SOURCE: The Goldfield Corporation

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November 12, 2014 08:40 ET

Goldfield Announces 2014 Third Quarter Earnings and Record Backlog

MELBOURNE, FL--(Marketwired - November 12, 2014) - The Goldfield Corporation (NYSE MKT: GV) today announced its operating results for the three and nine months ended September 30, 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 southeast and mid-atlantic regions of the United States and in Texas.

Nine Months Ended September 30, 2014

Revenue for the nine months ended September 30, 2014, increased 5.3% to $69.9 million from $66.4 million in the comparable prior year period. This increase resulted from higher electrical construction revenue attributable to the acquisition of C and C Power Line, Inc. ("C&C") in January.

Income from continuing operations before income taxes for the nine months ended September 30, 2014, was $3.1 million compared to $5.2 million in 2013. This decrease largely resulted from higher electrical construction operations costs attributable to approximately $1.3 million in previously disclosed expenses relating to difficulties on one now completed project, as well as increases in our electrical operations fixed and overhead costs in order to gear up for anticipated higher operating levels.

Net income for the nine months ended September 30, 2014, was $1.3 million, or $0.05 income per share, compared to net income of $2.4 million, or $0.09 income per share, in the comparable prior year period. Our net income for the nine months ended September 30, 2014 and 2013, include special charges (after tax) of $665,000 and $748,000, respectively, in discontinued operations in connection with a previously disclosed EPA matter, settled on September 15, 2014.

Three Months Ended September 30, 2014

Revenue for the three months ended September 30, 2014, decreased slightly to $22.7 million from $23.3 million in the comparable prior year period. This decrease was mainly attributable to the completion of the South Texas Electric Cooperative ("STEC") project in August 2013, which represented approximately 31.2% of electrical construction revenue for the three months ended September 30, 2013. The revenue from STEC was largely replaced by revenue from our acquisition of C&C.

Income from continuing operations before income taxes for the three months ended September 30, 2014, was $1.9 million compared to $2.2 million in 2013.

Net income for the three months ended September 30, 2014, was $1.2 million, or $0.05 income per share, compared to $1.3 million, or $0.05 income per share, in the comparable prior year period.

Backlog

As previously announced, the Company has been focusing on developing and growing electrical construction services under multi-year Master Service Agreements ("MSAs"), which provide for more consistent work load and improved operating efficiencies. This effort has scored significant success in the second and third quarters of 2014. Total MSA backlog grew 392% to approximately $246 million as of September 30, 2014, from $50 million at March 31, 2014. The $246 million represents total revenue estimated over the life of the MSAs, of which about $48 million are estimated to be realized within 12-months. Because of the recent signing of these MSAs and the necessary delay in the start of specific construction projects, the new MSAs did not, in large part, impact revenue for the three and nine month periods ended September 30, 2014.

In addition to amounts reflected under MSAs, project-specific firm contracts to be completed within 12 months grew 78% to approximately $40 million as of September 30, 2014, from approximately $22 million as of September 30, 2013.

Of the total $287 million backlog as of September 30, 2014, we expect approximately $87 million (31%) to be completed within the next 12 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 assumed exercise of renewal options represents 49% of our total estimated MSA backlog as of September 30, 2014.

The estimated amount of backlog for work under 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 almost four-fold growth in our electrical construction MSAs during the second and third quarters demonstrates the strength of our electrical construction operation. At September 30th, anticipated 12-month revenue from MSAs stood at about $48 million -- up from about $13 million a year ago. We expect that these new MSAs will begin to have a significant impact on our operating results beginning the current quarter. Future results should also be favorably impacted by the strong 78% growth in our project specific firm contracts, with anticipated 12-month revenue from such contracts increasing to about $40 million from about $22 million a year ago."

About Goldfield

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

For additional information on our third quarter results, please refer to our Quarterly Report on Form 10-Q 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 Income 
(Unaudited) 
  
   Three Months Ended   Nine Months Ended  
   September 30,   September 30,  
   2014   2013   2014   2013  
Revenue                     
 Electrical construction  $22,111,299   $23,308,530   $66,520,732   $65,955,156  
 Other   548,052    1,762    3,399,954    447,786  
   Total revenue   22,659,351    23,310,292    69,920,686    66,402,942  
Costs and expenses                     
 Electrical construction   17,849,577    18,590,749    56,141,402    53,885,682  
 Other   420,331    1,762    2,738,397    361,128  
 Selling, general and administrative   997,214    1,075,834    3,249,188    2,946,863  
 Depreciation and amortization   1,495,141    1,281,946    4,515,441    3,693,818  
 (Gain) loss on sale of property and equipment   (161,035 )  27,888    (323,936 )  433  
  Total costs and expenses   20,601,228    20,978,179    66,320,492    60,887,924  
   Total operating income   2,058,123    2,332,113    3,600,194    5,515,018  
Other income (expense), net                     
 Interest income   7,647    6,238    16,758    17,506  
 Interest expense   (163,632 )  (159,065 )  (516,127 )  (444,398 )
 Other income, net   11,830    57,479    40,059    86,040  
  Total other expense, net   (144,155 )  (95,348 )  (459,310 )  (340,852 )
Income before income taxes   1,913,968    2,236,765    3,140,884    5,174,166  
Income tax provision   728,243    955,108    1,192,826    2,054,808  
Income from continuing operations   1,185,725    1,281,657    1,948,058    3,119,358  
Loss from discontinued operations, net of tax benefit of $405,478 in 2014 and $451,560 in 2013   -    -    (665,347 )  (748,440 )
Net income  $1,185,725   $1,281,657   $1,282,711   $2,370,918  
                      
Net income per share of common stock -- basic and diluted                     
 Continuing operations  $0.05   $0.05   $0.08   $0.12  
 Discontinued operations   -    -    (0.03 )  (0.03 )
Net income per share of common stock -- basic and diluted  $0.05   $0.05   $0.05   $0.09  
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) 
  
   September 30,   December 31,  
   2014   2013  
ASSETS           
Current assets           
 Cash and cash equivalents  $9,090,280   $20,214,569  
 Accounts receivable and accrued billings, net   10,819,860    14,194,959  
 Costs and estimated earnings in excess of billings on uncompleted contracts   8,894,970    4,991,754  
 Income taxes receivable   162,560    452,099  
 Real estate inventory   -    395,062  
 Residential properties under construction   -    1,616,916  
 Prepaid expenses   876,370    471,221  
 Deferred income taxes   940,118    621,632  
 Other current assets   314,186    74,976  
  Total current assets   31,098,344    43,033,188  
            
Property, buildings and equipment, at cost, net   36,529,214    31,853,982  
Deferred charges and other assets   4,365,251    2,691,818  
Total assets  $71,992,809   $77,578,988  
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
Current liabilities           
 Accounts payable and accrued liabilities  $8,055,346   $7,852,337  
 Current portion of notes payable   6,757,466    13,046,080  
 Accrued remediation costs   1,509,474    155,667  
 Other current liabilities   310,199    55,846  
  Total current liabilities   16,632,485    21,109,930  
            
Deferred income taxes   6,544,836    5,982,368  
Accrued remediation costs   129,935    900,000  
Notes payable, less current portion   16,282,313    18,485,681  
Other accrued liabilities   43,797    24,277  
Total liabilities   39,633,366    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   12,404,570    11,121,859  
 Common stock in treasury, at cost   (1,308,187 )  (1,308,187 )
  Total stockholders' equity   32,359,443    31,076,732  
Total liabilities and stockholders' equity  $71,992,809   $77,578,988  

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