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 March 31, 2000
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)
(321) 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 March 31, 2000.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2000 1999
ASSETS
Current assets
Cash and cash equivalents $ 2,912,204 $ 5,719,163
Accounts receivable and accrued billings 2,620,251 2,315,682
Current portion of notes receivable 46,654 42,383
Inventories 380,386 351,458
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,485,483 139,051
Income taxes recoverable 11,000 --
Prepaid expenses and other current assets 621,326 535,845
Total current assets 8,077,304 9,103,582
Property, buildings and equipment, net 5,737,949 4,626,695
Notes receivable, less current portion 391,281 251,563
Deferred charges and other assets
Deferred income taxes (Note 3) 1,150,000 1,150,000
Land held for sale 283,863 385,296
Cash surrender value of life insurance 779,100 779,100
Total deferred charges and other assets 2,212,963 2,314,396
Total assets $16,419,497 $16,296,236
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 1,306,005 $ 1,453,707
Billings in excess of costs and estimated
earnings on uncompleted contracts 33,761 59,974
Current portion of deferred gain on
installment sales 10,592 10,905
Income taxes payable (Note 3) -- 71,639
Total current liabilities 1,350,358 1,596,225
Deferred gain on installment sales,
less current portion 126,315 47,303
Total liabilities 1,476,673 1,643,528
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 (6,434,934) (6,725,050)
Total 14,961,544 14,671,428
Less common stock in treasury, 17,358
shares, at cost 18,720 18,720
Total stockholders' equity 14,942,824 14,652,708
Total liabilities and stockholders' equity $16,419,497 $16,296,236
See accompanying notes to consolidated financial statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
2000 1999
Revenue
Electrical construction $ 4,195,421 $ 5,578,184
Mining 723,901 381,075
Other income, net 140,340 67,241
Total revenue 5,059,662 6,026,500
Costs and expenses
Electrical construction 3,503,451 4,599,212
Mining 557,561 376,540
Depreciation and amortization 284,597 254,591
General and administrative 416,451 366,511
Total costs and expenses 4,762,060 5,596,854
Income from operations before income taxes 297,602 429,646
Income taxes (Note 3) 1,547 34,530
Net income 296,055 395,116
Preferred stock dividends 5,939 5,939
Income available to common stockholders $ 290,116 $ 389,177
Basic and diluted earnings per
share of common stock (Note 4) $ 0.01 $ 0.01
Weighted average number of
common shares outstanding 26,854,748 26,854,748
See accompanying notes to consolidated financial statements
THE GOLDFIELD CORPORATION
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities
Net income $ 296,055 $ 395,116
Adjustments to reconcile net income to net
cash used in operating activities
Depreciation and amortization 284,597 254,591
Gain on sale of property and equipment (42,121) (10,796)
Gain on disposition of land held for sale (30,418) (10,389)
Cash provided from (used by) changes in
Accounts receivable and accrued billings (304,569) (525,953)
Inventories (28,928) 45,801
Costs and estimated earnings in excess
of billings on uncompleted contracts (1,346,432) 391,515
Income taxes recoverable (11,000) --
Prepaid expenses and other current assets (85,481) (158,813)
Accounts payable and accrued liabilities (147,702) (635,600)
Billings in excess of costs and estimated
earnings on uncompleted contracts (26,213) 223,798
Income taxes payable (71,639) 9,580
Net cash used in operating activities (1,513,851) (21,150)
Cash flows from investing activities
Proceeds from the disposal of
property and equipment 89,550 56,791
Issuance of notes receivable -- (1,692)
Proceeds from notes receivable 21,237 49,092
Purchases of property and equipment (1,443,280) (457,475)
Proceeds from sale of land held for sale 45,324 11,999
Cash surrender value of life insurance -- (500)
Net cash used by investing activities (1,287,169) (341,785)
Cash flows from financing activities
Payments of preferred stock dividends (5,939) (5,939)
Net decrease in cash and cash equivalents (2,806,959) (368,874)
Cash and cash equivalents at beginning of period 5,719,163 2,616,465
Cash and cash equivalents at end of period $2,912,204 $2,247,591
Supplemental disclosure of cash flow information:
Income taxes paid $ 84,187 $ 1,628
Supplemental disclosure of non-cash
investing activities:
Notes receivable in partial payment for
land held for sale $ 165,226 $ --
See accompanying notes to consolidated financial statements
THE GOLDFIELD CORPORATION
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
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, 1999, 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, 1999. 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 - Reclassifications
Certain amounts in 1999 have been reclassified to
conform to the 2000 presentation.
Note 3 - Income Taxes
The income tax provisions consisted of the following:
Three Months Ended
March 31,
2000 1999
Current
Federal $ -- $ 6,000
State 1,547 28,530
1,547 34,530
Deferred
Federal -- --
State -- --
-- --
Total $1,547 $34,530
The effective income tax rate was 0.5% and 8% for the
three months ended March 31, 2000 and 1999,
respectively, primarily due to the application of a net
operating loss carryforward. At March 31, 2000, the
Company had tax net operating loss carryforwards of
approximately $5,100,000 available to offset future
regular taxable income, which, if unused, will expire
from 2001 through 2020.
The Company decreased the valuation allowance for
deferred tax assets by $144,000 for the three months
ended March 31, 2000 and decreased the valuation
allowance by $186,000 for the three months ended March
31, 1999.
Note 4 - Basic and Diluted Earnings Per Share of
Common Stock
Basic earnings per common share, after deducting
dividend requirements on the Company's Series A 7%
Voting Cumulative Convertible Preferred Stock ("Series
A Stock") of $5,939 in each of the three month periods
ended March 31, 2000 and 1999, 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 March 31, 2000 and 1999.
Common shares issuable on conversion of Series A Stock
are not considered in the diluted earnings per share
calculation because their inclusion would be anti-dilutive.
Note 5 - Business Segment Information
The Company is primarily involved in two business
segments, mining and electrical construction.
There were no material amounts of sales or
transfers between segments and no material
amounts of export sales.
The following table sets forth certain segment information
for the periods indicated. Any intersegment sales have
been eliminated.
Three Months Ended
March 31,
2000 1999
Sales from operations to
unaffiliated customers
Electrical construction $4,195,421 $5,578,184
Mining 723,901 381,075
Total
$4,919,322 $5,959,259
Gross profit
Electrical construction $489,537 $816,042
Mining 102,176 (69,126)
Total gross profit 591,713 746,916
Interest and other
income, net 140,340 67,241
General corporate expenses (434,451) (384,511)
Income from operations
before income taxes $297,602 $429,646
The following table sets forth certain segment
information as of the dates indicated:
March 31, December 31,
2000 1999
Identifiable assets
Electrical construction $ 9,398,978 $ 9,872,851
Mining 2,837,500 2,796,696
Corporate 4,183,019 3,626,689
Total $16,419,497 $16,296,236
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Results of Operations - Three Months Ended March 31,
2000 Compared to Three Months Ended March 31, 1999.
Net Income
The Company had net income of $296,055 for the three
months ended March 31, 2000, compared to net income
of $395,116 for the three months ended March 31, 1999.
The decline was primarily attributable to lower electrical
construction revenue as discussed below.
Revenues
Total revenues for the three months ended March 31,
2000 were $5,059,662, compared to $6,026,500 for the
three months ended March 31, 1999.
Electrical construction revenue decreased by 25% in the
three months ended March 31, 2000 to $4,195,421 from
$5,578,184 for the three months ended March 31, 1999.
This decrease was primarily attributable to a reduction
in subcontract and materials expense and a reduced
level of work. The reduction in subcontract and
materials expense directly effects revenue as these
costs are billed to the customer as part of their
contract. The level of work has been reduced due to
the slow start-up of two major jobs.
Revenue from mining operations increased by 90% to
$723,901 for the three months ended March 31, 2000 from
$381,075 for the three months ended March 31, 1999.
This increase was primarily attributable to a single
construction aggregate project which was completed
during the second quarter of 2000.
Operating Results
Electrical construction operations had an operating
profit of $489,537 in the three months ended March 31,
2000, compared to an operating profit of $816,042
during the three months ended March 31, 1999. The
decrease in operating results in 2000 was primarily due
to the reasons noted above. 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 31, 2000, the
approximate value of uncompleted contracts was
$15,000,000, compared to $5,800,000 at March 31, 1999.
During the three months ended March 31, 2000, the
operating profit from mining operations increased to
$102,176 from an operating loss of $69,126 during the
three months ended March 31, 1999. This increase
was primarily due to the single construction aggregate
project referred to above. The operating results
from mining included depreciation expense of
$64,164 during the three months ended March 31, 2000,
compared to $73,661 during the three months ended March
31, 1999.
St. Cloud Mining Company, a wholly owed subsidiary of
the Company ("St. Cloud"), sold 4,201 tons of natural
zeolite during the three months ended March 31, 2000,
compared to 4,024 tons during the three months ended
March 31, 1999.
Other Income
Other income for the three months ended March 31, 2000
was $140,340, compared to $67,241 in the three months
ended March 31, 1999. The increase in other income for
2000 was primarily a result of increased interest
income.
Costs and Expenses
Total costs and expenses, and the components thereof,
decreased to $4,762,060 for the three months ended
March 31, 2000 from $5,596,854 for the three months
ended March 31, 1999, primarily as a result of decreased
electrical construction costs.
Electrical construction costs were $3,503,451 and
$4,599,212 in the three months ended March 31, 2000 and
1999, respectively. The decrease in costs for 2000 was
attributable to a lower level of activity.
Mining costs were $557,561 for the three months ended
March 31, 2000, compared to $376,540 in the three
months ended March 31, 1999.
Depreciation and amortization was $284,597 in the three
months ended March 31, 2000, compared to $254,591 in
the three months ended March 31, 1999.
General corporate expenses of the Company increased to
$434,451 in the three months ended March 31, 2000, from
$384,511 in the three months ended March 31, 1999.
Liquidity and Capital Resources
Cash and cash equivalents at March 31, 2000 were
$2,912,204 as compared to $5,719,163 as of December 31,
1999. The decrease in cash was primarily the result of
both capital expenditures in the electrical construction
segment and an increase in costs and estimated earnings in
excess of billings on uncompleted contracts. Working
capital at March 31, 2000 was $6,726,946, compared
to $6,419,585 at March 31, 1999. The Company's ratio
of current assets to current liabilities increased
to 6.0 to 1 at March 31, 2000, from 5.7 to 1 at
December 31, 1999.
The Company does not enter into financial instruments
for trading purposes. Financial instruments entered
into for other than trading purposes consist
principally of cash and cash equivalents with limited
market risk sensitivity.
The Company paid cash dividends on its Series A
Preferred Stock in the amount of $5,939 in each of the
three months ended March 31, 2000 and 1999. The
Company has paid no cash dividends 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 three months ended March 31, 2000 and
1999. 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 three months
ended March 31, 2000 increased to $1,443,280 from
$457,475 for the three months ended March 31, 1999. This
increase in the level of capital expenditures was primarily
to accommodate the increased level of operations in the
Company's electrical construction segment.
Year 2000 Compliance
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,
if not addressed, these systems may not have been able to properly
interpret dates beyond the Year 1999, which may have led to
business disruptions. Accordingly, the Company identified
and performed all needed material modifications and testing
of sigificant systems, and communicated with customers,
suppliers, banks and others with whom it does significant
business to determine their Year 2000 readiness and the extent
to which the Company was vulnerable to any other organization's
Year 2000 issues.
The Company considers the transition into the Year 2000
successful from the perspective of its systems. In
addition to the changeover to January 1, 2000, it has
been shown that certain other dates may also present
similar problems for some systems. The Company
continues to monitor the situation. To date, the
Company has not experienced any material Year 2000
issues with respect to its systems, customers or
suppliers.
The Company estimates that the total cost to the
Company of Year 2000 activities has been less than
$10,000.
New Accounting Pronouncements
Statement 133 - Accounting for Derivative Instruments and
Hedging Activities. Statement 133 establishes methods of
accounting for derivative financial instruments and hedging
activities related to those instruments as well as other
hedging activities. As the Company does not hold derivative
instruments or engage in hedging activities, we do not
anticipate that the adoption of this statement will have a
material impact on our consolidated financial statements.
We will be required to implement Statement 133 in the first
quarter of our year ending December 31, 2001.
SEC Staff Accounting Bulletin Number 101 - Revenue Recognition
in Financial Statements. As we have historically made a
practice of recognizing revenue in accordance with the
provisions of this bulletin, we do not anticipate that the
adoption of the bulletin will have a material impact on our
consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
There were no material changes in the information provided
in the Company's December 31, 1999 consolidated financial
statements.
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
None.
(b) Reports on Form 8-K
No Current Report on Form 8-K was filed during
the quarter ended March 31, 2000.
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: May 10, 2000 /s/ Stephen R. Wherry
(Stephen R. Wherry)
Vice President, Treasurer
and Chief Financial Officer