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PART I
Item 1. Business.
The Goldfield Corporation, incorporated in Wyoming in 1906 and
subsequently reincorporated in Delaware in 1968, is engaged in
electrical construction, mining activities, and since January 1,
1996, the construction of fiber optic communication systems. Unless
the context otherwise requires, the terms "Goldfield" and "the
Company" as used herein mean The Goldfield Corporation and its
consolidated subsidiaries. For information concerning sales,
operating profits and identifiable assets by business segment, see
Note 13 of Notes to Consolidated Financial Statements.
Electrical Construction
Southeast Power
The Company, through its subsidiary, Southeast Power Corporation, a
Florida corporation ("Southeast Power"), is engaged in the
construction and maintenance of electrical facilities for utilities
and industrial customers in Florida. The Company's construction
business includes the construction of transmission lines,
distribution systems and substations and other electrical
installation services for utility systems and industrial and
specialty projects. As a result of an acquisition effected January
1, 1996, electrical construction operations now includes the
construction of fiber optic communication systems.
It is Southeast Power's policy to commit itself only to the amount
of work it believes it can properly supervise, equip and complete to
the customer's satisfaction and schedule. As a result of these
policies and the magnitude of some of the construction projects
undertaken by Southeast Power, a substantial portion of Southeast
Power's annual revenue is derived from a relatively small number of
customers.
Construction is customarily performed pursuant to the plans and
specifications of customers. Southeast Power generally supplies the
management, labor, equipment, tools and, except with respect to some
utility customers, the materials necessary to construct a project.
Contracts may extend beyond one year, although most projects are
completed within 90 days.
The electrical construction business is highly competitive. Certain
of the Company's actual or potential competitors have substantially
greater financial resources available to them. A portion of the
electrical construction work requires payment and performance bonds.
Southeast Power has adequate bonding availability.
Southeast Power enters into contracts on the basis of either
competitive bidding or direct negotiations with its customers.
Competitively bid contracts account for a majority of Southeast
Power's revenues. Although there is considerable variation in the
terms of the contracts undertaken, such contracts typically involve
either lump sum or unit price contracts, pursuant to which Southeast
Power agrees to do the work for a fixed amount.
The magnitude and duration of projects undertaken by Southeast Power
vary, which may result in substantial fluctuations in its backlog
from time to time. At February 14, 1996, the approximate value of
uncompleted contracts was $3,480,000, compared to $1,700,000 at
February 14, 1995 and $6,500,000 at March 1, 1994. Uncompleted
contracts at February 14, 1996 included approximately $325,000 of
work attributable to Fiber Optic Services, Inc., a recently acquired
subsidiary of the Company ("Fiber Optic").
As of February 23, 1996, Southeast Power had a staff of 12 salaried
employees, including executive officers, division managers,
superintendents, project managers and administrative personnel. In
addition, at such date, Southeast Power had 89 hourly-rated
employees, none of whom are affiliated with any trade or labor
organization. The number of hourly-rated employees fluctuates
depending upon the number and size of projects under construction at
any particular time. Southeast Power believes that the experience
and continuity of its staff employees has been an important factor
in its success. Management of Southeast Power believes its
relations with both its salaried and hourly rated employees are
good.
Southeast Power is subject to the authority of state and municipal
regulatory bodies concerned with the licensing of contractors.
Southeast Power believes that it is in compliance with such
licensing requirements in all jurisdictions in which it conducts its
business.
The administrative and maintenance facilities of Southeast Power are
located on a 13-acre tract of land near Titusville, Florida owned by
the Company. The office building has 3,744 feet of floor space and
the shop and buildings contain approximately 17,000 feet of floor
space.
Fiber Optic
Fiber Optic provides various construction services, including
installation of aerial and underground cable systems, conduit
systems and the splicing, testing and documentation of optical fibers.
Fiber Optic performs these services primarily for power utilities
and telecommunications companies, pursuant to fixed and unit price
contracts. Although the magnitude and number of projects will vary
from time to time, current revenues from existing customers are at
an annual rate in excess of $1 million.
Mining
The Company, through its subsidiaries, explores for, mines,
processes and markets industrial minerals and base and precious
metals from properties located in New Mexico.
The Company does not consider itself to be a significant factor in
the mining industry. The Company competes with other companies in
the search for and the acquisition of mining properties and their
exploration and development. Many of these competitors have
substantially greater financial resources than the Company, which
may give them certain competitive advantages, especially with
respect to projects requiring large amounts of capital.
The Company's mining operations are subject to the jurisdiction of
federal and state governmental authorities which have responsibility
for environmental matters such as air and water quality, the
promotion of occupational safety and minimum standards for mine
reclamation. The Company has in the past reclaimed mining areas,
tailing impoundments and other associated disturbances and expects
to continue to do so in the future. Costs of such reclamation are
charged against earnings as incurred. Future costs or capital
expenditures relating to the protection of the environment are not
expected to have a material adverse effect on the Company's
earnings. The Company believes that compliance with mine reclamation
laws will not adversely affect the competitive position of its
operations since competitors in the mining industry are subject to
the same laws. The Company currently holds all federal and state
environmental permits and licenses required for the operation of its
mining activities.
St. Cloud - Industrial Minerals
St. Cloud Mining Company, a Florida Corporation ("St. Cloud"), is a
wholly-owned subsidiary of the Company and operates the St. Cloud
mill and mining properties in Sierra County, New Mexico. The St.
Cloud mill and mining properties encompass approximately 1,500 acres
which are estimated to contain several million tons of geologic
reserves of natural zeolites, a special type of volcanic ash
(clinoptilolite).
The clinoptilolite mineral occurs in flat lying beds and is
extracted by conventional open pit mining methods. At the St. Cloud
mill, the clinoptilolite minerals are crushed, dried, and sized
without beneficiation and shipped in bulk or packaged to customer's
specifications. Most deliveries are by rail or contract motor
carriers to manufacturers, brokers, or independent sales agents who
incorporate zeolites into specific consumer products or for specific
industrial uses.
The zeolite products were originally sold as animal feed
supplements. Zeolite products now include cat litter, industrial
absorbents, air and water filtration media, environmental products
and soil conditioners. The zeolite product is also used in other
applications where ammonia control or specific cation exchange
capacity is required. Zeolite sales are currently at approximately
one-half the 1995 level as a result of the change in the needs of
one customer which accounted for 51% of 1995 sales. The Company is
currently seeking other customers to replace this business.
In 1995, St. Cloud sold 20,775 tons of natural zeolite, compared to
20,921 tons and 13,984 tons in 1994 and 1993, respectively. St.
Cloud has made several modifications to accommodate this current
level of production including the addition of drying, warehousing,
bagging and additional screening capabilities to the mill. In
addition, St. Cloud has also constructed an off site rail loading
facility to better serve customers and expand its transportation
network.
At February 23, 1996, St. Cloud had a total of 14 full-time
employees, none of whom are affiliated with trade or labor
organizations.
St. Cloud - Base and Precious Metals Mining
Since 1968, the Company has been involved in the exploration, mining
and milling of silver, copper and gold ores at the St. Cloud
property. Production commenced at St. Cloud in 1981. However,
surface and underground mining has been halted since the third
quarter of 1991 and the first quarter of 1992, respectively, due to
declining metal prices and mine grades. St. Cloud's viability is
sensitive to the future price of base and precious metals,
particularly silver. Significant portions of the Company's
investment in St. Cloud's silver mines, processing facilities and
equipment were written-down at the end of 1993, as described below.
St. Cloud's principal properties are located within the Gila
National Forest in the Chloride Mining District and encompass
approximately 500 acres in two main claim blocks.
Individual ore shoots containing base and precious metals are
confined to steeply dipping, silicified fissure veins with normal
fault displacement. Several veins are known to exist in the
Chloride Mining District. The Company's two main deposits, the St.
Cloud and U. S. Treasury mines, have been partially explored at
depths up to 1,000 feet. Mining widths vary from 3 to more than 20
feet and have averaged approximately 10-12 feet. The underground
mines have been developed by declined ramps utilizing rubber-tired
trucks and loaders, and the principal mining method has been
conventional shrink stoping. St. Cloud currently estimates their
demonstrated reserves to be approximately 379,000 tons averaging
0.76% copper, 6.23 ounces silver per ton and 0.029 ounces gold per
ton. Based on current metal prices, the Company believes that the
above-estimated reserves are not, at present, economically
recoverable.
During 1994, the Company implemented a plan to refocus mining
operations on the production of industrial minerals. As a result,
mineralized siliceous converter flux sales at St. Cloud were
virtually discontinued. Subsequent to the first quarter of 1992,
the only base and precious metal mining activity at St. Cloud was
the sale of stockpiled ore of mineralized siliceous converter flux.
No significant amount of stockpiled ore remains at St. Cloud. Such
sales for 1993 were 26 tons. There were no such sales in 1994 and
1995.
Management of the Company reviews the net carrying value of all
mining facilities on a periodic basis to determine, among other
factors, (1) the net realizable value of each major project, (2) the
ability of the Company to fund all care, maintenance and standby
costs, (3) the status and usage of the assets while in a standby
mode, to determine whether some form of amortization is appropriate
and (4) current projections of metal prices that affect the decision
to reopen or make a disposition of the Company's assets. As a
result of such review, during the fourth quarter of 1993, the
Company reduced the carrying value of substantially all the assets
associated with its base and precious metals mining operations and
recorded a charge of $2,668,559 for this write-down, of which
$2,618,935 was attributable to St. Cloud and the remainder was
attributable to Lordsburg (as defined below). This decision was
based primarily on the continued low price of silver, the cost of
extraction and the low-grade of the remaining reserves.
Lordsburg
In 1990, The Lordsburg Mining Company, a wholly-owned subsidiary of
the Company ("Lordsburg"), entered into a venture agreement with
Federal Resources Corporation ("Federal") to explore, develop and
mine deposits near the town of Lordsburg in southwestern New Mexico.
Under this operating agreement, Federal conveyed and assigned to the
venture, The Lordsburg Mining Company, approximately 12,000 acres of
patented and unpatented mining claims which include certain mining
claims leased in the Lordsburg Mining District by Federal, and
existing milling facilities, buildings and other personal property
located on the claims. In April 1994, the Company acquired
Federal's 50% interest in the Lordsburg properties for $75,000.
Prior to the acquisition of Federal's interest, Lordsburg did not
produce sufficient revenue over the related expenses to permit a net
proceeds distribution to Lordsburg and Federal.
During 1993, a large number of unpatented claims were dropped due to
increased holding costs imposed by the Federal government, but most
of the important mining and exploration potential is on patented
property and was retained. Underground reserves are estimated to be
103,800 tons averaging 0.53% copper, 1.0 ounces silver per ton and
0.097 ounces gold per ton. Based on current metal prices and
operating costs, the above estimated reserves are not, at present,
economically recoverable.
Production from underground mining, which was suspended in February
1994, had previously been intermittent due to low ore grade and
inconsistent smelter demand. The ore produced from the mine was
used by nearby copper smelters as precious metal bearing siliceous
flux. Future demand for underground ores cannot be determined at
this time.
Although the Company has continued limited production of
construction aggregates and siliceous flux at Lordsburg, a final
decision with respect to the future operations at Lordsburg has not
been reached.
In 1995, Lordsburg sold 20,993 tons of barren, siliceous flux to
copper smelters, compared to 6,319 tons and 26,924 tons sold in 1994
and 1993, respectively. Lordsburg also sold 17,347 tons of
construction aggregate material in 1995, compared to 14,190 tons and
14,215 tons in 1994 and 1993, respectively.
At February 23, 1996, Lordsburg had a total of 3 full-time employees
in New Mexico, none of whom are affiliated with trade or labor
organizations.
San Pedro
On April 12, 1993, the capital stock of The San Pedro Mining
Corporation ("San Pedro"), a then wholly-owned subsidiary of the
Company, was sold for $1,220,000 of which $50,000 in cash was paid
at closing with the balance of the purchase price represented by a
promissory note payable to the Company in equal monthly principal
installments of $15,000 through October 1999. The note bears
interest at the rate of prime plus 1% (9.5% at December 31, 1995)
payable monthly and is secured by a first real estate mortgage and
personal property security agreement upon substantially all of the
assets of and a pledge of all of the outstanding capital stock of
San Pedro.
Since the purchaser's initial investment in the property amounted to
less than 20% of the sale price, the installment method of profit
recognition was used resulting in a deferred gain of $330,214 of
which $48,720, $48,720 and $46,014 were recognized as revenue during
1995, 1994 and 1993, respectively. The installment method
recognizes proportionate amounts of the gain associated with the
transaction as cash is received.
The primary assets of San Pedro were represented by mining
properties with a net book value of $889,786 at the date of sale.
Royalties
In connection with a coal mining property in Harlan, Kentucky,
formerly owned by the Company, the Company retains a coal royalty
which provides for a royalty between 1 1/2% to 3% to be paid until
2002.
During 1995, the Company earned $183,308 from the Harlan coal
royalty, compared to $236,094 in 1994 and $206,792 in 1993. During
1995, the lessee suspended mining operations at Harlan Fuel Company.
The Company is currently receiving annual minimum royalties in the
amount of $150,000.
Item 2. Properties.
For information with respect to the principal properties and
equipment utilized in the Company's mining and electrical
construction operations, see "Item 1. Business."
The Company's principal office is located in Melbourne, Florida,
where the Company leases 3,560 square feet of space at an annual
rental rate of $46,992. The lease, which expires in January 1998
may be renewed for two additional three year terms.
Item 3. Legal Proceedings.
There are no material pending legal proceedings, other than routine
litigation incidental to the business of the Company, to which the
Company or any of its subsidiaries is a party or of which any of
their property is subject.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the
fourth quarter of 1995.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
The Common Stock of the Company is traded on the American Stock
Exchange, Inc. under the symbol GV. The following table shows the
reported high and low sales price at which the Common Stock of the
Company was traded in 1995 and 1994.
1995 1994
High Low High Low
First Quarter 7/16 5/16 5/8 1/2
Second Quarter 7/16 5/16 5/8 3/8
Third Quarter 1/2 5/16 1/2 3/8
Fourth Quarter 7/16 1/4 1/2 5/16
As of February 23, 1996, the Company had approximately 20,035
holders of record.
No cash dividends have been paid by the Company on its Common
Stock since 1933, and it is not expected that the Company will pay
any cash dividends on its Common Stock in the immediate future.
Item 6. Selected Financial Data.
The following table sets forth summary consolidated financial
information of the Company for each of the years in the five-year
period ended December 31, 1995.
Years Ended December 31,
1995 1994 1993 1992 1991
(in thousands except per share amounts)
Statements of Operations
Total revenues $13,328 $13,394 $12,826 $15,048 $17,128(1)
Net income (loss) (678) (1,101) (2,554)(2) 1,124 4,700
Earnings (loss)
per share of
common stock (.03) (.04) (.10) .04 .16
Balance sheets
Total assets 13,851 14,458 16,402 18,301 18,451
Working capital 6,241 7,511 8,362 9,161 8,915
Long-term
obligations -- -- -- -- 185
Stockholders'
equity 12,805 13,506 14,631 17,208 16,908
(1) Includes $6,282,784 gain on sale of the Getchell gold royalty
which was sold for $7,000,000.
(2) Includes a credit of $917,500 which represents the cumulative
effect from the adoption of SFAS 109, "Accounting For Income Taxes"
and a charge of $2,668,559 from write-down of certain mining assets,
as described in Notes 1 and 5, respectively, of Notes to
Consolidated Financial Statements.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Net Income (Loss)
The Company incurred a net loss of $677,558 for the year ending
December 31, 1995, compared to net losses of $1,100,516 and
$2,553,900 for the years ended December 31, 1994 and 1993,
respectively. The Company's 1993 loss resulted primarily from a
charge of $2,668,559 relating to the write-down of certain mining
assets and a noncash benefit of $917,500 resulting from a change in
accounting for income tax purposes. Excluding such write-down and
change in accounting, the net loss was $802,841 in 1993.
Revenues
Total revenues in 1995 were $13,328,184, compared to $13,393,832 and
$12,826,314 in 1994 and 1993, respectively. The revenue levels and
revenue contributions by electrical construction and mining
operations during the past three years have remained substantially
constant.
Electrical construction revenue remained constant at $10,676,254 in
1995, compared to $10,811,611 in 1994. In 1994, electrical
construction revenue increased by 7% from $10,093,736 in 1993
principally as a result of increased volume under fixed price
contracts.
Revenue from mining operations increased to $1,907,684 for the year
ended December 31, 1995 from $1,783,728 for the year ended December
31, 1994. In 1993, revenue from mining operations was $1,921,797.
Operating Results
Electrical construction operations had operating losses of $223,154
and $181,278 in 1995 and 1994, respectively, compared to an
operating profit of $335,111 in 1993. The decline in operating
results has been primarily due to decreased gross margins from
contract work. The varying magnitude and duration of electrical
construction projects may result in substantial fluctuation in the
Company's backlog from time to time. As of February 14, 1996, the
approximate value of uncompleted contracts was $3,480,000, compared
to $1,700,000 at February 14, 1995. Approximately $325,000 of the
value of uncompleted contracts at February 14, 1996 included work
attributable to a recently acquired subsidiary engaged in the
construction of fiber optic communication systems.
Operating profit from mining operations increased to $72,150 in 1995
from $25,288 in 1994. In 1993 the Company sustained a loss of
$3,148,842, including the $2,668,559 write-down of certain mining
assets. Excluding such write-down, the operating loss from mining
in 1993 was $480,283. Operating profit(loss) includes royalty
income and depreciation expense. The increase in operating results
from mining operations in 1995 was primarily due to increased sales
of natural zeolites, reduced losses at Lordsburg. Royalty income
was $183,308 in 1995 as compared to $236,094 and $206,792 in 1994
and 1993, respectively. During 1995, the lessee suspended mining
operations at Harlan Fuel Company and the Company is, therefore,
currently receiving only the annual minimum royalties of $150,000.
Other Income
Other income for 1995 was $560,938 as compared to $562,399 and
$603,989 for 1994 and 1993, respectively.
Costs and Expenses
Electrical construction costs were $10,358,367 and $10,433,366 in
1995 and 1994, respectively as compared to $9,122,184 in 1993.
Depreciation and amortization was $902,524 in 1995, compared to
$948,995 and $1,169,724 in 1994 and 1993, respectively.
General corporate expenses of the Company decreased to $1,025,492 in
1995 from $1,481,925 in 1994. General corporate expenses were
$1,287,564 in 1993. The decrease in general corporate expenses for
1995 was primarily due to the termination of the employment
agreement between the Company and James Sottile, Chairman of the
Board. The increase in general corporate expenses for 1994 was
primarily due to a one-time severance payment of $165,000 paid to
James Sottile in accordance with the termination of the above
referenced employment agreement.
Liquidity and Capital Resources
Cash and cash equivalents as of December 31, 1995 were $4,447,810 as
compared to $5,875,538 as of December 31, 1994. Working capital was
$6,240,833 and $7,511,030 as of December 31, 1995 and 1994,
respectively. The Company's ratio of current assets to current
liabilities was 7.9 to 1 at December 31, 1995, compared to 10.8 to
1 at December 31, 1994. The decrease in the current ratio for 1995
resulted primarily from a decrease in cash and cash equivalents of
$1,427,728. Capital expenditures in 1995 of $1,260,127 were
financed through cash reserves.
The Company paid cash dividends on its Series A Preferred Stock in
the amount of $23,758 in each of the years ended December 31, 1995,
1994 and 1993. No cash dividends have been paid by the Company on
its Common Stock since 1933, and it is not expected that the Company
will pay any cash dividends on its Common Stock in the immediate
future.
Pursuant to an unsecured line of credit agreement between Southeast
Power and SunTrust Bank, N.A. (guaranteed by the Company), Southeast
Power may borrow up to $1,000,000 at the bank's prime rate of
interest. This credit line expires April 30, 1996 at which time the
Company expects to renew it for an additional year. No borrowings
were outstanding under this line of credit during 1995, 1994 and
1993.
The Company's capital expenditures in 1995 increased to $1,260,127
from $878,467 in 1994. Capital expenditures in 1996 are expected to
be approximately $600,000, which the Company expects to finance
through existing credit facilities or cash reserves. In addition,
as of January 1, 1996 the Company purchased the assets of Fiber
Optic Services for an initial cash payment of $167,630.
Item 8. Financial Statements and Supplementary Data.
Independent Auditors' Report
The Shareholders and Board of Directors
The Goldfield Corporation:
We have audited the consolidated financial statements of The
Goldfield Corporation and subsidiaries as listed in the accompanying
index (Item 14(a)(1)). In connection with our audits of the
consolidated financial statements, we also have audited the
financial statement schedules as listed in the accompanying index
(Item 14(a)(2)). These consolidated financial statements and
financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these consolidated financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of The Goldfield Corporation and subsidiaries at December
31, 1995 and 1994, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1995, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement
schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
Orlando, Florida
February 21, 1996
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31,
ASSETS 1995 1994
Current assets
Cash and cash equivalents $ 4,447,810 $ 5,875,538
Accounts receivable and accrued billings 1,538,039 1,484,460
Current portion of notes receivable (Note 3) 191,438 190,962
Inventories (Note 4) 165,608 216,708
Costs and estimated earnings in excess of
billings on uncompleted contracts (Note 2) 639,186 248,320
Prepaid expenses and other current assets 162,470 259,870
Total current assets 7,144,551 8,275,858
Properties, net (Note 5) 4,355,900 3,983,649
Notes receivable, less current portion (Note 3) 810,000 690,000
Deferred charges and other assets
Deferred income taxes (Note 6) 860,000 922,000
Repurchased royalties at cost, less
accumulated amortization of $158,640 in
1995 and $132,562 in 1994 160,810 186,888
Cash surrender value of life insurance (Note 7) 515,499 399,511
Total deferred charges and other assets 1,536,309 1,508,399
Total assets $13,846,760 $14,457,906
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities
(Note 8) $ 819,847 $ 608,059
Billings in excess of costs and estimated
earnings on uncompleted contracts (Note 2) 35,151 108,049
Current portion of deferred gain (Note 3) 48,720 48,720
Total current liabilities 903,718 764,828
Deferred gain on installment sale, less
current portion (Note 3) 138,040 186,760
Total liabilities 1,041,758 951,588
Stockholders' equity
Preferred stock, $1 par value per share,
5,000,000 shares authorized; issued and
outstanding 339,407 shares in 1995 and
1994 of Series A 7% voting cumulative
convertible stock (Note 10) 339,407 339,407
Common stock, $.10 par value per share,
40,000,000 shares authorized; issued
26,872,106 shares in 1995 and 1994
(Notes 10 and 12) 2,687,211 2,687,211
Capital surplus 18,369,860 18,369,860
Retained earnings (deficit) (8,572,756) (7,871,440)
Total 12,823,722 13,525,038
Less common stock in treasury, 17,358 shares
in 1995 and 1994, at cost 18,720 18,720
Total stockholders' equity 12,805,002 13,506,318
Total liabilities and stockholders' equity $13,846,760 $14,457,906
See accompanying Notes to Consolidated Financial Statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994 1993
Revenue
Electrical construction $10,676,254 $10,811,611 $10,093,736
Mining 1,907,684 1,783,728 1,921,797
Royalty income 183,308 236,094 206,792
Other income, net (Note 11) 560,938 562,399 603,989
Total revenue 13,328,184 13,393,832 12,826,314
Costs and expenses
Electrical construction 10,358,367 10,433,366 9,122,184
Mining 1,712,404 1,763,677 2,237,393
Depreciation 876,446 798,586 1,019,278
Reduction in carrying value of
mining properties and milling
and mining equipment (Note 5) -- -- 2,668,559
Amortization of repurchased
royalties 26,078 26,078 26,078
General and administrative 970,447 1,447,641 1,250,128
Interest -- -- 3,594
Total costs and expenses 13,943,742 14,469,348 16,327,214
Loss from operations before
income taxes and cumulative effect
of change in accounting for income
taxes (615,558) (1,075,516) (3,500,900)
Income taxes (benefit) (Note 6) 62,000 25,000 (29,500)
Net loss before cumulative
effect of change in
accounting for income taxes (677,558) (1,100,516) (3,471,400)
Cumulative effect of change in
accounting for income taxes -- -- 917,500
Net loss (677,558) (1,100,516) (2,553,900)
Preferred stock dividends 23,758 23,758 23,758
Loss available to common
stockholders $ (701,316) $(1,124,274) $(2,577,658)
Loss per share of common stock
Loss from operations before
change in accounting for
income taxes $(0.03) $(0.04) $(0.13)
Cumulative effect of change in
accounting for income taxes -- -- 0.03
Loss per share of common stock
(Note 12) $(0.03) $(0.04) $(0.10)
Weighted average number of
shares outstanding 26,854,748 26,854,748 26,854,748
See accompanying Notes to Consolidated Financial Statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
1995 1994 1993
Cash flows from operating activities
Net loss before cumulative effect
of a change in accounting principle $(677,558) $(1,100,516) $(3,471,400)
Adjustments to reconcile net loss to
net cash provided from (used by)
operating activities
Depreciation 876,446 798,586 1,019,278
Reduction in carrying value of
mining properties and milling
and mining equipment -- -- 2,668,559
Amortization of excess of cost
over equity in net assets of
the acquired business -- 124,331 124,368
Amortization of repurchased
royalties 26,078 26,078 26,078
Deferred income taxes (benefit) 62,000 25,000 (29,500)
Deferred gain on sale of
subsidiary (48,720) (48,720) (46,014)
Gain on sale of property and
equipment (88,640) (115,239) (14,430)
Decrease (increase) in accounts
receivable and accrued billings (53,579) 609,494 212,451
Decrease (increase) in inventories 51,100 140 80,696
Increase in costs and estimated
earnings in excess of billings
on uncompleted contracts (390,866) (12,575) (136,084)
Decrease (increase) in prepaid
expenses and other current assets 97,400 (67,505) 13,378
Increase in cash surrender
value of life insurance (115,988) (94,444) (127,929)
Increase (decrease) in accounts
payable and accrued liabilities 211,788 (804,633) 674,751
Increase (decrease) in billings in
excess of costs and estimated
earnings on uncompleted contracts (72,898) 108,049 (94,991)
Total adjustments 554,121 548,562 4,370,611
Net cash provided from (used by)
operating activities (123,437) (551,954) 899,211
Cash flows from investing activities
Proceeds from the disposal of
fixed assets 100,070 169,919 78,285
Payments made to grant loans (352,863) (10,962) --
Proceeds from notes receivable 232,387 193,485 171,500
Purchases of fixed assets (1,260,127) (862,467) (1,313,822)
Net cash used by investing
activities (1,280,533) (510,025) (1,064,037)
Cash flows from financing activities
Payments on long-term debt -- -- (184,700)
Payments of preferred stock dividends (23,758) (23,758) (23,758)
Net cash used by financing
activities (23,758) (23,758) (208,458)
Net increase (decrease) in cash and
cash equivalents (1,427,728) (1,085,737) (373,284)
Cash and cash equivalents at
beginning of year 5,875,538 6,961,275 7,334,559
Cash and cash equivalents at end
of year $4,447,810 $ 5,875,538 $6,961,275
Interest paid $ -- $ -- $3,594
Taxes paid -- -- --
See accompanying Notes to Consolidated Financial Statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31,
1995 1994 1993
RETAINED EARNINGS Beginning balance $(7,871,440) $(6,747,166) $(4,169,508)
(DEFICIT) Net loss (677,558) (1,100,516) (2,553,900)
Cash dividends
Series A Stock
(per share: 7%) (23,758) (23,758) (23,758)
Ending balance (8,572,756) (7,871,440) (6,747,166)
PREFERRED STOCK Beginning and
SERIES A ending balance 339,407 339,407 339,407
COMMON STOCK Beginning and
ending balance 2,687,211 2,687,211 2,687,211
CAPITAL SURPLUS Beginning and
ending balance 18,369,860 18,369,860 18,369,860
TREASURY STOCK Beginning and
ending balance (18,720) (18,720) (18,720)
Total consolidated
stockholders'
equity $12,805,002 $13,506,318 $14,630,592
See accompanying Notes to Consolidated Financial Statements
THE GOLDFIELD CORPORATION
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995 and 1994
Note 1 - Summary of Significant Accounting Policies
Basis of Financial Statement Presentation - The accompanying
consolidated financial statements include the accounts of The
Goldfield Corporation ("Parent") and its subsidiaries (collectively,
"the Company"), all of which are wholly-owned. All significant
intercompany balances and transactions have been eliminated.
Nature of Operations - The Company's principal lines of business are
electrical construction and the mining of industrial minerals as
well as base and precious metals. The principal market for the
Company's electrical construction operation is electric utilities in
Florida and Alabama. The principal market for the Company's mining
operations is purchasers of zeolite products throughout the United
States.
Cash Equivalents - The Company considers all highly liquid
investments with a maturity of one year or less when purchased to be
cash equivalents.
Inventories - Inventories are valued at the lower of cost or market.
Cost is determined by the first-in, first-out method. Costs
associated with extraction and milling or production activities are
inventoried and valued at lower of cost or estimated final smelter
settlement or net sales (net realizable value).
Properties and Depreciation - Property, buildings and equipment are
stated at cost. The Company provides depreciation for financial
reporting purposes over the estimated useful lives of fixed assets
using the straight-line and units-of-production methods.
Amortization of Royalty Interests - The Harlan coal royalty is
amortized on a straight-line basis over the period ending January
2002.
Mining Revenues - Zeolite sales are recorded upon delivery. Other
sales are recorded in the month of delivery. Recorded values are
adjusted periodically and upon final settlement.
Mine Exploration and Development - Exploration costs and normal
development costs at operating mines are charged to operations as
incurred.
Long-Term Electrical Contracts - Revenues are earned under long-
term fixed price contracts and units of delivery contracts.
Revenues from units of delivery contracts are recorded as the
service is performed. For completed contracts, the revenue is based
on actual billings. For uncompleted contracts the revenue is based
on actual labor hours incurred and estimated final billing rates.
Revenues from long-term fixed price construction contracts are
recognized on the percentage-of-completion method measured by
comparing the costs incurred to date to the estimated total costs to
be incurred for each contract. The asset, "costs and estimated
earnings in excess of billings on uncompleted contracts" represents
revenues recognized in excess of amounts billed. The liability,
"billings in excess of costs and estimated earnings on uncompleted
contracts" represents billings in excess of revenue recognized.
Contract costs include all direct material, direct labor,
subcontractor costs and other indirect costs related to contract
performance, such as supplies, tools and repairs. General and
administrative costs are charged to expense as incurred. Provisions
for estimated losses on uncompleted contracts are made in the period
in which such losses are determined. Changes in job performance,
job conditions, estimated profitability and final contract
settlements may result in revisions to costs and income and are
recognized in the period in which the revisions are determined.
Deferred Charge - The Company amortized the excess cost over equity
in net assets of a subsidiary on a straight-line basis over the
period ended December 31, 1994.
Income Taxes - In February 1992, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" ("SFAS 109"). Under the asset and
liability method of SFAS 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their 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.
Under SFAS No. 109, 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.
Effective January 1, 1993, the Company adopted SFAS 109 and has
reported the cumulative effect of that change in the method of
accounting for income taxes in the consolidated statements of
operations for the quarter ended March 31, 1993.
Acquisition of Fiber Optic Services - In January 1996, the Company
acquired the assets of Fiber Optic Services for a payment of
$167,630 and future payments equal to 2 1/2 times their average pre-
tax earnings for the five years ended December 31, 2000. The
Company has allocated the initial payment and estimated minimum
amount of additional payments based on earnings to the assets
acquired. Proforma effects of this acquisition for fiscal 1995 are
considered immaterial.
Fiber Optic Services is engaged in the construction of fiber optic
communication systems throughout the United States primarily for
electric utilities and communication companies.
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 generally
accepted accounting principles. Actual results could differ from
those estimates.
Financial Instruments Fair Value, Concentration of Business and
Credit Risks - The carrying amount reported in the balance sheet for
cash and cash equivalents, accounts receivable and accrued billing,
accounts payable and accrued liabilities approximates fair value
because of the immediate or short-term maturity of these financial
instruments. It is not considered practical to estimate the fair
value of the $690,000 note receivable relating to the sale of The
San Pedro Mining Corporation (see Note 3). The fair value of the
$300,000 note receivable which provides for an interest rate of 18%
and is collateralized by land located in Brevard County, Florida, is
considered to be its carrying value due to the lack of a ready
market for such loans. Financial instruments which potentially
subject the Company to concentrations of credit risk consist
principally of accounts receivable, accrued billings and retainage
in the amount of $1,091,585 at December 31, 1995 due from electrical
utilities pursuant to contract terms. Substantially all of the
electrical construction accounts and contracts receivable and
contract revenues are from electrical utilities. The Company
considers these electrical utility customers to be creditworthy. In
January 1996, the Company lost its largest zeolite customer which
represented 51% of mining revenue in 1995. The Company is currently
seeking other customers to replace this business.
Reclassifications - Certain amounts in 1994 have been reclassified
to conform to the 1995 presentation.
Note 2 - Costs and Estimated Earnings on Uncompleted Contracts
At December 31, 1995 and 1994, long-term fixed price construction
contracts in progress accounted for on the percentage-of-completion
method consisted of:
1995 1994
Costs incurred on uncompleted
contracts $9,039,931 $7,241,283
Estimated earnings (loss) (125,181) 677,913
8,914,750 7,919,196
Less billings to date 8,310,715 7,778,925
$ 604,035 $ 140,271
Included in the balance sheets
under the following captions
Costs and estimated earnings
in excess of billings on
uncompleted contracts $639,186 $ 248,320
Billings in excess of costs
and estimated earnings on
uncompleted contracts (35,151) (108,049)
Total $604,035 $ 140,271
The amounts billed but not paid by customers pursuant to retention
provisions of long-term construction contracts were $468,474 and
$744,484 at December 31, 1995 and 1994, respectively. The
retainage is expected to be collected within the next twelve
months.
Note 3 - Sale of Mining Subsidiary
In April 1991, The San Pedro Mining Corporation ("San Pedro"), a
then wholly-owned subsidiary of the Company, entered into an
option agreement to sell its mining facilities located in Santa Fe
County, New Mexico. Accordingly, through March 1993, option
proceeds amounting to approximately $505,000 have been recognized
as revenue by the Company.
In April 1993, the capital stock of San Pedro was sold for
$1,220,000 of which $50,000 in cash was paid at closing with the
balance of the purchase price represented by a promissory note
payable to the Company in equal monthly principal installments of
$15,000 through October 1999. The note bears interest at the rate
of prime plus 1% (9.5% at December 31, 1995) payable monthly and is
secured by a first real estate mortgage and personal property
security agreement upon substantially all of the assets of and a
pledge of all of the outstanding capital stock of San Pedro.
Since the purchaser's initial investment in the property amounted to
less than 20% of the sale price, the installment method of profit
recognition was used resulting in a deferred gain of $330,214 of
which $48,720, $48,720 and $46,014 were recognized as revenue during
1995, 1994 and 1993, respectively. The installment method
recognizes proportionate amounts of the gain associated with the
transaction as cash is received.
The primary assets of San Pedro were represented by mining
properties with a net book value of $889,786 at the date of sale.
Note 4 - Inventories
Inventories at December 31 are as follows:
1995 1994
Materials and supplies $111,856 $ 93,686
Industrial mineral products 46,838 107,382
Ores in process 6,914 15,640
Total inventories $165,608 $216,708
Note 5 - Properties
Balances of major classes of properties at December 31 are as
follows:
1995 1994
Land, mines and mining claims $ 5,255,047 $ 5,179,951
Buildings and improvements 1,721,825 1,721,825
Machinery and equipment 13,794,318 13,395,993
Total 20,771,190 20,297,769
Less accumulated depreciation,
depletion and amortization 16,415,290 16,314,120
Net properties $ 4,355,900 $ 3,983,649
As a matter of policy, management of the Company reviews the net
carrying value of all mining facilities on a periodic basis. As a
result of such review, during the fourth quarter of 1993, the
Company reduced the carrying value of substantially all of the
assets associated with its base and precious metals mining
operations and recorded a charge of $2,668,559. This decision was
based primarily on the continued low price of silver, the costs of
extraction and the relatively low-grade of the remaining reserves.
Note 6 - Income Taxes
The income tax provision (benefit) for the years ended December 31,
1995, 1994 and 1993 consists of the following:
1995 1994 1993
Current
Federal $ -- $ -- $ --
State -- -- --
-- -- --
Deferred
Federal 52,000 24,000 6,500
State 10,000 1,000 (36,000)
Total $62,000 $25,000 $(29,500)
The deferred income tax benefit for the years ended 1995 and 1994
represents the portion of deferred tax assets that the Company
estimates will ultimately be realized.
Temporary differences and carryforwards which give rise to
deferred tax assets and liabilities as of December 31, 1995 and
December 31, 1994 are as follows:
December 31, December 31,
1995 1994
Deferred tax assets
Depletion, mineral rights
and deferred development
and exploration cost $ 325,000 $ 325,000
Accrued workers' compensation
costs 99,000 116,000
Accrued vacation and bonus 15,000 14,000
Property and equipment,
principally due to differences
in depreciation and valuation
write-downs 389,000 461,000
Net operating loss carryforwards 2,685,000 2,430,000
Investment tax credit
carryforwards 295,000 320,000
Alternative minimum tax
credit carryforwards 256,000 256,000
4,064,000 3,922,000
Valuation allowance (3,204,000) (3,000,000)
Total net deferred tax assets 860,000 922,000
Deferred tax liabilities -- --
Net deferred tax assets $ 860,000 $ 922,000
The Company has recorded a valuation allowance in accordance with
the provisions of SFAS 109 to reflect the estimated amount of
deferred tax assets which may not be realized. In assessing the
realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the
deferred tax 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
those temporary differences become deductible. Management
considers the projected future taxable income and tax planning
strategies in making this assessment. The Company increased the
valuation allowance for net deferred tax assets by approximately
$204,000 and $193,000 for the years ended December 31, 1995 and
1994, respectively.
At December 31, 1995, the Company had tax net operating loss
carryforwards of approximately $7,100,000 available to offset future
regular taxable income, which if unused, will expire from 1999
through 2010.
Additionally, the Company has investment tax credit carryforwards of
approximately $295,000 available to reduce future Federal income
taxes, which if unused, will expire from 1996 through 2000. In
addition, the Company has alternative minimum tax credit
carryforwards of approximately $256,000 which are available to
reduce future Federal income taxes over an indefinite period.
The differences between the Company's effective income tax rate and
the Federal statutory rate for the years ended December 31, 1995,
1994 and 1993 are reconciled below:
1995 1994 1993
Federal statutory rate (benefit) (34.0%) (34.0%) (34.0%)
Amortization of excess of cost
over equity in net assets
of business acquired -- 3.9 1.2
State income tax 2.0 -- --
Other non-deductible expenses 3.0 1.6 --
Other 6.0 -- --
Valuation allowance 33.1 30.8 32.0
Total 10.1% 2.3% (0.8%)
Note 7 - Employee Benefit Agreements and 401(k) Plan
Beginning in 1989, the Company entered into employee benefit
agreements with certain employees of the Company. Under the terms
of the agreements, the Company buys life insurance policies that
build cash surrender value while also providing life insurance
benefits for the employee. The Company is entitled to a refund of
all previously paid premiums or the cash surrender value of the
policy, whichever is lower, if the agreement is terminated prior to
the employee attaining the age of 65. After an employee reaches age
65, the Company is entitled to a refund of all previously paid
premiums in ten annual installments. In the event of death, the
Company will immediately be entitled to a refund of all previously
paid premiums. The Company may terminate the agreements at any time
by giving written notice to the employee. At December 31, 1995 and
1994, none of the herein described policies had any cash surrender
value in excess of the previously paid premiums.
Effective January 1, 1995, the Company adopted The Goldfield
Corporation and Subsidiaries Employee Savings and Retirement Plan,
a defined contribution plan that qualifies under Section 401(k) of
the Internal Revenue Code. The plan provides retirement benefits to
all employees who meet eligibility requirements and elect to
participate. Under the plan, participating employees may defer up
to 15% of their pre-tax compensation per calendar year subject to
Internal Revenue Code limits. The Company's contributions to the
plan are discretionary and amounted to approximately $74,000 for the
year ended December 31, 1995.
Note 8 - Worker's Compensation Self-Insurance Plan
During 1990, the Company adopted a self-insured plan for worker's
compensation claims subject to certain limits. In July 1993, the
Company changed its method of insuring workers' compensation claims
to a plan that is not self-insured. As of December 31, 1995 and
1994, the estimated liability for workers' compensation for the
outstanding claims under the previous self-insured plan was
approximately $260,000 and $240,000, respectively. Such liability
is included in accounts payable and accrued liabilities in the
accompanying balance sheets.
Note 9 - Credit Facility
Under an unsecured line of credit arrangement expiring April 30,
1996 (guaranteed by the Company), the Company's electrical
construction subsidiary may borrow up to $1,000,000 at the bank's
prime rate of interest. At December 31, 1995 and 1994, no
borrowings were outstanding under this line of credit. All stated
conditions related to this available credit line have been complied
with in 1995 and 1994.
Note 10 - Preferred and Common Stock
The Series A 7% Voting Cumulative Convertible Preferred Stock
("Series A Stock") is convertible into common stock, presently at
the rate of 1.144929 shares of common stock for each share of Series
A Stock, and has an annual dividend rate of $.07 per share. The
Series A Stock may be redeemed by the Company at par. Holders of
the Series A Stock have the same voting rights as common
stockholders (except under certain circumstances arising from the
failure to pay dividends on the Series A Stock) and have certain
rights not held by common stockholders such as preferences in
liquidation and controlling voting rights in certain mergers, sales
and amendments to the Certificate of Incorporation.
At December 31, 1995, 26,872,106 shares of Series A Stock were
issued and 388,597 shares of Series A Stock were reserved for
issuance.
Note 11 - Other Income, Net
Other income, net consists of the following:
1995 1994 1993
Interest income $404,646 $317,695 $253,946
Option proceeds (Note 3) -- -- 252,727
Recognized gain on
sale of subsidiary (Note 3) 48,720 48,720 46,014
Gain on sale of equipment 88,640 115,239 14,430
Other 18,932 80,745 36,872
Total other income, net $560,938 $562,399 $603,989
Note 12 - Earnings (Loss) Per Share of Common Stock
Earnings (loss) per common share, after deducting dividend
requirements on the Company's Preferred Stock of $23,758 in each of
the years ended December 31, 1995, 1994 and 1993 were based on the
weighted average number of shares of Common Stock outstanding,
excluding average shares of Treasury stock, of 17,358 for each of
the years ended December 31, 1995, 1994 and 1993. The inclusion of
Common Stock issuable upon conversion of Preferred Stock has not
been included in the per share calculations because such inclusion
would not have a material effect on the earnings (loss) per common
share.
Note 13 - Business Segment Information
Operations include mining and electrical construction. Intersegment
sales have been eliminated. The following table sets forth certain
segment information for the periods indicated:
1995 1994 1993
Sales from operations to
unaffiliated customers
Electrical construction $10,676,254 $10,811,611 $10,093,736
Mining 1,907,684 1,783,728 1,921,797
Total $12,583,938 $12,595,339 $12,015,533
Gross profit (loss)
Electrical construction $ (223,154) $ (181,278) $ 335,111
Mining 72,150 25,288 (3,148,842)
Total gross profit (loss) (151,004) (155,990) (2,813,731)
Interest and other income, net 560,938 562,399 603,989
General corporate expenses (1,025,492) (1,481,925) (1,287,564)
Interest expense -- -- (3,594)
Loss from operations
before income taxes
and cumulative effect
of change in accounting
for income taxes $ (615,558) $(1,075,516) $(3,500,900)
Identifiable assets
Electrical construction $ 5,177,368 $ 5,172,820 $ 5,997,424
Mining 3,140,009 3,052,651 3,050,253
Corporate 5,529,383 6,232,435 7,354,807
Total $13,846,760 $14,457,906 $16,402,484
Capital expenditures
Electrical construction $ 780,613 $464,040 $ 871,211
Mining 338,728 372,259 387,668
Corporate 140,786 42,168 54,943
Total $1,260,127 $878,467 $1,313,822
Depreciation and depletion
Electrical construction $541,041 $559,523 $ 636,441
Mining 280,360 204,779 345,401
Corporate 55,045 34,284 37,436
Total $876,446 $798,586 $1,019,278
Gross profit (loss) is total operating revenue less operating
expenses. Gross profits (losses) exclude general corporate
expenses, interest expense, interest income and income taxes.
Royalty income is included in the calculation of gross profit
(loss) for the mining segment. Identifiable assets by industry are
used in the operations of each industry.
Sales (in thousands of dollars) to major customers exceeding 10% of
total sales follows:
1995 1994 1993
% of % of % of
Total Total Total
Amount Sales Amount Sales Amount Sales
Electrical construction
Customer A $2,081 17 $6,927 58
Customer B $3,409 27
Customer C 1,389 12
Customer D 1,584 13 3,245 26 1,249 10
Customer E 3,781 30
Note 14 - Quarterly Financial Data (Unaudited)
Selected quarterly financial data (in thousands of dollars except
per share amounts) follows:
1995
First Second Third Fourth
Quarter Quarter Quarter Quarter
Revenues $2,222 $3,381 $4,101 $3,624
Gross profit (loss)
Electrical construction (170) 226 (302) 23
Mining (36) 13 48 46
Net income (loss) (375) 64 (369) 3
Earnings (loss) available
to common stockholders (381) 58 (375) (3)
Earnings (loss) per share
of common stock (.01) -- (.01) --
1994
First Second Third Fourth
Quarter Quarter Quarter Quarter
Revenues $2,357 $2,566 $5,129 $3,343
Gross profit (loss)
Electrical construction (320) 166 66 (93)
Mining 51 (12) (54) 40
Net income (loss) (426) (35) (132) (507)
Earnings (loss) available
to common stockholders (432) (41) (138) (513)
Earnings (loss) per share
of common stock (.02) -- (.01) (.02)
The totals for the years 1995 and 1994 may differ from the sum of the
quarterly information due to rounding.
Item 9. Charges In and Disagreements With Accountants on Accounting
and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information concerning the directors of the Company is contained
under "Election of Directors" in the Company's 1996 Proxy Statement,
which information is incorporated by reference.
The executive officers of the Company are as follows:
Year in which
Service Began
Name and Title(1) as Officer Age
James Sottile
Chairman of the Board
of Directors 1970 82
John H. Sottile, (2)
President and Chief
Executive Officer, Director 1983 48
John M. Starling
Secretary, Director 1996 66
Stephen R. Wherry,
Vice President, Treasurer
and Chief Financial Officer 1988 37
Throughout the past five years John H. Sottile and Stephen R. Wherry
have been principally employed as executive officers of the Company.
James Sottile has served as Chairman of the Board for the past five
years.
John M. Starling has been an executive officer of the Company since
March 15, 1996. Since January 1, 1995, Mr. Starling has acted as Of
Counsel for the law firm of Severs, Stadler & Harris, P.A. Prior to
such time, Mr. Starling was a member of the law firm of Holland,
Starling, Severs, Stadler & Friedland, P.A.
The term of office of all directors is until the next annual meeting
and the term of office of all officers is for one year and until
their successors are chosen and qualify.
(1) As of February 23, 1996.
(2) John H. Sottile is the son of James Sottile, Chairman
of the Board of Directors.
Item 11. Executive Compensation.
Information concerning executive compensation is contained under
"Executive Compensation" in the Company's 1996 Proxy Statement,
which information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Information concerning the security ownership of the directors and
officers of the registrant is contained under "Ownership of Voting
Securities by Certain Beneficial Owners and Management" in the
Company's 1996 Proxy Statement, which information is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions.
Information concerning relationships and related transactions of the
directors and officers of the Company is contained under "Election
of Directors" in the Company's 1996 Proxy Statement, which
information is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a) 1. Financial Statements Page
Report of Independent Certified Public Accountants 11
Consolidated Balance Sheets - December 31, 1995
and 1994 12
Consolidated Statements of Operations - Three Years
ended December 31, 1995 13
Consolidated Statements of Cash Flows - Three Years
ended December 31, 1995 14
Consolidated Statements of Stockholders' Equity-
Three Years ended December 31, 1995 15
Notes to Consolidated Financial Statements 16
2. Financial Statement Schedules Required to be
Filed by Item 8 of this Form
Schedule III - Condensed Financial Information of Registrant
Condensed Balance Sheets - December 31, 1995 and 1994 32
Condensed Statements of Operations -
Three Years ended December 31, 1995 33
Condensed Statements of Cash Flows -
Three Years ended December 31, 1995 34
3. Exhibits
3-1 Restated Certificate of Incorporation of the Company, as
amended, is hereby incorporated by reference to Exhibit
3-1 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1987, heretofore filed with the
Commission (file No. 1-7525).
3-2 By-Laws of the Company, as amended, is hereby incorporated
by reference to Exhibit 3-2 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1987,
heretofore filed with the Commission (file No. 1-7525).
4-1 Action by Unanimous Consent of Holders of Preferred Stock
as of September 30, 1979 permanently waiving mandatory
redemption is hereby incorporated by reference to Exhibit
3-5 of the Company's Registration Statement on Form S-l,
No. 2-65781, heretofore filed with the Commission on
November 28, 1979.
4-2 Specimen copy of Company's Common Stock certificate is
hereby incorporated by reference to Exhibit 4-5 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1987, heretofore filed with the Commission
(file No. 1-7525).
10-1 Employment Agreement dated January 1, 1986 between
Southeast Power Corporation and Romey A. Taylor is hereby
incorporated by reference to Exhibit 10-l(b) of the
Company's Registration Statement on Form S-l, No. 33-3866,
heretofore filed with the Commission on March 10, 1986.
10-1(a) Amendment No. 1 to Employment Agreement dated January 1,
1986 between Southeast Power Corporation, Romey A. Taylor
and The Goldfield Corporation is hereby incorporated by
reference to Exhibit 10-1(a) to the Company's report on
Form 10-Q for the quarter ended September 30, 1988,
heretofore filed with the Commission (file No. 1-7525).
10-1(b) Amendment dated September 11, 1995 to Employment Agreement
effective January 1, 1986 between Southeast Power
Corporation and Romey A. Taylor is hereby incorporated by
reference to Exhibit 10-1(b) to the Company's report on
Form 10-Q for the quarter ended September 30, 1995,
heretofore filed with the Commission (file No. 1-7525).
10-2 Employment Agreement effective January 15, 1985 between The
Goldfield Corporation and John H. Sottile is hereby
incorporated by reference to Exhibit 10-6 of the Company's
Registration Statement on Form S-l, No. 33-3866,
heretofore filed with the Commission on March 10, 1986.
10-2(a) Amendment dated February 25, 1986 to the Employment
Agreement included in Exhibit 10-2 is hereby incorporated
by reference to Exhibit 10-6(a) of the Company's
Registration Statement on Form S-l, No. 33-3866,
heretofore filed with the Commission on March 10, 1986.
10-2(b) Amendment dated September 23, 1988 to Employment Agreement
effective January 15, 1985 between The Goldfield
Corporation and John H. Sottile is hereby incorporated by
reference to Exhibit 10-2(b) to the Company's report on
Form 10-Q for the quarter ended September 30, 1988,
heretofore filed with the Commission (file No. 1-7525).
10-2(c) Amendment dated February 27, 1990 to Employment Agreement
effective January 15, 1985 between The Goldfield
Corporation and John H. Sottile, is hereby incorporated by
reference to Exhibit 10-2(c) of the Company's Annual
Report on Form 10-K for the year ended December 31, 1989,
heretofore filed with the Commission (file No. 1-7525).
10-2(d) Amendment dated January 29, 1992 to Employment Agreement
effective January 15, 1985 between The Goldfield Corporation
and John H. Sottile, is hereby incorporated by reference
to Exhibit 10-2(d) of the Company's Annual Report on Form
10-K for the year ended December 31, 1991, heretofore
filed with the Commission (file No. 1-7525).
10-2(e) Amendment dated September 15, 1995 to Employment Agreement
effective January 15, 1985 between The Goldfield
Corporation and John H. Sottile, is hereby incorporated by
reference to Exhibit 10-2(e) of the Company's report on
Form 10-Q for the quarter ended September 30, 1995,
heretofore filed with the Commission (file No. 1-7525).
10-3 Employment Agreement dated January 1, 1986 among John H.
Sottile, Southeast Power Corporation and The Goldfield
Corporation is hereby incorporated by reference to Exhibit
10-8 of the Company's Registration Statement on Form S-l,
No. 33-3866, heretofore filed with the Commission on March
10, 1986.
10-3(a) Amendment No. 1 to Employment Agreement dated January 1,
1986 among John H. Sottile, Southeast Power Corporation
and The Goldfield Corporation is hereby incorporated by
reference to Exhibit 10-4(a) of the Company's report on
Form 10-Q for the quarter ended September 30, 1988,
heretofore filed with the Commission (file No. 1-7525).
10-3(b) Amendment No. 2 to Employment Agreement dated January 1,
1986 among John H. Sottile, Southeast Power Corporation
and The Goldfield Corporation, is hereby incorporated by
reference to Exhibit 10-4(b) of the Company's Annual
Report on Form 10-K for the year ended December 31, 1991,
heretofore filed with the Commission (file No. 1-7525).
10-3(c) Amendment dated September 11, 1995 to Employment Agreement
effective January 1, 1986 between Southeast Power
Corporation and John H. Sottile, is hereby incorporated by
reference to Exhibit 10-4(c) of the Company's report on
Form 10-Q for the quarter ended September 30, 1995
heretofore filed with the Commission (file No. 1-7525).
10-4 Employee Benefit Agreement dated November 20, 1989 between
The Goldfield Corporation and John H. Sottile, is hereby
incorporated by reference to Exhibit 10-5 of the Company's
Annual Report on Form 10-K for the year ended December
31, 1989, heretofore filed with the Commission (file No.
1-7525).
10-5 Employee Benefit Agreement dated November 16, 1989 between
The Goldfield Corporation and Stephen R. Wherry, is hereby
incorporated by reference to Exhibit 10-6 of the Company's
Annual Report on Form 10-K for the year ended December
31, 1989, heretofore filed with the Commission (file No.
1-7525).
10-6 Form of Exchange Agent Agreement is hereby incorporated by
reference to Exhibit 4-11 of the Company's Registration
Statement on Form S-l, No. 33-3866, heretofore filed with
the Commission on March 10, 1986.
10-7 Stock Purchase Agreement dated April 12, 1993 between
Florida Transport Corporation and Royalstar Southwest,
Inc., is hereby incorporated by reference to Exhibit 10-13
of the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, heretofore filed with the
Commission (file No. 1-7525).
10-8 The Goldfield Corporation and Subsidiaries Standardized
Adoption Agreement and Prototype Cash or Deferred Profit-
Sharing Plan and Trust Basic Plan Document #3 effective
January 1, 1995, is hereby incorporated by reference to
Exhibit 10-9 of the Company's report on Form 10-Q for the
quarter ended March 31, 1995, heretofore filed with the
Commission (file No. 1-7525).
11 For computation of per share earnings, see Note 15 of Notes
to Consolidated Financial Statements.
*21 Subsidiaries of Registrant.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter
ended December 31, 1995.
* Filed herewith.
THE GOLDFIELD CORPORATION
(Parent Company)
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS
December 31,
ASSETS 1995 1994
Current assets
Cash and cash equivalents $ 3,109,742 $ 4,092,761
Accounts receivable 64,455 357
Prepaid expenses and other
current assets 25,056 2,582
Total current assets 3,199,253 4,095,700
Investments in and amounts due from
subsidiaries 8,131,850 7,971,607
Property and equipment, at cost 300,379 255,312
Less accumulated depreciation 123,722 132,898
Net property and equipment 176,657 122,414
Deferred charges and other assets
Deferred income taxes 860,000 922,000
Repurchased royalties at cost, less
accumulated amortization of
$158,640 in 1995 and $132,562
in 1994 160,810 186,888
Cash surrender value of
life insurance 303,473 222,678
1,324,283 1,331,566
Total assets $12,832,043 $13,521,287
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 27,041 $ 14,969
Stockholders' equity 12,805,002 13,506,318
Total liabilities and
stockholders' equity $12,832,043 $13,521,287
THE GOLDFIELD CORPORATION
(Parent Company)
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994 1993
Revenue
Royalty income $ 183,308 $ 236,094 $ 206,792
Interest and other
income, net 201,194 172,121 143,921
Total revenue 384,502 408,215 350,713
Costs and expenses
Depreciation 55,045 34,284 37,436
Amortization of coal royalty 26,078 26,078 26,078
General and administrative 926,700 1,343,140 1,134,310
Total costs and expenses 1,007,823 1,403,502 1,197,824
Loss before income of
subsidiaries (623,321) (995,287) (847,111)
Income (loss) of subsidiaries 7,763 (80,229) (2,653,789)
Loss before income taxes (615,558) (1,075,516) (3,500,900)
Income taxes (benefit) 62,000 25,000 (29,500)
Loss before cumulative effect
of change in accounting
for income taxes (677,558) (1,100,516) (3,471,400)
Cumulative effect of
change in accounting
for income taxes -- -- 917,500
Net loss (677,558) (1,100,516) (2,553,900)
Preferred stock dividends 23,758 23,758 23,758
Earnings (loss) available
to common stockholders $ (701,316) $(1,124,274) $(2,577,658)
Earnings (loss) per share:
Income (loss) from operations
before change in accounting
for income taxes $(0.03) $(0.04) $(0.13)
Cumulative effect of change in
accounting for income taxes -- -- 0.03
Earnings (loss) per share of
common stock $(0.03) $(0.04) $(0.10)
Weighted average number of
shares outstanding 26,854,748 26,854,748 26,854,748
THE GOLDFIELD CORPORATION
(Parent Company)
SCHEDULE III
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
Years Ended December 31,
1995 1994 1993
Cash flows from operating activities
Net loss before cumulative effect
of a change in accounting for
income taxes $(677,558) $(1,100,516) $(3,471,400)
Adjustments to reconcile net loss
to net cash provided from (used by)
operating activities
Depreciation 55,045 34,284 37,436
Amortization of excess of cost
over equity in net assets of
the acquired business -- 124,331 124,368
Amortization of repurchased
royalties 26,078 26,078 26,078
Deferred income taxes 62,000 25,000 (29,500)
Loss on sale of equipment -- 265 14,832
Decrease (increase) in accounts
receivable (64,098) 180 (201)
Decrease (increase) in prepaid
expenses and other current
assets (22,474) 38,652 (28,721)
Increase in cash surrender value
of life insurance (80,795) (74,015) (71,649)
Increase in accounts
payable and accrued liabilities 12,072 434 584
(Increase) decrease in
intercompany receivables (152,480) 35,758 (68,173)
Undistributed (earnings) loss
from subsidiaries (7,763) (4,342) 2,822,728
Total adjustments (172,145) 206,625 2,827,782
Net cash used by
operating activities (849,973) (893,891) (643,618)
Cash flows from investing activities
Proceeds from the disposal of
equipment -- 1,003 25,883
Purchases of equipment, net of
intercompany transfers (109,288) (12,186) (54,276)
Net cash used by investing
activities (109,288) (11,183) (28,393)
Cash flows from financing activities
Dividends received from subsidiaries -- -- 120,000
Payments of preferred stock dividends (23,758) (23,758) (23,758)
Net cash provided by (used by)
financing activities (23,758) (23,758) 96,242
Net decrease in cash and cash
equivalents (983,019) (928,832) (575,769)
Cash and cash equivalents at
beginning of year 4,092,761 5,021,593 5,597,362
Cash and cash equivalents at
end of year $3,109,742 $4,092,761 $ 5,021,593
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE GOLDFIELD CORPORATION
By /s/ John H. Sottile
(John H. Sottile)
President, Chief Executive Officer
and Director
Dated: March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ James Sottile Chairman of the Board March 22, 1996
(James Sottile)
/s/ John H. Sottile President, March 22, 1996
(John H. Sottile) Chief Executive
Officer and Director
/s/ Stephen R. Wherry Vice President, March 22, 1996
(Stephen R. Wherry) Finance and Chief
Financial Officer
(Principal Financial
Officer), Treasurer
and Principal
Accounting Officer
/s/ John M. Starling Director and Secretary March 22, 1996
(John M. Starling)
/s/ John P. Fazzini Director March 22, 1996
(John P. Fazzini)
/s/ Danforth E. Leitner Director March 22, 1996
(Danforth E. Leitner)