |
22,281,842 |
|
|
$ |
16,137,315 |
|
______________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, 2019 to our remaining unsatisfied
performance obligation as defined under U.S. GAAP:
|
December 31,2019 |
|
Total backlog |
$ |
276,391,364 |
|
Estimated MSAs |
|
(198,035,808 |
) |
Estimated firm
(1) |
|
(9,814,819 |
) |
Total unsatisfied performance obligation |
$ |
68,540,737 |
|
______________________________________ |
|
|
|
(1) Represents estimated backlog contract value as
of December 31, 2019, on projects awarded. |
|
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