UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended September 30, ~~2015~~2016



o	☐ 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 x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x ☒ No ¨☐

~~Table of Contents~~

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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	x☒

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

The number of shares of the Registrant’s Common Stock outstanding as of November ~~9, 2015~~1, 2016 was 25,451,354.

~~Table of Contents~~

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, ~~2015~~2016

TABLE OF CONTENTS

~~Table of Contents~~

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED).

THE GOLDFIELD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	September 30,			December 31,			September 30,			December 31,
	2015			2014			2016			2015
ASSETS
Current assets
Cash and cash equivalents	$	7,645,491		$	9,822,179		$	16,815,987		$	11,374,238
Accounts receivable and accrued billings	18,786,292			17,840,680			18,547,073			17,250,067
Costs and estimated earnings in excess of billings on uncompleted contracts	11,612,548			6,537,280			12,044,706			10,292,199
Income taxes receivable	815,737			763,821			639,379			—
Current portion of notes receivable	61,412			53,332			—			47,851
Residential properties under construction	1,097,094			—			2,768,374			145,450
Prepaid expenses	685,620			613,765			1,494,843			1,210,780
Deferred income taxes	581,909			2,274,896			—			773,245
Other current assets	278,516			262,630			509,394			1,140,779
Total current assets	41,564,619			38,168,583			52,819,756			42,234,609

Property, buildings and equipment, at cost, net of accumulated depreciation of $29,970,793 in 2015 and $28,224,661 in 2014	37,039,527			37,002,843
Property, buildings and equipment, at cost, net of accumulated depreciation of $32,573,472 in 2016 and $28,653,138 in 2015							32,838,290			34,671,947
Deferred charges and other assets
Land and land development costs	2,395,602			2,564,449			2,484,885			2,417,089
Cash surrender value of life insurance	548,841			546,291			550,508			549,600
Restricted cash	307,048			566,321			173,023			307,092
Notes receivable, less current portion	15,703			50,096			—			8,197
Goodwill	101,407			101,407			101,407			101,407
Intangibles, net of accumulated amortization of $124,759 in 2015 and $75,967 in 2014	889,041			937,833
Intangibles, net of accumulated amortization of $186,259 in 2016 and $140,134 in 2015							827,541			873,666
Other assets	37,874			32,113			59,711			—
Total deferred charges and other assets	4,295,516			4,798,510			4,197,075			4,257,051
Total assets	$	82,899,662		$	79,969,936		$	89,855,121		$	81,163,607
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	9,669,477		$	9,674,961		$	11,712,672		$	10,067,553
Contract loss accruals	267,702			2,547,816
Billings in excess of costs and estimated earnings on uncompleted contracts	29,286			1,537,971			272,287			234,161
Current portion of notes payable	8,133,482			3,685,859
Current portion of notes payable, net							6,105,039			5,815,510
Income taxes payable							—			483,763
Accrued remediation costs	164,631			1,048,380			140,089			135,786
Total current liabilities	18,264,578			18,494,987			18,230,087			16,736,773
Deferred income taxes	7,868,045			7,988,539			7,547,460			8,328,492
Accrued remediation costs, less current portion	64,260			15,000			95,420			107,429
Notes payable, less current portion	23,665,518			22,657,973
Notes payable, less current portion, net							18,254,279			20,656,402
Other accrued liabilities	69,227			55,766			66,923			83,698
Total liabilities	49,931,628			49,212,265			44,194,169			45,912,794
Commitments and contingencies (notes 3 and 5)	—			—			—			—
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 and 25,451,354 shares outstanding	2,781,377			2,781,377			2,781,377			2,781,377
Additional paid-in capital	18,481,683			18,481,683			18,481,683			18,481,683
Retained earnings	13,013,161			10,802,798			25,706,079			15,295,940
Treasury stock, 2,362,418 shares, at cost	(1,308,187		)	(1,308,187		)	(1,308,187		)	(1,308,187		)
Total stockholders’ equity	32,968,034			30,757,671			45,660,952			35,250,813
Total liabilities and stockholders’ equity	$	82,899,662		$	79,969,936		$	89,855,121		$	81,163,607

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,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Revenue
Electrical construction	$	26,813,125		$	22,111,299		$	90,509,971		$	66,520,732		$	29,653,625		$	26,813,125		$	95,385,820		$	90,509,971
Other	249,236			548,052			553,102			3,399,954			1,000,538			249,236			3,283,799			553,102
Total revenue	27,062,361			22,659,351			91,063,073			69,920,686			30,654,163			27,062,361			98,669,619			91,063,073
Costs and expenses
Electrical construction	20,966,266			17,849,577			77,422,210			56,141,402			23,161,561			20,966,266			70,096,028			77,422,210
Other	231,163			420,331			502,040			2,738,397			663,320			231,163			2,298,227			502,040
Selling, general and administrative	1,072,870			997,214			3,552,001			3,249,188			1,532,689			1,072,870			4,607,106			3,552,001
Depreciation and amortization	1,677,097			1,495,141			4,949,367			4,515,441			1,590,233			1,677,097			4,672,078			4,949,367
Gain on sale of property and equipment	(84,179		)	(161,035		)	(66,988		)	(323,936		)	(19,056		)	(84,179		)	(914		)	(66,988		)
Total costs and expenses	23,863,217			20,601,228			86,358,630			66,320,492			26,928,747			23,863,217			81,672,525			86,358,630
Total operating income	3,199,144			2,058,123			4,704,443			3,600,194			3,725,416			3,199,144			16,997,094			4,704,443
Other income (expense), net
Interest income	4,918			7,647			14,903			16,758			10,009			4,918			25,369			14,903
Interest expense	(175,651		)	(163,632		)	(509,478		)	(516,127		)
Interest expense, net of amount capitalized													(146,022		)	(175,651		)	(457,313		)	(509,478		)
Other income, net	14,216			11,830			47,053			40,059			12,903			14,216			42,363			47,053
Total other expense, net	(156,517		)	(144,155		)	(447,522		)	(459,310		)	(123,110		)	(156,517		)	(389,581		)	(447,522		)
Income before income taxes	3,042,627			1,913,968			4,256,921			3,140,884
Income from continuing operations before income taxes													3,602,306			3,042,627			16,607,513			4,256,921
Income tax provision	1,199,211			728,243			1,746,602			1,192,826			1,298,420			1,199,211			6,089,367			1,746,602
Income from continuing operations	1,843,416			1,185,725			2,510,319			1,948,058			2,303,886			1,843,416			10,518,146			2,510,319
Loss from discontinued operations, net of tax benefit of ($39,395), $0, ($194,249) and ($405,478), respectively	(98,918		)	—			(299,956		)	(665,347		)
Loss from discontinued operations, net of income tax benefit of $0, $39,395, $66,077 and $194,249, respectively													—			(98,918		)	(108,007		)	(299,956		)
Net income	$	1,744,498		$	1,185,725		$	2,210,363		$	1,282,711		$	2,303,886		$	1,744,498		$	10,410,139		$	2,210,363

Net income (loss) per share of common stock — basic and diluted
Continuing operations	$	0.07		$	0.05		$	0.10		$	0.08		$	0.09		$	0.07		$	0.41		$	0.10
Discontinued operations	0.00			—			(0.01		)	(0.03		)	—			—			—			(0.01		)
Net income	$	0.07		$	0.05		$	0.09		$	0.05		$	0.09		$	0.07		$	0.41		$	0.09
Weighted average shares outstanding — basic and diluted	25,451,354			25,451,354			25,451,354			25,451,354			25,451,354			25,451,354			25,451,354			25,451,354

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,						Nine Months Ended September 30,
	2015			2014			2016			2015
Cash flows from operating activities
Net income	$	2,210,363		$	1,282,711		$	10,410,139		$	2,210,363
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization	4,949,367			4,515,441			4,672,078			4,949,367
Amortization of debt issuance costs							17,498			47,964
Deferred income taxes	1,572,493			243,982			(7,787		)	1,572,493
Gain on sale of property and equipment	(66,988		)	(323,936		)	(914		)	(66,988		)
Gain on cash surrender value of life insurance	(2,550		)	(3,761		)
Changes in operating assets and liabilities, net of effects of acquisition
Other gains							(908		)	(2,550		)
Changes in operating assets and liabilities
Accounts receivable and accrued billings	(945,612		)	5,939,637			(1,297,006		)	(945,612		)
Real estate inventory	—			395,062
Costs and estimated earnings in excess of billings on uncompleted contracts	(5,075,268		)	(3,870,551		)	(1,752,507		)	(5,075,268		)
Residential properties under construction	(1,097,094		)	1,616,916			(2,622,924		)	(1,097,094		)
Income taxes receivable	(51,916		)	289,539			(639,379		)	(51,916		)
Prepaid expenses and other assets	(93,502		)	(639,900		)	287,611			(98,811		)
Land and land development costs	168,847			(551,079		)	(67,796		)	168,847
Restricted cash	259,273			(85,248		)	134,069			259,273
Income taxes payable							(483,763		)	—
Accounts payable and accrued liabilities	(59,355		)	(1,139,271		)	1,658,621			(2,339,469		)
Contract loss accruals	(2,280,114		)	(31,615		)
Billings in excess of costs and estimated earnings on uncompleted contracts	(1,508,685		)	(77,651		)	38,126			(1,508,685		)
Accrued remediation costs	(834,489		)	583,742			(7,706		)	(834,489		)
Net cash (used in) provided by operating activities	(2,855,230		)	8,144,018
Net cash provided by (used in) operating activities							10,337,452			(2,812,575		)
Cash flows from investing activities
Proceeds from disposal of property and equipment	814,293			1,701,819			91,571			814,293
Proceeds from notes receivable	26,313			38,898			56,048			26,313
Purchases of property, buildings and equipment	(5,617,232		)	(6,773,377		)	(2,913,230		)	(5,617,232		)
Net cash paid for acquisition	—			(5,743,665		)
Net cash used in investing activities	(4,776,626		)	(10,776,325		)	(2,765,611		)	(4,776,626		)
Cash flows from financing activities
Proceeds from notes payable	24,500,000			3,500,000			3,950,000			24,500,000
Repayments on notes payable	(15,785,197		)	(10,521,633		)	(6,076,742		)	(15,785,197		)
Installment loan repayments	(3,259,635		)	(1,470,349		)	—			(3,259,635		)
Net cash provided by (used in) financing activities	5,455,168			(8,491,982		)
Net decrease in cash and cash equivalents	(2,176,688		)	(11,124,289		)
Debt issuance costs							(3,350		)	(42,655		)
Net cash (used in) provided by financing activities							(2,130,092		)	5,412,513
Net increase (decrease) in cash and cash equivalents							5,441,749			(2,176,688		)
Cash and cash equivalents at beginning of period	9,822,179			20,214,569			11,374,238			9,822,179
Cash and cash equivalents at end of period	$	7,645,491		$	9,090,280		$	16,815,987		$	7,645,491
Supplemental disclosure of cash flow information
Interest paid	$	471,807		$	505,620
Interest paid, net of amounts capitalized							$	419,330		$	471,807
Income taxes paid, net	$	31,776		$	253,857		$	7,154,219		$	31,776
Supplemental disclosure of non-cash investing and financing activities
Liability for equipment acquired	$	67,332		$	385,044		$	54,084		$	67,332

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 ~~construction.~~infrastructure for the utility industry and industrial customers. The principal market for the Company’s electrical construction operation is ~~electric utilities throughout much~~primarily in the Southeast and mid-Atlantic regions of the United ~~States.~~States and Texas.

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 financial statements presented herein are unaudited with the exception of the consolidated balance sheet as of December 31, ~~2014,~~2015, 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 financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, ~~2014.~~2015.

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 ~~all~~reasonable means of collection have been exhausted and the potential for recovery is considered remote. ~~Any increase in the allowance account has a corresponding negative effect on the results of operations.~~ As of ~~both~~ September 30, ~~2015~~2016 and December 31, ~~2014,~~2015, 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 who 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 financial statements in conformity with ~~U. S.~~U.S. generally accepted accounting principles (“GAAP”). Actual results could differ from those estimates. Management considers the most significant estimates in preparing these financial statements to be the estimated cost to complete electrical construction contracts in progress, the adequacy of the accrued remediation costs and the realizability of deferred tax assets.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable and accrued billings, ~~notes receivable,~~ restricted cash collateral deposited with insurance carriers, cash surrender value of life insurance policies, accounts payable, notes payable, and other current liabilities.

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.

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 inon the consolidated balance sheets for cash and cash equivalents, accounts receivable and accrued billings, accounts payable and accrued liabilities, to approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of notes receivable is considered by management to approximate carrying value based on their interest rates and terms, maturities, collateral, and current status of the receivables. The fair value of the Company’s long-term notes payable are ~~also~~ estimated by management to

~~Table of Contents~~

approximate ~~their~~ carrying value since the interest rates prescribed by Branch Banking and Trust

Company (the “Bank”) are variable market interest rates and are adjusted periodically. Restricted cash is considered by management to approximate fair value due to the nature of the asset held in a secured interest bearing bank account. The carrying value of cash surrender value of life insurance is also 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.

~~Restricted Cash~~Land and Land Development Costs and Residential Properties Under Construction

The ~~Company’s restricted cash includes cash deposited~~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 ASC Topics 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 ~~secured interest bearing bank account, as required by~~current transaction between willing parties, that is, other than in a forced or liquidation sale. The Company also complies with ASC Topic 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 or residential properties under construction carrying value for the ~~Collateral Trust Agreement in connection~~year ended December 31, 2015 or the nine months ended September 30, 2016. On October 3, 2016, the Company purchased land with ~~the Company’s workers’ compensation insurance policies, as described in note 8.~~a purchase price of $2.4 million for a future real estate development project.

Goodwill and Intangible Assets

Intangible assets with finite useful lives are recorded at cost upon acquisition, and 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. ~~All definite lived intangibles are amortized over their estimated useful lives.~~ 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, ~~2014,~~2015, the Company assessed the recoverability of its long-lived assets and goodwill, and believed that there were no events or circumstances present that would require a test of recoverability on those assets. As a result, there was no impairment of the carrying amounts of such ~~assets and no reduction in their estimated useful lives.~~assets.

Segment Reporting

The Company operates as a single reportable segment, electrical construction, under ASC Topic 280-10-50 Disclosures about Segments of an Enterprise and Related Information. The Company’s real estate activities have diminished to a point that it is no longer significant for reporting purposes and, accordingly, results of the ongoing real estate operations are included in the income statement under the caption “Other.” Certain corporate costs are not allocated to athe electrical construction segment.

Reclassifications

Certain amounts previously reflected on the prior year balance sheet and in the prior year statement of cash flows have been reclassified to conform to the Company’s ~~2015~~2016 presentation. The prior year balance sheet included amounts under contract loss accruals now included under accounts payable and accrued liabilities, in addition the prior year balance sheet includes amounts under residential properties under construction previously included under other assets. The cash flows from operating activities include amounts ~~under contract loss accruals which were previously reported~~ within accounts payable and accrued ~~liabilities. This reclassification~~liabilities which were previously reported under contract loss accruals. These reclassifications had no effect on the previously reported total of current assets, current liabilities or cash flows from operating activities.

Recent Accounting Pronouncements

In May 2014, the ~~FASB~~Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, which will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles and is intended to improve and converge the financial reporting requirements for revenue from contracts with customers with International Financial Reporting Standards (“IFRS”). The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 allows for both retrospective and prospective methods of adoption and is effective for periods beginning after December 15, 2016. ~~The Company is currently evaluating the method of adoption and the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements.~~ In August 2015, the FASB issued ASU 2015-14 which provides a one-year deferral of the revenue recognition standard’s effective date. Public business entities are required to apply

the revenue recognition standard to annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early application is permitted but not before the original effective date for public business entities (annual reporting periods beginning after December 15, 2016). The option to use either a retrospective or cumulative-effective transition method did not change. The Company is currently evaluating the method of adoption and the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements.

In May 2016, the FASB issued ASU 2016-12, which improves guidance on assessing collectability, presentation of sales taxes, non-cash consideration, and completed contracts and contract modifications at transition. This update is effective concurrently with ASU 2014-09 and is also being evaluated by the Company.

In August 2014, the FASB issued ASU 2014-15 requiring management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The standard also provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company ~~is currently evaluating the impact that~~does not expect the adoption of ~~ASU 2014-15 will~~this guidance to have a significant impact on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03 that intends to simplify the presentation of debt issuance costs. The new standard will more closely align the presentation of debt issuance costs under U.S. generally accepted accounting principles with the presentation under comparable IFRS standards. Debt issuance costs related to a recognized debt liability will be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts. ASU 2015-03 is effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The cost of issuing debt will no longer be recorded as a separate asset, except when incurred before receipt of the funding from the associated debt liability. Under current U.S. generally accepted accounting principles, debt issuance costs are

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reported on the balance sheet as assets and amortized as interest expense. The costs will continue to be amortized to interest expense using the effective interest method. Subsequent to the issuance of ASU 2015-03 the Securities and Exchange Commission staff made an announcement regarding the presentation of debt issuance costs associated with line-of-credit arrangements, which was codified by the FASB in ASU 2015-15. This guidance, which clarifies the exclusion of line-of-credit arrangements from the scope of ASU 2015-03, is effective upon adoption of ASU 2015-03. The Company ~~is currently evaluating the impact that the adoption of~~has adopted both ASU 2015-03 and ~~2015-15~~2015-15. This new guidance was applied on a retrospective basis.

In November 2015, the FASB issued ASU No 2015-17 to simplify the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current on the balance sheet. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company has adopted ASU 2015-17 prospectively as of January 1, 2016 and there were no adjustments made to prior periods as a result of the adoption.

In February 2016, the FASB issued ASU 2016-02, 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). ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the effect that adoption will have on its consolidated financial statements.

In ~~April 2015,~~August 2016, the FASB issued ASU ~~2015-05~~2016-15, which provides ~~guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then~~clarification regarding how certain cash receipts and cash payments are presented and classified in the ~~customer should account for the software license element~~statement of ~~the arrangement consistent~~cash flows. This update addresses eight specific cash flow issues with the ~~acquisition~~objective of ~~other software licenses. If a cloud computing arrangement does not include a software license,~~reducing the ~~customer should account~~existing diversity in practice. This new guidance is effective for ~~the arrangement as a service contract. The guidance will not change~~ ~~U.S. generally accepted accounting principles~~ ~~for a customer~~’~~s accounting for service contracts. The standard will be effective~~ ~~for fiscal years~~annual and interim periods beginning after December 15, ~~2015, and interim periods within those fiscal years~~.2017, with early adoption permitted. The Company is currently ~~evaluating~~assessing the ~~impact~~effect that ~~the~~ adoption ~~of ASU 2015-05~~ will have on its consolidated financial statements.

Note 2 – Income Taxes

The following table presents the provision for income tax and the effective tax rates from continuing operations for the three and nine month periods ended September 30 as indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Income tax provision	$	1,199,211		$	728,243		$	1,746,602		$	1,192,826		$	1,298,420		$	1,199,211		$	6,089,367		$	1,746,602
Effective income tax rate	39.4		%	38.0		%	41.0		%	38.0		%	36.0		%	39.4		%	36.7		%	41.0		%

The Company’s expected tax rate for the year ending December 31, ~~2015,~~2016, which was calculated based on the estimated annual operating results for the year, is ~~41.0%~~36.7%. The expected tax rate differs from the federal statutory rate of ~~34.0% mainly~~35% due to ~~non-deductible expenses and~~ state income ~~taxes.~~taxes offset by permanent differences.

The Company’s effective tax rate for the three and nine months ended September 30, 2016 were 36.0% and 36.7%, respectively. The effective tax ~~rates~~rate for the three and nine months ended September 30, 2016 differs from the federal statutory rate of 35% due to state income taxes offset by permanent differences. The effective tax rate for the three and nine months ended September 30, 2015 were 39.4% and 41.0%, ~~respectively. The effective tax rate for the three months ended September 30, 2015~~which differs from the expected tax rate due to an adjustment of the estimated annual operating results for the year. The effective tax rate for the nine months ended September 30, 2015 reflects the expected tax rate for the year.

~~The effective tax rates for both the three and nine months ended September 30, 2014 were 38.0% and differ~~ from the federal statutory rate of ~~34.0% primarily~~34% mainly due to non-deductible expenses and state income taxes.

~~The~~Due to the early adoption of ASU No 2015-17, the current deferred tax assets decreased to $~~582,000~~0 as of September 30, ~~2015~~2016, from ~~$2.3 million~~$773,000 as of December 31, ~~2014 primarily due to~~2015 and the ~~decrease in accrued contract losses and to a lesser extent the decrease in accrued remediation costs. The~~ non-current deferred tax liabilities ~~were $7.9 million and $8.0~~decreased to $7.5 million as of September 30, ~~2015~~2016 ~~and~~from $8.3 million as of December 31, ~~2014, respectively. This change is mainly due to a decrease between the book and tax net value of fixed assets.~~2015.

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, the duration of statutory carryforward periods, experience with loss carryforwards expiring unused, 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, ~~2015~~2016 is approximately $~~2.1~~2.5 million.

The Company has gross unrecognized tax benefits of ~~$12,000 and $11,000~~$5,000 as of both September 30, ~~2015~~2016 and December 31, ~~2014, respectively.~~2015. 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

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tax years prior to ~~2012~~2013 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 3 – ~~Discontinued Operations~~

Commitments and Contingencies Related toDiscontinued Operations

~~Through certain of our subsidiaries and predecessor companies, the Company was previously engaged in~~Discontinued operations represent former mining activities, ~~and~~the last of which ended ~~all such activities~~ in ~~December~~ 2002.

~~Effective September 15, 2014, the Company entered into~~ Pursuant to an ~~Administrative Order on Consent (“AOC”)~~agreement with the United States Environmental Protection Agency (the “EPA”) ~~with respect to~~, the Company performed certain remediation actions at a ~~previously owned mining~~ property ~~the Sierra Zinc Site located in Stevens County, Washington (the “Site”). The Company~~ sold ~~the Site~~ over fifty years ago. ~~The Site includes a tailings impoundment that was not previously reclaimed. Pursuant to the AOC, the Company agreed to undertake certain~~This remediation ~~actions at the Site, which~~ work was completed by September 30, 2015.

~~Based on the foregoing, the~~ The Company has ~~reasonably estimated the amounts related to this response action in accordance with ASC Topic 450-20,~~ ~~Loss Contingencies,~~ ~~and~~ established a contingency provision ~~within~~related to discontinued ~~operations. As~~operations, which was $236,000 and $243,000, as of September 30, ~~2015~~2016 and December 31, ~~2014, the balance of the estimated contingency provision accrued by the Company was $229,000 and $1.1 million, respectively, including an increase of $138,000 and $494,000 recognized in the three and~~2015, respectively. During the nine months ended September 30, ~~2015, respectively.~~2016, the Company increased the provision by $174,000 ($108,000, net of tax benefit of $66,000). This increase ~~resulted mainly from changes in~~is related to costs associated with some corrective remediation efforts during the ~~scope of the project as required by the EPA.~~period. The remaining balance of the accrued remediation costs as of September 30, ~~2015,~~2016, mainly represents estimated future charges for EPA response costs and monitoring of the ~~Site. It is reasonably possible the~~property. The total ~~actual~~ costs to be incurred ~~at the Site~~ in future periods may vary from this estimate.

The provision will be reviewed periodically based upon facts and circumstances available at the time. ~~The costs provisioned for future expenditures related to this environmental obligation are not discounted to present value.~~

~~As of September 30, 2015 and December 31, 2014, respectively, discontinued operations had no liabilities other than the accrued remediation costs associated with the aforementioned EPA action.~~

September 30, December 31,
2015 2014
Accrued remediation costs current $ 164,631
$ 1,048,380
Accrued remediation costs non-current 64,260
15,000
Total liabilities of discontinued operations $ 228,891
$ 1,063,380

~~The following table presents the operating results of the discontinued operations for the three and nine month periods ended September 30, as indicated:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2014 2015 2014
Provision for remediation costs $ (138,313 ) $ —
$ (494,205 ) $ (1,070,825 )

Loss from discontinued operations before income taxes (138,313 ) —
(494,205 ) (1,070,825 )
Income tax benefit (39,395 ) —
(194,249 ) (405,478 )
Loss from discontinued operations, net of tax $ (98,918 ) $ —
$ (299,956 ) $ (665,347 )

The Company’s effective tax benefit rates related to discontinued operations for the three and nine month periods ended September 30, 2015 was (28.5)% and (39.3)%, respectively. The effective tax benefit rate for the three months ended September 30, 2015 differs from the expected tax rate due to an adjustment of the estimated annual operating results for the year. The effective tax benefit rate for the nine months ended September 30, 2015 differs from the statutory rate of (34.0)% primarily due to non-deductible expenses and state income taxes. The Company’s effective tax benefit rates related to discontinued operations for the three and nine month periods ended September 30, 2014 was 0.0% and (37.9)%, respectively. The Company had no discontinued operations for the three months ended September 30, 2014. The effective tax benefit rate differs from the statutory rate of (34.0)% primarily due to state income taxes.

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Note 4 – Notes Payable

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

Lending Institution Maturity Date September 30, 2015 December 31, 2014 Interest Rates
September 30, 2015 December 31, 2014
Working Capital Loan Branch Banking and Trust Company June 16, 2017 $ 4,500,000
$ —
2.06 % 2.19 %
$6.94 Million Equipment Loan Branch Banking and Trust Company February 22, 2016 —
2,701,343
— % 2.69 %
$1.5 Million Equipment Loan Branch Banking and Trust Company October 17, 2016 —
727,000
— % 2.69 %
$4.25 Million Equipment Loan Branch Banking and Trust Company September 19, 2016 —
2,094,000
— % 2.69 %
$1.5 Million Equipment Loan (2013) Branch Banking and Trust Company April 22, 2017 —
1,000,000
— % 2.67 %
$5.0 Million Equipment Loan Branch Banking and Trust Company April 22, 2018 —
3,703,704
— % 2.67 %
$3.5 Million Acquisition Loan Branch Banking and Trust Company January 28, 2019 —
2,858,150
— % 2.19 %
$10.0 Million Equipment Loan Branch Banking and Trust Company July 28, 2020 10,000,000
10,000,000
2.25 % 2.19 %
$17.0 Million Equipment Loan Branch Banking and Trust Company March 6, 2020 15,299,000
—
2.06 % — %
$2.0 Million Equipment Loan Branch Banking and Trust Company March 6, 2020 2,000,000
—
2.06 % — %
$7.9 Million Installment Sale Contract Caterpillar Financial Services Corporation July 17, 2016 —
3,259,635
— % 3.45 %
Total notes payable 31,799,000
26,343,832

Current portion of notes payable (8,133,482 ) (3,685,859 )
Notes payable, less current portion $ 23,665,518
$ 22,657,973



	Lending Institution	Maturity Date	September 30, 2016		December 31, 2015		Interest Rates
	Lending Institution	Maturity Date	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Working Capital Loan	Branch Banking and Trust Company	June 16, 2018	$	4,432,340	$	1,500,000	2.38	%	2.06	%
$10.0 Million Equipment Loan	Branch Banking and Trust Company	July 28, 2020	8,135,185		10,000,000		2.56	%	2.44	%
$17.0 Million Equipment Loan	Branch Banking and Trust Company	March 6, 2020	10,451,500		13,027,392		2.38	%	2.13	%
$2.0 Million Equipment Loan	Branch Banking and Trust Company	March 6, 2020	1,381,625		2,000,000		2.38	%	2.13	%
Total notes payable			24,400,650		26,527,392
Less unamortized debt issuance costs			41,332		55,480
Total notes payable, net			24,359,318		26,471,912
Less current portion of notes payable, net			6,105,039		5,815,510
Notes payable net, less current portion			$	18,254,279	$	20,656,402

As of September 30, ~~2015~~2016, the Company, and the Company’s wholly owned subsidiaries Southeast Power, Pineapple House of Brevard, Inc. (“Pineapple House”), Bayswater Development Corporation (“Bayswater”), Power Corporation of America (“PCA”) and C and C Power Line, Inc. (“C&C”), collectively (the “Debtors,”) were parties to a Master Loan Agreement, dated March 6, 2015 (the “2015 Master Loan Agreement”), with Branch Banking and Trust Company (the “Bank”).

All loans with the Bank are guaranteed by the Debtors and include the grant of a continuing security interest in all now owned, hereafter acquired and wherever located personal property of the Debtors.

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As of September 30, ~~2015~~,2016, the Company had a loan agreement and a series of related ancillary agreements with the Bank providing for a revolving line of credit loan for a maximum principal amount of ~~$15.0~~$15.0 million,, to be used as a “~~Working~~“Working Capital ~~Loan~~.Loan.” As of September 30, ~~2015~~2016 and December 31, ~~2014,~~2015, borrowings under the Working Capital Loan were ~~$4.5~~$4.4 million and ~~$0,~~$1.5 million, respectively. 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 related to workers’ compensation. The amount of this letter of credit was $420,000 and $320,000, as of September 30, 2016 and December 31, 2015, respectively.

On October ~~15, 2015~~3, 2016, the Company ~~paid down $3.0 million~~made borrowings of $750,000 on the Working Capital Loan. In addition, on November 1, 2016, the Company and the Bank modified the Working Capital Loan agreement. This modification increased the amount of the Working Capital Loan from $15.0 million to $18.0 million and changed the due date from June 16, 2018 to November 28, 2019. This modification increases its available balance to $12.4 million, as of November 1, 2016.

As of September 30, 2016, the Debtors had loan agreements with the Bank for the $10.0 Million Equipment Loan, the $17.0 Million Equipment Loan and the $2.0 Million Equipment Loan. ~~Such amount has been reflected under~~All loans with the ~~“current portion~~Bank are guaranteed by the Debtors and include the grant of ~~notes payable”~~a continuing security interest in all now owned and hereafter acquired and wherever located personal property of the ~~accompanying consolidated balance sheets.~~Debtors.

The $10.0 Million Equipment Loan bears interest at a rate per annum equal to one month LIBOR (as defined in the ancillary loan documents) plus ~~two percent~~ 2.00%, which is adjusted monthly and subject to a maximum interest rate of 24.00%.

The Working Capital Loan, the $17.0 Million Equipment Loan and the $2.0 Million Equipment Loan 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 of 24.00%.

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 5 – 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, ~~2015~~2016, outstanding performance bonds issued on behalf of the Company’s electrical construction ~~subsidiary~~subsidiaries amounted to approximately $~~42.2~~46.0 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.

Note 6 – 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.

As of September 30, ~~2015~~2016 and ~~2014~~2015, the Company had no common stock equivalents. The computation of the weighted average number of common stock shares outstanding excludes 2,362,418 shares of Treasury Stock for each of the three and nine month periods ended September 30, ~~2015~~2016 and ~~2014~~.2015.

Note 7 – Customer Concentration

~~A significant portion of the Company’s electrical construction revenue has historically been derived from three or four utility customers each year.~~ For the nine months ended September 30, ~~2015~~2016 and ~~2014,~~2015, the three largest customers accounted for ~~57%~~59% and ~~56%~~57%, respectively, of the Company’s total revenue. For the three months ended September 30, ~~2015~~2016 and ~~2014,~~2015, the three largest customers accounted for ~~77%~~57% and ~~55%~~77%, respectively of the Company’s total revenue. ~~The increase in concentration for the most recent quarter resulted from fluctuations in awards under existing MSAs.~~

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Note 8 – Restricted Cash

On ~~October 25, 2010~~,Restricted cash, reported under “Deferred charges and other assets” on the ~~Company, as grantor, Valley Forge Insurance Company (the “Beneficiary”) and Branch Banking and Trust Company (the “Trustee”) entered into~~Company’s balance sheet, represents amounts deposited in a ~~Collateral Trust Agreement (the “Agreement”)~~trust account to secure the Company’s obligations in connection with the Company’s workers’ compensation insurance ~~policies issued by the Beneficiary (the “Policies”) beginning in~~ ~~2009~~. The Agreement was made to grant the Beneficiary a security interest in certain of the Company’s assets and to place those assets in a Trust Account to secure the Company’s obligations to the Beneficiary under the Policies. The deposits maintained under the Agreement are recorded as restricted cash, within the non-current assets section of our balance sheet.policies.

Note 9 – Goodwill and Other Intangible Assets ~~Associated with the Acquisition of C&C~~

On January 3, 2014, PCA completed its acquisition of all the issued and outstanding shares of stock of C&C. The purchase price was $7.3 million in cash, subject to certain customary post-closing adjustments. As of December 31, 2014 all such adjustments were recognized. In connection with the acquisition of C&C, the Company acquired intangible assets with definite useful lives primarily consisting of trademarks and names, customer relationships and non-competition agreements and are amortized over periods from five to twenty years. The aggregate cash consideration paid, net of cash acquired of $1.4 million, was $5.8 million, of which $101,000 was allocated to goodwill, $1.0 million to acquired other intangible assets, $3.3 million to property and equipment, $2.6 million to net current assets and $1.3 million to net liabilities assumed.

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


		September 30, 2015							December 31, 2014								September 30, 2016							December 31, 2015
	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		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	Indefinite-lived and non-amortizable acquired intangible assets															Indefinite-lived and non-amortizable acquired intangible assets
Goodwill	Indefinite	$	101,407	$	—		$	101,407	$	101,407	$	—		$	101,407	Indefinite	$	101,407	$	—		$	101,407	$	101,407	$	—		$	101,407

Definite-lived and amortizable acquired intangible assets	Definite-lived and amortizable acquired intangible assets															Definite-lived and amortizable acquired intangible assets
Trademarks/Names	15	$	640,000	$	(74,667	)	$	565,333	$	640,000	$	(42,667	)	$	597,333	15	$	640,000	$	(117,335	)	$	522,665	$	640,000	$	(85,334	)	$	554,666
Customer relationships	20	350,000		(30,625		)	319,375		350,000		(17,500		)	332,500		20	350,000		(48,125		)	301,875		350,000		(35,000		)	315,000
Non-competition agreement	5	10,000		(5,667		)	4,333		10,000		(2,000		)	8,000		5	10,000		(6,999		)	3,001		10,000		(6,000		)	4,000
Other	1	13,800		(13,800		)	—		13,800		(13,800		)	—		1	13,800		(13,800		)	—		13,800		(13,800		)	—
Total intangible assets, net	Total intangible assets, net	$	1,013,800	$	(124,759	)	$	889,041	$	1,013,800	$	(75,967	)	$	937,833	Total intangible assets, net	$	1,013,800	$	(186,259	)	$	827,541	$	1,013,800	$	(140,134	)	$	873,666

~~Table~~Amortization of ~~Contents~~definite-lived intangible assets will be approximately $61,000 annually for 2016 through 2020.

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

Forward-Looking Statements

We make “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~~fixed-price construction contracts; and heightened competition in the electrical construction field, including intensification of price competition. Other factors that may affect the results of our operations include, among others: adverse weather; natural disasters; effects of climate changes; changes in generally accepted accounting principles; ability to obtain necessary permits from regulatory agencies; our ability to maintain or increase historical revenue and profit margins; general economic conditions, both nationally and in our region; adverse legislation or regulations; availability of skilled construction labor and materials and material increases in labor and material costs; and our ability to obtain additional and/or renew financing. Other important factors which could cause our actual results to differ materially from the forward-looking statements in this document include, but are not limited to, those discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as those discussed elsewhere in this report and as set forth from time to time in our other public filings and public statements. In addition to the other information included in this report and our other public filings and releases, a discussion of factors affecting our business is included in our Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015 under “Item 1A. Risk Factors” and should be considered while evaluating our business, financial condition, results of operations and prospects.

You should read this report in its entirety and with the understanding that our actual future results may be materially different from what we expect. We may not update these forward-looking statements, even in the event that our situation changes in the future, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

Overview

We are a provider of electrical construction services, primarily in the ~~southeast~~Southeast and mid-Atlantic regions of the United States ~~including~~and Texas. For the nine months ended September 30, ~~2015~~2016, our total consolidated revenue ~~was~~grew 8.4% to $~~91.1~~98.7 million. from $91.1 million in the same period in 2015.

Through our subsidiaries, Power Corporation of America (“PCA”), Southeast Power Corporation (“Southeast Power”), and C and C Power Line, Inc. (“C&C”), we are engaged in the construction ~~and maintenance~~ of ~~electric~~electrical infrastructure for the utility ~~facilities for electric utilities~~industry and industrial customers. Southeast Power performs electrical contracting services ~~throughout~~including the ~~United States.~~construction of transmission lines, concrete foundations, distribution systems and fiber optic splicing. Southeast Power is headquartered in Titusville, Florida and has additional offices in Bastrop, Texas and Spartanburg, South Carolina. C&C, headquartered in Jacksonville, Florida, is a full service electrical contractor ~~headquartered in Jacksonville, Florida. C&C has~~that provides similar services as Southeast Power with a unionized ~~workforce and~~workforce. C&C has been involved in the electrical business primarily in Florida since 1989.

The electrical construction business is highly competitive and fragmented. We compete with other independent contractors, including larger regional and national firms that may have financial, operational, technical and marketing resources that exceed our own. We also face competition from existing and prospective customers establishing or augmenting in-house ~~service~~services and organizations that employ personnel who perform ~~some of the same types of~~similar services as those provided by us. In addition, a significant portion of our electrical construction revenue is derived from a small group of customers ~~several of which~~that account for a substantial portion of our revenue in any given year. The ~~relative~~ revenue contribution by any single customer or group of customers may significantly fluctuate from ~~period to period.~~period-to-period. For example, for the nine months ended September 30, ~~2015~~2016 and the year ended December 31, ~~2014,~~2015, three of our customers accounted for approximately ~~57%~~59% and ~~54%, respectively,~~62% of our consolidated ~~revenue.~~revenue, respectively. The loss of or decrease in current demand from one or more ~~of these~~ customers, ~~would,~~ if not replaced, ~~by other business,~~may result in a material decrease in revenue, ~~margins~~margin and ~~profits, which could be material.~~profit.

Critical Accounting Estimates

This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to ~~fixed price~~fixed-price electrical construction contracts, the adequacy of our accrued remediation costs

and deferred tax assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, under the circumstances, the results of which form the basis for making judgments about the carrying

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values of assets and liabilities, that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our management has discussed the selection and development of our critical accounting policies, estimates, and related disclosure with the Audit Committee of the Board of Directors.

Percentage of Completion

We recognize revenue from ~~fixed price~~fixed-price contracts on a percentage-of-completion basis, using primarily the cost-to-cost method based on the percentage of total cost incurred to date, in proportion to total estimated cost to complete the contract. Total estimated cost, and thus contract income, is impacted by ~~several~~ factors including, but not limited to: changes in productivity and scheduling, the cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, site conditions and scheduling that differ from those assumed in the original bid (to the extent contract remedies are unavailable), customer needs, customer delays in providing approvals and materials, the availability and skill level of workers in the geographic location of the project, a change in the availability and proximity of materials, and governmental regulation, may also affect the progress and estimated cost of a project’s completion and thus the timing of income and revenue recognition.

A change order is a modification to a contract that changes the provisions of the contract, typically resulting from changes in scope, specifications, design, manner of performance, facilities, equipment, materials, sites, or period of completion of the work under the contract. Revenue from a change order is included in total estimated contract revenue only when it is probable that the change order will result in an addition to contract value and can be reliably estimated.

The accuracy of our revenue and profit recognition in a given period is almost solely dependent on the accuracy of our estimates of the cost to complete each project. Our projects can be complex and in almost every case the profit margin estimates for a project will either increase or decrease, to some extent, from the amount that was originally estimated at the time of bid. 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 were insignificant as of September 30, ~~2015 decreased to $268,000 from $2.5 million~~2016 and $65,000 as of December 31, ~~2014.~~2015. The accrued contract losses ~~for~~as of December 31, 2015 ~~and 2014~~ are mainly attributable to transmission projects experiencing either adverse weather conditions or unexpected construction issues. ~~The 2014 accrued amount related mainly to projects in Texas, where adverse weather conditions were especially severe.~~ Revenue from change orders, extra work, variations in the scope of work and claims is recognized when realization is ~~probable.~~probable and estimable.

Accrued Remediation Costs

In 2013, we originally established a contingency provision within discontinued operations of $1.2 million relating to a pending environmental matter with respect to a mining property, the Sierra Zinc Site located in Stevens County, Washington (the “Site”), which we sold over fifty years ago. As described in note 3 to the consolidated financial statements, ~~during the nine months ended September 30, 2015~~we completed remediation activities at a mining site which we sold over 50 years ago. We had a balance of accrued remediation costs, related mainly to Environmental Protection Agency response costs and 2014, we increased the contingency provision within discontinued operations by $494,000 and $1.1 million, respectively. The increase in the contingency provision for the nine months ended September 30, 2015 resulted mainly from changes in the scopemonitoring of the ~~project as required by the EPA.~~

~~The balance of the accrued remediation costs~~site, as of September 30, ~~2015~~2016 and December 31, ~~2014, was $229,000~~2015, of $236,000 and ~~$1.1 million,~~$243,000, respectively. We anticipate that ~~the current~~this accrual will be adequate to cover the full remediation costs. ~~However, the~~The accrual will be reviewed periodically based upon facts and circumstances available at the time, which could result in changes to this amount. We have taken certain remediation actions at the Site, which work is now completed, with future costs accrued related mainly to EPA response costs and the monitoring of the site.time.

Deferred Tax Assets and Liabilities

We account for income taxes in accordance with ASC Topic 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 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, ~~2015~~2016, in accordance with ASU No 2015-17, our deferred tax assets ~~were~~and liabilities are netted and reported as a non-current deferred tax liability on our balance sheet. Our non-current deferred tax liabilities are primarily comprised of tax depreciation in excess of book depreciation and are offset by our deferred tax assets, largely comprised of accrued vacation, accrued payables, accrued workers’ compensation claims, accrued remediation costs, inventory adjustments and ~~federal net operating loss carryforward.~~capitalized acquisition 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, the duration of statutory carryforward periods, our experience with loss carryforwards expiring unused, and tax planning alternatives. If we determine we will not be able to realize all or part of our deferred tax assets, a valuation allowance would be recorded to reduce our deferred tax assets to the amount that is more likely than not to be realized.

Based on our assumption with respect to forecasts of future taxable income and tax planning, among others, we anticipate being able to generate sufficient taxable income to utilize our deferred tax assets. Therefore, we have 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, ~~2015~~2016 is approximately $~~2.1~~2.5 million.

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RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, ~~2015~~2016 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, ~~2014~~2015

The table below presents our operating income from continuing operations for the nine months ended September 30, ~~2015~~2016 and ~~2014:~~2015:


	2015			2014			2016			2015
Revenue
Electrical construction	$	90,509,971		$	66,520,732		$	95,385,820		$	90,509,971
Other	553,102			3,399,954			3,283,799			553,102
Total revenue	91,063,073			69,920,686			98,669,619			91,063,073
Costs and expenses
Electrical construction	77,422,210			56,141,402			70,096,028			77,422,210
Other	502,040			2,738,397			2,298,227			502,040
Selling, general and administrative	3,552,001			3,249,188			4,607,106			3,552,001
Depreciation and amortization	4,949,367			4,515,441			4,672,078			4,949,367
Gain on sale of property and equipment	(66,988		)	(323,936		)	(914		)	(66,988		)
Total costs and expenses	86,358,630			66,320,492			81,672,525			86,358,630
Total operating income	$	4,704,443		$	3,600,194		$	16,997,094		$	4,704,443

Operating income 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 excludes interest expense, interest income, other income, and income taxes.

~~The table below presents our operating income from electrical construction operations for the nine months ended September 30, 2015 and 2014:~~

2015 2014
Revenue $ 90,509,971
$ 66,520,732
Cost and expenses (excluding depreciation and amortization): 77,422,210
56,141,402
Selling, general and administrative 253,677
369,039
Depreciation and amortization 4,856,430
4,450,733
Gain on sale of property and equipment (66,988 ) (323,936 )
Total operating income from electrical construction operations $ 8,044,642
$ 5,883,494

Operating income from electrical construction operations equals electrical construction revenue less electrical construction costs and expenses inclusive of depreciation and amortization, and selling, general and administrative expenses. Electrical construction operating costs and expenses also include any gains or losses on the sale of property and equipment. Electrical construction operating income excludes interest expense, interest income, other income, and income taxes.

Revenue

Total revenue for the nine months ended September 30, ~~2015~~2016, increased ~~30.2%~~8.4% to $~~91.1~~98.7 million, from $~~69.9~~91.1 million in ~~the same period in 2014, due to the increase in electrical construction operations revenue.~~2015. Electrical construction operations revenue ~~increased $24.0~~grew $4.9 million ~~(36.1%~~(5.4%) to $95.4 million, from $90.5 million ~~from $66.5 million~~ in ~~the same period in 2014,~~2015, due primarily to significant growth in non-MSA electrical construction projects.

Revenue from real estate development is included under the caption “Other” and was $3.3 million and $553,000 for the nine months ended September 30, 2016 and 2015, respectively, representing approximately 3% and less than 1%, respectively, of our total revenue for such periods. This increase was due to increased sales of residential properties. Our current real estate development activity involves the construction ~~under master service agreements (“MSA”).~~of single and multi-family residential projects in Brevard County, Florida.

Backlog

Our backlog represents ~~the uncompleted portion of~~future services to be performed under existing project-specific fixed-price and maintenance contracts and the estimated value of future services that we expect to provide under our existing ~~MSAs.~~master service agreements (“MSAs”).

The table below presents our total backlog as of September 30, ~~2015~~2016 and ~~2014~~2015 along with an estimate of the backlog amounts expected to be realized within 12 months and during the ~~total~~ life of each of the MSAs. The existing MSAs have initial terms ranging from one year to four years and some provide for ~~additional~~ renewals at the option of the customer. The calculation assumes exercise of the renewal options by the customer. Revenue from assumed exercise of renewal options represents ~~$97.7~~$107.4 million ~~(63.5%~~(77.9%) of our total estimated MSA backlog as of September 30, ~~2015~~2016.

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	Backlog as of				Backlog as of				Backlog as of				Backlog as of
	September 30, 2015				September 30, 2014				September 30, 2016				September 30, 2015
Electrical Construction Operations	12 Months		Total		12 Months		Total		12-Month		Total		12-Month		Total
Project-Specific Firm Contracts	$	48,792,425	$	60,592,086	$	39,823,589	$	41,345,422	$	32,449,751	$	32,449,751	$	48,792,425	$	60,592,086
Estimated Master Service Agreements (MSAs)	39,704,268		153,916,666		47,584,962		245,941,406
Estimated MSAs									43,474,491		137,841,991		39,704,268		153,916,666
Total	$	88,496,693	$	214,508,752	$	87,408,551	$	287,286,828	$	75,924,242	$	170,291,742	$	88,496,693	$	214,508,752

Our total backlog as of September 30, ~~2015~~2016, was ~~$214.5~~$170.3 million, compared to ~~$287.3~~$214.5 million as of September 30, ~~2014.~~2015. Of the ~~$214.5~~$170.3 million backlog as of September 30, ~~2015~~2016, ~~$60.6~~$32.4 million ~~(28.2%~~(19.1%) is believed to be firm under project-specific ~~fixed-price~~fixed-

price and maintenance ~~contracts and~~contracts. The project-specific backlog expected to be realized within twelve months decreased 33.5% to $32.4 million, from $48.8 million from the ~~balance represents the estimated value of future services under our existing MSAs. This compares to a~~same date last year. Total project-specific backlog ~~of $287.3 million~~ as of September 30, ~~2014,~~2016, decreased $28.1 million (46.4%) from $60.6 million to $32.4 million. The balance of ~~which $41.3 million (14.4%) was believed to be firm under project-specific fixed-price and maintenance contracts and~~ the ~~balance was attributable to~~backlog represents the estimated value of future services under our existing MSAs. Of our total backlog as of September 30, ~~2015~~,2016, we expect approximately ~~$88.5~~$75.9 million ~~(41.3%~~(44.6%) to be completed over the next ~~twelve months.~~twelve-months.

AsBacklog is only estimated at a particular point in time and is not determinative of ~~September 30, 2015, compared to December 31, 2014, our~~ total ~~backlog declined $60.5 million (22.0%)~~revenue in any particular period. It does not reflect future revenue from a significant number of short-term projects undertaken and ~~our 12-month backlog increased $3.2 million (3.7%).~~completed between the estimated dates. The decline in our total backlog resulted primarily from ~~completion~~performance of ~~some~~work completed under the existing MSA ~~work,~~agreements, which are not ~~replaced by new work and the reduction in estimated work under certain MSAs. Growth in non-MSA firm contracts partially offset the decrease in MSAs.~~yet eligible for renewal.

The estimated amount of backlog for work under MSAs is calculated by using recurring historical trends inherent in current MSAs and projected customer needs based upon ongoing communications with the customer. Our estimated backlog also assumes exercise of existing customer renewal options. Certain MSAs are not exclusive to the Company and, therefore, the size and amount of projects we may be awarded cannot be determined with certainty. Accordingly, the amount of future revenue from MSA contracts may vary substantially from reported backlog. Even if we realize all of the revenue from the projects in our ~~current estimate.~~ backlog, there is no guarantee of profit from the projects awarded under MSAs.

Backlog is not a term recognized under U.S. generally accepted accounting principles, but is a common measurement used in our industry. While we believe that our methodology of calculation is appropriate, such methodology may not be comparable to that employed by some other companies.

~~Backlog is only a snap-shot~~ Given the duration of our contracts and MSAs and our method of calculating backlog, our backlog at ~~a particular~~any point in time may not accurately represent the revenue that we expect to realize during any period and isour backlog as of the end of a fiscal year may not ~~completely determinative~~be indicative of ~~total future~~the revenue we expect to earn in ~~any particular period. It does~~the following fiscal year and should not ~~reflect future revenue from~~be viewed or relied upon as a ~~significant number~~stand-alone indicator. Consequently, we cannot provide assurance as to our customers’ requirements or our estimates of ~~short-term projects undertaken and completed between the snap-shot dates.~~

~~As of~~ ~~September 30, 2015~~ ~~and~~ ~~2014, the estimated value of future services under MSAs accounted for approximately~~ ~~71.8%~~ ~~and~~ ~~85.6%~~ of total backlog, respectively. We plan to continue our efforts to grow MSA business. MSA contracts are generally multi-year which allows for more consistent work load and improved operating efficiencies.backlog.

Revenue estimates included in our backlog ~~can~~may be subject to change as a result of project accelerations, additions, cancellations or delays due to various factors, including but not limited to: commercial issues, material ~~deficiency,~~deficiencies, permitting, regulatory requirements and adverse weather. Our customers are not contractually committed to a specific level of services under our MSAs. While we did not experience any material cancellations during the current period, most of our contracts may be terminated, even if we are not in default under the contract.

As of September 30, 2016 and 2015, MSAs accounted for approximately 80.9% and 71.8% of total backlog, respectively. We plan to continue our efforts to grow MSA business. MSA contracts are generally multi-year and should provide improved operating efficiencies.

Operating Results

~~Electrical construction operations~~Total operating income increased ~~$2.2 million (36.7%)~~ to $~~8.0~~17.0 million for the nine months ended September 30, ~~2015~~2016, from $~~5.9~~4.7 million in ~~the same period in~~ ~~2014~~2015. ~~This increase was mainly due to the aforementioned increase in revenue attributable to growth in our construction under master service agreements.~~

Electrical construction operations operating ~~margins~~income (a non-GAAP financial measure) increased to 8.9% for the nine months ended September 30, 2015, from 8.8% in the same period in 2014, mainly attributable to the aforementioned increase in MSA revenue and partially offset by losses recognized in the nine months ended September 30, 2015. These losses were largely recognized in the first quarter and primarily resulted from extreme adverse weather conditions affecting several large projects in Texas which are now completed.

~~We had total operating income of $4.7~~$19.9 million for the nine months ended September 30, 2016, from $8.0 million in 2015. This was due to increases in revenue combined with continued operating efficiencies and improved performance of our current projects in Texas. Results for the nine month period in 2015 ~~compared~~included a pre-tax operating loss of approximately $4.4 million on certain Texas projects completed in the second quarter of 2015. As a result, electrical construction operations operating margins (a non-GAAP financial measure) increased to 20.9% for the nine months ended September 30, 2016, from 8.9% in 2015.

Electrical construction operations operating income (a non-GAAP financial measure) is defined as total operating income adjusted for non-electrical construction activity within total operating income including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, and gain or loss on sale of ~~$3.6 million in~~property and equipment. Electrical construction operations operating income does not purport to be an alternative to the ~~same period in 2014. This increase resulted mainly from~~Company’s total operating income as a ~~36.1% revenue increase in~~measure of operations. Because not all companies use identical calculations, this presentation of electrical construction operations ~~coupled~~operating income may not be comparable to other similarly-titled measures of other companies. We believe investors benefit from the presentation of electrical construction operations operating income in evaluating our operating performance because it provides our investors with ~~improved~~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 and is useful in comparing our operating results with those of our competitors.

The table below provides a reconciliation of (i) our total operating income to our electrical construction operations operating income (a non-GAAP financial measure) and (ii) our operating margins to our electrical construction operations operating margins (a non-GAAP financial measure) for the nine months ended September 30, 2016 and 2015:



Electrical Construction Operations Operating Income	2016			2015
Total operating income (GAAP as reported)	$	16,997,094		$	4,704,443
Total operating income (GAAP as reported) as a percentage of total revenue ($98,669,619 and $91,063,073 for the nine months ended September 30, 2016 and 2015, respectively)	17.2		%	5.2		%
Other operations gross margin	(985,572		)	(51,062		)
Non-electrical construction selling, general and administrative	3,790,577			3,298,324
Non-electrical construction depreciation and amortization	98,053			92,937
Electrical construction operations operating income	$	19,900,152		$	8,044,642
Electrical construction operations operating income as a percentage of electrical construction revenue ($95,385,820 and $90,509,971 for the nine months ended September 30, 2016 and 2015, respectively)	20.9		%	8.9		%

The table below provides a reconciliation of our net income to EBITDA (a non-GAAP financial measure) for the nine months ended September 30, 2016 and 2015:



EBITDA	2016		2015
Net income (GAAP as reported)	$	10,410,139	$	2,210,363
Interest expense, net of amount capitalized	457,313		509,478
Provision for income taxes, net ⁽¹⁾	6,023,290		1,552,353
Depreciation and amortization⁽²⁾	4,672,078		4,949,367
EBITDA	$	21,562,820	$	9,221,561
___________
⁽¹⁾Provision for income tax, net is equal to the total amount of tax provision, which includes the tax benefit for discontinued operations. ⁽²⁾Depreciation and amortization includes depreciation on property, plant and equipment and amortization of finite-lived intangible assets.

EBITDA, a non-GAAP performance measure used by management, is defined as net income plus: interest expense, provision (benefit) for income taxes and depreciation and amortization, as shown in the ~~third quarter~~table above. EBITDA, a non-GAAP financial measure, does not purport to be an alternative to net income as a measure of ~~2015, attributable~~operating performance or to net cash flows provided by operating activities as a measure of liquidity. 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 ~~completion~~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 ~~unprofitable projects~~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 financial statements in ~~Texas.~~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.

Using EBITDA as a performance measure has material limitations as compared to net income, or other financial measures as defined under U.S. GAAP as it excludes certain recurring items which may be meaningful to investors. EBITDA excludes interest expense; however, as we have borrowed money in order to finance transactions and operations, interest expense is an element of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, EBITDA excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenues, depreciation and amortization are a necessary element of our costs and ability to generate revenue. Finally, EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. As a result of these exclusions from EBITDA, any measure that excludes interest expense, depreciation and amortization and income taxes has material limitations as compared to net income. When using EBITDA as a performance measure, management compensates for these limitations by comparing EBITDA and net income in each period, so as to allow for the comparison of the performance of the underlying core operations with the overall performance of the company on a full-cost, after-tax basis.

Using both EBITDA and net income to evaluate the business allows management and investors to (a) assess our relative performance against our competitors and (b) monitor our capacity to generate returns for our stockholders.

Costs and Expenses

~~Electrical construction operations cost of goods sold increased~~Total costs and expenses decreased by ~~$21.3~~$4.7 million to ~~$77.4~~$81.7 million for the nine months ended September 30, ~~2015,~~2016, from ~~$56.1~~$86.4 million in the same period in ~~2014. This increase was primarily attributable to a 36.1% higher~~

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~~level of electrical~~2015. Electrical construction operations ~~and to a lesser extent, the aforementioned losses relating primarily to the Texas projects also contributed to this increase. Mainly due to this increase in electrical construction expenses, total~~ costs and expenses ~~increased~~(excludes depreciation and amortization, selling, general and administrative expenses, and loss on sale of property and equipment) decreased by ~~$20.0~~$7.3 million to ~~$86.4~~$70.1 million for the nine months ended September 30, ~~2015~~,2016, from $~~66.3~~77.4 million in ~~the same period in~~ ~~2014~~2015. This decrease was primarily attributable to the continued operating efficiencies and improved performance of our current projects in Texas.

The increase in our “Other” costs and expenses of $1.8 million is mainly due to the costs of sales attributable to the residential properties sold during the nine months ended September 30, 2016. These costs totaled $2.3 million, for the nine months ended September 30, 2016, compared to $502,000 in 2015.

The following table sets forth selling, general and administrative (“SG&A”) expenses for the nine months ended September 30, ~~2015~~2016 and ~~2014:~~2015:


	2015		2014		2016		2015
Electrical construction operations	$	253,677	$	369,039	$	816,529	$	253,677
Other	324,750		412,421		591,284		324,750
Corporate	2,973,574		2,467,728		3,199,293		2,973,574
Total	$	3,552,001	$	3,249,188	$	4,607,106	$	3,552,001



	Page

PART I. FINANCIAL INFORMATION	1

Item 1. Financial Statements (Unaudited).	1

Consolidated Balance Sheets	1

Consolidated Statements of Income	2

Consolidated Statements of Cash Flows	3

Notes to Consolidated Financial Statements	4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	11

Item 3. Quantitative and Qualitative Disclosures About Market Risk.	2022

Item 4. Controls and Procedures.	2022

PART II. OTHER INFORMATION	2122

Item 1. Legal Proceedings.	2122

Item 1A. Risk Factors.	2122

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	2122

Item 3. Defaults Upon Senior Securities.	2223

Item 4. Mine Safety Disclosures.	2223

Item 5. Other Information.	2223

Item 6. Exhibits.	2223

SIGNATURES	2324

EXHIBIT INDEX	2425



Electrical Construction Operations Operating Income	2016			2015
Total operating income (GAAP as reported)	$	3,725,416		$	3,199,144
Total operating income (GAAP as reported) as a percentage of total revenue ($30,654,163 and $27,062,361 for the three months ended September 30, 2016 and 2015, respectively)	12.2		%	11.8		%
Other operations gross margin	(337,218		)	(18,073		)
Non-electrical construction selling, general and administrative	1,183,276			1,033,841
Non-electrical construction depreciation and amortization	37,129			31,094
Electrical construction operations operating income	$	4,608,603		$	4,246,006
Electrical construction operations operating income as a percentage of electrical construction revenue ($29,653,625 and $26,813,125 for the three months ended September 30, 2016 and 2015, respectively)	15.5		%	15.8		%


			Actual as of				Actual as of
Covenants Measured at Quarter End:	Covenant		September 30, 2015
Covenants Measured at Each Quarter End:					Covenant		September 30, 2016
Tangible net worth minimum	$	20,000,000	$	31,977,586	$	20,000,000	$	44,732,004
Outside debt not to exceed	$	500,000	$	—	$	500,000	$	—
Maximum debt/tangible net worth ratio not to exceed	2.5 : 1.0		1.56 : 1:0		2.5 : 1.0		0.99 : 1.00
Covenants Measured at Year End:
Covenants Measured Only at Year End:
Fixed charge coverage ratio must equal or exceed	1.3 : 1.0		1.52 : 1.0		1.3 : 1.0		2.23 : 1:00



~~10-1~~	Modification Promissory Note, dated September 4, 2015 (incorporated by reference to Exhibit 10-1 of the Company’s Current Report on Form 8-K dated September 4, 2015 heretofore filed with the Securities and Exchange Commission (file no. 1-7525))
~~10-2~~	Addendum to Modification Promissory Note, dated September 4, 2015 (incorporated by reference to Exhibit 10-2 of the Company’s Current Report on Form 8-K dated September 4, 2015 heretofore filed with the Securities and Exchange Commission (file no. 1-7525))
31-1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. Section 7241
31-2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. Section 7241
32-1 (1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
32-2 (1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document



Dated: November ~~12, 2015~~4, 2016		THE GOLDFIELD CORPORATION


	By:	/s/ JOHN H. SOTTILE
		John H. Sottile
		Chairman of the Board, President and Chief
		Executive Officer (Principal Executive Officer)

		/s/ STEPHEN R. WHERRY
		Stephen R. Wherry
		Senior Vice President, Chief Financial
		Officer, Treasurer and Assistant Secretary
		(Principal Financial and Accounting Officer)



	2015			2014
Provision for remediation costs	$	(494,205	)	$	(1,070,825	)

Loss from discontinued operations before income taxes	(494,205		)	(1,070,825		)
Income tax benefit	(194,249		)	(405,478		)
Loss from discontinued operations, net of tax	$	(299,956	)	$	(665,347	)


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



(1)	These exhibits are furnished in accordance with Regulation S-K Item 601(b)(32) and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section. These exhibits shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the registrant specifically incorporates them by reference.