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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ________ to ________
Commission File Number: 1-7525
The Goldfield Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 88-0031580
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
100 Rialto Place, Suite 500
Melbourne, Florida 32901
(Address of principal executive offices) (Zip Code)
(407) 724-1700
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, American Stock Exchange, Inc.
Par Value $.10 per share
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No ___
Indicate by check mark if disclosure of delinquent filers,
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
On March 6, 1998, the aggregate market value (based upon the
closing price of the American Stock Exchange, Inc.) of the common
stock held by nonaffiliates was approximately $8.3 million.
As of March 6, 1998, 26,854,748 shares of the Registrant's common
stock were outstanding.
Documents Incorporated by Reference
Document Where Incorporated
Proxy Statement for 1998 Annual Meeting Part III
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 and mining activities. Since January 1,
1996, the electrical construction segment has included 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 14 of notes to
consolidated financial statements.
Electrical Construction
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 the southeastern United States. As a
result of an acquisition effected January 1, 1996, electrical
construction operations now include, through the Company's
subsidiary Fiber Optic Services, Inc., a Florida corporation,
("Fiber Optic Services"), the construction of fiber optic
communication systems throughout the United States.
The Company's construction business through Southeast Power includes
the construction of transmission lines, distribution systems and
substations and other electrical installation services for utility
systems and industrial and specialty projects. Fiber Optic Services
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
Services performs these services primarily for power utilities and
telecommunications companies pursuant to fixed and unit price
contracts.
It is the Company'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 this
policy and the magnitude of some of the construction projects
undertaken by the Company, a substantial portion of the Company's
annual revenue is derived from a relatively small number of
customers, the specific identity of which vary from year to year.
See note 14 of notes to consolidated financial statements.
Construction is customarily performed pursuant to the plans and
specifications of customers. The Company 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.
The Company has adequate bonding availability.
The Company enters into contracts on the basis of either competitive
bidding or direct negotiations with its customers. Competitively bid
contracts account for a majority of the Company's construction
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 the Company
agrees to do the work for a fixed amount.
The magnitude and duration of projects undertaken by the Company
vary, which may result in substantial fluctuations in its backlog
from time to time. At March 1, 1998, the approximate value of
uncompleted contracts was $1,500,000, compared to $4,000,000 at
February 14, 1997 and $3,480,000 at February 14, 1996.
As of March 6, 1998, electrical construction had a staff of 16
salaried employees, including executive officers, division managers,
superintendents, project managers and administrative personnel. In
addition, at such date, electrical construction had 97 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. The Company believes that the experience and
continuity of its staff employees has been an important factor in
its success. Management of the Company believes its relations with
both its salaried and hourly rated employees are good.
The Company is subject to the authority of state and municipal
regulatory bodies concerned with the licensing of contractors. The
Company 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.
The administrative and maintenance facility of Fiber Optic Services
is located in Largo, Florida, where the Company leases approximately
10,100 square feet of space at an average annual rental rate of
$48,000. This lease, which expires in March 2001, may be renewed
for two additional two year terms.
Mining
The Company, through its subsidiaries, explores for, mines,
processes and markets industrial minerals, aggregate products 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 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 holds
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, packaged or modified to
customer's specifications. Most deliveries are by contract motor
carriers to manufacturers, brokers, or independent sales agents who
incorporate zeolites into consumer products or for specific
industrial uses.
The zeolite products were originally sold beginning in 1990 as
animal feed supplements. Zeolite markets now include cat litter,
industrial fillers and 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.
In 1997, St. Cloud sold 15,013 tons of natural zeolite, compared to
14,456 tons and 20,775 tons in 1996 and 1995, respectively. St.
Cloud has made several modifications to its zeolite operation
including the addition of cation exchange capacity for added value
products, drying, warehousing, bagging, blending and additional
classification capabilities to expand markets for the products.
At March 6, 1998, St. Cloud had a total of 20 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 was halted during 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.
St. Cloud's principal metal mining properties are located within the
Gila National Forest in the Chloride Mining District in New Mexico
and encompass approximately 250 acres in two main claim blocks.
Several veins are known to exist in the Chloride Mining District and
may have exploration potential. The Company's two main deposits, the
St. Cloud and U. S. Treasury mines, have been partially mined and
explored at depths up to 1,000 feet from declined ramps utilizing
rubber-tired equipment. St. Cloud currently estimates their
indicated reserves to be approximately 349,500 tons averaging 0.70%
copper, 5.95 ounces silver per ton and 0.031 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. There
were no such sales in 1997, 1996 and 1995.
As part of the industrial mineral operations, as well as the Company's
construction aggregate operations described below, the Company
provides off-site construction services utilizing existing mining
personnel and equipment. Recent projects included an endangered
species habitat restoration and a municipal landfill closure.
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.
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. Most of
the important mining and exploration potential is on patented
property and was retained. Indicated 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 production of construction
aggregates at Lordsburg, a final decision with respect to the future
operations at Lordsburg has not been reached.
Lordsburg sold 24,553 tons of construction aggregate material in
1997, compared to 14,070 tons and 17,347 tons in 1996 and 1995,
respectively. Lordsburg sold 17,190 tons of barren, siliceous flux
to copper smelters in 1996, compared to 20,993 tons in 1995. There
were no barren, siliceous flux sales in 1997.
At March 6, 1998, Lordsburg had a total of 2 full-time employees in
New Mexico, none of whom are affiliated with trade or labor
organizations.
San Pedro
In April 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 January 2000. Effective December 23, 1997, the
terms of the note and mortgage were modified to defer principal
payments until November 1998. The current principal balance of the
note is $355,000. The modified note bears interest at the rate of
prime plus 1% (9.5% at December 31, 1997) and is secured by a first
real estate mortgage and personal property security agreement upon
substantially all of the assets, and a pledge of all of the
outstanding capital stock, of San Pedro. The Company has classified
this note receivable as noncurrent as of December 31, 1997 and 1996.
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 $66,313, $24,360 and $48,720 were recognized as revenue during
1997, 1996 and 1995, respectively. The installment method
recognizes proportionate amounts of the gain associated with the
transaction as payments are 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.
Royalty
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. The original royalty agreement provided that the Company was
to receive annual minimum royalties in the amount of $150,000.
During 1997, the Company earned $10,000 from the Harlan coal
royalty, compared to $20,000 in 1996 and $183,308 in 1995. During
1995, the lessee suspended mining operations at Harlan Fuel Company.
During the year ended December 31, 1996, the Company did not receive
any 1996 minimum royalty payments. Effective February 14, 1997, the
agreement was amended to provide for a payment of $20,000 and
monthly minimum payments of $5,000 until all minimum royalties are
collected. Such annual minimum royalties will be recognized when
realization of the income is assured. On January 9, 1998, the
Company declared a default in the agreement dated February 14, 1997
and the royalty agreement dated February 19, 1982 for failure to
make required monthly payments. The Company may bring court action
to enforce its rights under the agreement. The Company is
continuing to amortize the royalty interest on a straight-line basis
over the period ending January 2002.
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 4,313 square feet of space at an annual
rental rate of $62,240. The lease, which expires in January 2001,
may be renewed for one additional three year term.
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 1997.
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 1997 and 1996.
1997 1996
High Low High Low
First Quarter 3/8 1/4 7/16 1/4
Second Quarter 3/8 1/4 3/8 1/4
Third Quarter 7/16 1/4 3/8 1/4
Fourth Quarter 1/2 5/16 5/16 1/4
As of March 6, 1998, the Company had approximately 19,275 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, 1997.
Years Ended December 31,
1997 1996 1995 1994 1993
(in thousands except per share amounts)
Statements of Operations
Total revenues $15,974 $13,544 $13,328 $13,394 $12,826
Net income (loss) 414 (338) (678) (1,101) (2,554)*
Earnings (loss)
per share of
common stock 0.01 (0.01) (0.03) (0.04) (0.10)
Balance Sheets
Total assets 13,967 13,652 13,847 14,458 16,402
Working capital 6,371 5,934 6,241 7,511 8,362
Stockholders'
equity 12,834 12,443 12,805 13,506 14,631
(*) 1993 results include a charge of $2,668,559 from the write-down
of certain mining assets partially offset by a credit of $917,500
representing the cumulative effect from the adoption of SFAS 109,
"Accounting For Income Taxes".
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations
Net Income (Loss)
The Company had pretax earnings of $754,702 and net income of
$413,971 for the year ended December 31, 1997, compared to net
losses of $337,838 and $677,558 for the years ended December 31,
1996 and 1995, respectively.
Revenues
Total revenues in 1997 were $15,974,357, compared to $13,544,392 and
$13,328,184 in 1996 and 1995, respectively. The increase in revenues
was primarily attributable to a higher level of activity in
electrical construction operations.
Electrical construction revenue increased by 18% in 1997 to
$13,742,723 from $11,628,898 for 1996. In 1995, electrical
construction revenue was $10,676,254. The increase in electrical
construction revenues for 1997 was primarily due to a higher level
of both power line and fiber optic construction activity. The
increase in electrical construction revenue for 1996 was primarily
due to revenue of $788,690, net of intercompany eliminations, from
the newly acquired subsidiary, Fiber Optic Services. For 1997,
Fiber Optic Services contributed revenue of $1,114,954.
Revenue from mining operations increased by 20% to $1,814,583 for
the year ended 1997 from $1,506,797 for the year ended 1996. The
increase in revenue from mining for 1997 was primarily a result of
new off-site construction contracts utilizing existing mining
personnel and equipment. In 1995, revenue from mining operations
was $1,907,684.
Operating Results
Electrical construction operations had operating profit of
$1,715,608 during 1997, compared to an operating profit of $578,265
in 1996 and an operating loss of $223,154 in 1995. The increase in
operating results was due to a higher level of construction activity
and generally improved profit margins. The varying magnitude and
duration of electrical construction projects may result in
substantial fluctuation in the Company's backlog from time to time.
At March 1, 1998, the approximate value of uncompleted contracts was
$1,500,000, compared to $4,000,000 at February 14, 1997.
The operating loss from mining operations was $82,003, compared to
an operating loss of $179,542 in 1996 and an operating profit of
$72,150 in 1995. The improvement in operating results from mining
operations in 1997 was primarily a result of new off-site
construction contracts utilizing existing mining personnel and
equipment. Operating profit (loss) includes royalty income and
depreciation expense. Royalty income in 1997 was $10,000 as
compared to $20,000 in 1996 and $183,308 in 1995. During 1995, the
lessee suspended mining operations at Harlan Fuel Company. The
original royalty agreement provided that the Company was to receive
annual minimum royalties in the amount of $150,000. During the year
ended December 31, 1996, the Company did not receive any 1996
minimum royalty payments. Effective February 14, 1997, the agreement
was amended to provide for a payment of $20,000 and monthly minimum
payments of $5,000 until all minimum royalties are collected. Such
annual minimum royalties will be recognized when realization of the
income is assured. The Company is continuing to amortize the royalty
interest on a straight-line basis over the period ending January 2002.
Other Income
Other income for 1997 was $407,051 as compared to $388,697 and
$560,938 during 1996 and 1995, respectively. The increase in 1997
from 1996 was primarily attributable to an increase in interest
income.
Costs and Expenses
Total costs and expenses and the components thereof increased
approximately 10% as compared to the like period in 1996 as a result
of increased construction activity.
Electrical construction costs were $11,361,069 and $10,482,506 in
1997 and 1996, respectively, as compared to $10,358,367 in 1995.
Depreciation and amortization was $1,058,403 in 1997 compared to
$916,726 and $902,524 in 1996 and 1995, respectively.
General corporate expenses of the Company increased to $1,285,954 in
1997 from $1,125,348 in 1996. General corporate expenses were
$1,025,492 in 1995.
Liquidity and Capital Resources
Cash and cash equivalents at December 31, 1997 were $4,397,281 as
compared to $4,610,198 as of December 31, 1996. Working capital at
December 31, 1997 was $6,371,043, compared to $5,933,947 at December
31, 1996. The Company's ratio of current assets to current
liabilities was 7.3 to 1 at December 31, 1997, compared to 6.8 to 1
at December 31, 1996.
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, 1997,
1996 and 1995. 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 of Central Florida, 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, 1998, at
which time the Company expects to renew it for an additional year.
No borrowings were outstanding under this line of credit during
1997, 1996 and 1995. However, beginning in 1996 $100,000 of this
line of credit was reserved for a standby letter of credit.
The Company's capital expenditures in 1997 increased to $1,450,914
from $736,406 in 1996. This increase was primarily due to a higher
level of equipment purchases in the electrical construction
operations. The capital expenditures for 1996 included the
acquisition of the fixed assets of Fiber Optic Services for $173,138
as described in note 13 of notes to consolidated financial
statements. Capital expenditures in 1998 are expected to be
approximately $1,300,000, which the Company expects to finance
through existing credit facilities or cash reserves.
Year 2000 Issue
The year 2000 issue results from computer programs that do not
differentiate between the year 1900 and the year 2000 because they
are written using two digits rather than four to define the
applicable year. If not corrected, many computer applications could
fail or create erroneous results by or at the year 2000. This year
2000 issue is believed to affect virtually all companies and
organizations. However, the Company believes that all of its
existing material computer systems and software are year 2000
compliant. Therefore, the financial impact to the Company to ensure
year 2000 compliance has not been, and is not anticipated to be,
material to its business, financial condition or results of
operations. The Company is seeking to determine the effect, if any,
of the year 2000 issue on its vendors or suppliers as they may
affect the Company.
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. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these consolidated financial statements
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, 1997 and 1996, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1997, in conformity with generally accepted accounting
principles.
/s/
KPMG Peat Marwick LLP
Orlando, Florida
February 20, 1998
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31,
1997 1996
ASSETS
Current assets
Cash and cash equivalents $ 4,397,281 $ 4,610,198
Accounts receivable and accrued billings 1,829,644 1,420,270
Current portion of notes receivable (Note 2) 78,946 39,771
Inventories (Note 3) 218,502 228,049
Costs and estimated earnings in excess of
billings on uncompleted contracts (Note 4) 791,360 600,302
Prepaid expenses and other current assets 74,368 63,794
Total current assets 7,390,101 6,962,384
Property, buildings and equipment, net (Note 5) 4,510,158 4,187,288
Notes receivable, less current portion (Note 2) 672,576 875,100
Deferred charges and other assets
Deferred income taxes (Note 6) 548,000 860,000
Repurchased royalty at cost, net of accumulated
amortization of $210,793 in 1997 and
$184,718 in 1996 108,657 134,732
Cash surrender value of life insurance (Note 7) 737,050 632,739
Total deferred charges and other assets 1,393,707 1,627,471
Total assets $13,966,542 $13,652,243
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities
(Note 8) $ 917,279 $ 954,366
Billings in excess of costs and estimated
earnings on uncompleted contracts (Note 4) 73,048 74,071
Income taxes payable (Note 6) 28,731 --
Total current liabilities 1,019,058 1,028,437
Deferred gain on installment sales 113,865 180,400
Total liabilities 1,132,923 1,208,837
Stockholders' equity
Preferred stock, $1 par value per share,
5,000,000 shares authorized; issued and
outstanding 339,407 shares of Series A
7% voting cumulative convertible stock
(Note 9) 339,407 339,407
Common stock, $.10 par value per share,
40,000,000 shares authorized; issued
26,872,106 shares (Notes 9 and 10) 2,687,211 2,687,211
Capital surplus 18,369,860 18,369,860
Accumulated deficit (8,544,139) (8,934,352)
Total 12,852,339 12,462,126
Less common stock in treasury, 17,358 shares,
at cost 18,720 18,720
Total stockholders' equity 12,833,619 12,443,406
Total liabilities and stockholders' equity $13,966,542 $13,652,243
See accompanying notes to consolidated financial statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
1997 1996 1995
Revenue
Electrical construction $13,742,723 $11,628,898 $10,676,254
Mining 1,814,583 1,506,797 1,907,684
Royalty income 10,000 20,000 183,308
Other income, net (Note 11) 407,051 388,697 560,938
Total revenue 15,974,357 13,544,392 13,328,184
Costs and expenses
Electrical construction 11,361,069 10,482,506 10,358,367
Mining 1,565,801 1,388,150 1,712,404
Depreciation and amortization 1,058,403 916,726 902,524
General and administrative 1,234,382 1,094,848 970,447
Total costs and expenses 15,219,655 13,882,230 13,943,742
Income (loss) from operations
before income taxes 754,702 (337,838) (615,558)
Income taxes (Note 6) 340,731 -- 62,000
Net income (loss) 413,971 (337,838) (677,558)
Preferred stock dividends 23,758 23,758 23,758
Income (loss) available to
common stockholders $ 390,213 $ (361,596) $ (701,316)
Basic earnings (loss) per share
of common stock (Note 10) $ 0.01 $ (0.01) $ (0.03)
Weighted average number of
common 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,
1997 1996 1995
Cash flows from operating activities
Net income (loss) $ 413,971 $ (337,838) $ (677,558)
Adjustments to reconcile net income
(loss) to net cash provided from
(used by) operating activities
Depreciation and amortization 1,058,403 916,726 902,524
Deferred income taxes 312,000 -- 62,000
Deferred gain on installment sales (66,535) (24,360) (48,720)
Gain on sale of property and
equipment (14,499) (32,288) (88,640)
Cash provided by (used for)
changes in
Accounts receivable and accrued
billings (409,374) 117,769 (53,579)
Notes receivable granted -- (42,600) --
Inventories 9,547 (62,441) 51,100
Costs and estimated earnings
in excess of billings on
uncompleted contracts (191,058) 38,884 (390,866)
Prepaid expenses and other
current assets (10,574) 98,676 97,400
Cash surrender value of life
insurance (104,311) (117,240) (115,988)
Accounts payable and accrued
liabilities (37,087) 134,519 211,788
Billings in excess of costs
and estimated
earnings on uncompleted contracts (1,023) 38,920 (72,898)
Income taxes payable 28,731 -- --
Deferred income from notes granted -- 18,000 --
Net cash provided from (used by)
operating activities 988,191 746,727 (123,437)
Cash flows from investing activities
Proceeds from the disposal of
property and equipment 110,215 46,658 100,070
Loans granted (139,969) (71,278) (352,863)
Collections from notes receivable 303,318 200,445 232,387
Purchases of property and equipment (1,450,914) (563,268) (1,260,127)
Payments made to acquire fixed
assets of Fiber Optic Services -- (173,138) --
Net cash used by investing
activities (1,177,350) (560,581) (1,280,533)
Cash flows from financing activities
Payments of preferred stock
dividends (23,758) (23,758) (23,758)
Net increase (decrease) in cash and
cash equivalents (212,917) 162,388 (1,427,728)
Cash and cash equivalents at
beginning of period 4,610,198 4,447,810 5,875,538
Cash and cash equivalents at
end of period $4,397,281 $4,610,198 $4,447,810
See accompanying notes to consolidated financial statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31,
1997 1996 1995
STOCKHOLDERS' EQUITY
ACCUMULATED Beginning balance $(8,934,352) $(8,572,756) $(7,871,440)
DEFICIT Net income (loss) 413,971 (337,838) (677,558)
Cash dividends
Series A Stock
(per share: 7%) (23,758) (23,758) (23,758)
Ending balance (8,544,139) (8,934,352) (8,572,756)
PREFERRED Beginning and
STOCK 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 Beginning and
SURPLUS 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 $12,833,619 $12,443,406 $12,805,002
SHARES OF CAPITAL STOCK ISSUED
PREFERRED Beginning and
STOCK SERIES A ending balance 339,407 339,407 339,407
COMMON STOCK Beginning and
ending balance 26,872,106 26,872,106 26,872,106
TREASURY STOCK Beginning and
ending balance 17,358 17,358 17,358
See accompanying notes to consolidated financial statements
THE GOLDFIELD CORPORATION
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
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
the southeastern United States. 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).
Property, Buildings, Equipment 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.
Repurchased Royalty - The original royalty agreement provided that
the Company was to receive annual minimum royalties in the amount of
$150,000. During the year ended December 31, 1996, the Company did
not receive any 1996 minimum royalty payments. Effective February
14, 1997, the agreement was amended to provide for a payment of
$20,000 and monthly minimum payments of $5,000 until all minimum
royalties are collected. Such annual minimum royalties will be
recognized when realization of the income is assured. On January 9,
1998, the Company declared a default in the agreement dated February
14, 1997 and the royalty agreement dated February 19, 1982 for
failure to make required monthly payments. The Company may bring
court action to enforce its rights under the agreement. The Company
is continuing to amortize the royalty interest 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.
Income Taxes - The Company accounts for income taxes using the asset
and liability method. Under the asset and liability method,
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. 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.
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 billings,
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 $355,000 note receivable relating to the sale of The
San Pedro Mining Corporation (see Note 2). The fair value of the
$212,500 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 $1,419,403 at December 31, 1997 due from electrical
utilities pursuant to contract terms. The Company considers these
electrical utility customers to be creditworthy. In January 1996,
the Company lost its largest zeolite customer, which represented 38%
of mining revenue in 1995. The Company is continually seeking other
customers to replace this business.
Note 2 - Sale of Mining Subsidiary
In April 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 January 2000. Effective December 23, 1997, the
terms of the note and mortgage were modified to defer principal
payments until November 1998. The current principal balance of the
note is $355,000. The modified note bears interest at the rate of
prime plus 1% (9.5% at December 31, 1997) 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. The Company has classified
this note receivable as noncurrent as of December 31, 1997 and 1996.
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. In
the years ended December 31, 1997, 1996 and 1995, $66,313, $24,360
and $48,720 respectively, of such deferred gain was recognized as
revenue. The installment method recognizes proportionate amounts of
the gain associated with the transaction as payments are 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 3 Inventories
Inventories at December 31 consisted of:
1997 1996
Materials and supplies $110,399 $106,672
Industrial mineral products 45,169 62,983
Ores in process 62,934 58,394
Total inventories $218,502 $228,049
Note 4 - Costs and Estimated Earnings on Uncompleted Contracts
Long-term fixed price construction contracts in progress accounted
for on the percentage-of-completion method at December 31 consisted
of:
1997 1996
Costs incurred on uncompleted contracts $5,269,002 $3,788,038
Estimated earnings 828,429 790,319
6,097,431 4,578,357
Less billings to date 5,379,119 4,052,126
$ 718,312 $ 526,231
Included in the balance sheets under
the following captions
Costs and estimated earnings
in excess of billings on
uncompleted contracts $791,360 $600,302
Billings in excess of costs
and estimated earnings
on uncompleted contracts (73,048) (74,071)
Total $718,312 $526,231
The amounts billed but not paid by customers pursuant to retention
provisions of long-term construction contracts were $346,283 and
$282,850 at December 31, 1997 and 1996, respectively. Such retainage
is expected to be collected within the next twelve months.
Note 5 Property, Buildings and Equipment
Balances of major classes of properties at December 31 consisted of:
1997 1996
Land, mines and mining claims $ 5,255,047 $ 5,255,047
Buildings and improvements 1,728,278 1,729,313
Machinery and equipment 14,966,807 14,296,694
Construction in progress 23,935 34,109
Total 21,974,067 21,315,163
Less accumulated depreciation,
depletion and amortization 17,463,909 17,127,875
Net properties $ 4,510,158 $ 4,187,288
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, no write-down was considered necessary during
any of the years in the three-year period ended December 31, 1997.
Note 6 - Income Taxes
The income tax provision for the years ended December 31 consisted
of:
1997 1996 1995
Current
Federal $ 5,000 $ -- $ --
State 23,731 -- --
28,731 -- --
Deferred
Federal 261,000 -- 52,000
State 51,000 -- 10,000
312,000 -- 62,000
Total $340,731 $ -- $62,000
Temporary differences and carryforwards which give rise to deferred
tax assets and liabilities as of December 31 consisted of:
1997 1996
Deferred tax assets
Depletion, mineral rights and deferred
development and exploration costs $ 324,000 $ 325,000
Accrued workers' compensation costs 28,000 62,000
Accrued vacation and bonus 14,000 11,000
Property and equipment, principally
due to differences in depreciation
and valuation write-downs 358,000 398,000
Contingent salary payments recorded
as goodwill for tax purposes 7,000 --
Net operating loss carryforwards 2,644,000 2,881,000
Investment tax credit carryforwards 209,000 264,000
Alternative minimum tax credit
carryforwards 262,000 256,000
3,846,000 4,197,000
Valuation allowance (3,298,000) (3,337,000)
Total net deferred tax assets 548,000 860,000
Deferred tax liabilities -- --
Net deferred tax assets $ 548,000 $ 860,000
The Company has recorded a valuation allowance 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 decreased the valuation allowance for net
deferred tax assets by $39,000 for the year ended December 31, 1997.
At December 31, 1997, the Company had tax net operating loss
carryforwards of approximately $6,900,000 available to offset future
regular taxable income, which if unused, will expire from 2000
through 2011.
Additionally, the Company at December 31, 1997 had investment tax
credit carryforwards of approximately $209,000 available to reduce
future Federal income taxes, which if unused, will expire in 1998
and 2000. In addition, the Company has alternative minimum tax
credit carryforwards of approximately $262,000 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 are
reconciled below:
1997 1996 1995
Federal statutory rate (benefit) 34.0% (34.0)% (34.0)%
State income tax 6.5 (3.6) 2.0
Other non-deductible expenses 2.5 6.4 3.0
Expiration of investment tax credits 7.4 -- 6.0
Valuation allowance (5.2) 31.2 33.1
Total 45.2% -- % 10.1 %
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.
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 $96,000,
$79,000 and $74,000 for the years ended December 31, 1997, 1996 and
1995, respectively.
Note 8 Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities at December 31 consisted
of:
1997 1996
Accounts payable $430,176 $361,841
Bonuses 199,382 122,355
Payroll and related
expenses 130,970 102,101
Worker's compensation
insurance reserve 73,302 161,519
Insurance 29,735 162,801
Other 53,714 43,749
Total $917,279 $954,366
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, 1997 and
1996, the estimated liability for workers' compensation for the
outstanding claims under the previous self-insured plan was $73,302
and $161,519, respectively. Such liability is included in accounts
payable and accrued liabilities in the accompanying balance sheets.
Note 9 - 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, 1997, 26,872,106 shares of Common Stock were issued
and 388,597 shares of Common Stock were reserved for possible
conversion of the Series A Stock.
Note 10 Basic Earnings (Loss) Per Share of Common Stock
Basic earnings (loss) per common share, after deducting dividend
requirements on the Company's Series A Stock of $23,758 in each of
the years ended December 31, 1997, 1996 and 1995, were based on the
weighted average number of shares of Common Stock outstanding,
excluding 17,358 shares of Treasury Stock for each of the years
ended December 31, 1997, 1996 and 1995. The inclusion of Common
Stock issuable upon conversion of Series A 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 11 - Other Income, Net
Other income, net for the years ended December 31 consisted of:
1997 1996 1995
Interest income $300,241 $283,538 $404,646
Recognized gain on sale of
subsidiary (Note 2) 66,313 24,360 48,720
Gain on sale of equipment 14,499 32,288 88,640
Other 25,998 48,511 18,932
Total other income, net $407,051 $388,697 $560,938
Note 12 - Credit Facility
Under an unsecured line of credit arrangement expiring April 30,
1998 (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, 1997 and 1996, no
borrowings were outstanding under this line of credit; however,
during 1997 and 1996, $100,000 of the line of credit was reserved
for a standby letter of credit for the outstanding self-insured
workers compensation claims. All stated conditions related to this
available credit line have been complied with in 1997 and 1996.
Note 13 - Acquisition of Fiber Optic Services
In January 1996, the Company acquired the fixed assets of Fiber
Optic Services for payments of $173,138 and contingent payments
equal to 2 1/2 times their average pre-tax earnings for the five
years ended December 31, 2000. This acquisition was accounted for
as a purchase. Accordingly, the initial payments were allocated to
the fixed assets acquired based upon their estimated fair market
values. Contingent payments will be treated as compensation expense
in the period incurred. Proforma effects of this acquisition for
fiscal 1996 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.
Note 14 - 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:
1997 1996 1995
Sales from operations to
unaffiliated customers
Electrical construction $13,742,723 $11,628,898 $10,676,254
Mining 1,814,583 1,506,797 1,907,684
Total $15,557,306 $13,135,695 $12,583,938
Gross profit (loss)
Electrical construction $1,715,608 $ 578,265 $ (223,154)
Mining (82,003) (179,452) 72,150
Total gross profit (loss) 1,633,605 398,813 (151,004)
Interest and other
income, net 407,051 388,697 560,938
General corporate expenses (1,285,954) (1,125,348) (1,025,492)
Income (loss) from
operations before
income taxes $ 754,702 $ (337,838) $ (615,558)
Identifiable assets
Electrical construction $ 7,365,219 $ 6,459,253 $ 5,177,368
Mining 2,745,216 2,835,680 3,140,009
Corporate 3,856,107 4,357,310 5,529,383
Total $13,966,542 $13,652,243 $13,846,760
Capital expenditures
Electrical construction $1,120,678 $579,032 $ 780,613
Mining 152,783 79,783 338,728
Corporate 177,453 77,591 140,786
Total $1,450,914 $736,406 $1,260,127
Depreciation and depletion
Electrical construction $ 666,047 $568,127 $541,041
Mining 314,709 280,720 280,360
Corporate 51,572 41,801 55,045
Total $1,032,328 $890,648 $876,446
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:
1997 1996 1995
% of % of % of
Total Total Total
Amount Sales Amount Sales Amount Sales
Electrical construction
Customer A $2,910 19 $2,171 17
Customer B $3,409 27
Customer C 3,081 23
Customer D 1,584 13
Customer E 1,526 10
Customer F 3,383 22
Item 9. Changes 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 will be
contained under "Election of Directors" in the Company's 1998 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 84
John H. Sottile, (2)
President and Chief
Executive Officer, Director 1983 50
John M. Starling
Secretary, Director 1996 68
Stephen R. Wherry,
Vice President, Treasurer
and Chief Financial Officer 1988 39
(1) As of March 1, 1998.
(2) John H. Sottile is the son of James Sottile, Chairman of the Board
of Directors.
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 March 1, 1998, Mr. Starling has acted as Of
Counsel for the law firm of Dwight W. Severs & Associates, P.A.
Between January 1, 1995 and March 1, 1998, Mr. Starling 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.
Item 11. Executive Compensation.
Information concerning executive compensation will be contained
under "Executive Compensation" in the Company's 1998 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 will be contained under "Ownership of
Voting Securities by Certain Beneficial Owners and Management" in
the Company's 1998 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 will be contained under
"Election of Directors" in the Company's 1998 Proxy Statement, which
information is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a) Financial Statements Page
Report of Independent Certified Public Accountants 13
Consolidated Balance Sheets - December 31, 1997
and 1996 14
Consolidated Statements of Operations - Three Years
ended December 31, 1997 15
Consolidated Statements of Cash Flows - Three Years
ended December 31, 1997 16
Consolidated Statements of Stockholders' Equity -
Three Years ended December 31, 1997 17
Notes to Consolidated Financial Statements 18
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter
ended December 31, 1997.
(c) 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 Stock Purchase Agreement dated April 12, 1993 between
Florida Transport Corporation and Royalstar Southwest,
Inc. relating to the sale of San Pedro Mining Corporation
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.
10-6(a) Amendment dated April 3, 1996 to Promissory Note dated
April 12, 1993 between Florida Transport Corporation and
The San Pedro Mining Corporation, Royalstar Resources
Ltd., and Royalstar Southwest is hereby incorporated by
reference to Exhibit 10-6(a) of the Company's Annual
Report on Form 10-K for the year ended December 31, 1996,
heretofore filed with the Commission (file No. 1-7525).
10-6(b) Amendment dated February 18, 1997 to Promissory Note dated
April 12, 1993 between Florida Transport Corporation and
The San Pedro Mining Corporation, Royalstar Resources
Ltd., and Royalstar Southwest is hereby incorporated by
reference to Exhibit 10-6(b) of the Company's Annual
Report on Form 10-K for the year ended December 31, 1996,
heretofore filed with the Commission (file No. 1-7525).
*10-6(c) Amendment dated May 2, 1997 to Promissory Note dated April
12, 1993 between Florida Transport Corporation and The San
Pedro Mining Corporation, Royalstar Resources Ltd., and
Royalstar Southwest is hereby incorporated by reference to
Exhibit 10-6(c) of the Company's report on Form 10-Q for
the quarter ended March 31, 1997, heretofore filed with
the Commission (file No. 1-7525).
*10-6(d) Amendment dated December 23, 1997 to the Modification of Secured
Term Note, Mortgage, Security Agreement and Financing
Statements between Florida Transport Corporation and The
San Pedro Mining Corporation, Royalstar Resources Ltd. and
Royalstar Southwest, Inc.
10-7 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).
10-8 Royalty Agreement dated February 19, 1982 between Bow
Valley Coal Resources, Inc. and Northern Goldfield
Investments, Ltd., Inc. is hereby incorporated by
reference to Exhibit 10-8 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1996,
heretofore filed with the Commission (file No. 1-7525).
10-8(a) Amendment dated February 14, 1997 to Royalty Agreement
dated February 19, 1982 between Great Western Coal Inc.
dba New Horizons Coal Inc. and The Goldfield Corporation
is hereby incorporated by reference to Exhibit 10-8(a) of
the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, heretofore filed with the
Commission (file No. 1-7525).
11 For computation of per share earnings, see note 10 of
notes to consolidated financial statements.
*21 Subsidiaries of Registrant.
*24 Powers of Attorney
(a) Powers of Attorney
(b) Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf of the
Registrant to sign pursuant to a power of attorney.
27 Financial Data Schedule (submitted electronically for SEC
information only)
* Filed herewith.
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.
Dated: March 26, 1998
THE GOLDFIELD CORPORATION
By /s/
(John H. Sottile)
President, Chief Executive Officer and Director
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 indicated on March 26, 1998.
Signature Title
* Chairman of the Board
(James Sottile)
/s/ President, Chief Executive
(John H. Sottile) Officer and Director
/s/ Vice President,
(Stephen R. Wherry) Finance and Chief Financial
Officer (Principal Financial
Officer), Treasurer and
Principal Accounting Officer
* Director and Secretary
(John M. Starling)
* Director
(John P. Fazzini)
* Director
(Danforth E. Leitner)
*By: /s/
John H. Sottile
Attorney-in-Fact
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997 Commission File No.
1-7525
THE GOLDFIELD CORPORATION
EXHIBITS
March 26, 1998
INDEX TO EXHIBITS
Sequentially
Numbered
Pages
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter
ended December 31, 1997.
(c) 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 l0-l(b) of
the Company's Registration Statement on Form S-l, No.
33-3866, heretofore filed with the Commission on March
10, 1986 (file No. 1-7525).
Sequentially
Numbered
Pages
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 year 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 (file No. 1-7525).
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 (file No. 1-7525).
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).
Sequentially
Numbered
Pages
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 (file No. 1-7525).
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).
Sequentially
Numbered
Pages
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 Stock Purchase Agreement dated April 12, 1993 between
Florida Transport Corporation and Royalstar Southwest,
Inc. relating to the sale of San Pedro Mining
Corporation 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).
Sequentially
Numbered
Pages
10-6(a) Amendment dated April 3, 1996 to Promissory Note dated
April 12, 1993 between Florida Transport Corporation and
The San Pedro Mining Corporation, Royalstar Resources
Ltd., and Royalstar Southwest is hereby incorporated by
reference to Exhibit 10-6(a) of the Company's Annual
Report on Form 10-K for the year ended December 31,
1996, heretofore filed with the Commission (file No. 1-7525).
10-6(b) Amendment dated February 18, 1997 to Promissory Note
dated April 12, 1993 between Florida Transport
Corporation and The San Pedro Mining Corporation,
Royalstar Resources Ltd., and Royalstar Southwest is
hereby incorporated by reference to Exhibit 10-6(b) of
the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, heretofore filed with the
Commission (file No. 1-7525).
10-6(c) Amendment dated May 2, 1997 to Promissory Note dated April 12,
1993 between Florida Transport Corporation and The San
Pedro Mining Corporation, Royalstar Resources Ltd., and
Royalstar Southwest is hereby incorporated by reference
to Exhibit 10-6(c) of the Company's report on Form 10-Q
for the quarter ended March 31, 1997, heretofore filed
with the Commission (file No. 1-7525).
*10-6(d) Amendment dated December 23, 1997 to the Modification of Secured
Term Note, Mortgage, Security Agreement and Financing
Statements between Florida Transport Corporation and
The San Pedro Mining Corporation, Royalstar Resources
Ltd. and Royalstar Southwest, Inc.
Sequentially
Numbered
10-7 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).
10-8 Royalty Agreement dated February 19, 1982 between Bow
Valley Coal Resources, Inc. and Northern Goldfield
Investments, Ltd., Inc. is hereby incorporated by
reference to Exhibit 10-8 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1996,
heretofore filed with the Commission (file No. 1-7525).
10-8(a) Amendment dated February 14, 1997 to Royalty Agreement
dated February 19, 1982 between Great Western Coal Inc.
dba New Horizons Coal Inc. and The Goldfield Corporation
is hereby incorporated by reference to Exhibit 10-8(a)
of the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, heretofore filed with the
Commission (file No. 1-7525).
11 For computation of per share earnings, see note 13 of
notes to consolidated financial statements.
*21 Subsidiaries of Registrant.
*24 Powers of Attorney
24(a) Powers of Attorney
(b) Certified resolution of the Registrant's Board of
Directors authorizing officers and directors signing on
behalf of the Registrant to sign pursuant to a power of
attorney.
27 Financial Data Schedule (submitted electronically for SEC
information only)
* Filed herewith.