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 | | 4411 South 40th St., Ste. D11 Phoenix, Arizona 85040 |
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| | Telephone: (602) 437-5400 |
FOR IMMEDIATE RELEASE | | Fax: (602) 437-1681 |
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Investor Contact: | | Company Contact: |
Neil Berkman Associates | | Bradley E. Larson |
(310) 277-5162 | | Chief Executive Officer |
info@BerkmanAssociates.com | | www.MeadowValley.com |
Meadow Valley Reports First Quarter Results
Provides Updated Claims Data
PHOENIX, ARIZONA, May 14, 2004 . . .MEADOW VALLEY CORPORATION (NASDAQ:MVCO)today announced its financial results for the first quarter of 2004.
First Quarter Results
For the three months ended March 31, 2004, revenue increased to $39.2 million from $32.2 million for the first quarter of 2003. Net income for the first quarter of 2004 was $0.44 million, or $0.12 per diluted share. This compares to net income of $0.02 million, or $0.01 per diluted share, for the same period a year earlier.
Segment Information
Revenue from Meadow Valley’s construction materials business increased 38% to $13.6 million for this year’s first quarter compared to $9.8 million for the first quarter of 2003. Gross margin in this segment improved to 10% compared to 8.7% for the prior year. “The addition of 10 ready-mix trucks to our fleet during this year’s first quarter contributed significantly to the gains in revenue and gross margin. The growth reflected increases in both unit volumes and prices for our construction materials, which is an encouraging sign of strong economic conditions in our Phoenix and Las Vegas markets,” said Bradley E. Larson, chief executive officer.
Revenue from the Company’s construction services business increased to $25.6 million for this year’s first quarter from $22.4 million for the same period last year. Gross margin in this segment was approximately 4.3% compared to 3.8% for the prior year. During January 2004, the Company reached a $7 million settlement agreement with the New Mexico State Highway and Transportation Department (NMSHTD) on three of five disputed heavy construction projects it has completed in New Mexico. The settlement resulted in a net gain of approximately $1.7 million, which was recorded in construction services revenue for this year’s first quarter.
Backlog
The backlog of heavy construction projects at March 31, 2004 was $53.9 million compared to $73.4 million at March 31, 2003. Subsequent to the end of this year’s first quarter, the Company has been the successful bidder on approximately $26 million in additional heavy construction contracts.
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Meadow Valley Reports First Quarter Results
May 14, 2004
Page Two
Claims Update
The Company is continuing to pursue its claims on the remaining two projects in New Mexico, as well as the claim involving a project for the Clark County Department of Public Works in Las Vegas. Recently, a partial ruling by a majority of the three-member arbitration panel rejected a significant portion of the Clark County claim that was primarily asserted by a subcontractor. Hearings are scheduled to reconvene in July 2004.
As a result of the settlement with the NMSHTD mentioned above, and factoring in the arbitration panel’s decision on the Clark County claim, the Company’s portion of the total claims was reduced to $10.5 million from $14.6 million, and cumulative claims receivable on its balance sheet (to offset a portion of costs incurred on the claims) declined to $3.5 million at March 31, 2004 from $7.6 million at March 31, 2003.
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 while the Company’s construction materials operations provide concrete, gravel products and asphalt to itself and to other contractors. The Company’s current operations are concentrated in the Las Vegas and Phoenix, and Salt Lake City 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 onForm 10-K for the year ended December 31, 2003. 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.
(tables attached)
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MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | |
| | Three Months Ended |
| | March 31,
|
| | 2004
| | 2003
|
Revenue: | | | | | | | | |
Construction Services | | $ | 25,577,586 | | | $ | 22,363,021 | |
Construction Materials | | | 13,591,147 | | | | 9,831,090 | |
| | | | | | | | |
Total revenue | | | 39,168,733 | | | | 32,194,111 | |
| | | | | | | | |
Cost of revenue: | | | | | | | | |
Construction Services | | | 24,466,026 | | | | 21,513,704 | |
Construction Materials | | | 12,238,732 | | | | 8,974,239 | |
| | | | | | | | |
Total cost of revenue | | | 36,704,758 | | | | 30,487,943 | |
| | | | | | | | |
Gross profit | | | 2,463,975 | | | | 1,706,168 | |
General and administrative expenses | | | 1,672,519 | | | | 1,579,666 | |
| | | | | | | | |
Income from operations | | | 791,456 | | | | 126,502 | |
| | | | | | | | |
Other income (expense): | | | | | | | | |
Interest income | | | 11,947 | | | | 17,751 | |
Interest expense | | | (84,286 | ) | | | (107,852 | ) |
Other expense | | | (20,456 | ) | | | (4,955 | ) |
| | | | | | | | |
| | | (92,795 | ) | | | (95,056 | ) |
| | | | | | | | |
Income before income taxes | | | 698,661 | | | | 31,446 | |
Income tax expense | | | (261,998 | ) | | | (11,792 | ) |
| | | | | | | | |
Net income | | $ | 436,663 | | | $ | 19,654 | |
| | | | | | | | |
Basic net income per common share | | $ | 0.12 | | | $ | 0.01 | |
| | | | | | | | |
Diluted net income per common share | | $ | 0.12 | | | $ | 0.01 | |
| | | | | | | | |
Basic weighted average common shares outstanding | | | 3,601,250 | | | | 3,568,659 | |
| | | | | | | | |
Diluted weighted average common shares outstanding | | | 3,754,754 | | | | 3,568,659 | |
| | | | | | | | |
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
| | March 31,
| | December 31,
|
| | 2004
| | 2003
|
| | (Unaudited) | | | | |
Assets: | | | | | | | | |
Current Assets: | | | | | | | | |
Cash and cash equivalents | | $ | 5,686,442 | | | $ | 4,738,388 | |
Restricted cash | | | 1,587,432 | | | | 1,844,891 | |
Accounts receivable, net | | | 23,674,980 | | | | 20,664,022 | |
Claims receivable | | | — | | | | 4,101,898 | |
Prepaid expenses and other | | | 1,977,692 | | | | 2,196,899 | |
Inventory, net | | | 1,017,584 | | | | 1,249,118 | |
Land held for sale | | | — | | | | 264,738 | |
Costs and estimated earnings in excess of billings on uncompleted contracts | | | 1,752,897 | | | | 1,463,309 | |
Deferred tax asset | | | 981,898 | | | | 1,243,896 | |
| | | | | | | | |
Total Current Assets | | | 36,678,925 | | | | 37,767,159 | |
Property and equipment, net | | | 13,180,197 | | | | 13,127,675 | |
Refundable deposits | | | 194,299 | | | | 94,299 | |
Mineral rights and pit development, net | | | 294,843 | | | | 309,110 | |
Claims receivable | | | 3,521,080 | | | | 3,521,080 | |
| | | | | | | | |
Total Assets | | $ | 53,869,344 | | | $ | 54,819,323 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity: | | | | | | | | |
Current Liabilities: | | | | | | | | |
Accounts payable | | $ | 17,269,110 | | | $ | 18,646,857 | |
Accrued liabilities | | | 4,034,267 | | | | 4,563,816 | |
Notes payable | | | 3,452,914 | | | | 3,512,286 | |
Obligations under capital leases | | | 787,110 | | | | 878,280 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | | | 6,024,090 | | | | 4,955,454 | |
| | | | | | | | |
Total Current Liabilities | | | 31,567,491 | | | | 32,556,693 | |
Deferred tax liability | | | 2,604,652 | | | | 2,604,652 | |
Notes payable, less current portion | | | 6,753,229 | | | | 6,999,729 | |
Obligations under capital leases, less current portion | | | 934,125 | | | | 1,085,064 | |
| | | | | | | | |
Total Liabilities | | | 41,859,497 | | | | 43,246,138 | |
| | | | | | | | |
Commitments and contingencies 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; 3,601,250 and 3,601,250 issued and outstanding | | | 3,601 | | | | 3,601 | |
Additional paid-in capital | | | 10,943,569 | | | | 10,943,569 | |
Capital adjustments | | | (799,147 | ) | | | (799,147 | ) |
Retained earnings | | | 1,861,824 | | | | 1,425,162 | |
| | | | | | | | |
Total Stockholders’ Equity | | | 12,009,847 | | | | 11,573,185 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 53,869,344 | | | $ | 54,819,323 | |
| | | | | | | | |