Goldfield Announces Second Quarter 2015 Results

MELBOURNE, FL -- (Marketwired) -- 08/14/15 -- 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  

For further information, please contact:
The Goldfield Corporation
Phone: (321) 724-1700
Email: investorrelations@goldfieldcorp.com

Source: The Goldfield Corporation