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, 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, “We
continue to achieve strong revenue growth in our electrical
construction business. However, our bottom line has been negatively
impacted by adverse weather conditions and unanticipated production
issues encountered on some projects which have led to costly and
less efficient use of manpower and equipment. Recently, we have
secured additional new projects that are expected to have a
positive impact on revenue in our Texas-Southwest operations during
the second half of 2019. The increased revenue is expected to
reduce non-productive crew expenses and the under absorption of
fixed costs.”
SIX MONTHS ENDED JUNE 30, 2019
For the six months ended June 30, 2019, compared to the
same period in 2018:
- Consolidated revenue increased 27.7% to $91.9 million
from $71.9 million, attributable to increased electrical
construction operations and real estate development
operations.
- Electrical construction revenue increased 14.6%
to $80.6 million from $70.3 million primarily due to
continued growth in non-master service agreements (“MSA”) and to a
lesser extent MSA customer project activity combined with service
line expansion.
- Real estate development revenue increased to $11.3
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 14.6% from 20.3%, 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.
- Gross margin on real estate development decreased
to 26.1% from 37.8% primarily due to the amount and type
of units sold.
- Operating income decreased to $4.6 million
from $6.8 million, mainly due to lower margins on electrical
construction projects, an increase in depreciation expense and
higher selling, general and administrative expenses, partially
offset by higher real estate development activity.
- Net income decreased to $2.6 million, or $0.11
per share, compared to $4.6 million, or $0.18 per share.
- EBITDA (a non-GAAP measure)(1) was $10.0
million compared to $10.8 million. This decrease was
primarily due to the decrease in electrical construction margins
and the increase in selling, general and administrative expenses,
partially offset by the increase in real estate development segment
operations.
THREE MONTHS ENDED JUNE 30, 2019
For the three months ended June 30, 2019, compared to
the same period in 2018:
- Consolidated revenue increased 18.3% to $44.4
million from $37.5 million, attributable to increased revenue
in both real estate development and electrical construction
operations.
- Electrical construction revenue increased 8.3%
to $39.2 million from $36.2 million primarily due to
service line expansion and continued growth in both non-MSA and MSA
customer project activity.
- Real estate development revenue increased to $5.2
million from $1.3 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 14.5% from 19.1%, attributable to non-productive crew
expenses, resulting in an under absorption of our fixed costs in
our Texas-Southwest operations. This decrease was partially
offset by margin improvement in our Southeast operations and
expansion efforts in the mid-Atlantic operations.
- Gross margin on real estate development decreased
to 20.0% from 39.5% primarily due to the amount and type
of units sold.
- Operating income decreased to $1.6 million from $3.4
million, mainly due to lower margins on electrical construction
projects, an increase in depreciation expense and higher selling,
general and administrative expenses, partially offset by higher
real estate development activity.
- Net income decreased to $0.8 million, or $0.03
per share, compared to $2.2 million, or $0.08 per share.
- EBITDA (a non-GAAP measure)(1) was $4.5
million compared to $5.4 million. This decrease was
primarily due to the decrease in electrical construction margins
and the increase in selling, general and administrative expenses,
partially offset by the increase in real estate development segment
operations.
Backlog (a non-GAAP
measure)(1)
At June 30, 2019, total backlog increased $53.4
million, or 36.5%, to $199.5 million from $146.1
million at the same date last year, primarily due to the increase
in estimated MSA projects, which includes the addition of four new
MSA customers, partially offset by existing MSA backlog run-off and
adjustments to existing MSA backlog estimates. 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 $21.1 million, or 24.7%,
to $106.7 million from $85.5 million at the same date
last year, mainly due to the increase in MSA project activity
partially offset by 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.
Subsequent to June 30, 2019, we were awarded a new MSA from an
existing customer. We estimate approximately $20.0 million in
additional estimated MSA backlog from this MSA, of which $4.0
million is estimated to be completed over the next 12 months.
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 Thursday, August 8, 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/31174/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 second 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
Income(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
$ |
39,204,368 |
|
|
$ |
36,195,767 |
|
|
$ |
80,591,687 |
|
|
$ |
70,327,686 |
|
Real estate development |
|
|
5,175,851 |
|
|
|
1,311,477 |
|
|
|
11,268,788 |
|
|
|
1,618,254 |
|
Total revenue |
|
|
44,380,219 |
|
|
|
37,507,244 |
|
|
|
91,860,475 |
|
|
|
71,945,940 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
|
33,516,400 |
|
|
|
29,287,017 |
|
|
|
68,808,411 |
|
|
|
56,069,877 |
|
Real estate development |
|
|
4,139,420 |
|
|
|
793,348 |
|
|
|
8,329,075 |
|
|
|
1,007,105 |
|
Selling, general and administrative |
|
|
2,342,561 |
|
|
|
2,112,110 |
|
|
|
4,870,883 |
|
|
|
4,228,523 |
|
Depreciation and amortization |
|
|
2,738,483 |
|
|
|
2,002,233 |
|
|
|
5,319,562 |
|
|
|
3,889,742 |
|
Gain on sale of property and equipment |
|
|
(6,216 |
) |
|
|
(51,826 |
) |
|
|
(32,067 |
) |
|
|
(65,217 |
) |
Total costs and expenses |
|
|
42,730,648 |
|
|
|
34,142,882 |
|
|
|
87,295,864 |
|
|
|
65,130,030 |
|
Total operating income |
|
|
1,649,571 |
|
|
|
3,364,362 |
|
|
|
4,564,611 |
|
|
|
6,815,910 |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
31,218 |
|
|
|
10,053 |
|
|
|
42,770 |
|
|
|
16,841 |
|
Interest expense, net of amount capitalized |
|
|
(411,562 |
) |
|
|
(207,684 |
) |
|
|
(763,553 |
) |
|
|
(397,300 |
) |
Other income, net |
|
|
32,252 |
|
|
|
22,274 |
|
|
|
64,536 |
|
|
|
37,367 |
|
Total other expense, net |
|
|
(348,092 |
) |
|
|
(175,357 |
) |
|
|
(656,247 |
) |
|
|
(343,092 |
) |
Income before income taxes |
|
|
1,301,479 |
|
|
|
3,189,005 |
|
|
|
3,908,364 |
|
|
|
6,472,818 |
|
Income tax provision |
|
|
482,357 |
|
|
|
1,037,512 |
|
|
|
1,309,621 |
|
|
|
1,915,651 |
|
Net income |
|
$ |
819,122 |
|
|
$ |
2,151,493 |
|
|
$ |
2,598,743 |
|
|
$ |
4,557,167 |
|
Net income per share of common
stock — basic and diluted |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
0.11 |
|
|
$ |
0.18 |
|
Weighted average shares
outstanding — basic and diluted |
|
|
24,522,534 |
|
|
|
25,451,354 |
|
|
|
24,524,339 |
|
|
|
25,451,354 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
|
June 30, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,473,938 |
|
|
$ |
11,376,373 |
|
Accounts receivable and accrued billings, net |
|
|
22,479,886 |
|
|
|
22,236,071 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
|
15,270,062 |
|
|
|
12,030,000 |
|
Income taxes receivable |
|
|
1,454,638 |
|
|
|
1,220,527 |
|
Residential properties under construction |
|
|
573,236 |
|
|
|
8,244,995 |
|
Real estate inventory |
|
|
1,026,968 |
|
|
|
— |
|
Prepaid expenses |
|
|
1,487,549 |
|
|
|
634,069 |
|
Other current assets |
|
|
634,961 |
|
|
|
1,835,743 |
|
Total current assets |
|
|
58,401,238 |
|
|
|
57,577,778 |
|
Property, buildings and
equipment, at cost, net |
|
|
55,683,924 |
|
|
|
48,927,055 |
|
Deferred charges and other
assets |
|
|
12,297,689 |
|
|
|
6,043,642 |
|
Total assets |
|
$ |
126,382,851 |
|
|
$ |
112,548,475 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
13,503,637 |
|
|
$ |
15,999,157 |
|
Current portion of notes payable, net |
|
|
7,458,207 |
|
|
|
7,161,890 |
|
Accrued remediation costs |
|
|
69,686 |
|
|
|
60,101 |
|
Other current liabilities |
|
|
4,013,100 |
|
|
|
1,278,857 |
|
Total current liabilities |
|
|
25,044,630 |
|
|
|
24,500,005 |
|
Deferred income taxes |
|
|
7,199,743 |
|
|
|
6,061,042 |
|
Accrued remediation costs, less
current portion |
|
|
411,856 |
|
|
|
436,982 |
|
Notes payable, less current
portion, net |
|
|
28,303,522 |
|
|
|
21,731,024 |
|
Other accrued liabilities |
|
|
3,380,210 |
|
|
|
213,990 |
|
Total liabilities |
|
|
64,339,961 |
|
|
|
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 |
|
|
44,219,934 |
|
|
|
41,621,191 |
|
Common stock in treasury, at cost |
|
|
(3,440,104 |
) |
|
|
(3,278,819 |
) |
Total stockholders’ equity |
|
|
62,042,890 |
|
|
|
59,605,432 |
|
Total liabilities and
stockholders’ equity |
|
$ |
126,382,851 |
|
|
$ |
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 |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
EBITDA |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
Net income (GAAP as reported) |
|
$ |
819,122 |
|
|
$ |
2,151,493 |
|
|
$ |
2,598,743 |
|
|
$ |
4,557,167 |
Interest expense, net of amount capitalized |
|
|
411,562 |
|
|
|
207,684 |
|
|
|
763,553 |
|
|
|
397,300 |
Provision for income taxes, net (1) |
|
|
482,357 |
|
|
|
1,037,512 |
|
|
|
1,309,621 |
|
|
|
1,915,651 |
Depreciation and amortization (2) |
|
|
2,738,483 |
|
|
|
2,002,233 |
|
|
|
5,319,562 |
|
|
|
3,889,742 |
EBITDA |
|
$ |
4,451,524 |
|
|
$ |
5,398,922 |
|
|
$ |
9,991,479 |
|
|
$ |
10,759,860 |
(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.
Backlog
The following table presents a reconciliation of our total
backlog as of June 30, 2019 to our remaining unsatisfied
performance obligation as defined under U.S. GAAP:
|
|
|
|
|
|
June 30,
2019 |
|
Total backlog |
|
|
|
|
|
$ |
199,492,280 |
|
Estimated MSAs |
|
|
|
|
|
|
(146,211,174 |
) |
Estimated firm
(1) |
|
|
|
|
|
|
(1,566,313 |
) |
Total unsatisfied performance obligation |
|
|
|
|
|
$ |
51,714,793 |
|
(1) Represents estimated backlog contract value as of June 30,
2019, on projects awarded.
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