Goldfield Announces Second-Quarter and Six Month 2018 Results

Company Achieves Record Revenues, Increased Backlog and Invests for Future Growth and Efficiency

MELBOURNE, Fla., Aug. 07, 2018 (GLOBE NEWSWIRE) -- 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 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, 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 Companys Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operation sections of our Annual Report on Form 10-K and Goldfields other filings with the Securities and Exchange Commission, which are available on Goldfields 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 Corporation
Steve Carr
Phone: (312) 780-7211
Email:  scarr@dresnerco.com

The Goldfield Corporation and Subsidiaries
Consolidated 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 Subsidiaries

Condensed 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 Subsidiaries

Reconciliation 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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Source: The Goldfield Corporation