GV 8-K filed this morning...
25-May-2004
Other Events
Item 5. Other Events and Regulation FD Disclosure.
At the 2004 Annual Meeting of the Stockholders of The Goldfield Corporation (the"Company") on May 25, 2004, John H. Sottile, the Company's Chairman of the Boardof Directors, President and Chief Executive Officer, made the followingstatement:
At this point, I would like to turn to the management report and afterwardsprovide you an opportunity to ask questions. I want to give you a snapshot ofthe company's activities during 2003, discuss recent business, and give you anoutline of our strategy to continue maximizing shareholder value in the future.I would encourage all of you to review the more detailed information whichcan be found in our SEC filings, which may be accessed through our website atwww.goldfieldcorp.com.
Let me begin with the 2003 overview. Quite simply, 2003 was a year of strongimprovement for Goldfield - a year when we significantly increased revenues andincome from all of our operations.
On the numbers side, revenues from continuing operations increased more than 47percent to nearly $33 million, while income from continuing operations grew 41percent to half a million dollars, or 2 cents per share.
It is important to note that Goldfield's growth was driven by strong results inboth our electrical construction and real estate businesses.
Electrical Construction-
During last year's shareholders meeting, I indicated there were signs of ageneral turnaround in the electrical construction industry. This did notmaterialize. The industry continues in a slump, with many of our competitorsreporting losses. Despite this industry environment, Southeast Power experiencedgrowth in both revenue and operating income. This success is even moresignificant when you consider that it did not include any work related to thenortheast grid replacement efforts which we had expected to result from thepower outage last August.
Although Southeast Power has had an exceptional first quarter this year, we donot expect the same pace to continue in the second and third quarters. As wereported in our first quarter Form 10-Q, our backlog level declined 28 percentfrom the same date a year ago. We are currently experiencing a lower demand forelectrical construction services from many of our utility customers. We believethat this is also the case for our competitors. This general fall-off inindustry demand may likely have an adverse effect on pricing and margins. As youknow, our electrical construction work at any point involves a limited number ofprojects, and this, coupled with fluctuations in demand and any unanticipateddevelopments on particular projects, necessarily produces uneven results.
The immediate future of our electric construction business may also be affectedby recent operational issues (some safety-related) at two of our majorcustomers, which together accounted for approximately 28 percent of SoutheastPower's revenues over the last three
years. In the case of one customer, these incidents resulted in termination ofan ongoing contract, the unrecovered portion of which represented about 11percent of our electrical construction backlog at March 31, 2004. In the case ofthe other customer, we do not anticipate termination of any existing contracts.With respect to both customers, we may be temporarily limited in our ability tobid on certain of their future projects.
At this point, we cannot gauge the precise impact of these developments, butthey may have a material adverse effect on our near-term electrical constructionresults. Southeast Power has taken steps to strengthen its training and qualitycontrol efforts to prevent reoccurrence of such situations. In view of our longhistory of satisfactory professional relationships with these and our othercustomers, we believe that Southeast Power will continue to perform well in thefuture.
Real Estate-
Our real estate development activities were strong in 2003. During 2003, we:-
o Completed and sold our second luxury waterfront condominium development, Riomar, near Cocoa Beach.
o Began construction of our third luxury waterfront condominium development, Cape Club, in Cape Canaveral. All units there are under contract for sale, and completion is expected in the second quarter of 2004.
o Obtained reservations for sale on approximately 90 percent of the units in Oak Park, the company's townhouse-style project. This 40 unit project is expected to commence construction in the third quarter of this year.
o Completed the preliminary planning for a multi-phase river view residential complex in Melbourne, called Pineapple House. If all phases are completed, this project would be substantially larger than any of our prior developments. Although Pineapple House is still in the permitting phase, we currently estimate that it will be completed in stages over the next several years.
In short, we have continued to build on our solid reputation for planning, completing and selling high quality luxury condominium developments in Brevard County, Florida.
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Along with the strong successes in our two core businesses, we continued todevelop new initiatives designed to expand our customer base and grow thecompany in the future. For example, we:-
o Expanded the reach of Goldfield's electrical construction services by establishing a northern division, based in South Carolina. The division provides both telecommunication and electrical construction services beyond the company's traditional markets, and into the mid-Atlantic and northern region of the U.S.
o And we bolstered Goldfield's stock repurchase program, extending it through September 16, 2004 and increasing the number of shares purchasable to 2.5
million, of which the company has already purchased approximately 1.3 million shares.
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Certain statements in this Current Report on Form 8-K are forward-looking andactual results may differ materially. For further details, please see theCompany's filings with the Securities and Exchange Commission.
