The Goldfield Corporation (NYSE American:GV) released the comments
made earlier today by Mr. John H. Sottile, President and Chief
Executive Officer, at The Goldfield Corporation’s annual meeting of
stockholders. Goldfield is headquartered in Melbourne, Florida, and
through its subsidiaries, Power Corporation of America, C and C
Power Line, Inc. and Southeast Power Corporation, is a leading
provider of electrical construction services for the utility
industry and industrial customers, with operations primarily in the
Southeast, mid-Atlantic, Texas and Southwest regions of the United
States.
THE GOLDFIELD CORPORATION
ANNUAL SHAREHOLDERS’ MEETING MAY 24, 2018
COMMENTS BY JOHN H. SOTTILE, PRESIDENT
Last year at this time, I announced that in 2016 Goldfield
achieved its highest revenue and earnings in its 110 year history
as a public company. Our record performance makes the
comparison of 2017 to 2016 challenging. That being said,
Goldfield’s revenue has grown at a 7% compounded rate over the last
five years.
Comparing 2017 to 2016, Goldfield’s revenue declined 13% to $114
million from $130 million due primarily to the inclusion in 2016 of
certain large, higher margin fixed-price projects that did not
occur in 2017. This was partially offset by storm restoration
work and increased master service agreement, or MSA, work.
Gross margin in 2017 was also adversely affected by third and
fourth-quarter losses in our Texas operation. This was primarily
attributable to the retention of personnel in anticipation of
projects that did not materialize.
In the fourth quarter of 2017 positive changes began happening
for Goldfield as a result of project bidding modifications.
Importantly, fourth-quarter 2017 electrical construction revenue
improved by $4 million, or 16% over the third quarter. Also,
gross margin improved from 14% in the third quarter to 16% in the
fourth quarter as overall bidding and project awards improved.
This momentum continued through the first quarter of 2018, as we
experienced our third consecutive quarter of revenue and gross
margin improvement. First-quarter 2018 electrical
construction revenue improved $7 million, or 25%, over the fourth
quarter of 2017. Gross margin improved to 22% in the first
quarter from 16% in the fourth quarter.
Furthermore, we finished 2017 with a healthy backlog.
Total backlog increased 13% to $214 million at year-end 2017 from
$190 million at year-end 2016. Moreover, 12-month electrical
construction backlog improved to $110 million at December 31, 2017,
compared to $98 million one year ago, while 12-month estimated MSA
backlog increased 18% to $83 million.
This momentum also continued in the first quarter of 2018 as our
twelve-month electrical construction backlog improved 40% over the
first quarter of last year to a record $111 million. This
improvement demonstrates the strength of our business fundamentals
and gives us visibility for continued growth.
Additionally, Goldfield recorded a one-time, $2.5 million, or
$0.10 per share, income tax benefit primarily due to the tax act
passed in late 2017. We are planning to utilize this benefit
to increase field and administrative salaries and to continue to
upgrade our fleet of equipment.
We also finished 2017 with a solid balance sheet. At year
end, we had cash and cash equivalents of $19 million and working
capital of $36 million. This compares to cash and cash
equivalents of $21 million and working capital of $33 million at
year-end 2016.
We are proud to have been part of the storm restoration effort
following Hurricane Irma, one of the largest in U.S. history.
Our Texas and Florida crews worked cohesively and without incident,
demonstrating a very successful effort.
As a member of the Electrical Transmission & Distribution
Partnership we continuously endeavor to improve safety for our
employees. This partnership is a formal collaboration of
industry stakeholders including premier electrical contractors,
OSHA, EEI, IBEW and NECA. Now, I would like to share with you some
developments during the first quarter which we believe will put us
in a favorable position to capitalize on this robust market for
years to come. In Texas, we recently signed a new three-year
MSA with a major utility having an ambitious T&D construction
program. The addition of this MSA will materially enhance our
regional footprint and project bidding opportunities. Our
experience, proven track record and depth of resources in this
geographic region will enable us to provide expertise in bringing
projects to a successful and timely completion.
Additionally, we have been actively pursuing new customers in
adjoining states to expand both MSA and T&D bid work.
Finally, we have expanded our substation operations to include
our mid-Atlantic region. Projects have recently been awarded
under this expansion.
Industry activity and trends continue to point to historic
investments in electrical infrastructure. We believe we are
well-positioned in this competitive market to win our share of
future projects.
That being said, our priority is to focus on profitable growth
and increased margins. Accordingly, we remain focused on
project execution and a disciplined approach in our bidding and
operational activities.
The United States power grid is aging. We anticipate a
higher level of investment by our utility customers to upgrade
transmission and distribution systems. Our solid financial
position, strong customer base and commitment to attracting and
retaining an outstanding workforce should favorably impact future
results.
Are there any questions?
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 results,
please refer to our filings with the Securities and Exchange
Commission which can be found on the Company’s website at
http://www.goldfieldcorp.com.
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
CorporationContact: Kristine WalczakPhone: (312) 780-7205Email:
kwalczak@dresnerco.com
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