SOURCE: The Goldfield Corporation

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March 30, 2015 17:07 ET

Goldfield Announces 2014 Results

MELBOURNE, FL--(Marketwired - March 30, 2015) - The Goldfield Corporation (NYSE MKT: GV) today announced its results for the year ended December 31, 2014. The Goldfield Corporation headquartered in Florida, through its subsidiaries, Power Corporation of America, Southeast Power Corporation and C and C Power Line, Inc. is a leading provider of construction services to electric utilities, with operations primarily in the southeastern and mid-Atlantic regions of the United States including Texas.

Year Ended December 31, 2014
Revenue for the year ended December 31, 2014, increased 10.3% to $98.4 million from $89.2 million in the prior year. This increase was attributable to additional revenue from our acquisition of C and C Power Line, Inc. in January 2014 and growth in our construction under master service agreements ("MSAs").

Income from continuing operations before taxes for the year ended December 31, 2014, decreased 90.0% to $778,000 from $7.8 million in 2013. This decrease largely resulted from losses aggregating $5.0 million recognized in the fourth quarter on projects for two different utility companies in Texas. These losses were attributable to a combination of factors, including start-up delays in material procurement and adverse weather conditions which adversely affected the allocation of labor and equipment resources. We have made management changes in our Texas operations designed to improve project management.

Our projects are accounted for using the percentage of completion method. In calculating the periodic gains and/or losses on a project, we utilize the most recent information and operating results available. A provision is made in the period for the full amount of an expected loss through project completion. The aforementioned Texas projects are scheduled to be completed by May 2015. In providing for the full amount of expected losses through completion on the Texas projects, we utilized information available through late March 2015.

Operating margins on electrical construction operations were 4.9% in 2014, compared to 13.2% in 2013. Most of this decrease was attributable to the losses on the Texas projects discussed above.

As a result of the foregoing, the net loss for the year ended December 31, 2014, was $(319,000), or $(0.01) loss per share, compared to net income of $3.8 million, or $0.15 per share in the prior year.

Three months ended December 31, 2014
Revenue for the three months ended December 31, 2014, increased 24.7% to $28.4 million from $22.8 million in the prior year.

Income (loss) from continuing operations before taxes for the three months ended December 31, 2014, decreased $5.0 million to a loss of $(2.4) million from income of $2.6 million in the same period in 2013. This decrease was primarily due to the losses incurred in the fourth quarter of 2014 on the Texas projects discussed above.

Net loss for the three months ended December 31, 2014 was $(1.6) million, or $(0.06) loss per share, compared to net income of $1.4 million, or $0.06 per share in the prior year.

Backlog
As previously announced, the Company has been focusing on developing and growing electrical construction services under multi-year MSAs, which provide opportunities for more consistent work load and improved operating efficiencies. This effort scored significant success in 2014. Total backlog as of December 31, 2014 almost quadrupled to $275.0 million compared to $74.5 million as of December 31, 2013. The $275.0 million represents total revenue estimated over the life of the MSAs, as well as estimated revenue from fixed-price contracts, of which about $85.3 million (31.0%) are estimated to be realized within twelve months.

Our backlog represents the uncompleted portion of services to be performed under existing project-specific fixed-price and maintenance contracts and the estimated value of future services that we expect to provide under our existing MSAs. The existing MSAs have initial terms ranging from one year to four years, and some provide for additional renewals at the option of the customer. Our total MSA calculation assumes exercise of the renewal options. Revenue from the assumed exercise of renewal options represents $114.0 million (47.4%) of our total estimated MSA backlog as of December 31, 2014.

The estimated amount of backlog for work under the MSAs is calculated by using recurring historical trends in current MSAs and projected customer needs based upon ongoing communications with the customer. The size and amount of projects we may be awarded under MSAs cannot be determined with certainty and actual future revenue from such contracts may vary substantially from our current estimates.

John H. Sottile, President and Chief Executive Officer of Goldfield said, "The business and prospects of our electrical construction operations remain strong, notwithstanding the problems experienced in the fourth quarter on Texas projects. The revenue growth and dramatic backlog increase in 2014 portend well for the future." "Our current personnel and resources should permit us to capitalize on our opportunities," Mr. Sottile added.

About Goldfield
Goldfield is a leading provider of electrical construction and maintenance services in the energy infrastructure industry, primarily in the southeastern and mid-Atlantic regions of the United States including Texas. The company specializes in installing and maintaining electrical transmission lines for a wide range of electric utilities.

For additional information on our 2014 results, please refer to our Annual Report on Form 10-K being filed with the Securities and Exchange Commission and visit the Company's website at
http://www.goldfieldcorp.com.

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.

  
The Goldfield Corporation and Subsidiaries 
Consolidated Statements of Operations 
(Unaudited) 
  
 
 
 
 
Three Months Ended
December 31,
 
 
 
 
Year Ended
December 31,
 
 
  2014
  2013
  2014
  2013
 
Revenue                
 Electrical construction  $28,305,888   $22,800,080   $94,826,620   $88,755,236  
 Other   136,696    1,115    3,536,650    448,902  
  Total revenue   28,442,584    22,801,195    98,363,270    89,204,138  
Costs and expenses                     
 Electrical construction   27,926,540    17,795,195    84,067,942    71,680,877  
 Other   120,302    1,115    2,858,699    362,243  
 Selling, general and administrative   1,072,063    1,090,090    4,321,250    4,036,955  
 Depreciation and amortization   1,549,194    1,273,494    6,064,636    4,967,311  
 Gain on sale of property and equipment   (8,246 )  (100,666 )  (332,182 )  (100,233 )
  Total costs and expenses   30,659,853    20,059,228    96,980,345    80,947,153  
   Total operating (loss) income   (2,217,269 )  2,741,967    1,382,925    8,256,985  
Other income (expense), net                     
 Interest income   6,062    11,955    22,820    29,461  
 Interest expense   (164,974 )  (150,234 )  (681,101 )  (594,632 )
 Other income, net   13,438    13,835    53,497    99,875  
  Total other expense, net   (145,474 )  (124,444 )  (604,784 )  (465,296 )
(Loss) income from continuing operations before income taxes   (2,362,743 )  2,617,523    778,141    7,791,689  
Income tax provision   (539,384 )  1,229,839    653,442    3,284,647  
(Loss) income from continuing operations   (1,823,359 )  1,387,684    124,699    4,507,042  
Gain (loss) from discontinued operations, net of tax benefit of $267,736 in 2014 and $476,261 in 2013   221,587    24,701    (443,760 )  (723,739 )
Net (loss) income  $(1,601,772 ) $1,412,385   $(319,061 ) $3,783,303  
Net (loss) income per share of common stock - basic and diluted                     
 Continuing operations  $(0.07 ) $0.05   $0.00   $0.18  
 Discontinued operations   0.01    0.00    (0.02 )  (0.03 )
  Net (loss) income  $(0.06 ) $0.06   $(0.01 ) $0.15  
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,
2014
  December 31,
2013
 
ASSETS
      
Current assets           
 Cash and cash equivalents  $9,822,179   $20,214,569  
 Accounts receivable and accrued billings, net   17,840,680    14,194,959  
 Costs and estimated earnings in excess of billings on uncompleted contracts   6,537,280    4,991,754  
 Income taxes receivable   763,821    452,099  
 Real estate inventory   -    395,062  
 Residential properties under construction   -    1,616,916  
 Prepaid expenses   613,765    471,221  
 Deferred income taxes   2,274,896    621,632  
 Other current assets   315,962    74,976  
  Total current assets   38,168,583    43,033,188  
            
Property, buildings and equipment, at cost, net   37,002,843    31,853,982  
Deferred charges and other assets   4,798,510    2,691,818  
Total assets  $79,969,936   $77,578,988  
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
Current liabilities           
 Accounts payable and accrued liabilities  $9,674,961   $7,767,977  
 Contract loss accruals   2,547,816    84,360  
 Current portion of notes payable   3,685,859    13,046,080  
 Accrued remediation costs   1,048,380    155,667  
 Other current liabilities   1,537,971    55,846  
  Total current liabilities   18,494,987    21,109,930  
Deferred income taxes   7,988,539    5,982,368  
Accrued remediation costs, less current portion   15,000    900,000  
Notes payable, less current portion   22,657,973    18,485,681  
Other accrued liabilities   55,766    24,277  
Total liabilities   49,212,265    46,502,256  
Commitments and contingencies           
Stockholders' equity           
 Common stock   2,781,377    2,781,377  
 Capital surplus   18,481,683    18,481,683  
 Retained earnings   10,802,798    11,121,859  
 Common stock in treasury, at cost   (1,308,187 )  (1,308,187 )
  Total stockholders' equity   30,757,671    31,076,732  
Total liabilities and stockholders' equity  $79,969,936   $77,578,988  
         

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