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 ended March 31, 2020. Through its subsidiaries,
Power Corporation of America, C and C Power Line, Inc., Southeast
Power Corporation and Precision Foundations, Inc., Goldfield
provides electrical construction services primarily in the
Southeast, mid-Atlantic, and Texas-Southwest regions of the United
States. To a lesser extent, Goldfield is also engaged in real
estate operations focused on the development of residential
properties on the east coast of Central Florida.
President and Chief Executive Officer John H. Sottile said, “In
the first quarter, total backlog more than doubled from one year
ago to a near record $473 million, providing opportunity for growth
across multiple service lines over several years. Additionally,
work under recently awarded MSAs has begun to ramp up in the second
quarter, which we believe will significantly enhance 2020
results.”
Mr. Sottile continued, “We remain committed to the safety and
well-being of our employees during the COVID-19 pandemic. To date,
our operations have not been adversely effected. While we cannot
predict with certainty the potential future effects of this virus
on our operations, we believe that our strong balance sheet,
together with the nature of our principal customers and business
operations, will provide relative stability during the current
period of economic uncertainty.”
For the quarter ended March 31, 2020, compared to the same
period in 2019:
- Electrical construction revenue increased $1.7 million, or
4.1%, to $43.1 million from $41.4 million, primarily due to
increases in master service agreement (“MSA”) project activity and
service line expansion in the Texas-Southwest region.
- Real estate development revenue decreased to $1.8 million from
$6.1 million primarily due to the timing of completion of units
available for sale.
- Consolidated revenue decreased $2.6 million, or 5.6%, to $44.8
million from $47.5 million, primarily due to the decline in real
estate development activity.
- Gross margin on electrical construction improved to 15.3% from
14.7%, primarily attributable to the Texas-Southwest region as a
result of service line expansion, as well as higher foundation
construction activity with improved margins across multiple service
regions.
- Gross margin on real estate development increased to 32.2% from
31.2% primarily due to the number and type of units sold.
- Operating income decreased 45.1% to $1.6 million from $2.9
million primarily due to lower real estate development gross
profit.
- Net income decreased 16.8% to $1.5 million, or $0.06 per share,
from $1.8 million, or $0.07 per share, primarily due to the decline
in real estate development activity, partially offset by lower tax
expense due to adjustments related to the Coronavirus Aid, Relief,
and Economic Security Act (“CARES Act”).
- EBITDA (a non-GAAP measure(1)) was $4.6
million compared to $5.5 million. This decrease was primarily due
to the decrease in real estate development operations gross profit
partially offset by higher electrical construction gross
profit.
Backlog (a non-GAAP
measure(1))
At March 31, 2020, total backlog increased 127.2% to $473.0
million from $208.2 million at March 31, 2019, primarily
attributable to the award of four new MSAs, two of which are with
new MSA customers. Total backlog includes total revenue estimated
over the remaining life of the MSAs plus estimated revenue from
fixed-price contracts.
The Company’s 12-month electrical construction backlog increased
74.9% to $173.2 million from $99.0 million at March 31, 2019,
mainly due to increased MSAs and a higher level of project activity
with both new and existing customers.
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 Thursday, May 7, 2020. 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/37401/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 and Texas-Southwest regions of the United
States. For additional information on our first quarter 2020
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 measures used in this
earnings release are more fully described in the accompanying
supplemental data and reconciliation of the non-GAAP financial
measures to the reported GAAP measures. The EBITDA 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. EBITDA should be used to supplement, and not in lieu
of, results prepared in conformity with GAAP. Because not all
companies use identical calculations, the presentations of EBITDA
and Backlog may not be comparable to other similarly-titled
measures of other companies. The Backlog non-GAAP financial measure
in this press release enables management to more effectively
forecast our future capital needs and results and better identify
future operating trends that may not otherwise be apparent. The
Company believes this measure is also useful for investors in
forecasting our future results and comparing us to our competitors.
While the Company believes that our methodology of calculation is
appropriate, such methodology may not be comparable to that
employed by some 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; global pandemics; 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 WalczakT:
312-898-3072kwalczak@effectivecorpcom.com
The Goldfield Corporation and
SubsidiariesConsolidated Statements of
Income(Unaudited)
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
|
2019 |
|
Revenue |
|
|
|
|
|
|
|
|
Electrical construction |
|
$ |
43,065,392 |
|
|
$ |
41,387,318 |
|
Real estate development |
|
|
1,774,116 |
|
|
|
6,092,938 |
|
Total revenue |
|
|
44,839,508 |
|
|
|
47,480,256 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
Electrical construction |
|
|
36,472,260 |
|
|
|
35,292,012 |
|
Real estate development |
|
|
1,203,075 |
|
|
|
4,189,654 |
|
Selling, general and administrative |
|
|
2,603,208 |
|
|
|
2,528,321 |
|
Depreciation and amortization |
|
|
2,892,812 |
|
|
|
2,581,079 |
|
Loss (gain) on sale of property and equipment |
|
|
68,457 |
|
|
|
(25,851 |
) |
Total costs and expenses |
|
|
43,239,812 |
|
|
|
44,565,215 |
|
Total operating income |
|
|
1,599,696 |
|
|
|
2,915,041 |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
Interest income |
|
|
23,421 |
|
|
|
11,552 |
|
Interest expense, net of amount capitalized |
|
|
(285,849 |
) |
|
|
(351,992 |
) |
Other income, net |
|
|
36,793 |
|
|
|
32,284 |
|
Total other expense, net |
|
|
(225,635 |
) |
|
|
(308,156 |
) |
Income before income taxes |
|
|
1,374,061 |
|
|
|
2,606,885 |
|
Income tax provision |
|
|
(105,914 |
) |
|
|
827,264 |
|
Net income |
|
$ |
1,479,975 |
|
|
$ |
1,779,621 |
|
Net income per share of common
stock — basic and diluted |
|
$ |
0.06 |
|
|
$ |
0.07 |
|
Weighted average shares
outstanding — basic and diluted |
|
|
24,522,534 |
|
|
|
24,526,165 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
|
March 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
26,975,770 |
|
|
$ |
23,272,156 |
|
Accounts receivable and accrued billings, net |
|
|
21,844,254 |
|
|
|
23,930,655 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
|
19,841,766 |
|
|
|
9,321,368 |
|
Income taxes receivable |
|
|
2,319,659 |
|
|
|
1,482,618 |
|
Residential properties under construction |
|
|
61,900 |
|
|
|
2,060,364 |
|
Real estate inventory |
|
|
983,380 |
|
|
|
— |
|
Prepaid expenses |
|
|
1,924,210 |
|
|
|
924,733 |
|
Other current assets |
|
|
221,632 |
|
|
|
46,186 |
|
Total current assets |
|
|
74,172,571 |
|
|
|
61,038,080 |
|
Property, buildings and
equipment, at cost, net |
|
|
58,069,461 |
|
|
|
55,073,579 |
|
Deferred charges and other
assets |
|
|
16,939,754 |
|
|
|
13,255,519 |
|
Total assets |
|
$ |
149,181,786 |
|
|
$ |
129,367,178 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
15,155,454 |
|
|
$ |
13,881,277 |
|
Current portion of notes payable, net |
|
|
8,895,427 |
|
|
|
7,769,497 |
|
Accrued remediation costs |
|
|
78,045 |
|
|
|
75,545 |
|
Other current liabilities |
|
|
2,882,680 |
|
|
|
2,612,449 |
|
Total current liabilities |
|
|
27,011,606 |
|
|
|
24,338,768 |
|
Deferred income taxes |
|
|
9,813,889 |
|
|
|
9,008,765 |
|
Accrued remediation costs, less
current portion |
|
|
395,964 |
|
|
|
398,877 |
|
Notes payable, less current
portion, net |
|
|
35,834,901 |
|
|
|
24,402,926 |
|
Other accrued liabilities |
|
|
8,474,697 |
|
|
|
5,047,088 |
|
Total liabilities |
|
|
81,531,057 |
|
|
|
63,196,424 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
2,781,377 |
|
|
|
2,781,377 |
|
Capital surplus |
|
|
18,481,683 |
|
|
|
18,481,683 |
|
Retained earnings |
|
|
49,827,773 |
|
|
|
48,347,798 |
|
Common stock in treasury, at cost |
|
|
(3,440,104 |
) |
|
|
(3,440,104 |
) |
Total stockholders’ equity |
|
|
67,650,729 |
|
|
|
66,170,754 |
|
Total liabilities and
stockholders’ equity |
|
$ |
149,181,786 |
|
|
$ |
129,367,178 |
|
The Goldfield Corporation and
SubsidiariesReconciliation of Non-GAAP Financial
Measures(Unaudited)
EBITDA
EBITDA, a non-GAAP performance measure used by management, is
defined as net income (loss) plus: interest expense, provision 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 consolidated 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.
The following table provides a reconciliation of our net income
to EBITDA (a non-GAAP financial measure) for the three months ended
March 31, 2020 and 2019:
EBITDA |
|
2020 |
|
|
2019 |
|
Net income (GAAP as
reported) |
|
$ |
1,479,975 |
|
|
$ |
1,779,621 |
|
Interest expense, net of amount capitalized |
|
|
285,849 |
|
|
|
351,992 |
|
Provision for income taxes |
|
|
(105,914 |
) |
|
|
827,264 |
|
Depreciation and amortization (1) |
|
|
2,892,812 |
|
|
|
2,581,079 |
|
EBITDA |
|
$ |
4,552,722 |
|
|
$ |
5,539,956 |
|
______________________________________ |
|
|
|
|
|
|
|
|
(1)
Depreciation and amortization includes depreciation on property,
plant and equipment and amortization of finite-lived intangible
assets. |
|
The Goldfield Corporation and
SubsidiariesReconciliation of Non-GAAP Financial
Measures(Unaudited)
Backlog
Backlog is a non-GAAP financial measure, however it is a common
measurement used in our industry. We believe this measure enables
management to more effectively forecast our future capital needs
and results and better identify future operating trends that may
not otherwise be apparent. We believe this measure is also useful
for investors in forecasting our future results and comparing us to
our competitors. While we believe that our methodology of
calculation is appropriate, such methodology may not be comparable
to that employed by some other companies. Given the duration of our
contracts and MSAs and our method of calculating backlog, our
backlog at any point in time may not accurately represent the
revenue that we expect to realize during any period and our backlog
as of the end of a fiscal year may not be indicative of the revenue
we expect to earn in the following fiscal year and should not be
viewed or relied upon as a stand-alone indicator. Consequently, we
cannot provide assurance as to our customers’ requirements or our
estimates of backlog.
The following table presents a reconciliation of our total
backlog as of March 31, 2020 to our remaining unsatisfied
performance obligation as defined under U.S. GAAP:
|
|
|
|
|
|
March 31,
2020 |
|
Total backlog |
|
|
|
|
|
$ |
473,010,202 |
|
Estimated MSAs |
|
|
|
|
|
|
(387,789,892 |
) |
Estimated firm
(1) |
|
|
|
|
|
|
(3,579,073 |
) |
Total unsatisfied performance obligation |
|
|
|
|
|
$ |
81,641,237 |
|
______________________________________ |
|
|
|
|
|
|
|
|
(1) Represents estimated backlog contract value as
of March 31, 2020, on projects awarded. |
|
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