SOURCE: The Goldfield Corporation

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November 04, 2016 06:39 ET

Goldfield Announces Strong Third Quarter Results

MELBOURNE, FL--(Marketwired - November 04, 2016) - The Goldfield Corporation (NYSE MKT: GV), today announced strong results for the three and nine months ended September 30, 2016. 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 electrical construction services for the utility industry and industrial customers, with operations primarily in the Southeast and mid-Atlantic regions of the United States and Texas.

Nine months ended September 30, 2016, compared to the same period in 2015:

  • Revenue grew 8.4% to $98.7 million from $91.1 million. Electrical construction revenue grew 5.4%, attributable to significant growth in non-MSA electrical construction projects.
  • Income from continuing operations before taxes increased to $16.6 million from $4.3 million. This increase was fueled by more than a two-fold increase in electrical construction operations income before income taxes(1) resulting mainly from higher revenues and improved operating efficiencies. Margins on electrical construction operations operating income increased to 20.9% from 8.9%.(1) Results for the nine month period in 2015 included a pre-tax operating loss of approximately $4.4 million on certain Texas projects completed in the second quarter of 2015.
  • Net income grew to $10.4 million ($0.41 per share) from $2.2 million ($0.09 per share).
  • EBITDA(1) improved to $21.6 million from $9.2 million, as a result of the same factors which drove the growth in our pre-tax operating income.

Three months ended September 30, 2016, compared to the same period in 2015:

  • Revenue increased 13.3% to $30.7 million from $27.1 million. Electrical construction revenue increased 10.6%, mainly attributable to the increase in non-MSA work.
  • Income from continuing operations before taxes increased to $3.6 million from $3.0 million. This increase was fueled by a 9.8% increase in electrical construction operations income before income taxes(1) resulting mainly from revenue growth. Margins on electrical construction operations operating income remained steady at 15.5% compared to 15.8% in the same period last year.(1) The decrease in such margin from 20.9% in the current nine month period to 15.5% in the current quarterly period largely resulted from the conclusion of certain particularly high margin projects in the first two quarters of 2016.
  • Net income grew to $2.3 million ($0.09 per share) from $1.7 million ($0.07 per share).
  • EBITDA(1) improved to $5.3 million from $4.8 million, as a result of the same factors which drove the growth in our pre-tax operating income.

Backlog

As of September 30, 2016, backlog was $170.3 million compared to $214.5 million as of the same date last year. We expect approximately $75.9 million of this backlog to be completed within 12 months. Backlog is only 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. The decline in backlog resulted primarily from completion of work under existing master service agreements ("MSA") not yet eligible for renewal. 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.

President and Chief Executive Officer John H. Sottile said, "Our strong results reflect the successful efforts of our team in improving operating efficiencies. We have been able to achieve continued growth while maintaining healthy profit margins. We are committed to the high level of service provided to our existing customers while, at the same time, working to expand our geographic footprint and customer base."

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 and mid-Atlantic regions of the United States and in Texas.

For additional information on our 2016 third quarter 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 non-GAAP financial measures to the reported GAAP measures. The non-GAAP measures in this press release and on The Goldfield Corporation's website are 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. These measures should be used to supplement, and not in lieu of, results prepared in conformity with GAAP. Because not all companies use identical calculations, this presentation of electrical construction operations operating income (loss), electrical construction operations income (loss) before taxes and EBITDA may not be comparable to other similarly-titled measures of 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; 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,
   2016  2015  2016  2015
Revenue            
 Electrical construction  $29,653,625   $26,813,125   $95,385,820   $90,509,971  
 Other   1,000,538    249,236    3,283,799    553,102  
  Total revenue   30,654,163    27,062,361    98,669,619    91,063,073  
Costs and expenses                     
 Electrical construction   23,161,561    20,966,266    70,096,028    77,422,210  
 Other   663,320    231,163    2,298,227    502,040  
 Selling, general and administrative   1,532,689    1,072,870    4,607,106    3,552,001  
 Depreciation and amortization   1,590,233    1,677,097    4,672,078    4,949,367  
 Gain on sale of property and equipment   (19,056 )  (84,179 )  (914 )  (66,988 )
  Total costs and expenses   26,928,747    23,863,217    81,672,525    86,358,630  
   Total operating income   3,725,416    3,199,144    16,997,094    4,704,443  
Other income (expense), net                     
 Interest income   10,009    4,918    25,369    14,903  
 Interest expense, net of amount capitalized   (146,022 )  (175,651 )  (457,313 )  (509,478 )
 Other income, net   12,903    14,216    42,363    47,053  
  Total other expense, net   (123,110 )  (156,517 )  (389,581 )  (447,522 )
Income from continuing operations before income taxes   3,602,306    3,042,627    16,607,513    4,256,921  
Income tax provision   1,298,420    1,199,211    6,089,367    1,746,602  
Income from continuing operations   2,303,886    1,843,416    10,518,146    2,510,319  
Loss from discontinued operations, net of income tax benefit of $0, $39,395, $66,077 and $194,249, respectively   -    (98,918 )  (108,007 )  (299,956 )
Net income  $2,303,886   $1,744,498   $10,410,139   $2,210,363  
Net income (loss) per share of common stock - basic and diluted                     
 Continuing operations  $0.09   $0.07   $0.41   $0.10  
 Discontinued operations   -    -    -    (0.01 )
  Net income  $0.09   $0.07   $0.41   $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,
   2016  2015
ASSETS      
Current assets      
 Cash and cash equivalents  $16,815,987   $11,374,238  
 Accounts receivable and accrued billings, net   18,547,073    17,250,067  
 Costs and estimated earnings in excess of billings on uncompleted contracts   12,044,706    10,292,199  
 Income taxes receivable   639,379    -  
 Residential properties under construction   2,768,374    145,450  
 Prepaid expenses   1,494,843    1,210,780  
 Deferred income taxes   -    773,245  
 Other current assets   509,394    1,188,630  
  Total current assets   52,819,756    42,234,609  
            
Property, buildings and equipment, at cost, net   32,838,290    34,671,947  
Deferred charges and other assets   4,197,075    4,257,051  
Total assets  $89,855,121   $81,163,607  
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
Current liabilities           
 Accounts payable and accrued liabilities  $11,712,672   $10,067,553  
 Current portion of notes payable, net   6,105,039    5,815,510  
 Income taxes payable   -    483,763  
 Accrued remediation costs   140,089    135,786  
 Other current liabilities   272,287    234,161  
  Total current liabilities   18,230,087    16,736,773  
            
Deferred income taxes   7,547,460    8,328,492  
Accrued remediation costs, less current portion   95,420    107,429  
Notes payable, less current portion, net   18,254,279    20,656,402  
Other accrued liabilities   66,923    83,698  
Total liabilities   44,194,169    45,912,794  
Commitments and contingencies           
Stockholders' equity           
 Common stock   2,781,377    2,781,377  
 Capital surplus   18,481,683    18,481,683  
 Retained earnings   25,706,079    15,295,940  
 Common stock in treasury, at cost   (1,308,187 )  (1,308,187 )
  Total stockholders' equity   45,660,952    35,250,813  
Total liabilities and stockholders' equity  $89,855,121   $81,163,607  
 
The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Electrical construction operations operating income (loss), is defined as total operating income (loss) adjusted for non-electrical construction activity within total operating income (loss) including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, and gain or loss on sale of property and equipment. Electrical construction operations operating income (loss), a non-GAAP financial measure, does not purport to be an alternative to the Company's total operating income (loss) as a measure of operations. Because not all companies use identical calculations, this presentation of electrical construction operations operating income (loss) may not be comparable to other similarly-titled measures of other companies. We believe investors may benefit from the presentation of electrical construction operations operating income (loss) in evaluating our operating performance because it provides 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 and is useful in comparing our operating results with those of our competitors.

     
   Three Months Ended  Nine Months Ended
   September 30,  September 30,
Electrical Construction Operations Operating Income  2016  2015  2016  2015
Total operating income (GAAP as reported)  $3,725,416   $3,199,144   $16,997,094   $4,704,443  
Total operating income (GAAP as reported) as a percentage of total revenue of $30,654,163, $27,062,361, $98,669,619 and $91,063,073, respectively   12.2 %  11.8 %  17.2 %  5.2 %
 Other operations gross margin   (337,218 )  (18,073 )  (985,572 )  (51,062 )
 Non-electrical construction selling, general and administrative   1,183,276    1,033,841    3,790,577    3,298,324  
 Non-electrical construction depreciation and amortization   37,129    31,094    98,053    92,937  
Electrical construction operations operating income  $4,608,603   $4,246,006   $19,900,152   $8,044,642  
Electrical construction operations operating income as a percentage of electrical construction revenue $29,653,625, $26,813,125, $95,385,820 and $90,509,971, respectively   15.5 %  15.8 %  20.9 %  8.9 %
 
The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Electrical construction operations income (loss) before income taxes, is defined as consolidated income (loss) from continuing operations before income taxes adjusted for non-electrical construction activity within income (loss) from continuing operations before income taxes including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, gain or loss on sale of property and equipment, interest income, interest expense, and other income. Electrical construction operations income (loss) before income taxes, a non-GAAP financial measure, does not purport to be an alternative to the Company's consolidated income (loss) from continuing operations before income taxes as a measure of income (loss). Because not all companies use identical calculations, this presentation of electrical construction operations income (loss) before income taxes may not be comparable to other similarly-titled measures of other companies. We believe investors may benefit from the presentation of electrical construction operations income (loss) before income taxes in evaluating our performance because it provides our investors with an additional tool to compare our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core results and is useful in comparing our results with those of our competitors.

     
   Three Months Ended  Nine Months Ended
   September 30,  September 30,
Electrical Construction Operations Income Before Income Taxes  2016  2015  2016  2015
Total income from continuing operations before income taxes (GAAP as reported)  $3,602,306   $3,042,627   $16,607,513   $4,256,921  
 Other operations gross margin   (337,218 )  (18,073 )  (985,572 )  (51,062 )
 Non-electrical construction selling, general and administrative   1,183,276    1,033,841    3,790,577    3,298,324  
 Non-electrical construction depreciation and amortization   37,129    31,094    98,053    92,937  
 Non-electrical construction interest (income)   (1,678 )  (1,798 )  (7,726 )  (6,171 )
 Non-electrical construction other (income), net   (10,734 )  (13,601 )  (36,872 )  (44,027 )
Electrical construction operations income before income taxes  $4,473,081   $4,074,090   $19,465,973   $7,546,922  
 
The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

EBITDA, a non-GAAP performance measure used by management, is defined as net income (loss) plus: interest expense, provision (benefit) 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 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.

     
   Three Months Ended  Nine Months Ended
   September 30,  September 30,
EBITDA  2016  2015  2016  2015
Net income (GAAP as reported)  $2,303,886  $1,744,498  $10,410,139  $2,210,363
 Interest expense, net of amount capitalized   146,022   175,651   457,313   509,478
 Provision for income taxes, net (1)   1,298,420   1,159,816   6,023,290   1,552,353
 Depreciation and amortization(2)   1,590,233   1,677,097   4,672,078   4,949,367
EBITDA  $5,338,561  $4,757,062  $21,562,820  $9,221,561
___________                
(1) Provision for income tax, net is equal to the total amount of tax provision, which includes the tax benefit for discontinued operations.
(2) Depreciation and amortization includes depreciation on property, plant and equipment and amortization of finite-lived intangible assets.
 

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