Goldfield Announces 2017 Fourth-Quarter and Full-Year Results
March 14 2018 - 4:48PM
The Goldfield Corporation (NYSE American:GV), a leading provider of
electrical construction services for the utility industry and
industrial customers, today announced financial results for the
three months and year ended December 31, 2017. 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 and mid-Atlantic
regions of the United States and Texas.
President and Chief Executive Officer John H. Sottile said, “Our
fourth-quarter revenues and gross margin improved over the third
quarter, as we experienced overall increased bidding and project
activity. We enter 2018 with a healthy backlog, which represents
the strength of the demand for our services and gives us visibility
for continued growth.”
Year Ended December 31, 2017
For the year ended December 31, 2017, compared to the year ended
December 31, 2016:
- Total revenue decreased 12.6% to $114.0 million from $130.4
million attributable to fewer awarded bid opportunities and the
inclusion in 2016 of certain large, higher margin fixed-price
projects, partially offset by storm restoration work and increased
master service agreement (“MSA”) work.
- Gross margin on electrical construction operations decreased to
20.6% from 25.6% due to the inclusion in 2016 of certain large,
higher margin fixed-price projects, a decline in awarded bid
opportunities and increased competition which resulted in lower
margin. Margin was also impacted by third and fourth quarter losses
in the Texas operations attributable to the retention of personnel
for certain potential projects that did not materialize and a
higher volume of lower margin projects.
- Operating income decreased to $10.2 million from $21.4 million
due to the same factors which affected gross margin, as well as
higher selling, general and administrative and depreciation
expenses.
- Net income declined to $8.3 million, or $0.33 per share, from
$13.0 million, or $0.51 per share. Net income included a one-time
$2.5 million, or $0.10 per share, income tax benefit primarily due
to the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) on
December 22, 2017.
- EBITDA (a non-GAAP measure)(1) decreased to
$17.1 million from $27.6 million as a result of the same factors
which drove operating income.
Three Months Ended December 31, 2017
For the three months ended December 31, 2017, compared to
the three months ended December 31, 2016:
- Total revenue decreased 6.7% to $29.6 million from $31.8
million mainly attributable to a lower volume of MSA work.
- Gross margin on electrical construction operations decreased to
15.7% compared to 22.8% mainly due to a higher volume of lower
margin projects.
- Operating income decreased to $1.6 million from $4.4 million
due to the same factors which affected gross margin, as well as
higher selling, general and administrative and depreciation
expenses.
- Net income increased to $3.3 million, or $0.13 per share, from
net income of $2.6 million, or $0.10 per share. Net income included
a one-time $2.5 million, or $0.10 per share, income tax benefit
primarily due to the enactment of the Tax Act on December 22,
2017.
- EBITDA (a non-GAAP measure)(1) decreased to
$3.2 million from $6.1 million as a result of the same factors
which drove operating income.
Backlog
As of December 31, 2017, total backlog, which includes
total revenue estimated over the remaining life of the MSAs, an
estimate of existing customer renewal options, plus estimated
revenue from awarded fixed-price contracts, increased to $214.2
million, from $190.0 million as of December 31, 2016, an
improvement of 12.7 percent, mainly due to the successful renewal
of an MSA agreement and adjustments to existing MSA backlog
estimates partially offset by existing MSA backlog run off. The
Company’s 12-month electrical construction backlog improved to
$110.2 million compared to $97.6 million one year ago, while
12-month estimated MSA backlog increased 18 percent. 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 March 15, 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
http://thegoldfieldcorp.equisolvewebcast.com/q4-2017 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. Investors can access the
financial results (including any information required by Regulation
G) at http://ir.goldfieldcorp.com/financial-results.
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 fourth-quarter and full-year 2017
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 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 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
CorporationKristine WalczakPhone: (312) 780-7205Email:
kwalczak@dresnerco.com
|
The Goldfield Corporation and
Subsidiaries |
Consolidated Statements of Income |
(Unaudited) |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue |
|
|
|
|
|
|
|
Electrical construction |
$ |
27,284,989 |
|
|
$ |
30,385,541 |
|
|
$ |
109,154,476 |
|
|
$ |
125,771,361 |
|
Other |
2,327,569 |
|
|
1,368,303 |
|
|
4,799,043 |
|
|
4,652,102 |
|
Total
revenue |
29,612,558 |
|
|
31,753,844 |
|
|
113,953,519 |
|
|
130,423,463 |
|
Costs and expenses |
|
|
|
|
|
|
|
Electrical construction |
22,995,464 |
|
|
23,470,017 |
|
|
86,714,412 |
|
|
93,566,045 |
|
Other |
1,456,189 |
|
|
944,660 |
|
|
3,147,791 |
|
|
3,242,887 |
|
Selling,
general and administrative |
1,651,533 |
|
|
1,306,026 |
|
|
6,611,315 |
|
|
5,913,132 |
|
Depreciation and amortization |
1,831,537 |
|
|
1,640,086 |
|
|
7,217,901 |
|
|
6,312,164 |
|
Loss
(gain) on sale of property and equipment |
46,652 |
|
|
(16,621 |
) |
|
76,810 |
|
|
(17,535 |
) |
Total
costs and expenses |
27,981,375 |
|
|
27,344,168 |
|
|
103,768,229 |
|
|
109,016,693 |
|
Total
operating income |
1,631,183 |
|
|
4,409,676 |
|
|
10,185,290 |
|
|
21,406,770 |
|
Other income (expense),
net |
|
|
|
|
|
|
|
Interest
income |
8,187 |
|
|
8,096 |
|
|
31,696 |
|
|
33,465 |
|
Interest
expense, net of amount capitalized |
(190,756 |
) |
|
(133,863 |
) |
|
(665,268 |
) |
|
(591,176 |
) |
Other
income, net |
12,376 |
|
|
26,102 |
|
|
57,654 |
|
|
68,465 |
|
Total
other expense, net |
(170,193 |
) |
|
(99,665 |
) |
|
(575,918 |
) |
|
(489,246 |
) |
Income from continuing
operations before income taxes |
1,460,990 |
|
|
4,310,011 |
|
|
9,609,372 |
|
|
20,917,524 |
|
Income tax
provision |
(1,982,864 |
) |
|
1,720,401 |
|
|
1,035,997 |
|
|
7,809,768 |
|
Income from continuing
operations |
3,443,854 |
|
|
2,589,610 |
|
|
8,573,375 |
|
|
13,107,756 |
|
Loss from discontinued
operations, net of income tax benefit of $102,679, $0, $164,235 and
$66,077, respectively |
(172,137 |
) |
|
— |
|
|
(275,624 |
) |
|
(108,007 |
) |
Net income |
$ |
3,271,717 |
|
|
$ |
2,589,610 |
|
|
$ |
8,297,751 |
|
|
$ |
12,999,749 |
|
Net income (loss) per
share of common stock — basic and diluted |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.14 |
|
|
$ |
0.10 |
|
|
$ |
0.34 |
|
|
$ |
0.52 |
|
Discontinued operations |
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
|
— |
|
Net
income |
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.33 |
|
|
$ |
0.51 |
|
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, |
|
2017 |
|
2016 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
18,529,757 |
|
|
$ |
20,599,648 |
|
Accounts
receivable and accrued billings, net |
21,566,842 |
|
|
19,094,407 |
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts |
6,074,346 |
|
|
7,313,099 |
|
Income
taxes receivable |
619,552 |
|
|
533,837 |
|
Residential properties under construction |
2,412,202 |
|
|
1,552,131 |
|
Prepaid
expenses |
993,668 |
|
|
1,037,715 |
|
Other
current assets |
1,532,110 |
|
|
1,298,044 |
|
Total
current assets |
51,728,477 |
|
|
51,428,881 |
|
|
|
|
|
Property, buildings and
equipment, at cost, net |
36,072,300 |
|
|
33,245,947 |
|
Deferred charges and
other assets |
5,831,163 |
|
|
6,627,329 |
|
Total assets |
$ |
93,631,940 |
|
|
$ |
91,302,157 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable and accrued liabilities |
$ |
9,379,535 |
|
|
$ |
11,386,119 |
|
Current
portion of notes payable, net |
6,099,787 |
|
|
6,101,855 |
|
Accrued
remediation costs |
87,553 |
|
|
102,526 |
|
Other
current liabilities |
166,268 |
|
|
845,057 |
|
Total
current liabilities |
15,733,143 |
|
|
18,435,557 |
|
|
|
|
|
Deferred income
taxes |
4,698,720 |
|
|
8,204,324 |
|
Accrued remediation
costs, less current portion |
434,164 |
|
|
112,380 |
|
Notes payable, less
current portion, net |
16,151,567 |
|
|
16,231,373 |
|
Other accrued
liabilities |
66,033 |
|
|
67,961 |
|
Total liabilities |
37,083,627 |
|
|
43,051,595 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity |
|
|
|
Common
stock |
2,781,377 |
|
|
2,781,377 |
|
Capital
surplus |
18,481,683 |
|
|
18,481,683 |
|
Retained
earnings |
36,593,440 |
|
|
28,295,689 |
|
Common
stock in treasury, at cost |
(1,308,187 |
) |
|
(1,308,187 |
) |
Total
stockholders’ equity |
56,548,313 |
|
|
48,250,562 |
|
Total liabilities and
stockholders’ equity |
$ |
93,631,940 |
|
|
$ |
91,302,157 |
|
|
|
|
|
|
|
|
|
The Goldfield Corporation and
SubsidiariesReconciliation 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 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (GAAP as
reported) |
|
$ |
3,271,717 |
|
|
$ |
2,589,610 |
|
|
$ |
8,297,751 |
|
|
$ |
12,999,749 |
|
Interest
expense, net of amount capitalized |
|
190,756 |
|
|
133,863 |
|
|
665,268 |
|
|
591,176 |
|
Provision
for income taxes, net (1) |
|
(2,085,543 |
) |
|
1,720,401 |
|
|
871,762 |
|
|
7,743,691 |
|
Depreciation and amortization (2) |
|
1,831,537 |
|
|
1,640,086 |
|
|
7,217,901 |
|
|
6,312,164 |
|
EBITDA |
|
$ |
3,208,467 |
|
|
$ |
6,083,960 |
|
|
$ |
17,052,682 |
|
|
$ |
27,646,780 |
|
___________ |
|
|
|
|
|
|
|
|
(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. |