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Goldfield Announces First-Quarter 2017 Results

MELBOURNE, Fla., May 04, 2017 (GLOBE NEWSWIRE) -- The Goldfield Corporation (NYSE MKT:GV) today announced financial results for the three months ended March 31, 2017. Goldfield is headquartered in Melbourne, Florida, and 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.

President and Chief Executive Officer John H. Sottile said, “Our 2017 first-quarter electrical construction revenue and operating income continued at nearly the same strong level achieved in the fourth quarter of 2016. On a year over year basis, our results declined in the 2017 period because of the inclusion of certain large, higher margin fixed-price projects in the first quarter of 2016, which were substantially completed in the first half of 2016.

“During the first quarter of 2017, we experienced growth in our Texas operations and other master service agreement, or MSA, projects. As of March 31, 2017, our estimated 12-month MSA backlog grew 70 percent to $53 million from $31 million a year ago, and our estimated 12-month combined backlog grew 17.4 percent to $79 million from $68 million a year ago.

“We also significantly increased the level of our capital investments to $6 million this quarter to upgrade our fleet and to support the Company’s future growth and efficiencies. We believe that these investments will build greater long-term shareholder value. With a healthy backlog and long-term customer relationships, we remain confident in Goldfield’s future,” Mr. Sottile concluded.

Three Months Ended March 31, 2017

For the three months ended March 31, 2017 compared to the same period in 2016:

  • Total revenue decreased 14.1% to $30.7 million from $35.8 million, attributable to the inclusion in the 2016 period of certain large, higher margin fixed-price projects, partially offset by continued growth in Texas operations and other MSA projects.
  • Gross margin on electrical construction operations remained strong at 25.3%, compared to 27.8%.
  • Operating income decreased to $4.3 million from $7.0 million because of the inclusion in the first quarter of 2016 of certain large, higher margin fixed-price projects.
  • Net income declined to $2.7 million, or $0.10 per share, from $4.3 million, or $0.17 per share.
  • EBITDA (a non-GAAP measure)(1) was $6.1 million compared to $8.5 million as a result of the same factors which drove operating income.

Backlog

As of March 31, 2017, the Company’s 12-month electrical construction backlog grew $11.8 million (17.4%), to $79.5 million from $67.7 million a year ago, due to favorable timing in the release of MSA projects. Estimated MSA backlog increased $1.8 million to $125.9 million while project-specific firm backlog decreased as a result of the completion of several large fixed-price contracts in 2016 and early 2017. Total backlog, which includes total revenue estimated over the remaining life of the MSAs plus estimated revenue from fixed-price contracts, was $152.3 million as of March 31, 2017, compared to $160.7 million as of March 31, 2016. 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.

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 first quarter 2017 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.


The Goldfield Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
    Three Months Ended
    March 31,
    2017   2016
Revenue        
Electrical construction   $ 29,448,647     $ 34,841,504  
Other   1,275,217     917,480  
Total revenue   30,723,864     35,758,984  
Costs and expenses        
Electrical construction   22,008,973     25,156,975  
Other   874,277     657,329  
Selling, general and administrative   1,779,972     1,430,414  
Depreciation and amortization   1,748,892     1,537,974  
(Gain) loss on sale of property and equipment   (2,572 )   19,437  
Total costs and expenses   26,409,542     28,802,129  
Total operating income   4,314,322     6,956,855  
Other income (expense), net        
Interest income   7,336     6,820  
Interest expense, net of amount capitalized   (134,020 )   (159,548 )
Other income, net   14,649     15,378  
Total other expense, net   (112,035 )   (137,350 )
Income from continuing operations before income taxes   4,202,287     6,819,505  
Income tax provision   1,537,138     2,519,489  
Income from continuing operations   2,665,149     4,300,016  
Loss from discontinued operations, net of income tax benefit of $0 in 2017 and $23,884 in 2016       (39,845 )
Net income   $ 2,665,149     $ 4,260,171  
Net income per share of common stock — basic and diluted        
Continuing operations   $ 0.10     $ 0.17  
Discontinued operations        
Net income   $ 0.10     $ 0.17  
Weighted average shares outstanding — basic and diluted   25,451,354     25,451,354  


The Goldfield Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
 
  March 31,   December 31,
  2017   2016
ASSETS      
Current assets      
Cash and cash equivalents $ 14,228,271     $ 20,599,648  
Accounts receivable and accrued billings, net 16,970,860     19,094,407  
Costs and estimated earnings in excess of billings on uncompleted contracts 10,403,910     7,313,099  
Income taxes receivable     533,837  
Residential properties under construction 1,389,764     1,552,131  
Prepaid expenses 1,820,770     1,037,715  
Other current assets 1,386,620     1,298,044  
Total current assets 46,200,195     51,428,881  
       
Property, buildings and equipment, at cost, net 37,388,016     33,245,947  
Deferred charges and other assets 6,161,253     6,627,329  
Total assets $ 89,749,464     $ 91,302,157  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities      
Accounts payable and accrued liabilities $ 8,086,382     $ 11,386,119  
Current portion of notes payable, net 6,102,928     6,101,855  
Income taxes payable 1,241,528      
Accrued remediation costs 85,036     102,526  
Other current liabilities 520,231     845,057  
Total current liabilities 16,036,105     18,435,557  
       
Deferred income taxes 7,913,016     8,204,324  
Accrued remediation costs, less current portion 112,380     112,380  
Notes payable, less current portion, net 14,705,165     16,231,373  
Other accrued liabilities 67,087     67,961  
Total liabilities 38,833,753     43,051,595  
Commitments and contingencies      
Stockholdersequity      
Common stock 2,781,377     2,781,377  
Capital surplus 18,481,683     18,481,683  
Retained earnings 30,960,838     28,295,689  
Common stock in treasury, at cost (1,308,187 )   (1,308,187 )
Total stockholdersequity 50,915,711     48,250,562  
Total liabilities and stockholdersequity $ 89,749,464     $ 91,302,157  

/EIN News/ --

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
    March 31,
EBITDA   2017   2016
Net income (GAAP as reported)   $ 2,665,149     $ 4,260,171  
Interest expense, net of amount capitalized   134,020     159,548  
Provision for income taxes, net (1)   1,537,138     2,495,605  
Depreciation and amortization (2)   1,748,892     1,537,974  
EBITDA   $ 6,085,199     $ 8,453,298  
___________        
(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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