SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number - 1-7525
THE GOLDFIELD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 88-0031580
(State or other jurisdiction of (IRS employer identification no.)
incorporation or organization)
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)
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
There were 26,854,748 shares of common stock, par value $.10 per
share, of The Goldfield Corporation outstanding as of September 30,
1999.
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1999 1998
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 3,672,535 $ 2,616,465
Accounts receivable and accrued billings 3,471,153 3,133,855
Current portion of notes receivable 41,666 123,393
Inventories 293,128 346,799
Costs and estimated earnings in excess of
billings on uncompleted contracts 786,675 1,793,119
Prepaid expenses and other current assets 368,825 83,428
Total current assets 8,633,982 8,097,059
Property, buildings and equipment, net 4,715,828 4,450,256
Notes receivable, less current portion 263,601 293,956
Deferred charges and other assets
Deferred income taxes (Note 2) 548,000 548,000
Land held for sale 422,700 52,448
Cash surrender value of life insurance 775,030 771,430
Total deferred charges and other assets 1,745,730 1,371,878
Total assets $15,359,141 $14,213,149
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 1,444,719 $ 1,905,457
Billings in excess of costs and estimated
earnings on uncompleted contracts 199,653 13,769
Current portion of deferred gain on
installment sales 10,637 10,774
Income taxes payable (Note 2) 45,430 23,322
Total current liabilities 1,700,439 1,953,322
Deferred gain on installment sales,
less current portion 50,337 59,596
Total liabilities 1,750,776 2,012,918
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 339,407 339,407
Common stock, $.10 par value per share,
40,000,000 shares authorized; issued
and outstanding 26,872,106 shares 2,687,211 2,687,211
Capital surplus 18,369,860 18,369,860
Accumulated deficit (7,769,393) (9,177,527)
Total 13,627,085 12,218,951
Less common stock in treasury, 17,358
shares, at cost 18,720 18,720
Total stockholders' equity 13,608,365 12,200,231
Total liabilities and stockholders' equity $15,359,141 $14,213,149
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenue
Electrical
construction $3,085,624 $1,955,420 $14,461,978 $ 8,967,863
Mining 522,755 579,275 1,615,921 1,499,868
Other income, net 50,441 40,282 187,846 241,374
Total revenue 3,658,820 2,574,977 16,265,745 10,709,105
Costs and expenses
Electrical
construction 2,415,227 2,009,117 11,589,363 8,241,276
Mining 513,342 622,215 1,521,979 1,518,384
Depreciation and
amortization 274,756 270,077 807,710 797,932
Impairment
(recovery) loss
(Note 4) (181,087) 258,538 (234,587) 354,156
General and
administrative 323,853 264,064 1,058,207 1,027,577
Total costs
and expenses 3,346,091 3,424,011 14,742,672 11,939,325
Income (loss) from
operations before
income taxes 312,729 (849,034) 1,523,073 (1,230,220)
Income taxes (Note 2) 7,766 -- 97,120 --
Net income (loss) 304,963 (849,034) 1,425,953 (1,230,220)
Preferred stock
dividends 5,940 5,940 17,819 17,819
Income (loss)
available to common
stockholders $ 299,023 $ (854,974) $ 1,408,134 $(1,248,039)
Basic and diluted
earnings (loss)
per share of common
stock (Note 5) $ 0.01 $ (0.03) $ 0.05 $ (0.05)
Weighted average
number of
common shares
outstanding 26,854,748 26,854,748 26,854,748 26,854,748
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Cash flows from
operating activities
Net income (loss) $ 304,963 $ (849,034) $1,425,953 $(1,230,220)
Adjustments to
reconcile net
income (loss) to net
cash provided by
(used in) operating
activities
Depreciation and
amortization 274,756 270,077 807,710 797,932
Impairment losses -- 258,538 -- 354,156
Loss (gain) on sale
of property and
equipment 8,115 45,030 (22,275) 35,627
Gain on disposition
of land held for
sale (5,698) (22,391) (26,979) (80,827)
Deferral of gain
arising from
installment land
sales -- 16,023 17,583 146,619
Cash provided from
(used by) changes in
Accounts receivable
and accrued
billings 45,534 (29,764) (337,298) (7,946)
Inventories 1,520 74,483 53,671 4,494
Costs and estimated
earnings in excess
of billings on
uncompleted
contracts 603,205 78,824 1,006,444 310,726
Prepaid expenses
and other
current assets (137,988) 55,670 (285,397) (108,168)
Accounts payable
and accrued
liabilities 192,755 (156,443) (460,738) (355,758)
Billings in excess
of costs and
estimated
earnings on
uncompleted
contracts 195,328 (12,306) 185,884 (61,626)
Income taxes
payable (17,234) -- 22,108 (28,731)
Net cash
provided by
(used in)
operating
activities 1,465,256 (271,293) 2,386,666 (223,722)
Cash flows from
investing activities
Proceeds from the
disposal of
property and
equipment 11,000 68,446 379,552 155,293
Issuance of notes
receivable (159,101) (1,981) (171,749) (243,308)
Proceeds from
notes receivable 18,540 27,364 283,831 200,039
Purchases of
property and
equipment (465,814) (188,057) (1,430,559) (1,085,200)
Net sale
(acquisition)
of land
held for sale (113,543) 22,478 (370,252) (52,448)
Cash surrender
value of life
insurance (3,100) -- (3,600) (4,700)
Net cash used
by investing
activities (712,018) (71,750) (1,312,777) (1,030,324)
Cash flows from
financing activities
Payments of preferred
stock dividends (5,940) (5,940) (17,819) (17,819)
Net increase (decrease)
in cash and cash
equivalents 747,298 (348,983) 1,056,070 (1,271,865)
Cash and cash
equivalents at
beginning of
period 2,925,237 3,474,399 2,616,465 4,397,281
Cash and cash
equivalents at
end of period $3,672,535 $ 3,125,416 $3,672,535 $ 3,125,416
Supplemental
disclosure of
cash flow information:
Income taxes paid $ 25,000 $ -- $ 75,012 $ 28,731
Effective June 30, 1999, the Company sold to an unrelated party substantially
all the net assets of the Company's wholly-owned subsidiary, Fiber Optic
Services, Inc., at the recorded net book value thereof. Fiber Optic Services,
Inc. sold for $525,070.
See accompanying notes to consolidated financial statements
</TABLE>
THE GOLDFIELD CORPORATION
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
Note 1 - Basis of Presentation
In the opinion of management, the accompanying unaudited interim
consolidated financial statements include all adjustments necessary
to present fairly the financial position of the Company, the results
of its operations and changes in cash flows for the interim periods
reported. These adjustments are of a normal recurring nature. All
financial statements presented herein are unaudited. However, the
balance sheet as of December 31, 1998, was derived from the audited
consolidated balance sheet. These statements should be read in
conjunction with the financial statements included in the Company's
annual report on Form 10-K for the year ended December 31, 1998. The
results of operations for the interim periods shown in this report
are not necessarily indicative of results to be expected for the
fiscal year.
Note 2 - Income Taxes
<TABLE>
The income tax provisions consisted of:
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Current
Federal $ -- $ -- $25,000 $ --
State 7,766 -- 72,120 --
7,766 -- 97,120 --
Deferred
Federal -- -- -- --
State -- -- -- --
-- -- -- --
Total $7,766 $ -- $97,120 --
</TABLE>
The effective income tax rate was 7% and 0% for the nine months
ended September 30, 1999 and 1998, respectively, primarily due to
the application of a net operating loss carryforward. At September
30, 1999, the Company had tax net operating loss carryforwards of
approximately $5,300,000 available to offset future regular taxable
income, which, if unused, will expire from 2000 through 2018.
The Company decreased the valuation allowance for deferred tax
assets by $550,000 for the nine months ended September 30, 1999 and
decreased the valuation allowance by $116,000 for the three months
ended September 30, 1999.
Note 3 - The Goldfield Corporation 1998 Executive Long-Term
Incentive Plan
In 1998 the stockholders of the Company approved the 1998 Executive
Long-Term Incentive Plan (the "Plan"), which permits the granting of
Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Units, Performance Share and other awards to all
officers and key employees of the Company and its subsidiaries.
Shares granted pursuant to the Plan may be authorized but unissued
shares of Common Stock, Treasury shares or shares purchased on the
open market. The exercise price under such grants will be based on
the fair market value of the Common Stock at the date of grant. The
maximum number of shares available for grant under the Plan is
1,300,000. As of September 30, 1999, options for 985,000 shares
(exercisable at $0.22 per share) had been granted.
Note 4 - Impairment Losses
The Company had a note receivable from the sale of its San Pedro mining
property. During the third quarter of 1998, management determined
the note receivable to be an impaired asset and wrote off the unpaid
balance. Future discounted cash flows were estimated by management
to be zero primarily due to anticipated legal and reclamation costs.
During the second and third quarters of 1999, the Company received
a Deed in Lieu of Foreclosure for the real property, water rights
and other assets and a Bill of Sale in Lieu of Foreclosure for
certain equipment in connection with this mining property. The
Company has sold certain of these assets for cash and a note
receivable resulting in recovery of previously recognized impairment
losses. The recovery of $181,087 has been separately identified in
the Company's operating results from mining.
During the second quarter of 1999, the Company recovered $53,500
relating to its previous write-off in the second quarter of 1998, of
a coal royalty it retained in property it formerly owned in Harlan,
Kentucky, (the "Harlan Coal Royalty"). The Company recognized an
impairment loss of $95,618 in the second quarter of 1998, which was
included in the Company's operating results from mining. The
recovery of $53,500 has been separately identified in the Company's
operating results from mining.
Note 5 - Basic Earnings (Loss) Per Share of Common Stock
Basic earnings (loss) per common share, after deducting dividend
requirements on the Company's Series A 7% Voting Cumulative
Convertible Preferred Stock ("Series A Stock") of $17,819 in each of
the nine month periods ended September 30, 1999 and 1998, were based
on the weighted average number of shares of Common Stock
outstanding, excluding 17,358 shares of Treasury Stock for each of
the periods ended September 30, 1999 and 1998. Common shares
issuable on conversion of Series A Stock are not considered in the
basic earnings (loss) calculation because their inclusion would be
anti-dilutive.
Note 6 - Business Segment
The Company adopted SFAS No. 131, Disclosure About Segments of an
Enterprise and Related Information, in 1998. The adoption of this
statement did not have any effect on either the current or prior
years' presentation of reportable segments. The Company is
primarily involved in two lines of business, mining and electrical
construction. There were no material amounts of sales or transfers
between lines of business and no material amounts of export sales.
Any intersegment sales have been eliminated. The following tables
set forth certain segment information for the periods indicated:
<TABLE>
Three Months Ended
September 30,
1999 1998
<S> <C> <C>
Sales from operations to
unaffiliated customers
Electrical construction $3,085,624 $1,955,420
Mining 522,755 579,275
Total $3,608,379 $2,534,695
Gross profit
Electrical construction $490,269 $(230,561)
Mining 113,872 (377,191)
Total gross profit (loss) 604,141 (607,752)
Interest and other income, net 50,441 40,282
General corporate expenses (341,853) (281,564)
Income (loss) from
operations before
income taxes $312,729 $(849,034)
</TABLE>
<TABLE>
Nine Months Ended
September 30,
1999 1998
<S> <C> <C>
Sales from operations to
unaffiliated customers
Electrical construction $14,461,978 $ 8,967,863
Mining 1,615,921 1,499,868
Total $16,077,899 $10,467,731
Gross profit
Electrical construction $2,343,076 $ 218,934
Mining 103,458 (610,451)
Total gross profit (loss) 2,446,534 (391,517)
Interest and other
income, net 187,846 241,374
General corporate expenses (1,111,307) (1,080,077)
Income (loss) from
operations before
income taxes $1,523,073 $(1,230,220)
</TABLE>
The following table sets forth certain segment information as of the
date indicated:
<TABLE>
September 30,
1999 1998
<S> <C> <C>
Identifiable assets
Electrical construction $ 9,036,305 $ 6,553,164
Mining 2,827,945 2,705,835
Corporate 3,494,891 2,982,719
Total $15,359,141 $12,241,718
</TABLE>
Note 7 - Reclassifications
Certain amounts in 1998 have been reclassified to conform to the
1999 presentation.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations - Nine Months Ended September 30, 1999
Compared to Nine Months Ended September 30, 1998.
Net Income (Loss)
The Company had net income of $1,425,953 for the nine months ended
September 30, 1999, compared to a net loss of $1,230,220 for the
nine months ended September 30, 1998.
Revenues
Total revenues for the nine months ended September 30, 1999 were
$16,265,745, compared to $10,709,105 for the nine months ended
September 30, 1998, an increase of 52%. The increase in revenues was
primarily attributable to a higher level of activity in electrical
construction operations resulting from higher demand for such services
in the utilities industry.
Electrical construction revenue increased by 61% in the nine months
ended September 30, 1999 to $14,461,978 from $8,967,863 for the nine
months ended September 30, 1998.
Revenue from mining operations increased by 8% to $1,615,921 for the
nine months ended September 30, 1999 from $1,499,868 for the nine
months ended September 30, 1998.
Operating Results
Electrical construction operations had an operating profit of
$2,343,076 during the nine months ended September 30, 1999, compared
to an operating profit of $218,934 during the nine months ended
September 30, 1998. The increase in operating results in 1999 was
primarily due to an increase in the level of operations and 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 September 30, 1999, the
approximate value of uncompleted contracts was $2,600,000, compared
to $7,425,000 at September 30, 1998.
Effective June 30, 1999, the Company sold to an unrelated party
substantially all the net assets of the Company's wholly-owned
subsidiary, Fiber Optic Services, Inc., at the recorded net book
value thereof. Fiber Optic Services sold for $525,070. Fiber Optic's
Services's revenues for the six month period ended June 30, 1999 were
$592,244.
During the nine months ended September 30, 1999, the operating loss
from mining operations was $103,458, compared to an operating loss
of $610,451 during the nine months ended September 30, 1998. The
operating results from mining operations in 1999 included the
recovery of $234,587 of previously recorded impairment losses
related to the Harlan Coal Royalty and the San Pedro mine. The 1998
operating results from mining included a charge of $354,156 for this
impairment loss. The operating results from mining included
depreciation expense of $225,071 during the nine months ended
September 30, 1999, compared to $224,740 during the nine months
ended September 30, 1998.
St. Cloud Mining Company, a wholly-owned subsidiary of the Company
("St. Cloud"), sold 12,367 tons of natural zeolite during the nine
months ended September 30, 1999, compared to 10,846 tons during the
nine months ended September 30, 1998.
Surface and underground mining of base and precious metals have been
halted at St. Cloud since the third quarter of 1991 and the first
quarter of 1992, respectively, due to declining prices and mine
grades. St. Cloud's viability is sensitive to the future price of
base and precious metals, particularly silver.
During the nine months ended September 30, 1999, The Lordsburg
Mining Company, a wholly-owned subsidiary of the Company
("Lordsburg"), sold 7,765 tons of construction aggregate material,
compared to 16,314 tons sold during the nine months ended September
30, 1998.
Production from underground mining at Lordsburg, 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 at Lordsburg, a final decision with respect
to the future operations at Lordsburg has not been reached.
Other Income
Other income for the nine months ended September 30, 1999 was
$187,846, compared to $241,374 for the nine months ended September
30, 1998. The decrease in other income for 1999 was primarily a
result of lower interest income.
Costs and Expenses
Total costs and expenses, and the components thereof, increased to
$14,742,672 for the nine months ended September 30, 1999 from
$11,939,325 for the nine months ended September 30, 1998, primarily
as a result of increased electrical construction costs.
Electrical construction costs were $11,589,363, and $8,241,276 in
the nine months ended September 30, 1999 and 1998, respectively. The
increase in costs for 1999 was attributable to a higher level of
activity.
Mining costs were $1,521,979 for the nine months ended September 30,
1999, compared to $1,518,384 for the nine months ended September 30,
1998.
Depreciation and amortization was $807,710 in the nine months ended
September 30, 1999, compared to $797,932 in the nine months ended
September 30, 1998.
General corporate expenses of the Company increased to $1,111,307 in
the nine months ended September 30, 1999, from $1,080,077 in the
nine months ended September 30, 1998.
Results of Operations - Three Months Ended September 30, 1999
Compared to Three Months Ended September 30, 1998.
Net Income (Loss)
The Company had net income of $304,963 for the three months ended
September 30, 1999, compared to a net loss of $849,034 for the three
months ended September 30, 1998.
Revenues
Total revenues for the three months ended September 30, 1999 were
$3,658,820, compared to $2,574,977 in the like 1998 period, an
increase of 42%. The increase in revenues was primarily attributable
to a higher level of activity in electrical construction operations
resulting from higher demand for such services in the utility industry.
Electrical construction revenue increased by 58% in the three months
ended September 30, 1999 to $3,085,624 from $1,955,420 for the three
months ended September 30, 1998.
Revenue from mining operations decreased by 10% to $522,755 for the
three months ended September 30, 1999 from $579,275 for the three
months ended September 30, 1998.
Operating Results
Electrical construction operations had an operating profit of
$490,269 during the three months ended September 30, 1999, compared
to an operating loss of $230,561 for the three months ended
September 30, 1998. The increase in operating results in 1999 was
primarily due to an increase in the level of activity and profit
margins.
During the three months ended September 30, 1999, the operating
profit from mining operations was $113,872, compared to an operating
loss of $377,191 for the three months ended September 30, 1998. The
operating results from mining operations in 1999 included the
recovery of $181,087 of previously recorded impairment losses
related to the Harlan Coal Royalty and the San Pedro mine. The 1998
operating results from mining included a charge of $258,538 for
these impairment losses. The operating results from mining included
depreciation expense of $76,629 during the three months ended
September 30, 1999, compared to $75,714 during the three months
ended September 30, 1998.
St. Cloud sold 4,110 tons of natural zeolite during the three months
ended September 30, 1999, compared to 4,026 tons during the three
months ended September 30, 1998.
Lordsburg sold 586 tons of construction aggregate material during
the three months ended September 30, 1999, compared to 6,089 tons
during the three months ended September 30, 1998.
Other Income
Other income for the three months ended September 30, 1999 was
$50,441, compared to $40,282 for the three months ended September
30, 1998. The increase in other income for 1999 was primarily a
result of a decrease in the loss on the sale of fixed assets.
Costs and Expenses
Total costs and expenses, and the components thereof, increased to
$3,346,091 for the three months ended September 30, 1999 from
$3,424,011 for the three months ended September 30, 1998, primarily
as a result of increased electrical construction costs.
Electrical construction costs were $2,415,227 and $2,009,117 in the
three months ended September 30, 1999 and 1998, respectively. The
increase in costs for 1999 was attributable to a higher level of
activity.
Mining costs were $513,342 for the three months ended September 30,
1999, compared to $622,215 for the three months ended September 30,
1998.
Depreciation and amortization was $274,756 in the three months ended
September 30, 1999, compared to $270,077 in the three months ended
September 30, 1998.
General corporate expenses of the Company increased to $341,853 in
the three months ended September 30, 1999, compared to $281,564 in
the three months ended September 30, 1998.
Liquidity and Capital Resources
Cash and cash equivalents at September 30, 1999 were $3,672,535 as
compared to $2,616,465 as of December 31, 1998. Working capital at
September 30, 1999 was $6,933,543, compared to $6,143,737 at
December 31, 1998. The Company's ratio of current assets to current
liabilities increased to 5.1 to 1 at September 30, 1999, from 4.1 to
1 at December 31, 1998.
The Company paid cash dividends on its Series A Preferred Stock in
the amount of $17,819 in each of the nine months ended September 30,
1999 and 1998. 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 the
Company's subsidiary, Southeast Power Corporation, 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 June 30, 2000, at which time the
Company expects to renew it for an additional year. No borrowings
were outstanding under this line of credit during the nine months
ended September 30, 1999 and 1998. However, since 1996, $100,000 of
this line of credit has been reserved for a standby letter of
credit.
The Company's capital expenditures for the nine months ended
September 30, 1999 increased to $1,430,559 from $1,085,200 for the
nine months ended September 30, 1998.
Year 2000 Compliance
Background
In the past, many computers, software programs, and other
information technology ("IT systems"), as well as other equipment
relying on microprocessors or similar circuitry ("non-IT systems"),
were written or designed using two digits, rather than four, to
define the applicable year. As a result, date-sensitive systems
(both IT systems and non-IT systems) may recognize a date identified
with "00" as the year 1900, rather than the year 2000. This is
generally described as the Year 2000 issue. If this situation
occurs, the potential exists for system failures or miscalculations,
which could impact business operations.
The Securities and Exchange Commission ("SEC") has asked public
companies to disclose four general types of information related to
Year 2000 preparedness: the Company's state of readiness, costs,
risks, and contingency plans. See SEC Release No. 33-7558 (July 29,
1998). Accordingly, the Company has included the following
discussion in this report, in addition to the Year 2000 disclosures
previously filed with the SEC.
State of Readiness
The Company believes that it has identified all significant IT
systems and non-IT systems that require modification in connection
with Year 2000 issues. The Company has completed all material
modifications and testing of significant systems.
In addition, the Company has been communicating with customers,
suppliers, banks, vendors and others with whom it does significant
business (collectively, its "business partners") to determine their
Year 2000 readiness and the extent to which the Company is
vulnerable to any other organization's Year 2000 issues. Based on
these communications and related responses, the Company is
monitoring the Year 2000 preparations and state of readiness of its
business partners. Although the Company is not aware of any
significant Year 2000 problems with its business partners, there can
be no guarantee that the systems of other organizations on which the
Company's systems rely will be converted in a timely manner, or that
a failure to convert by another organization, or a conversion that
is incompatible with the Company's systems, would not have a
material adverse effect on the Company.
Costs
The total cost to the Company of Year 2000 activities is not material
to its financial position or results of operations. The total cost to
the Company of addressing Year 2000 issues will be less than $10,000.
Risks
The Company utilizes IT systems and non-IT systems in various
aspects of its business. Year 2000 problems in some of the
Company's systems could possibly disrupt operations, but the Company
does not expect that any such disruption would have a material
adverse impact on the Company's operating results.
The Company is also exposed to the risk that one or more of its
customers, suppliers or vendors could experience Year 2000 problems
that could impact the ability of such customers to transact business
or such suppliers or vendors to provide goods and services. Although
this risk is lessened by the availability of alternative suppliers,
the disruption of certain services, such as utilities, could,
depending upon the extent of the disruption, potentially have a
material adverse impact on the Company's operations.
Contingency Plans
The Company has developed contingency plans for the Company's IT
systems and non-IT systems requiring Year 2000 modification. In
addition, the Company has developed contingency plans to deal with
the possibility that some suppliers or vendors might fail to provide
goods and services on a timely basis as a result of Year 2000
problems. These contingency plans include the identification,
acquisition and/or preparation of backup systems, suppliers and
vendors.
PART II. OTHER INFORMATION
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits in accordance with the provisions of Item 601 of
Regulation S-K
10-2(f) Amendment dated September 20, 1999 to Employment Agreement
effective January 15, 1985 between The Goldfield
Corporation and John H. Sottile.
10-3(d) Amendment dated September 20, 1999 to Employment Agreement
effective January 1, 1986 between Southeast Power
Corporation and John H. Sottile.
(b) Reports on Form 8-K
No Current Report on Form 8-K was filed during the quarter
ended September 30, 1999.
SIGNATURES
Pursuant to the requirements 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
(Registrant)
Date: November 8, 1999 /s/ John H. Sottile
(John H. Sottile)
Chairman, President, and
Chief Executive Officer
/s/ Stephen R. Wherry
(Stephen R. Wherry)
Vice President, Treasurer and
Chief Financial Officer
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1999 Commission File No. 1-7525
THE GOLDFIELD CORPORATION
EXHIBITS
November 8, 1999
THE
GOLDFIELD
C O R P O R A T I O N
100 RIALTO PLACE, SUITE 500 TELEPHONE 407 724-1700
MELBOURNE, FLORIDA 32901 FAX 407 724-1703
September 20, 1999
Mr. John H. Sottile
100 Rialto Place - Suite 500
Melbourne, FL 32901
Dear Mr. Sottile:
Pursuant to a Resolution of the Board of Directors of The Goldfield
Corporation ("Goldfield"), adopted on January 15, 1985, Goldfield entered
into an Employment Agreement with you. Subsequent amendments to this
Resolution, the last dated September 15, 1995, have extended this
Employment Agreement until December 31, 2005.
The Board of Directors, on September 20, 1999 agreed to amend your
Employment Agreement as follows:
1. Extend the term of your Employment Agreement until December 31,
2009.
2. Amend Paragraph 10 to said Employment Agreement to read as follows:
10. Termination of Employment: Goldfield may terminate
your employment at any time upon thirty (30) days written
notice to you; provided, however, that in the event Goldfield
terminates your employment, Goldfield shall pay you within ten
(10) days of such notice of termination an amount equal to the
cash salary that you would have received in the absence of
such termination from the date of such termination through
December 31, 2009, and shall on the date of such termination
commence payment of any retirement benefits.
You and Goldfield agree that in the event of termination pursuant to this
section, payment of the sums prescribed above shall constitute liquidated
damages hereunder, and Goldfield shall have no further obligations to you
under this letter agreement and you shall have no further obligations to
Goldfield under this letter agreement.
Sincerely,
THE GOLDFIELD CORPORATION
Agreed to and accepted:
By: /s/ /s/
Stephen R. Wherry, Vice President John H. Sottile
SRW/ps
SOUTHEAST POWER CORPORATION
ELECTRICAL CONTRACTORS
1805 Hammock Road
Titusville, FL 32796-7820
Phone: 407-268-0540
Fax: 407-383-9477
September 20, 1999
Mr. John H. Sottile
100 Rialto Place - Suite 500
Melbourne, FL 32901
Dear Mr. Sottile:
Pursuant to a Resolution of the Board of Directors of Southeast Power
Corporation ("SEPCO"), adopted on January 1, 1986, SEPCO entered into an
Employment Agreement with you. Subsequent Amendments have extended this
Employment Agreement until December 31, 2005.
The Board of Directors, on September 20, 1999 passed a resolution to amend
your Employment Agreement as follows:
1. Extend the term of your Employment Agreement until December 31,
2009.
2. Amend Paragraph 1 (a) to said Employment Agreement to read as
follows:
1. Duties - SEPCO hereby employs EMPLOYEE to perform, and
EMPLOYEE agrees to perform the following:
(a) To act as Chairman of the business of SEPCO until
December 31, 2009, and from year to year until
terminated.
3. Amend Paragraph 10 to said Employment Agreement to read as follows:
10. Termination of Employment: SEPCO may terminate your
employment at any time upon thirty (30) days written notice to
you; provided, however, that in the event SEPCO terminates
your employment, SEPCO shall pay you within ten (10) days of
such notice of termination an amount equal to the cash salary
that you would have received in the absence of such
termination from the date of such termination through December
31, 2009, and shall on the date of such termination commence
payment of any retirement benefits.
Sincerely,
SOUTHEAST POWER CORPORATION
Agreed to and accepted:
By: /s/ /s/
Robert L. Jones, President John H. Sottile
THE GOLDFIELD CORPORATION, INC.
By: /s/
Stephen R. Wherry, Vice President
AMENDMENT
TO EMPLOYMENT AGREEMENT
WHEREAS, John H. Sottile ("Employee") and Southeast Power Corporation
("SEPCO") entered into an employment agreement on January 1, 1986, (the
"Employment Agreement") which was also executed by SEPCO's parent company,
The Goldfield Corporation ("Goldfield"); and,
WHEREAS, Employee, SEPCO and Goldfield have agreed to extend the term of
the employment agreement until December 31, 2009.
NOW, therefore, for and in consideration of the mutual covenants and
premises herein contained, Employee, SEPCO and Goldfield agree as follows:
1. That Paragraph 1 (a) of the Employment Agreement is amended to read
as follows:
(a) to act as Chairman for the business of SEPCO until December 31,
2009 and from year to year until terminated.
2. That the Employment Agreement, except as herein amended, shall remain
in full force and effect.
/s/
John H. Sottile
SOUTHEAST POWER CORPORATION
By: /s/
Robert L. Jones, President
THE GOLDFIELD CORPORATION
By: /s/
Stephen R. Wherry, Vice President
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