SOURCE: The Goldfield Corporation

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August 14, 2015 07:55 ET

Goldfield Announces Second Quarter 2015 Results

MELBOURNE, FL--(Marketwired - August 14, 2015) - The Goldfield Corporation (NYSE MKT: GV) today announced financial results for the three and six-month periods ended June 30, 2015. 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 for electric utilities, with operations primarily in the southeastern and mid-Atlantic regions of the United States including Texas.

Three-Months Ended June 30, 2015

For the three-months ended June 30, 2015 compared to the same period last year:

  • Revenue increased 32.1% to $33.5 million from $25.3 million -- attributable to higher revenue from both master service agreement (MSA) and non-MSA work.
  • Income from continuing operations before income taxes tripled to $2.8 million from $693,000 despite losses of $1.2 million incurred from continued adverse weather conditions causing construction delays in the current quarter on Texas projects, which are now substantially complete.
  • Net income rose to $1.3 million ($0.05 per share) from a net loss of $238,000 ($0.01 loss per share). Net income (loss) for the three-months ended June 30, 2015 and 2014 included special after tax charges of $201,000 and $665,000, respectively, in discontinued operations from a previously disclosed environmental remediation project, which is now substantially complete.

Six-Months Ended June 30, 2015

For the six-months ended June 30, 2015 compared to the same period last year:

  • Revenue increased 35.4% to $64.0 million from $47.3 million -- mainly attributable to growth in MSAs.
  • Income from continuing operations before income taxes remained approximately the same at $1.2 million despite losses aggregating $5.1 million recognized in the six-months ended June 30, 2015 (largely in the first quarter) on the substantially completed projects in Texas.
  • Net income increased over three-fold to $466,000 ($0.02 per share) from $97,000 (nil per share). Net income for the six-months ended June 30, 2015 and 2014, included special after tax charges of $201,000 and $665,000, respectively, in discontinued operations from the environmental remediation project mentioned above.

Backlog

Total backlog as of June 30, 2015 was $218.2 million compared to $223.5 million as of June 30, 2014. Backlog represents total revenue estimated over the life of an MSA plus estimated revenue from fixed-price contracts. Of this backlog, $73.0 million (33.4%) is expected to be realized within twelve months.

Compared to December 31, 2014, backlog as of June 30, 2015 declined $56.8 million (20.6%) and 12-month backlog declined $12.4 million (14.5%). These declines largely resulted from completion of certain MSA work and reduction of some future estimated work from these MSAs. Growth in non-MSA contracts partially offset the decrease in MSA backlog.

Existing MSAs have initial terms ranging from one to four years and generally provide for extensions. Total MSA backlog assumes the exercise of renewal options. Revenue from the exercise of renewal options represent $101.1 million (59.5%) of total estimated MSA backlog as of June 30, 2015. The estimated backlog from MSAs is calculated by using recurring historical revenue from current MSAs and projected needs based upon ongoing communications with customers. The size and amount of future projects awarded under MSAs cannot be determined with certainty and revenue from such contracts may vary substantially from current estimates.

John H. Sottile, President and Chief Executive Officer of Goldfield said, "We have now substantially completed our unprofitable Texas projects and have accomplished a reorganization of this operation. This will permit us to seek other projects from new and existing customers. Fortunately, our work outside Texas has remained strong. The general demand for electrical construction services is positive. Our focus is to achieve operating efficiencies, improved profit margins and to secure well qualified labor to take advantage of these opportunities."

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 second quarter 2015 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 Operations
(Unaudited)

  Three months ended June 30,  Six months ended June 30, 
  2015  2014  2015  2014 
Revenue                
 Electrical construction  $33,296,684   $22,890,318   $63,696,846   $44,409,433  
 Other   157,221    2,439,772    303,867    2,851,903  
  Total revenue   33,453,905    25,330,090    64,000,713    47,261,336  
Costs and expenses                     
 Electrical construction   27,222,221    19,963,568    56,455,944    38,291,826  
 Other   143,143    2,009,762    270,878    2,318,066  
 Selling, general and administrative   1,477,422    1,137,747    2,479,131    2,251,974  
 Depreciation and amortization   1,658,424    1,521,395    3,272,269    3,020,300  
 Loss (gain) on sale of property and equipment   11,564    (154,896 )  17,192    (162,901 )
  Total costs and expenses   30,512,774    24,477,576    62,495,414    45,719,265  
   Total operating income   2,941,131    852,514    1,505,299    1,542,071  
Other income (expense), net                     
 Interest income   4,120    1,418    9,985    9,111  
 Interest expense   (163,775 )  (174,682 )  (333,828 )  (352,494 )
 Other income, net   17,461    14,245    32,837    28,228  
  Total other expense, net   (142,194 )  (159,019 )  (291,006 )  (315,155 )
Income before income taxes   2,798,937    693,495    1,214,293    1,226,916  
Income tax provision   1,285,701    266,443    547,392    464,583  
Income from continuing operations   1,513,236    427,052    666,901    762,333  
Loss from discontinued operations, net of tax benefit of $154,855 in 2015 and $405,478 in 2014   (201,037 )  (665,347 )  (201,037 )  (665,347 )
Net income (loss)  $1,312,199    (238,295 ) $465,864   $96,986  
                      
Net income (loss) per share of common stock -- basic and diluted                     
 Continuing operations  $0.06   $0.02   $0.03   $0.03  
 Discontinued operations   (0.01 )  (0.03 )  (0.01 )  (0.03 )
  Net income (loss)  $0.05   $(0.01 ) $0.02   $0.00  
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)

  June 30, 2015
  December 31, 2014
 
ASSETS        
Current assets           
 Cash and cash equivalents  $7,279,986   $9,822,179  
 Accounts receivable and accrued billings, net   14,035,315    17,840,680  
 Costs and estimated earnings in excess of billings on uncompleted contracts   15,499,404    6,537,280  
 Deferred income taxes   948,459    2,274,896  
 Income taxes receivable   1,631,271    763,821  
 Residential properties under construction   673,817    -  
 Prepaid expenses   697,842    613,765  
 Other current assets   634,819    315,962  
  Total current assets   41,400,913    38,168,583  
            
Property, buildings and equipment, at cost, net   37,204,360    37,002,843  
Deferred charges and other assets   4,340,879    4,798,510  
Total assets  $82,946,152   $79,969,936  
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
Current liabilities           
 Accounts payable and accrued liabilities  $10,757,469   $9,674,961  
 Contract loss accruals   182,572    2,547,816  
 Current portion of notes payable   7,952,926    3,685,859  
 Accrued remediation costs   800,113    1,048,380  
 Other current liabilities   361,275    1,537,971  
  Total current liabilities   20,054,355    18,494,987  
            
Deferred income taxes   7,889,933    7,988,539  
Other accrued liabilities   66,755    55,766  
Notes payable, less current portion   23,696,574    22,657,973  
Accrued remediation costs, less current portion   15,000    15,000  
Total liabilities   51,722,617    49,212,265  
Commitments and contingencies           
Stockholders' equity           
 Common stock   2,781,377    2,781,377  
 Capital surplus   18,481,683    18,481,683  
 Retained earnings   11,268,662    10,802,798  
 Common stock in treasury, at cost   (1,308,187 )  (1,308,187 )
  Total stockholders' equity   31,223,535    30,757,671  
Total liabilities and stockholders' equity  $82,946,152   $79,969,936  

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