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 
Other1,311,477  305,415  1,618,254  1,580,632 
Total revenue37,507,244  29,109,882  71,945,940  59,833,746 
Costs and expenses       
Electrical construction29,287,017  21,410,600  56,069,877  43,419,573 
Other793,348  216,727  1,007,105  1,091,004 
Selling, general and administrative2,112,110  1,554,782  4,228,523  3,334,756 
Depreciation and amortization2,002,233  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 expenses34,142,882  25,008,844  65,130,030  51,418,386 
Total operating income3,364,362  4,101,038  6,815,910  8,415,360 
Other income (expense), net       
Interest income10,053  5,855  16,841  13,190 
Interest expense, net of amount capitalized(207,684) (138,440) (397,300) (272,459)
Other income, net22,274  15,818  37,367  30,467 
Total other expense, net(175,357) (116,767) (343,092) (228,802)
Income before income taxes3,189,005  3,984,271  6,472,818  8,186,558 
Income tax provision1,037,512  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, net24,418,346  21,566,842 
Costs and estimated earnings in excess of billings on uncompleted contracts10,411,674  6,074,346 
Income taxes receivable  619,552 
Residential properties under construction4,818,522  2,412,202 
Prepaid expenses1,125,766  993,668 
Other current assets851,602  1,532,110 
Total current assets51,496,433  51,728,477 
    
Property, buildings and equipment, at cost, net40,206,369  36,072,300 
Deferred charges and other assets6,468,791  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, net5,064,775  6,099,787 
Income taxes payable276,201   
Accrued remediation costs73,352  87,553 
Other current liabilities351,389  166,268 
Total current liabilities17,183,278  15,733,143 
    
Deferred income taxes4,951,436  4,698,720 
Accrued remediation costs, less current portion428,976  434,164 
Notes payable, less current portion, net14,197,805  16,151,567 
Other accrued liabilities304,618  66,033 
Total liabilities37,066,113  37,083,627 
Commitments and contingencies   
Stockholders’ equity   
Common stock2,781,377  2,781,377 
Capital surplus18,481,683  18,481,683 
Retained earnings41,150,607  36,593,440 
Common stock in treasury, at cost(1,308,187) (1,308,187)
Total stockholders’ equity61,105,480  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.