Acting Co-CEO and President of PCA Jason M. Spivey said, “Our electrical construction operations were strong during the third quarter, led by increased MSA project activity across all service lines in the mid-
Acting Co-CEO and Chief Financial Officer
NINE MONTHS ENDED
For the nine months ended
- Electrical construction revenue increased 11.3%, or
$14.0 million , to$137.8 million from$123.8 million , primarily due to increased master service agreements (“MSAs”) and non-MSA transmission project volume in the Southeast region, continued growth in MSA project activity and service line expansion in the Texas-Southwest region and increased storm work, partially offset by lower MSA activity in the mid-Atlantic region mostly in the first half of the year. - Real estate development revenue declined to
$3.3 million from$12.8 million primarily due to the decrease in the number and type of units sold and the timing of completion of units available for sale. - Consolidated revenue increased 3.3%, or
$4.5 million , to$141.0 million from$136.6 million , primarily due to improved electrical construction revenue offset by lower real estate development activity. - Gross margin on electrical construction improved to 17.2% from 14.7%, primarily attributable to increased MSA activity and service line expansion in the Texas-Southwest region, as well as higher foundation construction activity with increased margins. These improvements were partially offset by lower transmission project activity, mainly due to the delayed start-up of a newly awarded MSA in the mid-
Atlantic region, mostly in the first half of the year. - Gross margin on real estate development increased to 32.7% from 27.0% primarily due to the type of units sold.
- Operating income increased 9.8% to
$7.3 million from$6.6 million primarily due to higher electrical construction gross profit, partially offset by higher selling, general and administrative (“SG&A”) and depreciation expenses and lower real estate development gross profit. SG&A expenses were primarily impacted by a one-time expense of approximately$1.4 million due to the settlement of amounts owed, including employment agreement and death benefits, to the estate of the former Chief Executive Officer who passed away inAugust 2020 . - Net income increased 33.8% to
$5.0 million , or$0.21 per share, from$3.8 million , or$0.15 per share, primarily due to higher revenue and improved gross margin in electrical construction operations, as well as lower tax expense due to adjustments related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), partially offset by lower real estate development activity and higher SG&A and depreciation expenses. - EBITDA (a non-GAAP measure(1)) increased 10.6% to
$16.4 million compared to$14.8 million primarily due to improved electrical construction gross profit, partially offset by higher SG&A expense and lower real estate development gross profit.
THREE MONTHS ENDED
For the quarter ended
- Electrical construction revenue increased 11.3% to
$48.1 million from$43.2 million due to increased MSA project activity in the mid-Atlantic region, increased MSA and non-MSA project volume in the Southeast region and increased storm work, partially offset by lower transmission-related MSA activity in the Texas-Southwest region. - Real estate development revenue operations declined
$1.2 million , to$0.4 million from$1.6 million , primarily due to the decrease in the number of units sold and the timing of completion of units available for sale. - Consolidated revenue increased 8.2% to
$48.4 million from$44.7 million , attributable to improved electrical construction operations project activity, partially offset by lower real estate development activity. - Gross margin on electrical construction grew to 17.5% from 14.8%, primarily attributable to increased project activity in expanded service lines at higher gross margins across all regions.
- Gross margin on real estate development decreased to 32.9% from 33.5% primarily due to the type of units sold.
- Operating income decreased 9.4% to
$1.9 million from$2.1 million , mainly due to higher SG&A and depreciation expenses and lower real estate development gross profit, partially offset by improved electrical construction gross profit. SG&A expenses were primarily impacted by a one-time expense of approximately$1.4 million due to the settlement of amounts owed, including employment agreement and death benefits, to the estate of the former Chief Executive Officer. - Net income decreased 6.0% to
$1.1 million , or$0.04 per share, from$1.2 million , or$0.05 per share, primarily due to higher SG&A and depreciation expenses and lower real estate development activity, partially offset by increased revenue and improved gross margin in electrical construction operations. - EBITDA (a non-GAAP measure (1)) increased 3.0% to
$5.0 million compared to$4.9 million primarily due to improved electrical construction gross profit, partially offset by higher SG&A expense and lower real estate development gross profit.
Backlog (a non-GAAP measure(1))
At
The Company’s 12-month electrical construction backlog increased 57.5% to
Backlog is 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.
Conference Call
The Company will host a conference call and webcast to discuss results at
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, mid-
(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 the non-GAAP financial measures to the reported GAAP measures. The EBITDA non-GAAP measure in this press release and on The Goldfield Corporation’s website is 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. EBITDA should be used to supplement, and not in lieu of, results prepared in conformity with GAAP. Because not all companies use identical calculations, the presentations of EBITDA and Backlog may not be comparable to other similarly-titled measures of other companies. The Backlog non-GAAP financial measure in this press release enables management to more effectively forecast our future capital needs and results and better identify future operating trends that may not otherwise be apparent. The Company believes this measure is also useful for investors in forecasting our future results and comparing us to our competitors. While the Company believes that our methodology of calculation is appropriate, such methodology may not be comparable to that employed by some 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; global pandemics; 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
For further information, please contact:
T: 312-898-3072
kwalczak@effectivecorpcom.com
Consolidated Statements of Income
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue | ||||||||||||||||
Electrical construction | $ | 48,056,897 | $ | 43,182,197 | $ | 137,794,907 | $ | 123,773,883 | ||||||||
Real estate development | 364,900 | 1,550,684 | 3,250,563 | 12,819,473 | ||||||||||||
Total revenue | 48,421,797 | 44,732,881 | 141,045,470 | 136,593,356 | ||||||||||||
Costs and expenses | ||||||||||||||||
Electrical construction | 39,640,718 | 36,789,515 | 114,042,479 | 105,597,926 | ||||||||||||
Real estate development | 244,813 | 1,031,373 | 2,187,998 | 9,360,449 | ||||||||||||
Selling, general and administrative | 3,633,799 | 2,162,360 | 8,581,365 | 7,033,244 | ||||||||||||
Depreciation and amortization | 3,056,457 | 2,728,988 | 8,950,772 | 8,048,549 | ||||||||||||
(Gain) loss on sale of property and equipment | (25,831 | ) | (45,504 | ) | 2,915 | (77,571 | ) | |||||||||
Total costs and expenses | 46,549,956 | 42,666,732 | 133,765,529 | 129,962,597 | ||||||||||||
Total operating income | 1,871,841 | 2,066,149 | 7,279,941 | 6,630,759 | ||||||||||||
Other income (expense), net | ||||||||||||||||
Interest income | 29,245 | 28,311 | 58,939 | 71,082 | ||||||||||||
Interest expense, net of amount capitalized | (215,063 | ) | (367,244 | ) | (761,118 | ) | (1,130,798 | ) | ||||||||
Other income, net | 38,195 | 27,199 | 121,199 | 91,736 | ||||||||||||
Total other expense, net | (147,623 | ) | (311,734 | ) | (580,980 | ) | (967,980 | ) | ||||||||
Income before income taxes | 1,724,218 | 1,754,415 | 6,698,961 | 5,662,779 | ||||||||||||
Income tax provision | 632,467 | 592,413 | 1,665,769 | 1,902,034 | ||||||||||||
Net income | $ | 1,091,751 | $ | 1,162,002 | $ | 5,033,192 | $ | 3,760,745 | ||||||||
Net income per share of common stock — basic | $ | 0.04 | $ | 0.05 | $ | 0.21 | $ | 0.15 | ||||||||
Net income per share of common stock — diluted | $ | 0.04 | $ | 0.05 | $ | 0.21 | $ | 0.15 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 24,522,534 | 24,522,534 | 24,522,534 | 24,523,731 | ||||||||||||
Diluted | 24,554,324 | 24,522,534 | 24,533,208 | 24,523,731 |
Condensed Consolidated Balance Sheets
(Unaudited)
September 30, | December 31, | |||||||
2020 | 2019 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 20,593,879 | $ | 23,272,156 | ||||
Accounts receivable and accrued billings, net | 27,483,338 | 23,930,655 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 24,328,912 | 9,321,368 | ||||||
Income taxes receivable | 562,508 | 1,482,618 | ||||||
Residential properties under construction | 919,020 | 2,060,364 | ||||||
Prepaid expenses | 1,216,441 | 924,733 | ||||||
Other current assets | 578,805 | 46,186 | ||||||
Total current assets | 75,682,903 | 61,038,080 | ||||||
Property, buildings and equipment, at cost, net | 59,166,078 | 55,073,579 | ||||||
Deferred charges and other assets | 24,596,830 | 13,255,519 | ||||||
Total assets | $ | 159,445,811 | $ | 129,367,178 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 16,355,664 | $ | 13,881,277 | ||||
Current portion of notes payable, net | 13,895,635 | 7,769,497 | ||||||
Accrued remediation costs | 80,420 | 75,545 | ||||||
Other current liabilities | 5,108,960 | 2,612,449 | ||||||
Total current liabilities | 35,440,679 | 24,338,768 | ||||||
Deferred income taxes | 10,078,684 | 9,008,765 | ||||||
Accrued remediation costs, less current portion | 389,950 | 398,877 | ||||||
Notes payable, less current portion, net | 26,388,948 | 24,402,926 | ||||||
Other accrued liabilities | 15,873,328 | 5,047,088 | ||||||
Total liabilities | 88,171,589 | 63,196,424 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Common stock | 2,781,377 | 2,781,377 | ||||||
Capital surplus | 18,551,959 | 18,481,683 | ||||||
Retained earnings | 53,380,990 | 48,347,798 | ||||||
Common stock in treasury, at cost | (3,440,104 | ) | (3,440,104 | ) | ||||
Total stockholders’ equity | 71,274,222 | 66,170,754 | ||||||
Total liabilities and stockholders’ equity | $ | 159,445,811 | $ | 129,367,178 |
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
EBITDA
EBITDA, a non-GAAP performance measure used by management, is defined as net income (loss) plus: interest expense, provision 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 consolidated 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.
The following table provides a reconciliation of our net income to EBITDA (a non-GAAP financial measure) for the periods as indicated:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
EBITDA | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (GAAP as reported) | $ | 1,091,751 | $ | 1,162,002 | $ | 5,033,192 | $ | 3,760,745 | ||||||||
Interest expense, net of amount capitalized | 215,063 | 367,244 | 761,118 | 1,130,798 | ||||||||||||
Provision for income taxes | 632,467 | 592,413 | 1,665,769 | 1,902,034 | ||||||||||||
Depreciation and amortization (1) | 3,056,457 | 2,728,988 | 8,950,772 | 8,048,549 | ||||||||||||
EBITDA | $ | 4,995,738 | $ | 4,850,647 | $ | 16,410,851 | $ | 14,842,126 | ||||||||
______________________________________ | ||||||||||||||||
(1) Depreciation and amortization includes depreciation on property, plant and equipment and amortization of finite-lived intangible assets. |
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Backlog
Backlog is a non-GAAP financial measure, however it is a common measurement used in our industry. Total backlog includes total revenue estimated over the remaining life of the MSAs plus estimated revenue from fixed-price contracts. We believe this measure enables management to more effectively forecast our future capital needs and results and better identify future operating trends that may not otherwise be apparent. We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. While we believe that our methodology of calculation is appropriate, such methodology may not be comparable to that employed by some other companies. Given the duration of our contracts and MSAs and our method of calculating backlog, our backlog at any point in time may not accurately represent the revenue that we expect to realize during any period and our backlog as of the end of a fiscal year may not be indicative of the revenue we expect to earn in the following fiscal year and should not be viewed or relied upon as a stand-alone indicator. Consequently, we cannot provide assurance as to our customers’ requirements or our estimates of backlog.
The following table presents a reconciliation of our total backlog as of
September 30, 2020 | ||||||||
Total backlog | $ | 385,183,504 | ||||||
Estimated MSAs | (313,911,324 | ) | ||||||
Estimated firm (1) | (1,836,420 | ) | ||||||
Total unsatisfied performance obligation | $ | 69,435,760 | ||||||
______________________________________ | ||||||||
(1) Represents estimated backlog contract value as of |
Source:
2020 GlobeNewswire, Inc., source