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Goldfield Achieves Record Revenue and Earnings in 2016

Highest Annual Revenue And Earnings In 110-Year Public Company History

Fifth Consecutive Year of Record Revenue

MELBOURNE, Fla., March 15, 2017 (GLOBE NEWSWIRE) -- The Goldfield Corporation (NYSE MKT:GV) today announced financial results for the three months and year ended December 31, 2016. The Goldfield Corporation headquartered in Florida, through its subsidiaries, Power Corporation of America, Southeast Power Corporation and C and C Power Line, Inc., is a leading provider of electrical construction services for the utility industry and industrial customers, with operations primarily in the Southeast and mid-Atlantic regions of the United States and Texas.

/EIN News/ -- President and Chief Executive Officer John H. Sottile said, “We are proud of our accomplishments in 2016, as revenue grew 8.2% and earnings per share improved 183% over 2015. In 2016, we also realized our fifth consecutive year of record revenues. We believe that the strategies which helped us achieve these milestones will continue to serve us well. Additionally, over the past five years our revenue has grown nearly 300 percent while earnings improved from $0.03 per share to $0.51 per share. This demonstrates our ability to grow our business, strengthen our operations and deliver results to our stockholders while successfully and safely executing projects and meeting the needs of our customers. We anticipate continuing strength in infrastructure spending, particularly in transmission construction, and believe we are well positioned to secure new projects in our markets.”

Year Ended December 31, 2016

For the year ended December 31, 2016 compared to 2015

  • Revenue increased 8.2% to a record $130.4 million from $120.6 million, attributable to continued growth in fixed-price contracts and other electrical construction work, partially offset by lower master service agreement volume, due to customer project scheduling.
  • Income from continuing operations before taxes increased 155.0% to $20.9 million from $8.2 million, fueled by a 93.2% growth in electrical construction operations income before income taxes (a non-GAAP measure) (1) resulting from higher revenue from several large projects and sharply improved margins.
  • Net income grew to a record $13.0 million, or $0.51 per share, from $4.5 million, or $0.18 per share.
  • Margins on electrical construction operations operating income (a non-GAAP measure) (1) increased to 19.7% from 11.0% due to improved performance on several projects.
  • EBITDA (a non-GAAP measure) (1) grew to $27.6 million from $14.9 million as a result of the same factors which drove the growth in pre-tax operating income.

Three months ended December 31, 2016

For the three months ended December 31, 2016 compared to 2015

  • Revenue increased 7.6% to $31.8 million from $29.5 million driven by improved electrical construction revenue in both transmission and other electrical construction projects.
  • Income from continuing operations before taxes increased 9.2% to $4.3 million from $3.9 million.
  • Net income grew to $2.6 million, or $0.10 per share, from $2.3 million, or $0.09 per share.
  • Margins on electrical construction operations operating income (a non-GAAP measure) (1) decreased to 16.1% from 17.7% due to more favorable margins on certain projects last year.
  • EBITDA (a non-GAAP measure) (1) improved to $6.1 million from $5.7 million as a result of the same factors which drove the growth in pre-tax operating income.

Backlog

As of December 31, 2016, the Company’s 12-month electrical construction backlog increased to $97.6 million from $84.7 million as of December 31, 2015. Total backlog, which includes total revenue estimated over the remaining life of a master service agreement (MSA) plus estimated revenue from fixed-price contracts, was $190.0 million as of December 31, 2016, compared to $202.9 million as of year-end 2015. This decline resulted from completion of some MSA work, not replaced by new work and the reduction in estimated work under certain MSAs. 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 only 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. The Company’s electrical construction revenue in 2016 exceeded its 12-month backlog as of December 31, 2015 by 48.5%.

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 and mid-Atlantic regions of the United States and Texas. For additional information on our 2016 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 non-GAAP financial measures to the reported GAAP measures. The non-GAAP measures in this press release and on The Goldfield Corporation’s website are 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. These measures 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 electrical construction operations operating income (loss), electrical construction operations income (loss) before taxes and 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.

 
The Goldfield Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
  Three Months Ended   Year Ended December 31,
  December 31,   December 31,
  2016   2015   2016   2015
Revenue              
Electrical construction $ 30,385,541     $ 29,106,590     $ 125,771,361     $ 119,616,561  
Other 1,368,303     401,508     4,652,102     954,610  
Total revenue 31,753,844     29,508,098     130,423,463     120,571,171  
Costs and expenses              
Electrical construction 23,470,017     22,304,579     93,566,045     99,726,789  
Other 944,660     283,365     3,242,887     785,405  
Selling, general and administrative 1,306,026     1,195,492     5,913,132     4,747,492  
Depreciation and amortization 1,640,086     1,609,873     6,312,164     6,559,241  
(Gain) loss on sale of property and equipment (16,621 )   44,148     (17,535 )   (22,840 )
Total costs and expenses 27,344,168     25,437,457     109,016,693     111,796,087  
Total operating income 4,409,676     4,070,641     21,406,770     8,775,084  
Other income (expense), net              
Interest income 8,096     5,824     33,465     20,727  
Interest expense, net of amount capitalized (133,863 )   (158,118 )   (591,176 )   (667,596 )
Other income, net 26,102     28,828     68,465     75,880  
Total other expense, net (99,665 )   (123,466 )   (489,246 )   (570,989 )
Income from continuing operations before income taxes 4,310,011     3,947,175     20,917,524     8,204,095  
Income tax provision 1,720,401     1,631,602     7,809,768     3,378,205  
Income from continuing operations 2,589,610     2,315,573     13,107,756     4,825,890  
Loss from discontinued operations, net of income tax benefit of $0, $6,509, $66,077 and $200,759, respectively
    (32,793 )   (108,007 )   (332,748 )
Net income $ 2,589,610     $ 2,282,780     $ 12,999,749     $ 4,493,142  
Net income (loss) per share of common stock — basic and diluted              
Continuing operations $ 0.10     $ 0.09     $ 0.52     $ 0.19  
Discontinued operations             (0.01 )
Net income $ 0.10     $ 0.09     $ 0.51     $ 0.18  
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)
 
  December 31,   December 31,
  2016   2015
ASSETS      
Current assets      
Cash and cash equivalents $ 20,599,648     $ 11,374,238  
Accounts receivable and accrued billings, net 19,094,407     17,250,067  
Costs and estimated earnings in excess of billings on uncompleted contracts 7,313,099     10,292,199  
Income taxes receivable 533,837      
Residential properties under construction 1,552,131     145,450  
Prepaid expenses 1,037,715     1,210,780  
Deferred income taxes     773,245  
Other current assets 1,298,044     1,188,630  
Total current assets 51,428,881     42,234,609  
       
Property, buildings and equipment, at cost, net 33,245,947     34,671,947  
Deferred charges and other assets 6,627,329     4,257,051  
Total assets $ 91,302,157     $ 81,163,607  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities      
Accounts payable and accrued liabilities $ 11,386,119     $ 10,067,553  
Current portion of notes payable, net 6,101,855     5,815,510  
Income taxes payable     483,763  
Accrued remediation costs 102,526     135,786  
Other current liabilities 845,057     234,161  
Total current liabilities 18,435,557     16,736,773  
       
Deferred income taxes 8,204,324     8,328,492  
Accrued remediation costs, less current portion 112,380     107,429  
Notes payable, less current portion, net 16,231,373     20,656,402  
Other accrued liabilities 67,961     83,698  
Total liabilities 43,051,595     45,912,794  
Commitments and contingencies      
Stockholders’ equity      
Common stock 2,781,377     2,781,377  
Capital surplus 18,481,683     18,481,683  
Retained earnings 28,295,689     15,295,940  
Common stock in treasury, at cost (1,308,187 )   (1,308,187 )
Total stockholders’ equity 48,250,562     35,250,813  
Total liabilities and stockholders’ equity $ 91,302,157     $ 81,163,607  


The Goldfield Corporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Electrical construction operations operating income (loss), is defined as total operating income (loss) adjusted for non-electrical construction activity within total operating income (loss) including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, and gain or loss on sale of property and equipment. Electrical construction operations operating income (loss), a non-GAAP financial measure, does not purport to be an alternative to the Company’s total operating income (loss) as a measure of operations. Because not all companies use identical calculations, this presentation of electrical construction operations operating income (loss) may not be comparable to other similarly-titled measures of other companies. We believe investors may benefit from the presentation of electrical construction operations operating income (loss) in evaluating our operating performance because it provides 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 and is useful in comparing our operating results with those of our competitors.

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
Electrical Construction Operations Operating Income   2016   2015   2016   2015
Total operating income (GAAP as reported)   $ 4,409,676     $ 4,070,641     $ 21,406,770     $ 8,775,084  
Total operating income (GAAP as reported) as a percentage of total revenue of $31,753,844, $29,508,098, $130,423,463 and $120,571,171, respectively   13.9 %   13.8 %   16.4 %   7.3 %
Other operations gross margin   (423,643 )   (118,143 )   (1,409,215 )   (169,205 )
Non-electrical construction selling, general and administrative   856,744     1,144,854     4,647,321     4,443,178  
Non-electrical construction depreciation and amortization   34,280     41,834     132,333     134,771  
Non-electrical construction loss on sale of property and equipment   206     113     206     113  
Electrical construction operations operating income   $ 4,877,263     $ 5,139,299     $ 24,777,415     $ 13,183,941  
Electrical construction operations operating income as a percentage of electrical construction revenue of $30,385,541, $29,106,590, $125,771,361 and $119,616,561, respectively   16.1 %   17.7 %   19.7 %   11.0 %

The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Electrical construction operations income (loss) before income taxes, is defined as consolidated income (loss) from continuing operations before income taxes adjusted for non-electrical construction activity within income (loss) from continuing operations before income taxes including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, gain or loss on sale of property and equipment, interest income, interest expense, and other income. Electrical construction operations income (loss) before income taxes, a non-GAAP financial measure, does not purport to be an alternative to the Company’s consolidated income (loss) from continuing operations before income taxes as a measure of income (loss). Because not all companies use identical calculations, this presentation of electrical construction operations income (loss) before income taxes may not be comparable to other similarly-titled measures of other companies. We believe investors may benefit from the presentation of electrical construction operations income (loss) before income taxes in evaluating our performance because it provides our investors with an additional tool to compare our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core results and is useful in comparing our results with those of our competitors.

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
Electrical Construction Operations Income Before Income Taxes   2016   2015   2016   2015
Total income from continuing operations before income taxes (GAAP as reported)   $ 4,310,011     $ 3,947,175     $ 20,917,524     $ 8,204,095  
Other operations gross margin   (423,643 )   (118,143 )   (1,409,215 )   (169,205 )
Non-electrical construction selling, general and administrative   856,744     1,144,854     4,647,321     4,443,178  
Non-electrical construction depreciation and amortization   34,280     41,834     132,333     134,771  
Non-electrical construction loss on sale of property and equipment   206     113     206     113  
Non-electrical construction interest income   (3,065 )   (1,501 )   (10,791 )   (7,672 )
Non-electrical construction interest expense   2,349         2,349      
Non-electrical construction other income, net   (25,172 )   (28,083 )   (62,044 )   (72,109 )
Electrical construction operations income before income taxes   $ 4,751,710     $ 4,986,249     $ 24,217,683     $ 12,533,171  

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   Twelve Months Ended
    December 31,   December 31,
EBITDA   2016   2015   2016   2015
Net income (GAAP as reported)   $ 2,589,610     $ 2,282,780     $ 12,999,749     $ 4,493,142  
Interest expense, net of amount capitalized   133,863     158,118     591,176     667,596  
Provision for income taxes, net (1)   1,720,401     1,625,093     7,743,691     3,177,446  
Depreciation and amortization (2)   1,640,086     1,609,873     6,312,164     6,559,241  
EBITDA   $ 6,083,960     $ 5,675,864     $ 27,646,780     $ 14,897,425  
___________                
(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.

 

For further information, please contact:
The Goldfield Corporation
Contact: Kristine Walczak
Phone: (312) 780-7205
Email:  kwalczak@dresnerco.com

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