false 2020 Q3 GOLDFIELD CORP 0000042316 --12-31 P0Y 0.3333 0.3333 38200000 4500000 P15Y P20Y P5Y P1Y 0000042316 2020-01-01 2020-09-30 xbrli:shares 0000042316 2020-11-02 iso4217:USD 0000042316 2020-09-30 0000042316 2019-12-31 iso4217:USD xbrli:shares 0000042316 gv:ElectricalConstructionOperationsMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember 2019-07-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember 2019-01-01 2019-09-30 0000042316 us-gaap:RealEstateMember 2020-07-01 2020-09-30 0000042316 us-gaap:RealEstateMember 2019-07-01 2019-09-30 0000042316 us-gaap:RealEstateMember 2020-01-01 2020-09-30 0000042316 us-gaap:RealEstateMember 2019-01-01 2019-09-30 0000042316 2020-07-01 2020-09-30 0000042316 2019-07-01 2019-09-30 0000042316 2019-01-01 2019-09-30 0000042316 2018-12-31 0000042316 2019-09-30 0000042316 us-gaap:CommonStockMember 2020-06-30 0000042316 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0000042316 us-gaap:RetainedEarningsMember 2020-06-30 0000042316 us-gaap:TreasuryStockMember 2020-06-30 0000042316 2020-06-30 0000042316 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0000042316 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0000042316 us-gaap:CommonStockMember 2020-09-30 0000042316 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0000042316 us-gaap:RetainedEarningsMember 2020-09-30 0000042316 us-gaap:TreasuryStockMember 2020-09-30 0000042316 us-gaap:CommonStockMember 2019-06-30 0000042316 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000042316 us-gaap:RetainedEarningsMember 2019-06-30 0000042316 us-gaap:TreasuryStockMember 2019-06-30 0000042316 2019-06-30 0000042316 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0000042316 us-gaap:CommonStockMember 2019-09-30 0000042316 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0000042316 us-gaap:RetainedEarningsMember 2019-09-30 0000042316 us-gaap:TreasuryStockMember 2019-09-30 0000042316 us-gaap:CommonStockMember 2019-12-31 0000042316 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000042316 us-gaap:RetainedEarningsMember 2019-12-31 0000042316 us-gaap:TreasuryStockMember 2019-12-31 0000042316 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-09-30 0000042316 us-gaap:RetainedEarningsMember 2020-01-01 2020-09-30 0000042316 us-gaap:CommonStockMember 2018-12-31 0000042316 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000042316 us-gaap:RetainedEarningsMember 2018-12-31 0000042316 us-gaap:TreasuryStockMember 2018-12-31 0000042316 us-gaap:TreasuryStockMember 2019-01-01 2019-09-30 0000042316 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-30 xbrli:pure 0000042316 2017-01-01 2017-12-31 0000042316 srt:MaximumMember 2020-01-01 2020-09-30 0000042316 srt:ScenarioForecastMember 2020-01-01 2020-12-31 0000042316 gv:WorkingCapitalLoanMember 2020-01-01 2020-09-30 0000042316 gv:ThirtyEightPointTwoMillionEquipmentLoanMember 2020-01-01 2020-09-30 0000042316 gv:FourPointFiveMillionEquipmentLoanMember 2020-01-01 2020-09-30 0000042316 gv:WorkingCapitalLoanMember 2020-09-30 0000042316 gv:ThirtyEightPointTwoMillionEquipmentLoanMember 2020-09-30 0000042316 gv:FourPointFiveMillionEquipmentLoanMember 2020-09-30 0000042316 gv:WorkingCapitalLoanMember 2019-12-31 0000042316 gv:ThirtyEightPointTwoMillionEquipmentLoanMember 2019-12-31 0000042316 gv:FourPointFiveMillionEquipmentLoanMember 2019-12-31 0000042316 gv:WorkingCapitalLoanMember 2020-03-23 2020-03-23 0000042316 gv:WorkingCapitalLoanMember 2020-10-05 2020-10-05 0000042316 gv:ThirtyEightPointTwoMillionEquipmentLoanMember 2019-03-10 2019-12-09 0000042316 gv:ThirtyEightPointTwoMillionEquipmentLoanMember 2020-01-10 2024-03-09 0000042316 srt:ScenarioForecastMember gv:FourPointFiveMillionEquipmentLoanMember 2020-04-08 2024-03-07 0000042316 us-gaap:LondonInterbankOfferedRateLIBORMember gv:TwoThousandEighteenMasterLoanAgreementMember 2020-01-01 2020-09-30 0000042316 us-gaap:SuretyBondMember 2020-09-30 0000042316 us-gaap:TreasuryStockMember 2020-07-01 2020-09-30 0000042316 us-gaap:TreasuryStockMember 2020-01-01 2020-09-30 0000042316 us-gaap:TreasuryStockMember 2019-07-01 2019-09-30 0000042316 gv:UnvestedRestrictedStockMember 2020-07-01 2020-09-30 0000042316 gv:UnvestedRestrictedStockMember 2020-01-01 2020-09-30 0000042316 us-gaap:RestrictedStockUnitsRSUMember 2020-07-01 2020-09-30 0000042316 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:SoutheastMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:SoutheastMember 2019-07-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:SoutheastMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:SoutheastMember 2019-01-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:MidAtlanticMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:MidAtlanticMember 2019-07-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:MidAtlanticMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:MidAtlanticMember 2019-01-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:TexasAndSouthwestMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:TexasAndSouthwestMember 2019-07-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:TexasAndSouthwestMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:TexasAndSouthwestMember 2019-01-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:OtherElectricalConstructionMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:OtherElectricalConstructionMember 2019-07-01 2019-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:OtherElectricalConstructionMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionOperationsMember gv:OtherElectricalConstructionMember 2019-01-01 2019-09-30 0000042316 2020-07-01 2020-09-30 0000042316 2021-07-01 2020-09-30 0000042316 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2020-07-01 2020-09-30 0000042316 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2019-07-01 2019-09-30 0000042316 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2020-01-01 2020-09-30 0000042316 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-09-30 0000042316 us-gaap:TrademarksAndTradeNamesMember 2020-01-01 2020-09-30 0000042316 us-gaap:CustomerRelationshipsMember 2020-01-01 2020-09-30 0000042316 us-gaap:NoncompeteAgreementsMember 2020-01-01 2020-09-30 0000042316 us-gaap:OtherIntangibleAssetsMember 2020-01-01 2020-09-30 0000042316 us-gaap:TrademarksAndTradeNamesMember 2020-09-30 0000042316 us-gaap:CustomerRelationshipsMember 2020-09-30 0000042316 us-gaap:NoncompeteAgreementsMember 2020-09-30 0000042316 us-gaap:OtherIntangibleAssetsMember 2020-09-30 0000042316 us-gaap:TrademarksAndTradeNamesMember 2019-12-31 0000042316 us-gaap:CustomerRelationshipsMember 2019-12-31 0000042316 us-gaap:NoncompeteAgreementsMember 2019-12-31 0000042316 us-gaap:OtherIntangibleAssetsMember 2019-12-31 0000042316 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0000042316 gv:ElectricalConstructionCperationsEquipmentMember 2020-09-30 gv:Segment 0000042316 us-gaap:OperatingSegmentsMember gv:ElectricalConstructionOperationsMember 2020-07-01 2020-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:ElectricalConstructionOperationsMember 2019-07-01 2019-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:ElectricalConstructionOperationsMember 2020-01-01 2020-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:ElectricalConstructionOperationsMember 2019-01-01 2019-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:RealEstateDevelopmentMember 2020-07-01 2020-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:RealEstateDevelopmentMember 2019-07-01 2019-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:RealEstateDevelopmentMember 2020-01-01 2020-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:RealEstateDevelopmentMember 2019-01-01 2019-09-30 0000042316 us-gaap:CorporateNonSegmentMember 2020-07-01 2020-09-30 0000042316 us-gaap:CorporateNonSegmentMember 2019-07-01 2019-09-30 0000042316 us-gaap:CorporateNonSegmentMember 2020-01-01 2020-09-30 0000042316 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:ElectricalConstructionOperationsMember 2020-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:ElectricalConstructionOperationsMember 2019-12-31 0000042316 us-gaap:OperatingSegmentsMember gv:RealEstateDevelopmentMember 2020-09-30 0000042316 us-gaap:OperatingSegmentsMember gv:RealEstateDevelopmentMember 2019-12-31 0000042316 us-gaap:CorporateNonSegmentMember 2020-09-30 0000042316 us-gaap:CorporateNonSegmentMember 2019-12-31 0000042316 2020-07-01 2020-07-01 0000042316 srt:MaximumMember 2013-05-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2020-09-30 0000042316 gv:LongTermIncentivePlanMember 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember gv:OfficerAndOtherEmployeeMember 2020-01-01 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember gv:OfficerAndOtherEmployeeMember 2020-07-01 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2019-07-01 2019-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-01-01 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2020-01-01 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2020-01-01 2020-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionCperationsEquipmentMember 2020-07-01 2020-09-30 0000042316 gv:ElectricalConstructionCperationsEquipmentMember 2019-07-01 2019-09-30 0000042316 gv:ElectricalConstructionCperationsEquipmentMember 2020-01-01 2020-09-30 0000042316 gv:ElectricalConstructionCperationsEquipmentMember 2019-01-01 2019-09-30 0000042316 us-gaap:GeneralAndAdministrativeExpenseMember 2020-07-01 2020-09-30 0000042316 us-gaap:GeneralAndAdministrativeExpenseMember 2019-07-01 2019-09-30 0000042316 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-09-30 0000042316 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-09-30 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember gv:CompanyOfficersMember us-gaap:SubsequentEventMember 2020-09-02 2020-10-01 0000042316 gv:LongTermIncentivePlanMember us-gaap:RestrictedStockUnitsRSUMember us-gaap:SubsequentEventMember 2020-10-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-7525

The Goldfield Corporation

(Exact name of registrant as specified in its charter)

Delaware

88-0031580

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

1684 W. Hibiscus Boulevard

Melbourne, Florida 32901

(Address of principal executive offices) (Zip Code)

(321) 724-1700

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer (Do not check if a smaller reporting company)	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant’s Common Stock outstanding as of November 2, 2020 was 24,522,534.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.10 per share

NYSE American

Table of Contents

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2020

TABLE OF CONTENTS

	Page

PART I. FINANCIAL INFORMATION	1

Item 1. Consolidated Financial Statements (Unaudited).	1

Consolidated Balance Sheets	1

Consolidated Statements of Income	2

Consolidated Statements of Cash Flows	3

Consolidated Statements of Stockholders’ Equity	4

Notes to Consolidated Financial Statements	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18

Item 3. Quantitative and Qualitative Disclosures About Market Risk.	31

Item 4. Controls and Procedures.	31

PART II. OTHER INFORMATION	32

Item 1. Legal Proceedings.	32

Item 1A. Risk Factors.	32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	32

Item 3. Defaults Upon Senior Securities.	32

Item 4. Mine Safety Disclosures.	32

Item 5. Other Information.	33

Item 6. Exhibits.	33

SIGNATURES	34

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

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		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 of accumulated depreciation of $59,627,075 in 2020 and $51,904,568 in 2019		59,166,078			55,073,579
Deferred charges and other assets
Land and land development costs		4,457,410			5,060,581
Cash surrender value of life insurance		92,187			543,433
Goodwill		101,407			101,407
Intangibles, net of accumulated amortization of $429,926 in 2020 and $384,801 in 2019		583,874			628,999
Operating lease right-of-use assets		19,231,952			6,861,099
Other assets		130,000			60,000
Total 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
Billings in excess of costs and estimated earnings on uncompleted contracts		1,227,268			731,492
Current portion of operating lease liability		3,881,692			1,880,957
Current portion of notes payable, net		13,895,635			7,769,497
Accrued remediation costs		80,420			75,545
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
Operating lease liabilities		15,723,328			4,987,088
Other accrued liabilities		150,000			60,000
Total liabilities		88,171,589			63,196,424
Commitments and contingencies (notes 4 and 6)
Stockholders’ equity
Preferred stock, $1 par value, 5,000,000 shares authorized, none issued
Common stock, $.10 par value, 40,000,000 shares authorized; 27,813,772 shares issued; 24,522,534 shares outstanding in 2020 and in 2019.		2,781,377			2,781,377
Additional paid-in capital		18,551,959			18,481,683
Retained earnings		53,380,990			48,347,798
Treasury stock, 3,291,238 shares in 2020 and in 2019, 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

See accompanying notes to consolidated financial statements

Table of Contents

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended 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

See accompanying notes to consolidated financial statements

Table of Contents

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities
Net income	$	5,033,192		$	3,760,745
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		8,950,772			8,048,549
Amortization of debt issuance costs		24,660			22,500
Deferred income taxes		1,069,919			1,685,510
Loss (gain) on sale of property and equipment		2,915			(77,571	)
Other losses		215,446			2,572
Stock-based compensation expense		70,276			—
Changes in operating assets and liabilities
Accounts receivable and accrued billings		(3,316,883	)		(932,038	)
Costs and estimated earnings in excess of billings on uncompleted contracts		(15,007,544	)		(1,158,343	)
Residential properties under construction		1,141,344			6,839,119
Income taxes receivable		920,110			(263,507	)
Prepaid expenses and other assets		(894,327	)		1,141,340
Land and land development costs		603,171			(304,998	)
Accounts payable and accrued liabilities		2,277,325			1,878,771
Operating leases		366,122			(18,609	)
Billings in excess of costs and estimated earnings on uncompleted contracts		495,776			(228,688	)
Accrued remediation costs		(4,052	)		(22,519	)
Net cash provided by operating activities		1,948,222			20,372,833
Cash flows from investing activities
Proceeds from disposal of property and equipment		259,360			399,817
Purchases of property, buildings and equipment		(12,973,359	)		(16,156,893	)
Net cash used in investing activities		(12,713,999	)		(15,757,076	)
Cash flows from financing activities
Purchases of treasury stock		—			(161,285	)
Proceeds from notes payable		14,500,000			15,500,000
Repayments on notes payable		(6,412,500	)		(10,382,000	)
Other long-term debt repayments		—			(297,599	)
Debt issuance costs		—			(57,883	)
Net cash provided by financing activities		8,087,500			4,601,233
Net (decrease) increase in cash and cash equivalents		(2,678,277	)		9,216,990
Cash and cash equivalents at beginning of the period		23,272,156			11,402,353
Cash and cash equivalents at end of the period	$	20,593,879		$	20,619,343
Supplemental disclosure of cash flow information
Interest paid, net of amounts capitalized	$	762,983		$	1,107,666
Income taxes (refunded) paid, net	$	(324,260	)	$	480,031
Supplemental disclosure of non-cash investing
Liability for equipment acquired	$	411,240		$	809,521
Right-of-use asset obtained in exchange for operating lease obligations	$	14,310,658		$	4,215,378

See accompanying notes to consolidated financial statements

Table of Contents

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

Three Months Ended September 30, 2020
					Additional							Total
	Common stock				paid-in		Retained		Treasury			stockholders’
	Shares		Amount		capital		earnings		stock			equity
Balance as of June 30, 2020		27,813,772	$	2,781,377	$	18,481,683	$	52,289,239	$	(3,440,104	)	$	70,112,195
Stock-based compensation						70,276							70,276
Net income								1,091,751					1,091,751
Balance as of September 30, 2020		27,813,772	$	2,781,377	$	18,551,959	$	53,380,990	$	(3,440,104	)	$	71,274,222

Three Months Ended September 30, 2019
					Additional							Total
	Common stock				paid-in		Retained		Treasury			stockholders’
	Shares		Amount		capital		earnings		stock			equity
Balance as of June 30, 2019		27,813,772	$	2,781,377	$	18,481,683	$	44,219,934	$	(3,440,104	)	$	62,042,890
Repurchase of stock
Net income								1,162,002					1,162,002
Balance as of September 30, 2019		27,813,772	$	2,781,377	$	18,481,683	$	45,381,936	$	(3,440,104	)	$	63,204,892

Nine Months Ended September 30, 2020
					Additional							Total
	Common stock				paid-in		Retained		Treasury			stockholders’
	Shares		Amount		capital		earnings		stock			equity
Balance as of December 31, 2019		27,813,772	$	2,781,377	$	18,481,683	$	48,347,798	$	(3,440,104	)	$	66,170,754
Stock-based compensation						70,276							70,276
Net income								5,033,192					5,033,192
Balance as of September 30, 2020		27,813,772	$	2,781,377	$	18,551,959	$	53,380,990	$	(3,440,104	)	$	71,274,222

Nine Months Ended September 30, 2019
					Additional							Total
	Common stock				paid-in		Retained		Treasury			stockholders’
	Shares		Amount		capital		earnings		stock			equity
Balance as of December 31, 2018		27,813,772	$	2,781,377	$	18,481,683	$	41,621,191	$	(3,278,819	)	$	59,605,432
Repurchase of stock										(161,285	)		(161,285	)
Net income								3,760,745					3,760,745
Balance as of September 30, 2019		27,813,772	$	2,781,377	$	18,481,683	$	45,381,936	$	(3,440,104	)	$	63,204,892

See accompanying notes to consolidated financial statements

Table of Contents

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Organization and Summary of Significant Accounting Policies

Overview

The Goldfield Corporation (the “Company”) was incorporated in Wyoming in 1906 and subsequently reincorporated in Delaware in 1968. The Company’s principal line of business is the construction of electrical infrastructure for the utility industry and industrial customers. The Company is also engaged in real estate development operations. The principal market for the Company’s electrical construction operation is primarily in the Southeast, mid-Atlantic and Texas-Southwest regions of the United States. The Company’s real estate development operation is along the east coast of Central Florida.

Basis of Financial Statement Presentation

In the opinion of management, the accompanying unaudited interim consolidated financial statements include all adjustments necessary to present fairly the Company’s financial position, results of operations, and changes in cash flows for the interim periods reported. These adjustments are of a normal recurring nature. All consolidated financial statements presented herein are unaudited with the exception of the consolidated balance sheet as of December 31, 2019, which was derived from the audited consolidated financial statements. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. These statements should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2019.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on customer specific information and historical write-off experience. The Company reviews its allowance for doubtful accounts quarterly. Account balances are charged off against the allowance after reasonable means of collection have been exhausted and the potential for recovery is considered remote. As of September 30, 2020 and December 31, 2019, upon its review, management determined it was not necessary to record an allowance for doubtful accounts due to the majority of accounts receivable being generated by electrical utility customers whom the Company considers creditworthy based on timely collection history and other considerations.

Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates. Management considers the most significant estimates in preparing these consolidated financial statements to be the estimated costs at completion of electrical construction contracts in progress.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable and accrued billings, income tax receivable, cash surrender value of life insurance policies, accounts payable and notes payable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value guidance establishes a valuation hierarchy, which requires maximizing the use of observable inputs when measuring fair value.

The three levels of inputs that may be used are:

Level 1 - Quoted market prices in active markets for identical assets or liabilities.

Level 2 - Observable market based inputs or other observable inputs.

Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data. These values are generally determined using valuation models incorporating management’s estimates of market participant assumptions.

Table of Contents

Fair values of financial instruments are estimated through the use of public market prices, quotes from financial institutions, and other available information. Management considers the carrying amounts reported on the consolidated balance sheets for cash and cash equivalents, accounts receivable and accrued billings, income tax receivable, accounts payable and accrued liabilities, to approximate fair value due to the immediate or short-term maturity of these financial instruments. The Company’s carrying value of long-term notes payable are estimated by management to approximate fair value since the interest rates prescribed by Truist Bank are variable market interest rates and are adjusted periodically, and as such, are classified as Level 2. The carrying value of cash surrender value of life insurance is considered by management to approximate fair value as the carrying value is based on the current settlement value under the contract, as provided by the carrier and as such, is classified as Level 2.

Land and Land Development Costs and Residential Properties Under Construction

The costs of a land purchase and any development expenses up to the initial construction phase of any residential property development project are recorded under the asset “land and land development costs.” Once construction commences, both the land development costs and construction costs are recorded under the asset “residential properties under construction.” The assets “land and land development costs” and “residential properties under construction” relating to specific projects are recorded as current assets when the estimated project completion date is less than one year from the date of the consolidated financial statements, or as non-current assets when the estimated project completion date is one year or more from the date of the consolidated financial statements.

In accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-lived Assets, land and residential properties under construction are reviewed by the Company for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the carrying amount or basis is not expected to be recovered, impairment losses are recorded and the related assets are adjusted to their estimated fair value. The fair value of an asset is the amount at which that asset could be bought or sold in a current transaction between willing parties, other than in a forced or liquidation sale. The Company also complies with ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company did not record an impairment write-down to its land, land development costs or residential properties under construction carrying value for either of the three or nine months ended September 30, 2020 and 2019.

Goodwill and Intangible Assets

Intangible assets with finite useful lives recorded in connection with a historical acquisition are amortized over the term of the related contract or useful life, as applicable. Intangible assets held by the Company with finite useful lives include customer relationships and trademarks. The Company reviews the values recorded for intangible assets and goodwill to assess recoverability from future operations annually or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. As of December 31, 2019, the Company assessed the recoverability of its long-lived assets and goodwill, by reviewing relevant events and circumstances to evaluate the qualitative factors in addition to the quantitative impairment test. As a result, there was no impairment of the carrying amounts of such assets. There were no events or changes in circumstances as of September 30, 2020 that would indicate that the carrying amounts may not be recoverable.

Share-Based Compensation

The Company recognizes the cost of employee service received in exchange for awards of equity instruments based on the grant date fair value of those awards. The Company recognizes compensation expense on a straight-line basis over the employee service period for awards granted. The Company does not estimate forfeitures when recognizing compensation expense. Forfeitures are accounted for as they occur. Outstanding unvested restricted stock units are not included in common stock outstanding amounts.

Table of Contents

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, which eliminates Step 2 of the current goodwill impairment test. A goodwill impairment loss will instead be measured at the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the recorded amount of goodwill allocated to that reporting unit. The provisions of this ASU are effective for years beginning after December 15, 2019, with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. The Company adopted ASU 2017-04 on January 1, 2020 and the adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In June 2016 the FASB issued ASU-2016-13, Financial Instruments – Credit Losses. This update required immediate recognition of management’s estimates of current expected credit losses. This update was effective for the Company in the first quarter of 2020. The adoption of ASU 2016-13 did not have a significant impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU-2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, which will be effective for the Company in fiscal year 2021. This update simplifies the accounting for interim period tax law changes and loss limitations, ownership changes in equity investments, intraperiod tax allocations and the step up of tax basis in goodwill that is not acquired during a business combination. ASU-2019-12 will be adopted in 2021 and is not expected to have a significant impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In response to concerns about structural risks of interbank offered rates including the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable and less susceptible to manipulation. The provisions of this ASU are elective and apply to all entities, subject to meeting certain criteria, that have debt or hedging contracts and other contracts that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU, among other things, provides optional expedients and exceptions to applying certain U.S. generally accepted accounting principles requirements in order to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact of this accounting guidance.

COVID-19

The Company did not incur significant disruptions to its operations during the nine months ended September 30, 2020 from COVID-19. At this time, the Company is unable to predict the impact that COVID-19 will have on its consolidated financial statements in future periods due to numerous uncertainties. The Company is closely monitoring its efforts to manage the impact of the pandemic on all aspects of the Company’s business and consolidated financial statements. Please refer to Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 1A. Risk Factors for additional Risk Factors added by the Company regarding COVID-19.

Note 2 – Contract Assets and Contract Liabilities

The following table presents the net contract assets and liabilities for the electrical construction operations as of the dates indicated:

	September 30, 2020			December 31, 2019			$ Change
Contract assets ⁽¹⁾	$	24,328,912		$	9,321,368		$	15,007,544
Contract liabilities ⁽²⁾		(1,383,829	)		(1,008,679	)		(375,150	)
Net contract assets	$	22,945,083		$	8,312,689		$	14,632,394
______________________________________
⁽¹⁾ Contract assets consist of amounts under the caption “Costs and estimated earnings in excess of billings on uncompleted contracts.”
⁽²⁾Contract liabilities consist of the aggregate of amounts presented under the caption “Billings in excess of costs and estimated earnings on uncompleted contracts” and any contract loss accruals included in “Accounts payable and accrued liabilities.”

Table of Contents

The following table presents the changes in the net contract assets and liabilities for the electrical construction operations for the nine months ended September 30, 2020:

	$ Change
Cumulative adjustment due to changes in contract values ⁽¹⁾	$	2,332,735
Cumulative adjustment due to changes in estimated costs at completion		(996,012	)
Revenue recognized in the period		111,819,753
Amounts reclassified to receivables		(98,644,708	)
Impairment of contract assets ⁽²⁾		120,626
Total	$	14,632,394
______________________________________
⁽¹⁾Amount attributable to contract modifications accounted for on a cumulative catch-up basis where the customer has approved a change in the scope or price of the contract, where the modification is treated as part of the existing contract and where the remaining goods and services are not distinct.
⁽²⁾Adjustment amount due to changes in contract losses.

For the nine months ended September 30, 2020, $0.4 million of the total revenue recognized in the current period was attributable to the contract liability billings in excess of costs and estimated earnings on uncompleted contracts’ balance as of December 31, 2019.

Note 3 – Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted as a response to the economic uncertainty resulting from the COVID-19 pandemic. The CARES Act includes modifications for net operating loss carrybacks and carryforwards, limitations of business interest expense for tax, immediate refund of alternative minimum tax credit carryovers as well as a technical correction to the Tax Cuts and Jobs Act of 2017 for qualified improvement property. Specifically, the CARES Act allows corporate taxpayers to carryback net operating losses originating during 2018 through 2020 for up to five years when the maximum tax rate was 35%. The enactment of the CARES Act has resulted in a material benefit to the Company’s income tax provision for the nine months ended September 30, 2020.

The ultimate impact of the CARES Act may differ from this estimate due to changes in interpretations and assumptions, guidance that may be issued and actions the Company may take in response to the CARES Act. The Company will continue to assess the impact that various provisions will have on its business.

The following table presents the provision for income tax and the effective tax rates from continuing operations for the dates as indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Income tax provision	$	632,467		$	592,413		$	1,665,769		$	1,902,034
Effective income tax rate		36.7	%		33.8	%		24.9	%		33.6	%

Prior to adjustments to reflect the impact of the enactment of the CARES Act in March 2020, the Company’s expected tax rate for the year ending December 31, 2020, calculated based on the estimated annual operating results for the year, was 32.2%. However, due to the favorable impact of discrete items of 4.9%, the majority of which are related to the CARES Act, the resulting expected annual rate is 27.3%. The expected tax rate differs from the federal statutory rate of 21% due to nondeductible expenses and state income taxes offset by discrete items.

The Company’s effective tax rate for the three months ended September 30, 2020 was 36.7% and differs from the federal statutory rate of 21% due to nondeductible expenses and state income taxes offset by the impact of discrete items totaling $492,000. The discrete items were recorded in connection with the net operating loss carryback provisions of the CARES Act and to a lesser extent a state mandated income tax refund. The effective tax rate is higher than our expected annual tax rate of 27.3% due to current quarter increases in discrete items and nondeductible expenses in relation to expected income from prior quarters. The Company’s effective tax rate for the nine months ended September 30, 2020 was 24.9% and differs from the federal statutory rate of 21% due to nondeductible expenses and state income taxes offset by the impact of discrete items. It is lower than the expected annual tax rate of 27.3% due to the impact of discrete items reported, which will reduce over the year. The effective tax rate for the three and nine months ended September 30, 2019 was 33.8% and 33.6%, respectively, which differed from the federal statutory rate of 21% due to

Table of Contents

nondeductible expenses and state income taxes. The decrease in the 2020 expected tax rate when compared to 2019 is attributable to the effects of the CARES Act and other discrete items.

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which establishes the recognition requirements. Deferred tax assets and liabilities are recognized for the future tax effects attributable to temporary differences and carryforwards between the consolidated financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

As of September 30, 2020, the Company’s deferred tax liabilities are primarily comprised of tax depreciation in excess of book depreciation and are offset by deferred tax assets, largely comprised of state bonus depreciation carryovers, accrued vacation, inventory adjustments, lease liabilities reduced by right-of-use assets and accrued remediation costs. The carrying amounts of deferred tax assets are reduced by a valuation allowance, if based on the available evidence, it is more likely than not such assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the deferred tax assets are expected to be recovered or settled. In the assessment for a valuation allowance, appropriate consideration is given to positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability and tax planning alternatives. If the Company determines it will not be able to realize all or part of the deferred tax assets, a valuation allowance would be recorded to reduce deferred tax assets to the amount that is more likely than not to be realized.

Based on assumptions with respect to forecasts of future taxable income and tax planning, among others, the Company anticipates being able to generate sufficient taxable income to utilize the deferred tax assets. Therefore, the Company has not recorded a valuation allowance against deferred tax assets. The minimum amount of future taxable income required to be generated to fully realize the deferred tax assets as of September 30, 2020 is approximately $3.5 million.

The Company has gross unrecognized tax benefits of $800 and $4,000 as of September 30, 2020 and December 31, 2019, respectively. The Company believes that it is reasonably possible that the liability for unrecognized tax benefits related to certain state income tax matters may be settled within the next twelve months. The federal statute of limitation has expired for tax years prior to 2015 and relevant state statutes vary. The Company is currently not under any income tax audits or examinations and does not expect the assessment of any significant additional tax in excess of amounts provided.

The Company accrues interest and penalties related to unrecognized tax benefits as interest expense and other general and administrative expenses, respectively, and not as a component of income taxes.

Note 4 – Commitments and Contingencies Related to Discontinued Operations

Discontinued operations represent former mining activities, the last of which ended in 2002. Pursuant to an agreement with the United States Environmental Protection Agency (the “EPA”), the Company performed certain remediation actions at a property sold over fifty years ago. This remediation work was completed by September 30, 2015. The Company has established a contingency provision related to discontinued operations, which was $0.5 million as of both September 30, 2020 and December 31, 2019. No change to the provision was required for either of the three or nine months ended September 30, 2020 or 2019.

The remaining balance of the accrued remediation costs as of September 30, 2020 mainly represents estimated future charges for EPA response costs, monitoring of the property, and legal costs. The total costs to be incurred in future periods may vary from this estimate. The amounts recorded in the aforementioned contingency provision are not discounted. The provision will be reviewed periodically based upon facts and circumstances available at the time.

Table of Contents

Note 5 – Notes Payable

The following table presents the balances of notes payable as of the dates indicated:

						Interest Rates
Truist Bank	Maturity Date	September 30, 2020		December 31, 2019		September 30, 2020			December 31, 2019
Working Capital Loan	November 28, 2021	$	10,000,000		—		1.96	%		—	%
$38.2 Million Equipment Loan	March 9, 2024		26,394,000		32,244,000		1.96	%		3.52	%
$ 4.5 Million Equipment Loan	March 7, 2024		3,937,500		—		1.96	%		—	%
Total notes payable			40,331,500		32,244,000
Less unamortized debt issuance costs			46,917		71,577
Total notes payable, net			40,284,583		32,172,423
Less current portion of notes payable, net			13,895,635		7,769,497
Notes payable net, less current portion		$	26,388,948	$	24,402,926

As of September 30, 2020, the Company, and the Company’s wholly owned subsidiaries Southeast Power Corporation (“Southeast Power”), Pineapple House of Brevard, Inc. (“Pineapple House”), Bayswater Development Corporation (“Bayswater”), Power Corporation of America (“PCA”), Precision Foundations, Inc. (“PFI”) and C and C Power Line, Inc. (“C&C”), collectively (the “Debtors,”) were parties to a Master Loan Agreement, dated May 24, 2018 (the “2018 Master Loan Agreement”), with Branch Banking and Trust Company, now known as Truist Bank (the “Bank”), as amended on March 7, 2019 by the First Amendment to the 2018 Master Loan Agreement (the “Amendment”), and on December 6, 2019 by the Note Modification Agreement and related Addendum to Note Modification to the 2018 Master Loan Agreement (collectively, the “Ancillary Loan Document”).

As of September 30, 2020, the Company, the Debtors and the Bank were parties to the Working Capital Loan, evidenced by a promissory note and a series of related ancillary agreements with the Bank, under the 2018 Master Loan Agreement, the Amendment and the Ancillary Loan Document, that has a maximum principal amount of $23.0 million. On March 23, 2020, the Company drew $10.0 million from its Working Capital Loan, of which $5.0 million was repaid on October 5, 2020, to enhance liquidity in view of the uncertainties caused by the COVID-19 pandemic. As of September 30, 2020, borrowings under the Working Capital Loan were $10.0 million. There were no borrowings under the Working Capital Loan as of December 31, 2019.

As a credit guarantor to the Bank, the Company is contingently liable for the guaranty of a subsidiary obligation under an irrevocable letter of credit primarily related to workers’ compensation. The amount of this letter of credit was $0.7 million and $0.6 million as of September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the Company, the Debtors and the Bank were parties to a $38.2 Million Equipment Loan. Under the documentation related to the $38.2 Million Equipment Loan, principal payments of $598,000 plus accrued interest commenced on March 9, 2019 and continued monthly thereafter until and including the payment due on December 9, 2019. Thereafter, equal monthly principal payments of $650,000, plus accrued interest, commenced on January 9, 2020, and will continue monthly until the March 9, 2024 maturity date. Borrowings under the $38.2 Million Equipment Loan were $26.4 million as of September 30, 2020 and $32.2 million as of December 31, 2019.

As of September 30, 2020, the Company, the Debtors and the Bank were also parties to a $4.5 Million Equipment Loan. Under the documentation related to the $4.5 Million Equipment Loan, borrowings were made only for the purchase of equipment held by the Company under master lease agreements and may not exceed the cost of the lease buy-out. Interest only payments on any amounts drawn commenced on April 7, 2019, and continued monthly through and including the payment due on March 7, 2020. Thereafter, principal payments of $93,750 plus accrued interest commenced on April 7, 2020, and will continue monthly until and including the payment due on March 7, 2024. As of September 30, 2020 the borrowings under the $4.5 Million Equipment Loan were $3.9 million, which amount was drawn on March 2, 2020. There were no borrowings under the $4.5 Million Equipment Loan as of December 31, 2019.

Table of Contents

As of September 30, 2020, all loan agreements between the Debtors and the Bank, under the 2018 Master Loan Agreement, the Amendment, and the Ancillary Loan Document are guaranteed by the Debtors and include the grant of a continuing security interest in all now owned and after acquired and wherever located personal property of the Debtors.

The Working Capital Loan, the $38.2 Million Equipment Loan and the $4.5 Million Equipment Loan each bear interest at a rate per annum equal to one month LIBOR (as defined in the documentation related to each loan) plus 1.80%, which will be adjusted monthly and subject to a maximum rate as described in the documentation related to each loan.

The Company’s debt arrangements contain various financial and other covenants including, but not limited to: minimum tangible net worth, maximum debt to tangible net worth ratio and fixed charge coverage ratio. Other loan covenants prohibit, among other things, a change in legal form of the Company, and entering into a merger or consolidation. The loans also have cross-default provisions whereby any default under any loans of the Company (or its subsidiaries) with the Bank, will constitute a default under all of the other loans of the Company (and its subsidiaries) with the Bank.

Note 6 – Commitments and Contingencies

Performance Bonds

In certain circumstances, the Company is required to provide performance bonds to secure its contractual commitments. Management is not aware of any performance bonds issued for the Company that have ever been called by a customer. As of September 30, 2020, outstanding performance bonds issued on behalf of the Company’s electrical construction subsidiaries amounted to approximately $49.7 million.

Collective Bargaining Agreements

C&C, one of the Company’s electrical construction subsidiaries, is party to collective bargaining agreements with unions representing workers performing field construction operations. The collective bargaining agreements expire at various times and have typically been renegotiated and renewed on terms similar to the ones contained in the expiring agreements. The agreements require the subsidiary to pay specified wages, provide certain benefits to their respective union employees and contribute certain amounts to multi-employer pension plans and employee benefit trusts. The subsidiary’s multi-employer pension plan contribution rates generally are specified in the collective bargaining agreements (usually on an annual basis), and contributions are made to the plans on a “pay-as-you-go” basis based on such subsidiary’s union employee payrolls, which cannot be determined for future periods because contributions depend on, among other things, the number of union employees that such subsidiary employs at any given time; the plans in which it may participate vary depending on the projects it has ongoing at any time; and the need for union resources in connection with those projects. If the subsidiary withdraws from, or otherwise terminates its participation in, one or more multi-employer pension plans, or if the plans were to otherwise become substantially underfunded, such subsidiary could be assessed liabilities for additional contributions related to the underfunding of these plans. The Company is not aware of any amounts of withdrawal liability that have been incurred as a result of a withdrawal by C&C from any multi-employer defined benefit pension plans.

Legal Proceedings

The Company is involved in various legal claims arising in the ordinary course of business. The Company has concluded that the ultimate disposition of these matters should not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. The Company expenses legal fees as incurred.

Note 7 – Income Per Share of Common Stock

Basic income per common share is computed by dividing net income by the weighted average number of common stock shares outstanding during the period. Diluted income per share reflects the potential dilution that could occur if common stock equivalents, such as stock options outstanding, were exercised into common stock that subsequently shared in the earnings of the Company. Stock awards are excluded from the calculation of diluted earnings per share in the event they are antidilutive.

As of September 30, 2019, the Company had no common stock equivalents. For both the three and nine months ended September 30, 2020 and September 30, 2019, the computation of the weighted average number of common stock shares outstanding for both basic and diluted amounts exclude 3,291,238 shares of Treasury Stock. The computation of the weighted average number of common stock shares outstanding used to calculate diluted income per share for both the three and nine months ended September 30, 2020, include

Table of Contents

230,000 unvested restricted stock units. There were no restricted stock units outstanding during either of the three or nine month periods ended September 30, 2020 that were anti-dilutive.

Note 8 – ASC 606 Revenue Recognition and Significant Accounting Policies Disclosures

The Company’s significant accounting policies are detailed in “Note 1: Organization and Summary of Significant Accounting Policies” within Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

To determine the proper revenue recognition method for contracts for electrical construction services, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of the contracts, the Company provides a significant service of integrating a complex set of tasks and components into a single project or capability. Hence, the entire contract is accounted for as one performance obligation. However, less likely, if a contract is separated into more than one performance obligation, the Company allocates the total transaction price for each performance obligation in an amount based on the estimated relative stand-alone selling prices of the promised goods or services underlying each performance obligation.

The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company generally recognizes revenue over time as it performs because of continuous transfer of control to the customer. Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The cost-to-cost measure of progress is generally used for its contracts because it best depicts the transfer of control to the customer which occurs as the Company incurs costs on the contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue is recorded proportionally as costs are incurred.

Due to the nature of the work required to be performed on many of the performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. The Company estimates variable consideration at the most likely amount which the Company expects to receive. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of all information (historical, current and forecasted) that is reasonably available to the Company.

Contracts are often modified to account for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of the contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

The Company has a standard and disciplined quarterly estimated costs at completion process in which management reviews the progress and execution of our performance obligations. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), and execution by our subcontractors, among other variables. Based on this analysis, any quarterly adjustments to net revenue, cost of electrical construction revenue and the related impact to operating income are recognized as necessary in the period they become known.

Table of Contents

The following table disaggregates the Company’s revenue for the dates indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Electrical construction operations ⁽¹⁾
Southeast	$	19,010,869	$	17,127,019	$	59,643,565	$	51,956,218
mid-Atlantic		15,188,972		11,897,347		39,332,883		41,366,308
Texas-Southwest		11,914,994		13,038,099		35,259,981		28,461,784
Other electrical construction ⁽²⁾		1,942,062		1,119,732		3,558,478		1,989,573
Total electrical construction operations		48,056,897		43,182,197		137,794,907		123,773,883
Real estate development operations		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
______________________________________
⁽¹⁾ Principal electrical construction operations include revenue from transmission lines, distribution systems, substations and drilled pier foundations.
⁽²⁾ Other electrical construction includes revenue from storm work, fiber optics and other miscellaneous electrical construction items.

The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied as of September 30, 2020 is $69.4 million. Of this total, $64.9 million is expected to be satisfied within the next twelve months and the remaining balance of $4.5 million is expected to be satisfied thereafter.

Note 9 – Customer Concentration

For the nine months ended September 30, 2020 and 2019, the three largest customers accounted for 51.0% and 54.6%, respectively, of the Company’s total revenue. For the three months ended September 30, 2020 and 2019 the three largest customers accounted for 56.5% and 56.7%, respectively, of the Company’s total revenue.

Note 10 – Goodwill and Other Intangible Assets

The following table presents the gross and net balances of our goodwill and intangible assets as of the dates indicated:

			September 30, 2020							December 31, 2019
	Useful Life (Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived and non-amortizable acquired intangible assets
Goodwill	Indefinite		$	101,407	$	—		$	101,407	$	101,407	$	—		$	101,407
Definite-lived and amortizable acquired intangible assets
Trademarks/Names		15	$	640,000	$	(288,001	)	$	351,999	$	640,000	$	(256,001	)	$	383,999
Customer relationships		20		350,000		(118,125	)		231,875		350,000		(105,000	)		245,000
Non-competition agreement		5		10,000		(10,000	)		—		10,000		(10,000	)		—
Other		1		13,800		(13,800	)		—		13,800		(13,800	)		—
Total			$	1,013,800	$	(429,926	)	$	583,874	$	1,013,800	$	(384,801	)	$	628,999

Amortization of definite-lived intangible assets will be approximately $60,000 annually for 2020 through 2025.

Table of Contents

Note 11 – Leases

In February 2016, the FASB issued ASU 2016-02, ASC 842 Leases to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). On January 1, 2019, the Company adopted the accounting pronouncement issued using the modified retrospective method. The Company elected the “package of practical expedients” permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. In addition, the Company elected not to utilize the hindsight practical expedient to determine the lease term for existing leases. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company did not recognize right-of-use assets or lease liabilities, including not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components. Adoption of the new standard resulted in the recording of additional operating lease right-of-use assets and operating lease liabilities of approximately $4.3 million and $4.3 million, respectively, as of January 1, 2019. The adoption of this standard did not impact the Company’s retained earnings, liquidity, results of operations or its compliance with its debt covenants. The Company modified existing controls and processes to support the adoption of the new lease accounting standard that the Company adopted as of January 1, 2019.

From time to time, the Company enters into leases primarily for the electrical construction operation’s equipment needs and to a lesser extent office facilities. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of equipment rather than purchasing them. The Company’s leases have remaining terms ranging from months to seven years, some of which may include options to extend the lease term. Currently, all of the Company’s leases contain fixed payment terms. Additionally, all of our month-to-month leases are cancelable by the Company, at any time and are not included in our right-of-use asset or liability. At September 30, 2020, the Company had no leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company has concluded that it is not reasonably certain that such options will be exercised as the Company does not currently have a compelling economic reason to exercise the options. However, the Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive.

Financing Leases

The Company currently does not have any leases that are classified as financing leases under ASC 842 Leases.

Operating Lease Right-of-Use Assets

Operating lease right-of-use assets are reported under “Operating lease right-of-use assets,” on the Company’s consolidated balance sheet. The current portion operating lease liabilities are reported under “Current portion of operating lease liability” and the non-current portion is reported under “Operating lease liabilities,” respectively on the Company’s consolidated balance sheet. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate to calculate present value, the Company determines this rate, by estimating the Company’s incremental borrowing rate, at the lease commencement date. The majority of the operating lease right-of-use assets are for equipment used in the Company’s electrical construction operations. The incremental borrowing rate used for these leases is based on the interest rate of the outstanding notes payable at the date of lease execution, which reflects the rate the Company would incur to finance the equipment. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The following table presents a summary of the Company’s lease assets and lease liabilities as of the dates indicated:

	Classification	September 30, 2020		December 31, 2019
Lease Assets
Operating lease assets	Operating lease right-of-use assets	$	19,231,952	$	6,861,099

Lease Liabilities
Current operating lease liabilities	Current portion of operating lease liability	$	3,881,692	$	1,880,957
Non-current operating lease liabilities	Operating lease liabilities		15,723,328		4,987,088
Total lease liabilities		$	19,605,020	$	6,868,045

Table of Contents

The total weighted-average incremental borrowing rate and remaining lease term for the Company’s operating leases were 2.92% and 5.64 years, respectively, as of September 30, 2020. Operating lease costs for the three and nine months ended September 30, 2020 were $0.9 million and $2.2 million, respectively, which approximate the cash payments for these periods.

The following table presents the Company’s maturity analysis of its operating lease liabilities as of the date indicated:

	September 30, 2020
2020	$	1,024,091
2021		3,884,044
2022		3,789,192
2023		3,624,314
2024 and beyond		8,939,559
Total lease payments	$	21,261,200
Less: interest		(1,656,180	)
Present value of lease liabilities	$	19,605,020

Table of Contents

Note 12 – Business Segment Information

Segment

The Company performs services in two segments, electrical construction and real estate development. There were no material amounts of sales or transfers between segments and no material amounts of foreign sales. Any inter-segment sales have been eliminated.

The following table sets forth certain segment information for the dates indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Continuing Operations
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
Operating expenses
Electrical construction	$	43,206,985		$	39,962,922		$	125,093,691		$	115,051,543
Real estate development		471,677			1,389,541			2,979,110			10,840,667
Corporate		2,871,294			1,314,269			5,692,728			4,070,387
Total operating expenses	$	46,549,956		$	42,666,732		$	133,765,529		$	129,962,597
Operating income (loss)
Electrical construction	$	4,849,912		$	3,219,275		$	12,701,216		$	8,722,340
Real estate development		(106,777	)		161,143			271,453			1,978,806
Corporate		(2,871,294	)		(1,314,269	)		(5,692,728	)		(4,070,387	)
Total operating income	$	1,871,841		$	2,066,149		$	7,279,941		$	6,630,759
Other (expenses) income, net
Electrical construction	$	(153,229	)	$	(349,269	)	$	(593,360	)	$	(1,065,917	)
Real estate development		—			—			—			(5,499	)
Corporate		5,606			37,535			12,380			103,436
Total other expenses, net	$	(147,623	)	$	(311,734	)	$	(580,980	)	$	(967,980	)
Net income (loss) before taxes
Electrical construction	$	4,696,683		$	2,870,006		$	12,107,856		$	7,656,423
Real estate development		(106,777	)		161,143			271,453			1,973,307
Corporate		(2,865,688	)		(1,276,734	)		(5,680,348	)		(3,966,951	)
Total net income before taxes	$	1,724,218		$	1,754,415		$	6,698,961		$	5,662,779
Capital Expenditures
Electrical construction	$	3,957,702		$	1,779,984		$	12,861,020		$	15,218,970
Real estate development		1,249			—			1,571			59,048
Corporate		29,168			41,137			110,768			878,875
Total	$	3,988,119		$	1,821,121		$	12,973,359		$	16,156,893
Depreciation and Amortization
Electrical construction	$	3,018,610		$	2,695,012		$	8,839,030		$	7,955,556
Real estate development		8,411			6,926			25,013			18,690
Corporate		29,436			27,050			86,729			74,303
Total	$	3,056,457		$	2,728,988		$	8,950,772		$	8,048,549

Operating income (loss) equals total operating revenue less operating costs and expenses inclusive of depreciation and amortization, and selling, general and administrative expenses. Operating costs and expenses also include any gains or losses on the sale of property and equipment. Operating income (loss) excludes interest expense, interest income, other income and income taxes.

The following table sets forth assets by segment as of the dates indicated:

Assets	September 30, 2020		December 31, 2019
Electrical construction	$	138,254,547	$	111,064,071
Real estate development		6,191,084		7,578,440
Corporate		15,000,180		10,724,667
Total	$	159,445,811	$	129,367,178

Table of Contents

Note 13 – Stock-Based Compensation

On July 1, 2020, the Company issued 230,000 restricted stock units to certain employees and officers of the Company under The Goldfield Corporation 2013 Long-Term Incentive Plan (the “2013 Plan”), which had been approved by the Company’s stockholders on May 30, 2013. These 230,000 shares are the first shares awarded under the 2013 Plan. On each anniversary of the date of the award one third of the restricted stock units awarded will vest, subject to the participant’s continued employment with the Company.

Under the 2013 Plan the maximum number of shares that may be issued pursuant to awards is 1,250,000. Shares that are potentially deliverable under an award that expires or is canceled, forfeited, settled in cash or otherwise settled without the delivery of shares shall not be treated as having been issued under the 2013 Plan. Shares underlying lapsed or forfeited awards of restricted stock units shall not be treated as having been issued pursuant to an award under the 2013 Plan. Shares that are withheld to satisfy the option exercise price or tax withholding obligations related to any award shall be deemed to be shares issued under the 2013 Plan.

As of September 30, 2020, there were 230,000 outstanding unvested restricted stock units under the 2013 Plan. As of September 30, 2020, the 2013 Plan has 1,020,000 shares available for future grants. For the three and nine months ended September 30, 2020, the Company issued 230,000 restricted stock units to officers and other employees of the Company. There were no restricted stock units issued for either of the three or nine months ended September 30, 2019. The restricted stock units were issued with a grant date fair market value equal to the closing price of the stock on the date of the grants. As of September 30, 2020 the total grant-date fair value of awards granted during the period was $837,000. Of the 230,000 restricted stock units issued, 76,667 shares will vest in fiscal year 2021, 76,667 shares will vest in fiscal year 2022 and 76,666 shares will vest in fiscal year 2023. Total stock compensation expense recognized for both the three and nine months ended September 30, 2020 was

GOLDFIELD CORP 10-Q