MVCO Meadow Valley (MM)

Meadow Valley Corporation (Nasdaq:MVCO) today announced higher revenue and net income for the third quarter and first nine months of 2005 compared to the same periods of 2004. "Meadow Valley's improved financial performance is an encouraging sign of the progress we have made in re-establishing positive momentum at the Company. Our management team is confident and energized, our balance sheet has been substantially strengthened, and we look forward to taking advantage of the opportunities we see in both our construction services and construction materials businesses," said Chief Executive Officer Brad Larson. Third Quarter Results For the three months ended September 30, 2005, consolidated revenue increased 12% to $47.1 million from $42.1 million for the third quarter of 2004. Consolidated gross margin increased to 9.6% of revenue for this year's third quarter from 2.2% for the same period a year ago. Income from operations rose to $2.7 million for this year's third quarter compared to a loss from operations of $0.7 million for the third quarter of 2004. Net income for the third quarter of 2005 increased to $2.5 million, or $0.60 per diluted share. This compares to a net loss for the third quarter of 2004 of $0.4 million, or $0.11 per share. Construction services revenue increased 9% to $28.3 million for the third quarter of 2005 compared to $25.9 million for the third quarter of 2004. Construction materials revenue increased 16% to $18.7 million for the third quarter of 2005 from $16.2 million for the third quarter of 2004. On August 24, 2005, Meadow Valley's construction materials subsidiary, Ready Mix, Inc. (RMI) (AMEX:RMX), completed an initial public offering of approximately 1.8 million shares of its common stock at a price of $11.00 per share, including approximately 0.23 million shares to cover over-allotments. Meadow Valley currently owns approximately 2.0 million shares, or approximately 53%, of the outstanding common stock of RMI. Accordingly, RMI's operating results are consolidated in Meadow Valley's financial statements for financial reporting purposes. At September 30, 2005, Meadow Valley reported working capital of approximately $20.4 million, including cash and cash equivalents of $25.8 million. This compares to working capital at December 31, 2004, of $1.8 million, including cash and cash equivalents of $10.2 million. Total stockholders' equity at September 30, 2005, was $17.4 million, compared to $12.2 million at December 31, 2004. Nine Month Results For the first nine months of 2005, consolidated revenue increased to $140.5 million from $125.0 million for the first nine months of 2004. Net income for the first nine months of 2005 increased to $3.8 million, or $0.93 per diluted share. This compares to net income for the first nine months of 2004 of $0.05 million, or $0.01 per diluted share, which included a pre-tax gain of $1.7 million for the settlement of claims in New Mexico. Construction services revenue increased to $90.4 million for the first nine months of 2005 from $80.3 million for the same period last year, and construction materials revenue increased to $50.1 million from $44.7 million for the first nine months of 2004. Operations Review "In our construction services segment, we are clearly seeing the positive impact of our decisions to focus our activities in the Arizona and Southern Nevada regions, to increase the amount of work we do for private customers and to be increasingly selective in the nature of the projects we bid," Larson said. "Meadow Valley recently announced a new bonding relationship with Arch Insurance that provides us with sufficient bonding capacity to maintain our planned bidding activity. We hope to earn additional bonding capacity as we demonstrate further improvement in our financial and operational performance." Contract backlog in the construction services segment was approximately $73.9 million at September 30, 2005, compared to $62.5 million at June 30, 2005, and $103.6 million at September 30, 2004. In addition, Meadow Valley was the apparent low bidder on an additional $12.8 million of contracts that have yet to be awarded. "We believe that our backlog can support construction services revenue consistent with recent history. With ample bidding opportunities scheduled in both of our target markets, and the highway bill that was passed by Congress earlier this year that should help ensure funding going forward, we are optimistic about continued solid performance by our construction services business," Larson said. For construction materials, Larson said, "With the capital raised in RMI's recent public offering, we are pressing forward with our plans to add ready-mix concrete manufacturing and delivery capacity and expand our sand and gravel reserves." He noted that RMI currently operates three batch plants in the Las Vegas metro area, one in Moapa, Nev., and two plants in the Phoenix metro area, served by a fleet of 146 mixer trucks. Conference Call Meadow Valley has scheduled a conference call at 12:00 p.m. EST today. A simultaneous webcast of the conference call may be accessed online at the Investor Information link of www.MeadowValley.com or at www.earnings.com. A replay will be available after 2:00 p.m. EST at these same Internet addresses. For a telephone replay, dial 800-633-8284, reservation # 21266929 after 2:00 p.m. EST. About Meadow Valley Meadow Valley Corporation, based in Phoenix, Ariz., is engaged in the construction industry as both a contractor and a supplier of construction materials. The Company's construction services segment specializes in structural concrete construction of highway bridges and overpasses and the paving of highways and airport runways, primarily in Nevada and Arizona. The Company's construction materials operations provide concrete and gravel products primarily to other contractors. The Company's materials operations are concentrated in the Las Vegas and Phoenix metropolitan areas. Forward-Looking Statements Certain statements in this release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the following: changes in demand for the Company's products and services, product mix, the timing of new orders and contract awards, the impact of competitive products and pricing, excess or shortage of production capacity and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports, including the Company's Annual Report on Form 10-K for the year ended December 31, 2004. In addition, such statements could be affected by general industry and market conditions and growth rates and general domestic economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. -0- *T MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine Months Ended Three Months Ended September 30, September 30, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Revenue: Construction services $90,401,480 $80,320,938 $28,342,155 $25,885,201 Construction materials 50,051,011 44,659,716 18,741,321 16,218,601 ------------ ------------ ------------ ------------ Total revenue 140,452,491 124,980,654 47,083,476 42,103,802 ------------ ------------ ------------ ------------ Cost of revenue: Construction services 85,868,712 80,194,016 26,242,781 26,970,562 Construction materials 44,456,056 39,783,334 16,297,634 14,196,433 ------------ ------------ ------------ ------------ Total cost of revenue 130,324,768 119,977,350 42,540,415 41,166,995 ------------ ------------ ------------ ------------ Gross profit 10,127,723 5,003,304 4,543,061 936,807 General and administrative expenses 5,628,965 4,686,023 1,816,941 1,593,967 ------------ ------------ ------------ ------------ Income (loss) from operations 4,498,758 317,281 2,726,120 (657,160) ------------ ------------ ------------ ------------ Other income (expense): Interest income 352,542 48,038 115,580 2,059 Interest expense (273,990) (259,700) (90,362) (64,386) Other income (expense) 129,754 (28,795) 2,321 37,769 ------------ ------------ ------------ ------------ 208,306 (240,457) 27,539 (24,558) ------------ ------------ ------------ ------------ Income before income taxes and minority interest in consolidated subsidiary 4,707,064 76,824 2,753,659 (681,718) Income tax benefit (expense) (815,705) (28,809) (112,479) 254,633 ------------ ------------ ------------ ------------ Income before minority interest in consolidated subsidiary 3,891,359 48,015 2,641,180 (427,085) Minority interest in consolidated subsidiary 122,933 -- 122,933 -- ------------ ------------ ------------ ------------ Net income (loss) $3,768,426 $48,015 $2,518,247 $(427,085) ============ ============ ============ ============ Net income (loss) per common share Basic $1.02 $0.01 $0.66 $(0.12) ============ ============ ============ ============ Diluted $0.93 $0.01 $0.60 $(0.12) ============ ============ ============ ============ Weighted average common shares outstanding Basic 3,688,955 3,601,250 3,808,809 3,601,250 ============ ============ ============ ============ Diluted 4,066,387 3,744,830 4,198,742 3,601,250 ============ ============ ============ ============ MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2005 2004 ------------ ------------ Assets: (Unaudited) Current Assets: Cash and cash equivalents $25,822,825 $10,164,218 Restricted cash 1,870,344 1,268,449 Accounts receivable, net 23,751,685 22,163,719 Prepaid expenses and other 3,397,216 2,818,395 Inventory, net 835,035 871,112 Costs and estimated earnings in excess of billings on uncompleted contracts 2,095,085 449,358 Deferred tax asset, net 782,852 1,597,627 ------------ ------------ Total Current Assets 58,555,042 39,332,878 Property and equipment, net 24,283,331 21,541,946 Refundable deposits 155,502 21,780 Mineral rights and pit development, net 333,651 252,044 Claims receivable 3,521,080 3,521,080 Other receivables 115,000 115,000 ------------ ------------ Total Assets $86,963,606 $64,784,728 ============ ============ Liabilities and stockholders' equity: Current Liabilities: Accounts payable $17,034,273 $19,711,571 Accrued liabilities 5,612,934 4,907,554 Notes payable 5,494,022 5,212,187 Obligations under capital leases 538,466 531,746 Billings in excess of costs and estimated earnings on uncompleted contracts 9,515,301 7,219,762 ------------ ------------ Total Current Liabilities 38,194,996 37,582,820 Notes payable, less current portion 10,273,228 10,804,017 Obligations under capital leases, less current portion 574,864 981,799 Deferred tax liability 3,243,268 3,243,268 ------------ ------------ Total Liabilities 52,286,356 52,611,904 ------------ ------------ Commitments and contingencies Minority interest in consolidated subsidiary 17,273,752 -- ------------ ------------ Stockholders' Equity: Preferred stock -- $.001 par value; 1,000,000 shares authorized, none issued and outstanding -- -- Common stock -- $.001 par value; 15,000,000 shares authorized, 3,989,611 and 3,601,250 issued and outstanding 3,990 3,601 Additional paid-in capital 12,405,428 10,943,569 Capital adjustments (799,147) (799,147) Retained earnings 5,793,227 2,024,801 ------------ ------------ Total Stockholders' Equity 17,403,498 12,172,824 ------------ ------------ Total Liabilities and Stockholders' Equity $86,963,606 $64,784,728 ============ ============ *T