Company Achieves Record Revenues, Increased Backlog and Invests
for Future Growth and Efficiency
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 six months ended June 30, 2018. Through its
subsidiaries, Power Corporation of America, C and C Power Line,
Inc. and Southeast Power Corporation, Goldfield provides electrical
construction services primarily in the Southeast, mid-Atlantic,
Texas and Southwest regions of the United States.
President and Chief Executive Officer John H. Sottile said, “We
are pleased to announce record second-quarter and six-month revenue
as we experienced overall increased bidding and project activity
and a higher backlog in a healthy market which is very competitive.
Our results in the first half of this year benefited from higher
volume of MSA electrical construction projects awarded and work
completed in the Texas and Southwest and mid-Atlantic regions in
particular, though the project mix afforded us lower margins.
Overall, the healthy economy and strong industry outlook present
many new opportunities for us.”
Three Months Ended June 30, 2018
For the three months ended June 30, 2018, compared to the same
period in 2017:
- Total revenue increased 28.8% to $37.5 million from $29.1
million, primarily from MSA customer project activity in the
mid-Atlantic and Texas and Southwest regions, partially offset by a
decrease in the Southeast region caused by project mix and related
labor requirements.
- Gross margin on electrical construction operations was 19.1%
compared to 25.7%, mainly due to lower margins on a higher volume
of electrical construction projects.
- Operating income decreased to $3.4 million from $4.1 million
due to increases in selling, general and administrative expenses
(“SG&A”) and higher depreciation, partially offset by the
increase in gross margin in Other operations. Lower margin work and
cost increases, despite the higher volume of electrical
construction projects, also contributed to the decrease.
- Net income declined to $2.2 million, or $0.08 per share, from
$2.5 million, or $0.10 per share.
- EBITDA (a non-GAAP measure)(1) was $5.4 million compared to
$5.9 million as a result of the same factors which drove operating
income.
Six Months Ended June 30, 2018
For the six months ended June 30, 2018, compared to the same
period in 2017:
- Total revenue increased 20.2% to $71.9 million from $59.8
million attributable primarily to MSA electrical construction
projects awarded and work completed in the Texas and Southwest and
mid-Atlantic regions.
- Gross margin on electrical construction operations remained
healthy at 20.3% compared to 25.5%.
- Operating income decreased to $6.8 million from $8.4 million
due to changes in project mix which resulted in a higher volume of
lower margin work in a business environment of increased
competition, as well as increases in SG&A expenses and higher
depreciation. Higher wage and salary expense, and to a lesser
extent costs associated with changing our filing status to become
an accelerated filer, were key SG&A items. Higher depreciation
was attributable to an increase in capital expenditures.
- Net income declined to $4.6 million, or $0.18 per share,
compared to $5.2 million, or $0.20 per share.
- EBITDA (a non-GAAP measure)(1) was $10.8 million compared to
$12.0 million as a result of the same factors which drove operating
income.
Backlog
As of June 30, 2018, the Company’s 12-month electrical
construction backlog increased significantly to $85.5 million from
$68.8 million one year ago, while 12-month estimated MSA backlog
decreased to $51.5 million from $55.1 million. Total backlog, which
includes total revenue estimated over the remaining life of the
MSAs plus estimated revenue from fixed-price contracts, increased
12.7% to $146.1 million compared to $129.7 million as of
June 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, August 8, 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/25251/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, Texas and
Southwest regions of the United States. For additional information
on our second-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
Income(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
|
|
|
|
|
|
|
Electrical construction |
$ |
36,195,767 |
|
|
$ |
28,804,467 |
|
|
$ |
70,327,686 |
|
|
$ |
58,253,114 |
|
Other |
1,311,477 |
|
|
305,415 |
|
|
1,618,254 |
|
|
1,580,632 |
|
Total
revenue |
37,507,244 |
|
|
29,109,882 |
|
|
71,945,940 |
|
|
59,833,746 |
|
Costs and expenses |
|
|
|
|
|
|
|
Electrical construction |
29,287,017 |
|
|
21,410,600 |
|
|
56,069,877 |
|
|
43,419,573 |
|
Other |
793,348 |
|
|
216,727 |
|
|
1,007,105 |
|
|
1,091,004 |
|
Selling,
general and administrative |
2,112,110 |
|
|
1,554,782 |
|
|
4,228,523 |
|
|
3,334,756 |
|
Depreciation and amortization |
2,002,233 |
|
|
1,812,597 |
|
|
3,889,742 |
|
|
3,561,488 |
|
(Gain)
loss on sale of property and equipment |
(51,826 |
) |
|
14,138 |
|
|
(65,217 |
) |
|
11,565 |
|
Total
costs and expenses |
34,142,882 |
|
|
25,008,844 |
|
|
65,130,030 |
|
|
51,418,386 |
|
Total
operating income |
3,364,362 |
|
|
4,101,038 |
|
|
6,815,910 |
|
|
8,415,360 |
|
Other income (expense),
net |
|
|
|
|
|
|
|
Interest
income |
10,053 |
|
|
5,855 |
|
|
16,841 |
|
|
13,190 |
|
Interest
expense, net of amount capitalized |
(207,684 |
) |
|
(138,440 |
) |
|
(397,300 |
) |
|
(272,459 |
) |
Other
income, net |
22,274 |
|
|
15,818 |
|
|
37,367 |
|
|
30,467 |
|
Total
other expense, net |
(175,357 |
) |
|
(116,767 |
) |
|
(343,092 |
) |
|
(228,802 |
) |
Income before income
taxes |
3,189,005 |
|
|
3,984,271 |
|
|
6,472,818 |
|
|
8,186,558 |
|
Income tax
provision |
1,037,512 |
|
|
1,466,378 |
|
|
1,915,651 |
|
|
3,003,516 |
|
Net income |
$ |
2,151,493 |
|
|
$ |
2,517,893 |
|
|
$ |
4,557,167 |
|
|
$ |
5,183,042 |
|
|
|
|
|
|
|
|
|
Net income per share of
common stock — basic and diluted |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
0.18 |
|
|
$ |
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)
|
June 30, |
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
9,870,523 |
|
|
$ |
18,529,757 |
|
Accounts
receivable and accrued billings, net |
24,418,346 |
|
|
21,566,842 |
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts |
10,411,674 |
|
|
6,074,346 |
|
Income
taxes receivable |
— |
|
|
619,552 |
|
Residential properties under construction |
4,818,522 |
|
|
2,412,202 |
|
Prepaid
expenses |
1,125,766 |
|
|
993,668 |
|
Other
current assets |
851,602 |
|
|
1,532,110 |
|
Total
current assets |
51,496,433 |
|
|
51,728,477 |
|
|
|
|
|
Property, buildings and
equipment, at cost, net |
40,206,369 |
|
|
36,072,300 |
|
Deferred charges and
other assets |
6,468,791 |
|
|
5,831,163 |
|
Total assets |
$ |
98,171,593 |
|
|
$ |
93,631,940 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable and accrued liabilities |
$ |
11,417,561 |
|
|
$ |
9,379,535 |
|
Current
portion of notes payable, net |
5,064,775 |
|
|
6,099,787 |
|
Income
taxes payable |
276,201 |
|
|
— |
|
Accrued
remediation costs |
73,352 |
|
|
87,553 |
|
Other
current liabilities |
351,389 |
|
|
166,268 |
|
Total
current liabilities |
17,183,278 |
|
|
15,733,143 |
|
|
|
|
|
Deferred income
taxes |
4,951,436 |
|
|
4,698,720 |
|
Accrued remediation
costs, less current portion |
428,976 |
|
|
434,164 |
|
Notes payable, less
current portion, net |
14,197,805 |
|
|
16,151,567 |
|
Other accrued
liabilities |
304,618 |
|
|
66,033 |
|
Total liabilities |
37,066,113 |
|
|
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 |
41,150,607 |
|
|
36,593,440 |
|
Common
stock in treasury, at cost |
(1,308,187 |
) |
|
(1,308,187 |
) |
Total
stockholders’ equity |
61,105,480 |
|
|
56,548,313 |
|
Total liabilities and
stockholders’ equity |
$ |
98,171,593 |
|
|
$ |
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 |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
EBITDA |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income (GAAP as
reported) |
|
$ |
2,151,493 |
|
|
$ |
2,517,893 |
|
|
$ |
4,557,167 |
|
|
$ |
5,183,042 |
|
Interest
expense, net of amount capitalized |
|
207,684 |
|
|
138,440 |
|
|
397,300 |
|
|
272,459 |
|
Provision
for income taxes, net (1) |
|
1,037,512 |
|
|
1,466,378 |
|
|
1,915,651 |
|
|
3,003,516 |
|
Depreciation and amortization (2) |
|
2,002,233 |
|
|
1,812,597 |
|
|
3,889,742 |
|
|
3,561,488 |
|
EBITDA |
|
$ |
5,398,922 |
|
|
$ |
5,935,308 |
|
|
$ |
10,759,860 |
|
|
$ |
12,020,505 |
|
___________ |
|
|
|
|
|
|
|
|
(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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