MVCO Meadow Valley (MM)

MEADOW VALLEY CORPORATION (NASDAQ:MVCO) today announced financial results for the fourth quarter and year ended December 31, 2007. "Revenue in Meadow Valley's construction services business increased 15.5% for 2007 compared to 2006, and gross profit in this segment increased 12.6% for the year. This solid performance helped offset weakness in our construction materials segment caused by the decline in residential construction in the Las Vegas and Phoenix metropolitan markets," said Chief Executive Officer Bradley Larson. "While the outlook for residential construction remains cloudy, we are encouraged by the many opportunities for continued growth in our construction services business. The backlog of heavy construction contracts at December 31, 2007 was $172.4 million, including the $67.9 million contract awarded to Meadow Valley on December 21, 2007 to improve I-17 in Phoenix from the Loop 101 interchange to Jomax Road, compared to backlog of $89.5 million at the end of 2006. Many good projects are scheduled to come up for bid in both the Phoenix and Las Vegas areas in the months to come, and we are optimistic that Meadow Valley will continue to win its share of this business," Larson said. Fourth Quarter Results For the three months ended December 31, 2007, consolidated revenue was $49.7 million compared to $49.8 million for the three months ended December 31, 2006. Construction services revenue increased 10.8% to $34.3 million compared to $31.0 million a year earlier, reflecting scheduled progress on the larger value of highway construction projects underway in the fourth quarter of 2007 versus the same period last year. Construction materials revenue for the fourth quarter of 2007 decreased 18.8% to $15.1 million compared to $18.6 million for the fourth quarter of 2006. Consolidated gross margin was 8.6% for the fourth quarter of 2007 compared to 11.6% for the fourth quarter of 2006. Construction services gross margin was 10.7% for the fourth quarter of 2007 compared to 12.9% for the fourth quarter of 2006. Construction materials gross margin was 3.9% for the fourth quarter of 2007 compared to 9.5% for the fourth quarter of 2006. General and administrative expenses decreased to $2.5 million for the fourth quarter of 2007 compared to $3.3 million for the fourth quarter 2006. At December 31, 2007, Meadow Valley owned 2,645,212 shares, or approximately 69%, of the outstanding common stock of Ready Mix, Inc. (AMEX:RMX). Accordingly, RMI's operating results are consolidated in Meadow Valley's financial statements for financial reporting purposes. Net income after minority interest for the fourth quarter of 2007 was $1.6 million, or $0.30 per diluted share, based on approximately 5.3 million diluted shares outstanding. This compares to net income after minority interest for the fourth quarter of 2006 of $1.5 million, or $0.31 per diluted share, based on approximately 5.1 million diluted shares outstanding. Annual Results For the twelve months ended December 31, 2007, consolidated revenue increased 5.3% to $205.9 million compared to $195.5 million for 2006. Construction services revenue increased 15.5% to $129.3 million for 2007 versus $111.9 million for 2006. Construction materials revenue decreased 9.1% to $75.6 million for 2007 compared to $83.2 million for 2006. Revenue from Meadow Valley's construction materials testing subsidiary, which was founded in 2006, increased to $1.0 million compared to $0.4 million for the prior year. Net income after minority interest for 2007 was $4.1 million, or $0.77 per diluted share, based on approximately 5.3 million diluted shares outstanding. This compares to net income after minority interest for 2006 of $4.2 million, or $0.90 per diluted share, based on approximately 4.6 million diluted shares outstanding. Balance Sheet Highlights, New $10 Million Line of Credit At December 31, 2007, Meadow Valley reported working capital of $23.0 million, including cash, cash equivalents and restricted cash of $28.5 million. At December 31, 2006, working capital was $27.3 million, including cash, cash equivalents and restricted cash of $30.0 million. Shareholders' equity increased to $34.5 million at December 31, 2007 compared to $31.3 million at December 31, 2006. In October 2007, Meadow Valley consolidated its two lines of credit totaling $5,023,102 into one line of credit in the amount of $10.0 million, reduced its governing interest rate on its credit line from .75% plus prime rate to .25% plus prime rate and extended the term from December 31, 2007 to January 31, 2009. Conference�Call Meadow Valley has scheduled a conference call today at 11:00 a.m. EDT. To participate in the call, dial (212) 231-2908 and ask for the Meadow Valley conference call, reservation #21375956. A simultaneous webcast of the conference call may be accessed online at the Investor Information link of www.meadowvalley.com. A replay will be available after 2:00 p.m. EDT at this same Internet address. For a telephone replay, dial (800) 633-8284, reservation # 21375956 after 1:00 p.m. EDT. About Meadow Valley Meadow Valley Corporation, based in Phoenix, Arizona, 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 southern Nevada and Arizona. 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, the timing of new orders and contract awards, the Company's ability to successfully win contract bids, the impact of competitive products and pricing, excess or shortage of production capacity, bonding 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, 2006. 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, except as may be required by law. MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) � � � � � Three Months Ended � Twelve Months Ended December 31, December 31, � 2007 � � � 2006 � � 2007 � � � 2006 � Revenue: Construction services $ 34,337,250 $ 30,997,445 $ 129,262,421 $ 111,936,285 Construction materials 15,099,879 18,603,124 75,620,128 83,151,938 Construction materials testing � 290,858 � � 150,823 � � 1,036,455 � � 433,728 � � Total revenue � 49,727,987 � � 49,751,392 � � 205,919,004 � � 195,521,951 � � Cost of revenue: Construction services 30,653,082 26,993,203 117,924,528 101,866,540 Construction materials 14,518,380 16,831,319 69,465,646 73,945,571 Construction materials testing � 270,088 � � 174,901 � � 1,113,580 � � 399,752 � � Total cost of revenue � 45,441,550 � � 43,999,423 � � 188,503,754 � � 176,211,863 � � Gross profit: Construction services 3,684,168 4,004,242 11,337,893 10,069,745 Construction materials 581,499 1,771,805 6,154,482 9,206,367 Construction materials testing � 20,770 � � (24,078 ) � (77,125 ) � 33,976 � � Total gross profit 4,286,437 5,751,969 17,415,250 19,310,088 � General and administrative expenses � 2,530,582 � � 3,339,257 � � 11,813,302 � � 11,161,819 � � Income from operations � 1,755,855 � � 2,412,712 � � 5,601,948 � � 8,148,269 � � Other income (expense): Interest income 393,603 384,269 1,557,627 1,010,144 Interest expense (42,445 ) (91,886 ) (238,866 ) (338,886 ) Other income � 70,651 � � 33,251 � � 368,152 � � 73,629 � � � 421,809 � � 325,634 � � 1,686,913 � � 744,887 � � Income before income taxes and minority interest in consolidated subsidiary � 2,177,664 2,738,346 7,288,861 8,893,156 Income tax expense � (670,844 ) � (914,384 ) � (2,564,376 ) � (3,163,785 ) � Income before minority interest in consolidated subsidiary 1,506,820 1,823,962 4,724,485 5,729,371 Minority Interest in consolidated subsidiary � 60,648 � � � (280,991 ) � (663,679 ) � (1,563,449 ) � Net income $ 1,567,468 � $ 1,542,971 � $ 4,060,806 � $ 4,165,922 � � Net Income per common share Basic $ 0.31 � $ 0.32 � $ 0.79 � $ 0.96 � Diluted $ 0.30 � � $ 0.31 � � $ 0.77 � � $ 0.90 � � Weighted average common shares outstanding Basic � 5,137,030 � � 4,830,704 � � 5,129,275 � � 4,328,160 � Diluted � 5,304,571 � � � 5,056,513 � � � 5,306,294 � � � 4,621,124 � MEADOW VALLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS � � � � December 31, � 2007 � � � � 2006 � Assets: (unaudited) � Current assets: Cash and cash equivalents $ 28,146,028 $ 29,354,582 Restricted cash 327,886 605,243 Accounts receivable, net 28,565,983 25,990,763 Prepaid expenses and other 2,973,664 2,820,768 Inventory, net 1,232,478 1,366,534 Costs and estimated earnings in excess of billings on uncompleted contracts 567,013 1,254,860 Note receivable 110,824 106,499 Deferred tax asset � 580,103 � � 561,199 � � Total current assets 62,503,979 62,060,448 � Property and equipment, net 36,173,373 35,553,000 Refundable deposits 186,508 1,492,967 Note receivable, less current portion 424,536 535,360 Claims receivable � 2,463,880 � � 2,463,880 � � Total assets $ 101,752,276 � $ 102,105,655 � � � Liabilities and Stockholders' Equity: � Current liabilities: Accounts payable $ 15,288,168 $ 13,298,114 Accrued liabilities 6,907,633 7,569,928 Notes payable 4,216,498 4,837,628 Obligations under capital leases 102,100 332,898 Income tax payable 1,770,786 399,536 Billings in excess of costs and estimated earnings on uncompleted contracts � 11,248,107 � � 8,366,754 � � Total current liabilities 39,533,292 34,804,858 � Notes payable, less current portion 12,269,017 13,894,382 Obligations under capital leases, less current portion -- 102,100 Deferred tax liability � 2,610,836 � � 2,974,857 � � Total liabilities � 54,413,145 � � � 51,776,197 � � Commitments and contingencies � Minority interest in consolidated subsidiary � 12,812,403 � � 18,988,244 � � 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, 5,148,404 and 5,098,679 issued and outstanding 5,148 5,099 Additional paid-in capital 20,322,115 21,197,456 Capital adjustments (799,147 ) (799,147 ) Retained earnings � 14,998,612 � � 10,937,806 � � Total stockholders' equity � 34,526,728 � � 31,341,214 � � Total liabilities and stockholders' equity $ 101,752,276 � $ 102,105,655 �