President’s Comments at Goldfield’s Annual Meeting
May 23 2019 - 4:32PM
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., Southeast Power Corporation and Precision
Foundations, Inc., is a leading provider of electrical construction
services for the utility industry and industrial customers, with
operations primarily in the Southeast, mid-Atlantic and
Texas-Southwest regions of the United States. Goldfield is also, to
a lesser extent, engaged in real estate operations focused on the
development of residential properties on the east coast of Central
Florida.
THE GOLDFIELD CORPORATION
ANNUAL SHAREHOLDERS’ MEETING MAY 23, 2019
COMMENTS BY JOHN H. SOTTILE, PRESIDENT
Welcome to Goldfield’s annual meeting of shareholders.
In 2018, Goldfield achieved the highest revenue in its long
history as a public company. Although margins did not meet our
expectations, we continue to execute our strategic plan by
expanding our customer base, our service lines and the geographic
regions we serve. We continue to invest in both personnel and
capital resources to implement the plan. We see strong growth
opportunities across each of our electrical construction markets,
and we are aggressively pursuing additional opportunities to
position Goldfield for continued success.
To summarize our 2018 results compared to 2017:
- Consolidated revenue grew 21.2% to a record $138.1 million from
$114.0 million.
- Electrical construction revenue increased 25.1% to $136.5
million from $109.2 million, primarily due to increases in both MSA
and non-MSA customer project activity.
- Real estate development revenue decreased to $1.6 million from
$4.8 million, mainly due to a decrease in completed units
sold.
- Gross margin on electrical construction decreased to 16.5% from
20.6%, attributable to a higher volume of lower margin projects and
increased competition.
- Gross margin on real estate development was 37.6% compared to
34.4%.
- Operating income decreased to $7.6 million from $10.2 million,
driven by an increase in depreciation expense, lower real estate
development activity and reduced margins on electrical construction
projects.
- Net income decreased to $5.0 million, or $0.20 per share,
compared to $8.3 million, or $0.33 per share.
In the first quarter of 2019 electrical construction revenue
grew year-over-year, and our real estate development operations
delivered a strong top and bottom-line performance. Total revenue
for the quarter increased against a solid performance last year.
Our profit margins were held back primarily due to electrical
construction projects in our Texas-Southwest region adversely
affected by weather and project productivity issues.
To review the highlights of our 2019 first quarter compared to
the same period last year:
- Consolidated revenue increased 37.9% to $47.5 million from
$34.4 million, attributable to strong growth in both electrical
construction and real estate operations.
- Electrical construction revenue increased 21.3% to $41.4
million from $34.1 million primarily due to an increase in both MSA
and non-MSA customer project activity, as well as service line
expansion.
- Real estate development revenue increased to $6.1 million from
$307,000 mainly due to an increase in the number of completed units
sold.
- Gross margin on electrical construction decreased to 14.7% from
21.5%, attributable to project losses in our Texas-Southwest
operations resulting from weather and project productivity issues,
as well as start-up costs related to the substation service line
expansion.
- Gross margin on real estate development held relatively steady
at 31.2% compared to 30.3%.
- Operating income decreased to $2.9 million from $3.5 million,
mainly due to lower margins on electrical construction projects, an
increase in depreciation expense and higher selling, general and
administrative expenses, partially offset by higher real estate
development gross margin.
- Net income decreased to $1.8 million, or $0.07 per share,
compared to $2.4 million, or $0.09 per share.
Our total backlog at March 31, 2019 has remained strong. At
March 31, total backlog increased 7.8% to $208.2
million, from $193.1 million at the same date last year. The
Company’s 12-month electrical construction backlog decreased 10.9%
to $99 million from $111 million at the same date last year, mainly
due to adjustments to existing MSA backlog estimates partially
offset by new MSA customer backlog estimates.
As we look ahead to the rest of 2019, we see the potential for
continued significant growth in both our customer base and
services. Additionally, we are taking steps to improve margin
performance across our entire base of operations. The repositioning
of our foundation operations executed over the past year has begun
to yield benefits. We have been successful in securing a
significant amount of work from new customers, one of our strategic
objectives. We are broadening our service line offerings and
diversifying our customer base to drive improved 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 and Texas-Southwest
regions of the United States. Goldfield is also, to a lesser
extent, engaged in real estate operations focused on the
development of residential properties on the east coast of Central
Florida.
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 CorporationRobert Winters or Josh LittmanPhone:
(312) 445-2870Email: gv@alpha-ir.com
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