Earnings Call
Visionary Holdings Inc. (GV)
Earnings Call Transcript - GV Q3 2020
Operator, Operator
Good day, ladies and gentlemen, and welcome to The Goldfield Corporation Third Quarter 2020 Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the call over to Kristine Walczak of Effective Corporate Communications. You may begin.
Kristine Walczak, Effective Corporate Communications
Thank you, and good morning, everyone. I'd like to welcome you to The Goldfield Corporation conference call to discuss the company's third quarter results for 2020, which were reported yesterday. Joining us on today's call are acting Co-Chief Executive Officer and Chief Financial Officer, Steve Wherry; and Acting Co-Chief Executive Officer and President of Power Corporation of America, Jason Spivey. If you did not receive yesterday's press release, please contact me at 312-898-3072, and we will send you a copy or go to Goldfield's website where a copy is available under the Investor Relations tab. A replay of today's webcast will be available on the company's website under the Investor Relations tab. Before we begin, I want to remind you this discussion may contain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as may, will, expect, anticipate, believe, estimate, plan and continue or similar words. Any forward-looking statements are based upon Goldfield's management's current expectations about future events, and Goldfield assumes no obligation to update any such forward-looking statements, except as required by law. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these forward-looking statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's Form 10-Q for the quarterly period ended September 30, 2020. Also, certain non-GAAP financial information will be discussed on the call today. A reconciliation of this non-GAAP information to the most comparable GAAP measure is set forth in yesterday's press release, which can be found on the Investors section of the company's website. With that said, let me turn the call over to our Co-Chief Executive Officer and President of Power Corporation of America, Jason Spivey.
Jason Spivey, Co-CEO & President of Power Corporation of America
Thank you, Kristine, and good morning, everyone. Thank you for joining us and for your interest in The Goldfield Corporation. On the call today, I will provide a review of our operations and then turn the call over to Steve Wherry, who will provide a review of our third quarter results. Following Steve's comments, we welcome your questions. The recent passing of our long-time CEO and good friend, John Sottile, will not deter the management team he built from executing Goldfield's strategy. We remain dedicated to expanding our electrical construction operations geographically, growing and enhancing our portfolio of capabilities through service line expansion, and capitalizing on favorable industry dynamics of aging infrastructure, reliability, renewables, and system hardening. Yesterday, we reported record nine-month revenue. Moreover, year-over-year consolidated third quarter revenue improved over 8% despite real estate revenue decreasing 76%. Additionally, compared to our 2019 performance, our electric construction margin improved 271 basis points in the third quarter and 255 basis points in the nine months due to broad-based execution, including continued service line expansion into distribution and substations in the Texas Southwest region and customer expansion due to successful cross-selling initiatives, particularly in the Texas Southwest and Mid-Atlantic regions. I want to sincerely thank all of our Goldfield employees for their continued commitment and resilience during these challenging health and economic times. Through our pandemic protocols in the field and office, our work-from-home policies, and our continued active communication and collaborative relationships with our customers, we believe we have adapted effectively to this current unprecedented environment. We are very fortunate to be considered a critical and essential business. Throughout the third quarter, we experienced active bidding and project execution with minimal impact from COVID-19. Activity continues to center around small to medium-sized projects and ongoing work under long-term master service agreements. While industry headlines continue to reflect a positive market outlook, the magnitude of the impact from COVID-19 is still unfolding and could affect our future initiatives. We see ample opportunities for growth in the near and longer term. Demand for electric power services remains strong, with the majority of our utility customers actively deploying capital into their systems to modernize, harden, expand and adapt to current and future needs. Now I will turn the call over to Steve for a review of our financials.
Steve Wherry, Co-CEO & CFO
Thank you, Jason, and good morning, everyone. Today, I will be reviewing our third quarter results as compared to the prior year. Consolidated revenue for the third quarter of 2020 was $48.4 million, an increase of 8.2% compared to the same period last year. The increase in total revenue was attributable to an increase in electrical construction operations revenue, partially offset by a decline in real estate development activity. Electrical construction revenue in the 2020 third quarter was $48.1 million, an increase of 11.3% from the same period in 2019. The revenue improvement was mainly attributable to improved MSA project activity across all service lines in the Mid-Atlantic region of $3.3 million, increased MSA and non-MSA project volume in the Southeast region of $1.9 million, and increased storm work of $591,000. Partially offsetting these improvements was lower transmission-related MSA customer project activity in the Texas Southwest region of $1.1 million. Revenue from real estate development operations decreased to $365,000 for the three months ended September 30, 2020, from $1.6 million in the same period in 2019, primarily due to the decrease in the number of units sold and the timing and completion of units available for sale. Third quarter 2020 gross margin on electrical construction operations increased to 17.5% compared to 14.8% for the same period in 2019. This improvement was mainly due to the increase in project activity in our expanded service lines and higher margins across all regions. Comparing the year-over-year third quarter results, depreciation and amortization expenses increased approximately $327,000 or 12% to $3 million. This increase was mainly due to higher capital expenditures to support revenue growth in electrical construction operations. Selling, general, and administrative expenses increased to $3.6 million in the 2020 third quarter compared to $2.2 million in the same 2019 period. SG&A expenses were primarily impacted by approximately $1.4 million due to the settlement of the amounts owed, including employment agreement, and debt benefits to the estate of our former Chief Executive Officer, John Sottile, who passed away in August 2020. Operating income was $1.9 million in the 2020 third quarter compared to $2.1 million in the same 2019 period. This decrease was mainly due to the higher SG&A and depreciation expenses as well as lower real estate development gross profit, partially offset by higher electrical construction gross profit. In the third quarter of 2020, the provision for income taxes was $632,000 compared to $592,000 in the same period last year. The effective tax rate for the 2020 third quarter was 36.7%, compared to 33.8% in the 2019 third quarter. The 2020 third quarter effective tax rate was higher due to an increase in permanent differences in relation to expected income and the adjustment to discrete items. Net income decreased to $1.1 million or $0.04 per share basic and diluted for the 2020 third quarter from $1.2 million or $0.05 per share in the same period of 2019, mainly due to the higher SG&A and depreciation expenses as well as lower real estate development gross profit, partially offset by higher electrical construction gross profit. Cash provided by operating activities for the period ended September 30, 2020, was $1.9 million compared to $20.4 million in the same period of 2019. The decrease in operating cash flow is primarily due to the timing of electrical construction projects. EBITDA for the third quarter of 2020 improved to $5 million compared to $4.9 million for the same period of 2019, primarily due to improved electrical construction gross profit, offset by higher SG&A expense and lower real estate development gross profit. EBITDA was negatively impacted by the approximate $1.4 million settlement to the estate of our former CEO. Total backlog at September 30, 2020, increased 105% to $385.2 million from $187.5 million a year ago. This improvement is mainly due to the increase in the total amount of estimated MSA work, primarily attributable to the award of three new MSAs. At the end of the third quarter of 2020, our 12-month total electrical construction backlog increased 57.5% to $151.2 million compared to $96 million one year ago, mainly due to the increase in estimated MSA work attributable to the award of new MSAs as well as an increase in the amount of firm MSA project activity. To further expand on backlog, I would like to highlight a trend related to our reported 12-month electrical construction backlog. The 12-month electrical construction revenue earned in each of Q4 2019 through Q3 2020 exceeded the previous 12-month backlog for each quarter by 165%, 171%, 166%, and 190%, respectively. Due to the nature of work we performed, many projects are both awarded and completed within a 12-month time frame and are not included in our reported backlog. At September 30, 2020, our balance sheet remains strong with approximately $20.6 million of cash and cash equivalents, $40.3 million of funded debt, and a $23 million revolving line of credit, of which $12.3 million was available for borrowing. Total capital expenditures for the nine months ended September 30, 2020, was $13 million compared to $16.2 million in the same period a year ago. This decrease was due to the mix of assets purchased versus leased in the comparable quarters for our electrical construction operations. Our CapEx projection for the full year of 2020 is $16 million. This concludes our prepared remarks. Operator, please open the call to questions.
Operator, Operator
Our first question comes from Sam Rebotsky with SER Asset Management. Please go ahead with your question.
Sam Rebotsky, Analyst
Yes. Good morning, Jason, and Stephen, the stock market so far has reported on Goldfield, and it's down about $0.50 or so. And is this attributable to backlog, as I mentioned in the previous call, went from 473 to 417 to 385, and the June numbers went from also 171 to 151 backlog. Even though you've indicated that you've improved from the previous year, the backlogs are going down. What is the bidding you're doing? And do you expect this backlog to improve? And if not, why hasn't it improved?
Steve Wherry, Co-CEO & CFO
This is Steve. Our backlog is robust and will deliver long-term value to our shareholders. Increases in backlog are linked to the historical revenue we generate with clients and the leasing of Master Service Agreements (MSAs). The backlog increases as we renew these MSAs. We have had great success with renewing our MSAs, but as we generate revenue, the backlog will decrease until we renew an MSA successfully or acquire a new customer. We currently have 11 MSAs and have renewed two since September 30, totaling five renewals since the end of last year. Our non-MSA bidding market is also strong, which will benefit us. Most of our projects are secured after the bidding process, with work completed in under a year, so a lot of that isn’t reflected in the backlog. However, in the past 12 months, our revenue significantly exceeded the previous 12-month backlog by 165%, 171%, 166%, and 190%. Additionally, since 2014, revenues have generally outpaced the previous 12-month backlog by about 150%. Unless we bring on new MSA backlogs or successfully bid on substantial jobs, the backlog will continue to progress slowly, largely influenced by small to medium-sized contracts in our short life cycle.
Sam Rebotsky, Analyst
Okay. Steve and Jason, the team that John put together is a good team. And the only differences for whatever reason you haven't been stock market-oriented and the recent stock market awards should make you more interested in the stock? And hopefully also buying some stock in the open market. Furthermore, has there been, since the changes have taken place, has there been any interest in somebody acquiring the company because Goldfield is selling very low relative to the major players in the industry and John always would say, if anything happens in Goldfield, all the major companies would want to acquire Goldfield. Is there any companies making any offers? And have we hired investment bankers? And when do we hire investment bankers?
Steve Wherry, Co-CEO & CFO
Same good question. As you know, and you commented on John's earlier comments, this is a question which has been raised by investors for years. Goldfield is a solid operation, and as such, it's always been approached for M&A transactions. We'll continue to evaluate each opportunity on its merits with the goal of maximizing shareholder value, and we will continue our policy of not commenting on any possible future transactions.
Sam Rebotsky, Analyst
Well, sounds good. Hopefully, that you could build up the backlog and improve the profitability because the $1.4 million expense relative to John's contract plus the reduction in the insurance valuation of about $0.5 million, so that's a $2 million benefit that John received. And going forward, we have to tell our story and get the stock market investors to know about Goldfield and be willing to put their money where their mouth is. And hopefully, the offices will also participate. Good luck, and hopefully, we could keep going in the direction we were going.
Steve Wherry, Co-CEO & CFO
Thank you, Sam. And Sam, we are in a great position to drive shareholder value. So we're pleased with the momentum and the direction we're going with the team John built.
Operator, Operator
Our next question comes from Stephen Branstetter with ABL Investments. Please proceed with your question.
Stephen Branstetter, Analyst
Was there a key man life insurance on the former CEO?
Steve Wherry, Co-CEO & CFO
There was none.
Stephen Branstetter, Analyst
Okay. I've been in contact with several of the large shareholders over the past few months, I guess, including Sam, who you just had on the call. How corporation of America, that's kind of really what the company is. I know it's been called Goldfield for years. It's no longer in the gold business. It's been listed on, I guess, on the American Stock Exchange since the early 1900s. That really isn't representative of the future of the company. Future of the company is Power Corporation of America, expanding in areas like Texas, Oklahoma, and places like that. What are the thoughts on changing the name of the company to make the company more market-friendly and more understandable to the investment community, changing the name to Power Corporation of America?
Steve Wherry, Co-CEO & CFO
Thank you for your question. We thought about it. We continue to address it and consider it going forward, but it's not something we're ready to act on at this time.
Stephen Branstetter, Analyst
Okay. The stock's down 10% today. Clearly, investors don't know or understand that, I guess, there was a $1.4 million payout that hit the expense line and basically took your earnings per share, I guess, maybe down from $0.07 or $0.08 down to $0.04 and the stock is selling off the cost of it. What are you doing to get analyst coverage for the stock so that the company can be more understood and represented to Wall Street investors?
Steve Wherry, Co-CEO & CFO
Yes. Thank you. We're reaching out to some. We're taking calls from some analysts, but we just haven't been picked up yet.
Stephen Branstetter, Analyst
Okay. The company seems to be being run more like a private company than a public company. There's a lot of expenses that go with being a public company. As you know, being an accountant, you have a lot of listing fees, and a lot of extra accounting work. Are there any plans to take the company private?
Steve Wherry, Co-CEO & CFO
I don't have any comment on that at this time. As a company policy, we don't comment on that.
Stephen Branstetter, Analyst
Okay. Usually, when companies enter the Russell 2000, they get more volume, more people understand it. Your company just missed the threshold, I guess, last May. Every year, they readjust the Russell 2000. Your market cap is just a little below of where it would take to enter, but if the stock gets up to $5.50, $6, it would enter the Russell 2000 next year in June. Clearly, the company is growing. You're showing 11% growth. Obviously, real estate will improve probably next year when the coronavirus is over. Are there any big contracts that you're bidding on that possibly could get investor interest to get the stock where it needs to be to get into the Russell 2000 and have proper exposure to Wall Street?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes. We're continuing to actively bid large projects. Steve, we said in our comments that most of our projects are small to medium size. We are actively involved in bidding some large projects. These growth that we're trying to get to that threshold, as you're talking about the Russell index to get more institutional investors involved in our company. But there is a lot of bidding going on. COVID hasn't really affected that we've seen from our perspective.
Stephen Branstetter, Analyst
Okay. So are there any contract announcements that we could be looking for in the near future?
Jason Spivey, Co-CEO & President of Power Corporation of America
At this time, we cannot disclose that.
Stephen Branstetter, Analyst
I'm listening, sorry.
Steve Wherry, Co-CEO & CFO
Go ahead, Steve.
Stephen Branstetter, Analyst
No, you were about to say something. I apologize I cut you off.
Steve Wherry, Co-CEO & CFO
No, no. I mean, if it's a significant contract, we have a history of announcement, and we'll announce some of that time.
Stephen Branstetter, Analyst
Okay. You mentioned two renewed MSAs since September 30. Are those new? Or are they renewed?
Steve Wherry, Co-CEO & CFO
Those were renewals.
Stephen Branstetter, Analyst
Okay. Are there any potential future MSAs that could be increases rather than just renewals?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes. We're working on some right now.
Stephen Branstetter, Analyst
Okay. And the two that were renewed, those will, I guess, be additive to the backlog now that they've been renewed? Is that how the system works?
Steve Wherry, Co-CEO & CFO
Yes, sir. But based on the experience with the customer run rate and work that we have in hand. So those will be accretive in the future. The length of the MSA obviously matters, too. We have 3-year, 5-year, 7-year MSAs with renewal periods.
Stephen Branstetter, Analyst
Yes. Clearly, investors see the backlogs shrink and they think, oh, we’ve got to get out of stock. If they see it increase, they're missing the story. So when you get renewals, backlog increases, as you use it up each quarter, backlog drops until it's renewed again. Is that correct?
Jason Spivey, Co-CEO & President of Power Corporation of America
We could. Right now, we can feel better about our backlog and the success rate we’ve had on the renewals.
Stephen Branstetter, Analyst
Okay. And do you see the real estate increasing next year in sales?
Steve Wherry, Co-CEO & CFO
Real estate will see some activity next year, as we are starting a new project, and revenue is expected to come in 2022.
Stephen Branstetter, Analyst
Okay. And there was a $1.4 million charge for the quarter. If you back that out, would that pretty much have been pure profit, have that expense not hit the SG&A?
Steve Wherry, Co-CEO & CFO
Absolutely. Yes, sir.
Stephen Branstetter, Analyst
Okay. So we don't expect to see that again next year or next quarter?
Steve Wherry, Co-CEO & CFO
No, sir. That was completed.
Stephen Branstetter, Analyst
Okay. And one final question. Going forward, is there anything you can do on the corporate expense side that can keep it tighter so that when revenues increase, we see an increase in income?
Jason Spivey, Co-CEO & President of Power Corporation of America
We currently run a lean operation on the corporate side, but we're always looking at our expenses and seeing where we can reduce it.
Operator, Operator
Our next question comes from James Devlin with Henley & Company. Please proceed with your question.
James Devlin, Analyst
So macroeconomically, obviously, your end customers are some of the largest electric utility corporations in the Southeastern United States, right?
Steve Wherry, Co-CEO & CFO
Correct.
James Devlin, Analyst
In the last 90 to 120 days, we've observed Berkshire Hathaway acquiring Dominion Resources. There are daily reports about Florida Power, Georgia Power, and Duke Energy, including acquisitions and rumors of potential acquisitions. All of these companies have significantly increased their capital expenditure budgets. They appear to be providing 2- and 3-year CapEx guidance to Wall Street, indicating that utilities are likely to invest a substantial amount of money in the coming years. I believe that Florida Power, Georgia Power, and Duke Energy are definitely clients of Power Corporation of America.
Steve Wherry, Co-CEO & CFO
Yes, sir.
James Devlin, Analyst
If they're spending more money, there's not a direct correlation, but that's certainly good for your business trends looking forward. If we follow their CapEx spending patterns, is there a direct correlation to how your business will do?
Steve Wherry, Co-CEO & CFO
Yes, sir. By what you're saying and reading, it provides additional opportunities for us as well. So we're well aware of what their capital expenditures are.
James Devlin, Analyst
Okay. And then if you're following that, then obviously, you understand, I'm just trying to frame it that a large amount of the CapEx that's going to come flooding into the system is going to be aimed at both solar and wind farms. And you guys do outsourced kind of electrical contracting, civil engineering work. Solar farms are great, wind farms are great. How do you tie them to the grid? Do you guys benefit? Would they hire you guys to wire up a solar farm or a wind farm and tie it into the grid?
Steve Wherry, Co-CEO & CFO
Yes, sir. We have several projects with that same situation right now through most of our divisions across the company.
James Devlin, Analyst
Okay. The focus right now is the presidential election, and hopefully, we can all move past it soon. As a country, we are essentially at zero interest rates. The main consensus among both Democrats and Republicans is that to revive the economy, the U.S. will need an infrastructure spending bill, which could involve trillions of dollars. This might be the largest capital expenditure on infrastructure the country has ever seen. How do you all think you could benefit from this? There has been considerable discussion from the Biden administration about the smart grid. Can you clarify how you would benefit from that?
Jason Spivey, Co-CEO & President of Power Corporation of America
We're exploring those opportunities as they're presented to themselves, and we'll definitely try to capitalize on any of that that's laid in front of us.
James Devlin, Analyst
I had a conversation with John, a really nice guy I've known for years. He mentioned the possibility of using your laydown yard in Bastrop, Texas, as a way to expand into Kentucky and other Midwest states. Are you still pursuing that? Have you secured any business there? John seemed optimistic about Kentucky. Are there any other states you are considering for expansion? How about your markets in North Carolina, South Carolina, Georgia, Florida, and Texas? Have you been actively exploring any new markets or winning business in states we might not be aware of?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes, sir. We have an office in Kentucky. That has opened the doors up for transmission and distribution and some foundation work over there. We've expanded out of the Bastrop office in Texas up into Oklahoma, Arkansas, Louisiana, and Kansas.
James Devlin, Analyst
Okay. And are we seeing that in the balance sheet now? Or are those more growth initiatives down the road? How should we look at those new markets?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes, these are active projects.
James Devlin, Analyst
And these are one-offs? Or you guys think that you'll be able to compete in those markets for the longer term?
Jason Spivey, Co-CEO & President of Power Corporation of America
Definitely continue to pursue those markets aggressively and continue to grow, but we're very pleased with what we're seeing right now.
James Devlin, Analyst
Okay. Great. A previous caller mentioned explaining the investment to potential investors by highlighting that we are not just a gold company. If there is a way to reduce the perception of Goldfield as solely a gold company, it would help clarify the story and allow Wall Street to focus on our true identity, leading to a better EBITDA valuation. Some online statistics and company profiles still label us as a gold company and reference our long history in that sector, only briefly mentioning our involvement in electrical contracting. I share the sentiment of the previous caller. Your gross margins are performing exceptionally well, and the business appears to be in a strong position from a margin standpoint. I wish you success in entering new markets and exploring growth opportunities. We are all hopeful for an infrastructure package. Thank you for your time and for answering my question.
Steve Wherry, Co-CEO & CFO
Thank you so much, and we will continue to discuss that main situation with the Board.
James Devlin, Analyst
I believe this would clarify the narrative and provide a fresh opportunity for you to communicate it. The company has a deep history, and John's influence is evident throughout. Now, it's time for you to take the lead and navigate the company forward. Sometimes, you just need to implement a new system and change the name, allowing you to move ahead.
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes, sir.
Steve Wherry, Co-CEO & CFO
Understood. Thank you.
Operator, Operator
Our next question comes from George Gasper, Private Investor. Please proceed with your question.
Unidentified Analyst, Analyst
I have a few follow-up questions. I feel strongly that the company should consider changing its name to better reflect its core mission. I believe this would be a savvy decision. Regarding the payment from the company, was there no insurance policy on John's life that was payable directly to the company?
Steve Wherry, Co-CEO & CFO
That is correct, George. As I said earlier, there was not a policy on John's life to pay to the company.
Unidentified Analyst, Analyst
I see. So it was a conditional understanding that was on the record that in his passing that there was a payment to be made to the Chief Executive Officer. Is that right?
Steve Wherry, Co-CEO & CFO
Yes. It was based on his employment agreement. There was a death benefit in that. And there was another policy. Okay.
Unidentified Analyst, Analyst
The change in long-term debt is notable. Looking ahead, several million may be due in the upcoming year. Do you anticipate being able to refinance some of this long-term debt at a potentially lower interest rate?
Steve Wherry, Co-CEO & CFO
That's our plan. We're looking at it. Our rate is extremely low, and as mentioned earlier, interest rates are low nationwide, resulting in low debt. We do have one payment coming up. We also noted that we paid $5 million of our working capital loan after September 30, which has affected our current portion of long-term debt.
Unidentified Analyst, Analyst
In terms of opportunities to advance the company, how do you view the electric substation business currently? Are there possibilities to expand? It appears many power companies previously discussed are moving towards expansion. Are there areas where you could broaden your activities from the Southeast into Texas?
Jason Spivey, Co-CEO & President of Power Corporation of America
George, we have expanded, and we will continue to expand. When we acquire a new customer in the substation area, we aim to leverage that relationship to facilitate cross-selling our various service lines in transmission distribution. We are observing strong results in Texas and the Mid-Atlantic regions.
Unidentified Analyst, Analyst
It's great to hear that you're reconsidering your plans to move to Texas and Kentucky and instead focusing on the Oklahoma area, which seems to present a fantastic opportunity for you to capture more business. I hope you can make that happen.
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes, sir. We actually have an active project that spans between Oklahoma and Arkansas right now. So we're pleased with how it's going, and we're seeing continued bidding activity in those areas as well.
Unidentified Analyst, Analyst
And then finally, in terms of the look ahead here, just in this quarter that we're now in, which we're you're just through one month of the quarter. But can you give us any sense on how you see the business opportunity for this quarter versus, say, the third quarter?
Jason Spivey, Co-CEO & President of Power Corporation of America
Texas is receiving a lot of attention, and we are pleased with the results there. Everything is progressing well. When comparing to the fourth quarter of 2020, it may be challenging to match the performance from 2019 due to some very successful project completions at that time. Although we do not expect the same results in the fourth quarter of 2020, we are satisfied with what we are currently seeing and are making adjustments as needed. Overall, we are happy with our progress, and the filings show that we have turned a corner and are moving in the right direction in Texas.
Unidentified Analyst, Analyst
Okay. If I could just squeeze in one more, too. On the real estate side, Florida continues to have a pretty good real estate market in general with more people moving south out of New York and wherever, it would seem like there's still some real opportunity for you. Have you changed your strategy on what your build in terms of real estate or, let's say, grow the area that you are willing to get in terms of Florida?
Steve Wherry, Co-CEO & CFO
No, we're not changing our strategy at this time. I mean, we have invested in some properties that we believe will drive value for shareholders, and we have some projects planned. And we'd like to drive additional growth in that area. And we have a new project coming out of the ground. So if you're looking for some real estate in Florida, come see us.
Unidentified Analyst, Analyst
And just in a summation comment, I wish you guys a lot of success. You have a tremendous following in terms of shareholder interest. And I think they're enthusiastic. They want Goldfield to be a very successful company. A lot of us have been in it for a long time. And I'm sure you are very much aware of that, and we're behind you 100%, and hope you're going to be very successful going forward. Thank you.
Operator, Operator
Our next question comes from Bud Leedom, a private investor. Please proceed with your question.
Unidentified Analyst, Analyst
As you look at the long-term gross margin trends over the past several years, you were at around 30%. To understand the current business, even though your margins are improving, they are still significantly lower than before. Has the competitiveness of contracts changed, or is it a scope of work issue? Based on this, where do you think gross margins could trend in the future?
Steve Wherry, Co-CEO & CFO
Thank you, Bud. As we've mentioned over the past year, we are aiming for mid- to high teens gross margins. While we achieved some higher margins a couple of years ago, there are times when performance exceeds expectations, which can elevate those margins. I’ll let Jason elaborate further.
Jason Spivey, Co-CEO & President of Power Corporation of America
Bud, the market is very competitive and differs by region. There are many small businesses that lack the overhead to compete effectively with some of the smaller cooperatives. However, most of our customers are among the largest in the country. In terms of smaller markets, competition is intense, with Texas being the most challenging compared to the Mid-Atlantic or Southeast regions.
Unidentified Analyst, Analyst
And I think part of the confusion maybe or at least looking at the story and trying to reconcile a pretty significant increase in backlog versus the revenue growth you've experienced? I know some of these are 3- to 7-year MSAs. But perhaps you can kind of discuss the gives and takes around seeing a 100% jump in backlog versus revenue growth that's in the 7% to 8% range, albeit if you strip out real estate, we're somewhere in the 11% to 12% range. But is there any way to look at backlog and translate that into the future in terms of how we might be able to extrapolate out revenue growth based on your increases in backlog?
Steve Wherry, Co-CEO & CFO
It's challenging to make predictions about the full backlog. The backlog can extend over many years, and when we acquire a new Master Service Agreement, it typically covers seven years and adds significant backlog, but this won't translate into revenue for some time. It might be more useful to concentrate on the upcoming backlog for the next 12 months that will start to generate revenue. I've mentioned this in my opening remarks regarding our expectations. This is largely because the jobs we handle have a short turnaround from bidding to completion.
Unidentified Analyst, Analyst
And then just concerning the role of CEO, do you both plan to continue being Co-CEOs? Or is there a search in place to name a new CEO going forward? Maybe you can just articulate what the plans are around that.
Steve Wherry, Co-CEO & CFO
Thank you, it's Steve. The Board has been actively discussing the structure of the firm's permanent leadership. We know this is a concern for many of our stakeholders, including investors, customers, and employees. While we strive to be as transparent as we can, we cannot provide specific details at this moment. However, we want to assure you that the Board understands the significance of this issue.
Operator, Operator
Our next question comes from Kurt Caramanidis with Carl M. Hennig Inc. Please proceed with your question.
Kurt Caramanidis, Analyst
I'm getting a little more specific on the backlog. So I totally get what you're saying on the 12-month backlog and usually, you significantly exceed that, so we're running at a $200 million clip or slightly under. Backlog at $151 million, it was at $178 million. So that would indicate that if we're going to continue to be significantly above the 12-month backlog, we should be looking forward to quite a bit more in the quarters ahead in excess of $50 million or something not adding up with this amount that you say we're going to do over the one year, and we're slightly over the one year on a pace, but not to the extent that you had been in the past.
Steve Wherry, Co-CEO & CFO
Yes. Good question, Kurt. The main point I want to make is that I'm discussing past data and the outcomes, but we have a mix of projects and backlog that can lead to fluctuations. Currently, we have some longer projects in the backlog. As Jason and I have both mentioned, most of the jobs are shorter in duration, but we do have some longer projects as well.
Jason Spivey, Co-CEO & President of Power Corporation of America
Some of the projects that we have are not related to MSA. They are non-MSA, bid work that is awarded, started, and completed within a 12-month time frame. We feel very strong about our backlog and the opportunities it will provide.
Kurt Caramanidis, Analyst
Right. Based on our history, should we expect to start seeing revenues of over $50 million per quarter with the backlog going forward?
Steve Wherry, Co-CEO & CFO
We're trying to get there, but I'm not going to make that projection. I'm sorry.
Kurt Caramanidis, Analyst
I was happy to notice an increase in smaller projects. Historically, higher margins came from smaller projects, while larger projects generally have lower margins. You mentioned there is significant activity in small to medium-sized projects. Is it still accurate to say that these can positively impact your margins?
Jason Spivey, Co-CEO & President of Power Corporation of America
The larger projects historically had bigger margins, but with the current competitive landscape across various regions, some of those margins have decreased. However, we anticipate that the quantity of smaller and medium-sized projects will balance out moving forward. Currently, we expect our margins to consistently remain in the mid- to high teens.
Kurt Caramanidis, Analyst
Okay. And then Texas, did you have a hiccup in Q3 that's resolved for Q4? Or how can you elaborate on that?
Jason Spivey, Co-CEO & President of Power Corporation of America
That was a shift in revenue to storm work that's classified another in the queue. So as we've moved crews for storm work from Texas over to Louisiana during the first quarter.
Kurt Caramanidis, Analyst
So fourth quarter, they'll be back to normal?
Steve Wherry, Co-CEO & CFO
As Jason said earlier.
Jason Spivey, Co-CEO & President of Power Corporation of America
Whether they need it. We've been called. It's just how long a duration of the customer needs for the stone work.
Steve Wherry, Co-CEO & CFO
But your question was that are we back to normal. I mean, we just do want to point out that we had some significant closeouts in the fourth quarter 2019, so it's probably going to be hard to match those numbers.
Kurt Caramanidis, Analyst
That was mainly margins, right? Yes, I get that. But as far as workflow, your so somewhat normal, I think you had kind of a one-time margin bump last year in Q4. But as far as volume, is that still back to normal?
Jason Spivey, Co-CEO & President of Power Corporation of America
We feel good about the volume we're seeing up in front of us right now.
Operator, Operator
Our next question comes from Sam Rebotsky with SER Asset Management. Please proceed with your question.
Sam Rebotsky, Analyst
Yes. Tell me, the relationships with the bank has that changed? Are you taking a stronger involvement? Is there any more need for funding with the changes of John gone?
Steve Wherry, Co-CEO & CFO
No, Sam. I've always had a strong relationship with the bank. John was involved, but I played a significant role in that relationship and still do. I've been working with the same banker for many years. BB&T, now Truist, as they say.
Sam Rebotsky, Analyst
Yes. Well, that's good. And the one thing I didn't hear Kurt's question about the storm damage. Was there less work or more work? Or did we bid for more work on the storm damage because there seems to be so many storms, I thought there would have been more money for that. Did you just answer the question? I wasn't sure whether that was dealt with.
Jason Spivey, Co-CEO & President of Power Corporation of America
We experienced increased storm work in the same quarter last year. Some storm crews are still deployed, and our continued presence depends on customer needs, materials, and the duration required. We remain active in this area and are satisfied with the relationships we're developing through the storm work, which we hope will lead to further opportunities.
Sam Rebotsky, Analyst
Look, Steve and Jason, I'd like to continue the conversation later or when you're available offline. I think you've done a wonderful job. The company doesn't deal just with one person, although John was always the name and the face that everybody saw and that's why the market reacted the way it did. And hopefully, we could do something to continue in improvement and understand what Goldfield really is. So good luck, and I look forward to talking to you later or at another time.
Operator, Operator
Our next question comes from Stephen Branstetter with ABL Investments. Please proceed with your question.
Stephen Branstetter, Analyst
Could you tell us anything about the length and size of the 2 MSAs you resigned after September 30?
Steve Wherry, Co-CEO & CFO
Yes, give me just a second on that one.
Jason Spivey, Co-CEO & President of Power Corporation of America
They're two years in length. Both of them are two years. And we're pleased with the renewals of those and actually working on pursuing others.
Stephen Branstetter, Analyst
Okay. So I guess, is there any chance of renewing or signing any additional MSAs between now and the end of the year?
Jason Spivey, Co-CEO & President of Power Corporation of America
We don't comment, but we're working on some.
Stephen Branstetter, Analyst
Okay, the way the questions were asked was difficult to follow. Are you currently involved in any storm restoration efforts due to the hurricanes that impacted Louisiana?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes, they have been moving from Louisiana to Alabama and Mississippi due to the recent storm, but overall, there hasn't been a significant impact.
Stephen Branstetter, Analyst
Okay. And starting in.
Steve Wherry, Co-CEO & CFO
As we mentioned earlier, we are not pursuing storm restoration work aggressively. I want to remind you that we need to be released from our current customers, but we take advantage of opportunities when they arise.
Stephen Branstetter, Analyst
Okay. And looking into 2021 over 2020. When the new MSAs are signed, how long before they go into effect or how long before you start generating revenues from them?
Jason Spivey, Co-CEO & President of Power Corporation of America
Basically, immediately.
Steve Wherry, Co-CEO & CFO
What we said last quarter call, we said in the last couple of quarters call, when we renewed one up in the Carolinas, there was a slow start to it in the first quarter, but it's been kicking off pretty well. And I think we've had three sequential quarters of increasing revenues from that renewal from earlier in the year.
Stephen Branstetter, Analyst
Okay. And you signed a big contract last year for like $50 million, and I think John mentioned it might start, I guess, second quarter of 2020. And where is the status of the big contract that you signed, you saw something like a $50 million contract?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes. Both of those projects are currently ongoing. We sent out a press release, I believe late 2019, December. If you go back to that press release, you can probably get a lot more information but both of those are actively ongoing and will continue on into '21.
Steve Wherry, Co-CEO & CFO
Now Jason, those under the major project program?
Jason Spivey, Co-CEO & President of Power Corporation of America
Yes, a major project program.
Operator, Operator
Our next question comes from Steve Emerson with Emerson Investment Group. Please proceed with your question.
Steve Emerson, Analyst
When might we see a number of shareholder-friendly actions that are easy in expenses and obvious to everybody on this call. And specifically, sell off real estate projects, perhaps back to the family. Main change, which has already been referred to a corporate PowerPoint presentation, which is quite usual. And other of public relations effort to potential investors.
Steve Wherry, Co-CEO & CFO
Thank you, Steve. In response to your first question, we currently have no plans to sell our real estate business. As we've mentioned previously, we believe we are well-positioned to take advantage of those investments, which have been profitable in the past. Real estate can be inconsistent, as we know, because we haven't pursued it on a large scale that would create a significant project inventory consistently. That's our current stance on that. We will also consider your other comments. Thank you.
Steve Emerson, Analyst
Are we waiting until the end of the year or until the Board completes its review of the CEO? What needs to occur before we begin implementing these relatively simple shareholder-friendly actions?
Steve Wherry, Co-CEO & CFO
I mean, we're working on it. And my team is working on it, and we will continue to pursue those opportunities.
Jason Spivey, Co-CEO & President of Power Corporation of America
And we continue to engage with our shareholders through these calls, participating in individual calls when requested. We'll evaluate opportunities and to participate in investor conferences in the near future.
Steve Emerson, Analyst
Okay. And at this point, are you looking at potential acquisitions to expand your footprint? And what kind of dry powder or excess cash you have, excess bank lines at this point to pursue acquisitions?
Jason Spivey, Co-CEO & President of Power Corporation of America
Well, we evaluate opportunities all the time. But on the construction side, safety is the top key consideration. We believe our leverage is conservative and can be able to leverage acquiring acquisitions for strategic moves to grow our company.
Steve Wherry, Co-CEO & CFO
How much dry powder do you have? We have some capacity and reserves in our working capital line of credit, and the bank will make financing opportunities available to us.
Operator, Operator
Our next question comes from Ryan Parker, a private investor. Doesn't seem to be with us. I'll move on to the next call here, Mr. George Gasper, a private investor.
Unidentified Analyst, Analyst
Yes, just two quick additions to ask you about. The property buildings and equipment at cash net on the balance sheet is up about for a little over $4 million since December 31, 2019. Is that represented in terms of new trucking equipment, can you explain the increase is? Or is there some real estate in there or not? Can you give us a picture on that?
Steve Wherry, Co-CEO & CFO
So are you on the regular property buildings and equipment? Or are you talking about direct?
Unidentified Analyst, Analyst
I'm referring to property, buildings, and equipment. It's approximately $59.2 million.
Steve Wherry, Co-CEO & CFO
The majority of it is electrical construction equipment, and we're also expanding in Spartanburg, South Carolina. We're building a new facility there to handle our expansion. So that's added some costs there.
Unidentified Analyst, Analyst
I see. Okay. And could you give us an idea of what your total crew count is and maybe how that's changed during the first 9 months of the year here?
Steve Wherry, Co-CEO & CFO
Yes, sir. We're at approximately 520 employees, and we're up a small percent.
Unidentified Analyst, Analyst
Okay, I understand. So it's pretty steady?
Steve Wherry, Co-CEO & CFO
It's steady.
Unidentified Analyst, Analyst
I see. Okay. And if you were to just break that down, how many of those employees would be in, say, the Texas area relative to the rest of your operations?
Steve Wherry, Co-CEO & CFO
We just don't disclose crew counts by division. So for competitive reasons.
Operator, Operator
There are no further questions at this time. I'd like to turn the call back over to Steve Wherry for any closing remarks.
Steve Wherry, Co-CEO & CFO
Yes. So I'd like to thank everyone for joining us on our conference call today. Also, I would like to express my sincere thanks to our shareholders for their continued support.
Operator, Operator
Ladies and gentlemen, this concludes today's web conference. You may now disconnect your lines at this time. Thank you for your participation, and have a great day.