A challenging economic environment resulted in a difficult year for Goldfield.  We experienced continuing weakness in demand for electrical construction in the southeast, which persisted through most of 2008, and an historic weakness in the Florida real estate market.  Although our electrical construction operations for 2008 experienced an 8.6% increase in revenue over 2007, and operating income more than doubled, this improvement was offset by an increased operating loss in real estate operations primarily attributable to a significant write-down.  For 2008, we had revenue of $31.4 million and an operating loss of $5.1 million, compared to revenue of $27.3 million and an operating loss of $3.2 million in 2007.  Our net loss for 2008 was $5.4 million ($0.21 per share) versus net loss of $2.3 million ($0.09 per share) in 2007. 

Revenues from electrical construction in 2008 increased to $29.1 million from $26.8 million and operating income increased to $1.4 million from $688,000 in the prior year.  These increases were primarily due to a robust fourth quarter resulting from an increase in the number and size of the projects in process, particularly fiber optic work.

In our real estate development segment, sales of condominium units continued at low levels due to the depressed real estate market in Florida.  For 2008, revenue and operating loss from this segment were $2.4 million and $3.8 million, respectively, compared to revenue of $537,000 and an operating loss of $1.2 million in 2007.  The increase in revenue resulted primarily from the 2007 reversal of $7.2 million of previously recognized revenue on the Pineapple House project due to buyer defaults, which offset a significant portion of the revenue from sales of condominium units in 2007.  The increase in the operating loss was due primarily to the write-down of $3.2 million on real estate inventory, during the year ended December 31, 2008.  As of December 31, 2008, we had sold a majority of the units in our only active project, Pineapple House.  Nineteen of the thirty-three units have been sold.

We are encouraged by increased activity in our electrical construction operations in the beginning of 2009, continuing the improved trend from the fourth quarter of 2008.  As of December 31, 2008, our backlog was $14.6 million (a substantial increase from our backlog of $5.9 million as of December 31, 2007).  We expect to complete 70% of this backlog over the course of 2009.  In addition, we have expanded the reach of our electrical construction segment beyond our historic base in the southeastern United States with new projects in Colorado, northern Texas and Missouri.  While we are pleased with the continued growth of our electrical construction segment, our optimism must be tempered by general economic uncertainties. 

The real estate environment in Florida continues to be extremely challenging.  However, we are fortunate that our exposure is quite manageable.  Our only project, Pineapple House, has been completed and well received.  Our continuing expenses on this project will not be unduly burdensome. 

The current recessionary economic environment presents us with significant challenges; however, we believe that our sound financial condition – and the well-earned reputation of both our electrical construction and real estate development operations – position us well to capitalize on the opportunities that lie ahead. 

We appreciate your continued support.

John H. Sottile

Chairman of the Board

April 30, 2009