Goldfield Corp (GV)

[sbaker]

The new contract backlog increased from last year. The MSA or maintenance backlog only decreased because they are in the middle of their term and are not yet up for renewal. For example, if Goldfield has a 5 year MSA contract with FPL Florida Power for $100 million, the first year you would have a $100 million backlog. But heading into year four, backlog remaining would only be $40 million because $60 million was used up in the first 3 years and at the end of year 5 backlog would be $0. But when it renews the backlog will jump back to $100 million. It's not that they have lost any business, it is just the way the MSA backlog is reported.

I confirmed this MSA backlog "issue" with Goldfield CEO John Sottile at the shareholder meeting on June 2nd. MSA backlog will grow again when renewals are signed and they have plenty of opportunity to continue with MSA work. The recent management position increase points to current growth in their operations.

Q2 is seasonally Goldfield's strongest quarter because the Southeast Power plants do most of their maintenance and upgrade work at this time. If there is a strong hurricane or bad storms in the Fall, then Goldfield will have alot of emergency repair work which usually results in higher margins in Q3.