A slowdown in electrical construction in the southeast, coupled with an historic weakness in Florida real estate, made a difficult environment for Goldfield in 2007 – resulting in a significant decline in operating results.  We had revenues of $27.3 million and an operating loss of $3.2 million, compared to revenues of $47.5 million and operating income of $4.3 million in 2006.  Our net loss for 2007 was $2.3 million ($0.09 per share) versus net income of $3.0 million ($0.12 per share) in 2006. 

Our electrical construction segment in 2007 had revenues of $26.8 million and operating income of $688,000, compared to revenues of $36.4 million and operating income of $4.7 million in the prior year.  These decreases were primarily due to the electrical construction slowdown, as well as unanticipated costs associated with customer initiated delays arising during the course of certain projects.

Our real estate development segment had revenues of $537,000 and an operating loss of $1.2 million.  For 2006, revenues and operating income from this segment were $11.1 million and $2.6 million, respectively.  These decreases were due to the reversal in 2007 of $7.2 million of previously recognized revenues (and the related income) as a result of customer defaults on contracts to purchase condominium units, as well as a re-valuation of our unsold units.  This was partially offset by the sale of six units in the last quarter of 2007.

We are encouraged by increased activity in our electrical construction operations in the beginning of 2008.  We began the year with a backlog of $5.9 million (all of which is scheduled for completion in 2008) and through March received additional contracts totaling $12.0 million ($5.5 million of which is scheduled for completion in 2008).  In addition, work commenced in the fourth quarter on a multi-year project involving the upgrading of 46.2 miles of transmission lines to support load growth in central Florida.  Our optimism must be tempered, however, by a generally lower level of demand for electrical construction services in the southeast and by heightened competition for available projects. 

We plan to expand the geographic base of our electrical construction operation to include the western parts of the United States.  We have already been prequalified by certain utilities in that area.  We cannot at this point predict the timing and extent of this expansion.

The depth of the current real estate depression in Florida is unprecedented in recent history.  However, unlike many other developers, our exposure is quite manageable.  Our only current project (the first phase of Pineapple House) has been completed and, given market conditions, has been very well received.  Approximately half the units have been sold, and many are occupied.  Our continuing expenses on this project will not be unduly burdensome. 

We clearly have our work cut out for us in 2008.  But our sound financial condition – and the well-earned reputation of both our electrical construction and real estate development operations – position us well to take advantage of the opportunities and challenges ahead. 

We appreciate your continued support.

John H. Sottile

Chairman of the Board

April 24, 2008