Goldfield Corp Reports Operating Results (10-Q)
Goldfield Corp. has a market cap of $10.2 million; its shares were traded at around $0.4012 with and P/S ratio of 0.3.
Highlight of Business Operations: number of projects of varying levels of complexity and size in process at any given time, these changes in estimates can offset each other without materially impacting our overall profitability. If a current estimate of total costs indicates a loss on a contract, the projected loss is recognized in full when determined. Accrued contract losses as of March 31, 2011 and December 31, 2010, were $20,000 and $66,000, respectively. The accrued contract losses for 2011 and 2010 are mainly attributable to several transmission projects experiencing either adverse weather conditions or unexpected construction issues. Revenue from change orders, extra work, variations in the scope of work and claims is recognized when realization is probable.
The varying magnitude and duration of electrical construction projects may result in substantial fluctuations in our backlog from time to time. Backlog represents the uncompleted portion of services to be performed under project-specific contracts and the estimated value of future services that we expect to provide under our existing service agreements, including new contractual agreements on which work has not begun. In many instances, our customers are not contractually committed to specific volumes of services and many of our contracts may be terminated with notice, therefore we do not consider any portion of our backlog to be firm. However, our customers become obligated once we provide the services they have requested. Our service agreements are typically multi-year agreements, and we include in our backlog the amount of services projected to be performed over the terms of the contracts based on our historical relationships with these customers. Our estimates of a customers requirements during a particular future period may not be accurate at any point in time. As of March 31, 2011, the electrical construction operations backlog was approximately $6.2 million, which included approximately $4.5 million from fixed price contracts for which revenue is recognized using percentage-of-completion and approximately $1.7 million from service agreement contracts for which revenue is recognized as work is performed. We expect substantially all of our current backlog to be completed within the current fiscal year. This compares to a backlog of
$11.5 million at March 31, 2010, of which approximately $6.7 million represented backlog from fixed price contracts and approximately $4.8 million represented service agreement backlog.
Total operating loss was $1,000 for the three months ended March 31, 2011, compared to operating income of $146,000 in 2010, a decrease of $147,000. Electrical construction operations had operating income of $328,000 in the three months ended March 31, 2011, compared to operating income of $595,000 during the three months ended March 31, 2010, a decrease of $267,000. Operating margins on electrical construction operations decreased to 4.0% for the three months ended March 31, 2011, from 7.8% for the three months ended March 31, 2010. The decrease in operating margins for the three months ended March 31, 2011, when compared to the same period in 2010, was largely the result of additional expenses associated with our growth and expansion efforts within the electrical construction segment.
Real estate development operations had operating income of $225,000 in the three months ended March 31, 2011, compared to $251,000 in the three months ended March 31, 2010, a decrease of $26,000. This decrease was mainly due to the amount and sales price of the properties sold during the three months ended 2011, compared to the same period in the prior year. As of March 31, 2011, we held three Pineapple House condominium units for sale.
Costs of goods sold for real estate development operations decreased to $431,000 for the three months ended March 31, 2011, from $494,000 for the three months ended March 31, 2010, a decrease of 12.7%. The decrease in costs of goods sold is primarily attributable to the variance in the amount and costs of the properties sold during the three months ended 2011, when compared to the same period in 2010.
Read the The complete Report