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 and nine months ended September 30, 2020. Through its
subsidiaries, Power Corporation of America (“PCA”), 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. Goldfield is also engaged in real estate development
operations of residential properties on the east coast of Central
Florida.
Acting Co-CEO and President of PCA Jason M. Spivey said, “Our
electrical construction operations were strong during the third
quarter, led by increased MSA project activity across all service
lines in the mid-Atlantic region, improved MSA and non-MSA project
activity in the Southeast region, as well as additional storm work.
Our backlog remains solid, and the project pipeline has been
active. While we have not been materially adversely impacted by
COVID-19 to date, we continue to monitor the effects it may have on
our customers as well as our operations.”
Acting Co-CEO and Chief Financial Officer Stephen R. Wherry
added, “Our strong financial performance through the first nine
months of 2020 included record nine-month revenue, as well as an 11
percent improvement in electrical construction revenue and a 255
basis point increase in electrical construction gross margin. Even
as we and our customers continue to navigate these uncertain times,
we believe the outlook is solid for the markets we serve, providing
the opportunity to achieve long-term shareholder value.”
NINE MONTHS ENDED SEPTEMBER 30, 2020
For the nine months ended September 30, 2020, compared to
the same period in 2019:
- Electrical construction revenue
increased 11.3%, or $14.0 million, to $137.8 million from $123.8
million, primarily due to increased master service agreements
(“MSAs”) and non-MSA transmission project volume in the Southeast
region, continued growth in MSA project activity and service line
expansion in the Texas-Southwest region and increased storm work,
partially offset by lower MSA activity in the mid-Atlantic region
mostly in the first half of the year.
- Real estate development revenue
declined to $3.3 million from $12.8 million primarily due to the
decrease in the number and type of units sold and the timing of
completion of units available for sale.
- Consolidated revenue increased 3.3%,
or $4.5 million, to $141.0 million from $136.6 million, primarily
due to improved electrical construction revenue offset by lower
real estate development activity.
- Gross margin on electrical
construction improved to 17.2% from 14.7%, primarily attributable
to increased MSA activity and service line expansion in the
Texas-Southwest region, as well as higher foundation construction
activity with increased margins. These improvements were partially
offset by lower transmission project activity, mainly due to the
delayed start-up of a newly awarded MSA in the mid-Atlantic region,
mostly in the first half of the year.
- Gross margin on real estate
development increased to 32.7% from 27.0% primarily due to the type
of units sold.
- Operating income increased 9.8% to
$7.3 million from $6.6 million primarily due to higher electrical
construction gross profit, partially offset by higher selling,
general and administrative (“SG&A”) and depreciation expenses
and lower real estate development gross profit. SG&A expenses
were primarily impacted by a one-time expense of approximately $1.4
million due to the settlement of amounts owed, including employment
agreement and death benefits, to the estate of the former Chief
Executive Officer who passed away in August 2020.
- Net income increased 33.8% to $5.0
million, or $0.21 per share, from $3.8 million, or $0.15 per share,
primarily due to higher revenue and improved gross margin in
electrical construction operations, as well as lower tax expense
due to adjustments related to the Coronavirus Aid, Relief, and
Economic Security Act (“CARES Act”), partially offset by lower real
estate development activity and higher SG&A and depreciation
expenses.
- EBITDA (a non-GAAP
measure(1)) increased 10.6% to $16.4 million
compared to $14.8 million primarily due to improved electrical
construction gross profit, partially offset by higher SG&A
expense and lower real estate development gross profit.
THREE MONTHS ENDED SEPTEMBER 30, 2020
For the quarter ended September 30, 2020, compared to the
same period in 2019:
- Electrical construction revenue
increased 11.3% to $48.1 million from $43.2 million due to
increased MSA project activity in the mid-Atlantic region,
increased MSA and non-MSA project volume in the Southeast region
and increased storm work, partially offset by lower
transmission-related MSA activity in the Texas-Southwest
region.
- Real estate development revenue
operations declined $1.2 million, to $0.4 million from $1.6
million, primarily due to the decrease in the number of units sold
and the timing of completion of units available for sale.
- Consolidated revenue increased 8.2% to
$48.4 million from $44.7 million, attributable to improved
electrical construction operations project activity, partially
offset by lower real estate development activity.
- Gross margin on electrical
construction grew to 17.5% from 14.8%, primarily attributable to
increased project activity in expanded service lines at higher
gross margins across all regions.
- Gross margin on real estate
development decreased to 32.9% from 33.5% primarily due to the type
of units sold.
- Operating income decreased 9.4% to
$1.9 million from $2.1 million, mainly due to higher SG&A and
depreciation expenses and lower real estate development gross
profit, partially offset by improved electrical construction gross
profit. SG&A expenses were primarily impacted by a one-time
expense of approximately $1.4 million due to the settlement of
amounts owed, including employment agreement and death benefits, to
the estate of the former Chief Executive Officer.
- Net income decreased 6.0% to $1.1
million, or $0.04 per share, from $1.2 million, or $0.05 per share,
primarily due to higher SG&A and depreciation expenses and
lower real estate development activity, partially offset by
increased revenue and improved gross margin in electrical
construction operations.
- EBITDA (a non-GAAP measure
(1)) increased 3.0% to $5.0 million compared to
$4.9 million primarily due to improved electrical construction
gross profit, partially offset by higher SG&A expense and lower
real estate development gross profit.
Backlog (a non-GAAP
measure(1))
At September 30, 2020, total backlog increased 105.4% to
$385.2 million from $187.5 million at September 30, 2019,
primarily attributable to the award of three new MSAs during the
twelve months ending September 30, 2020. 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
57.5% to $151.2 million from $96.0 million at September 30,
2019, mainly due to new MSAs and a higher level of project
activity.
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 will host a conference call and webcast to discuss
results at 10 a.m. Eastern time on Thursday, November 5, 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/41620/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 third 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. You should not assume that material
events subsequent to the date of this press release have or have
not occurred. 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 |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
$ |
48,056,897 |
|
|
$ |
43,182,197 |
|
|
$ |
137,794,907 |
|
|
$ |
123,773,883 |
|
Real estate development |
|
|
364,900 |
|
|
|
1,550,684 |
|
|
|
3,250,563 |
|
|
|
12,819,473 |
|
Total revenue |
|
|
48,421,797 |
|
|
|
44,732,881 |
|
|
|
141,045,470 |
|
|
|
136,593,356 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical construction |
|
|
39,640,718 |
|
|
|
36,789,515 |
|
|
|
114,042,479 |
|
|
|
105,597,926 |
|
Real estate development |
|
|
244,813 |
|
|
|
1,031,373 |
|
|
|
2,187,998 |
|
|
|
9,360,449 |
|
Selling, general and administrative |
|
|
3,633,799 |
|
|
|
2,162,360 |
|
|
|
8,581,365 |
|
|
|
7,033,244 |
|
Depreciation and amortization |
|
|
3,056,457 |
|
|
|
2,728,988 |
|
|
|
8,950,772 |
|
|
|
8,048,549 |
|
(Gain) loss on sale of property and equipment |
|
|
(25,831 |
) |
|
|
(45,504 |
) |
|
|
2,915 |
|
|
|
(77,571 |
) |
Total costs and expenses |
|
|
46,549,956 |
|
|
|
42,666,732 |
|
|
|
133,765,529 |
|
|
|
129,962,597 |
|
Total operating income |
|
|
1,871,841 |
|
|
|
2,066,149 |
|
|
|
7,279,941 |
|
|
|
6,630,759 |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
29,245 |
|
|
|
28,311 |
|
|
|
58,939 |
|
|
|
71,082 |
|
Interest expense, net of amount capitalized |
|
|
(215,063 |
) |
|
|
(367,244 |
) |
|
|
(761,118 |
) |
|
|
(1,130,798 |
) |
Other income, net |
|
|
38,195 |
|
|
|
27,199 |
|
|
|
121,199 |
|
|
|
91,736 |
|
Total other expense, net |
|
|
(147,623 |
) |
|
|
(311,734 |
) |
|
|
(580,980 |
) |
|
|
(967,980 |
) |
Income before income taxes |
|
|
1,724,218 |
|
|
|
1,754,415 |
|
|
|
6,698,961 |
|
|
|
5,662,779 |
|
Income tax provision |
|
|
632,467 |
|
|
|
592,413 |
|
|
|
1,665,769 |
|
|
|
1,902,034 |
|
Net income |
|
$ |
1,091,751 |
|
|
$ |
1,162,002 |
|
|
$ |
5,033,192 |
|
|
$ |
3,760,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share of common
stock — basic |
|
$ |
0.04 |
|
|
$ |
0.05 |
|
|
$ |
0.21 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share of common
stock — diluted |
|
$ |
0.04 |
|
|
$ |
0.05 |
|
|
$ |
0.21 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
24,522,534 |
|
|
|
24,522,534 |
|
|
|
24,522,534 |
|
|
|
24,523,731 |
|
Diluted |
|
|
24,554,324 |
|
|
|
24,522,534 |
|
|
|
24,533,208 |
|
|
|
24,523,731 |
|
The Goldfield Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
|
September 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,593,879 |
|
|
$ |
23,272,156 |
|
Accounts receivable and accrued billings, net |
|
|
27,483,338 |
|
|
|
23,930,655 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
|
24,328,912 |
|
|
|
9,321,368 |
|
Income taxes receivable |
|
|
562,508 |
|
|
|
1,482,618 |
|
Residential properties under construction |
|
|
919,020 |
|
|
|
2,060,364 |
|
Prepaid expenses |
|
|
1,216,441 |
|
|
|
924,733 |
|
Other current assets |
|
|
578,805 |
|
|
|
46,186 |
|
Total current assets |
|
|
75,682,903 |
|
|
|
61,038,080 |
|
Property, buildings and
equipment, at cost, net |
|
|
59,166,078 |
|
|
|
55,073,579 |
|
Deferred charges and other
assets |
|
|
24,596,830 |
|
|
|
13,255,519 |
|
Total assets |
|
$ |
159,445,811 |
|
|
$ |
129,367,178 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
16,355,664 |
|
|
$ |
13,881,277 |
|
Current portion of notes payable, net |
|
|
13,895,635 |
|
|
|
7,769,497 |
|
Accrued remediation costs |
|
|
80,420 |
|
|
|
75,545 |
|
Other current liabilities |
|
|
5,108,960 |
|
|
|
2,612,449 |
|
Total current liabilities |
|
|
35,440,679 |
|
|
|
24,338,768 |
|
Deferred income taxes |
|
|
10,078,684 |
|
|
|
9,008,765 |
|
Accrued remediation costs, less
current portion |
|
|
389,950 |
|
|
|
398,877 |
|
Notes payable, less current
portion, net |
|
|
26,388,948 |
|
|
|
24,402,926 |
|
Other accrued liabilities |
|
|
15,873,328 |
|
|
|
5,047,088 |
|
Total liabilities |
|
|
88,171,589 |
|
|
|
63,196,424 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
2,781,377 |
|
|
|
2,781,377 |
|
Capital surplus |
|
|
18,551,959 |
|
|
|
18,481,683 |
|
Retained earnings |
|
|
53,380,990 |
|
|
|
48,347,798 |
|
Common stock in treasury, at cost |
|
|
(3,440,104 |
) |
|
|
(3,440,104 |
) |
Total stockholders’ equity |
|
|
71,274,222 |
|
|
|
66,170,754 |
|
Total liabilities and
stockholders’ equity |
|
$ |
159,445,811 |
|
|
$ |
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 periods as
indicated:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
EBITDA |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (GAAP as reported) |
|
$ |
1,091,751 |
|
|
$ |
1,162,002 |
|
|
$ |
5,033,192 |
|
|
$ |
3,760,745 |
|
Interest expense, net of amount capitalized |
|
|
215,063 |
|
|
|
367,244 |
|
|
|
761,118 |
|
|
|
1,130,798 |
|
Provision for income taxes |
|
|
632,467 |
|
|
|
592,413 |
|
|
|
1,665,769 |
|
|
|
1,902,034 |
|
Depreciation and amortization (1) |
|
|
3,056,457 |
|
|
|
2,728,988 |
|
|
|
8,950,772 |
|
|
|
8,048,549 |
|
EBITDA |
|
$ |
4,995,738 |
|
|
$ |
4,850,647 |
|
|
$ |
16,410,851 |
|
|
$ |
14,842,126 |
|
______________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. Total backlog includes total
revenue estimated over the remaining life of the MSAs plus
estimated revenue from fixed-price contracts. 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 September 30, 2020 to our remaining unsatisfied
performance obligation as defined under U.S. GAAP:
|
|
|
|
|
|
September 30,
2020 |
|
Total backlog |
|
|
|
|
|
$ |
385,183,504 |
|
Estimated MSAs |
|
|
|
|
|
|
(313,911,324 |
) |
Estimated firm
(1) |
|
|
|
|
|
|
(1,836,420 |
) |
Total unsatisfied performance obligation |
|
|
|
|
|
$ |
69,435,760 |
|
______________________________________ |
|
|
|
|
|
|
|
|
(1) Represents estimated backlog contract value as
of September 30, 2020, on projects awarded. |
|
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