Meadow Valley 8-K Meadow Valley Reports First Quarter Results

Exhibit 99.01

 
4602 East Thomas Road
Phoenix, Arizona 85018
Telephone: (602) 437-5400
Fax: (602) 437-1681

	Investor Contact:	Company Contact:
FOR IMMEDIATE RELEASE	Neil Berkman Associates (310) 826-5051info@BerkmanAssociates.com	Bradley E. Larson Chief Executive Officerwww.meadowvalley.com

Meadow Valley Reports First Quarter Results

     PHOENIX, ARIZONA, May 9, 2007 . . .MEADOW VALLEY CORPORATION (NASDAQ:MVCO) today announced financial results for the first quarter of 2007.

     For the three months ended March 31, 2007, consolidated revenue decreased to $42.6 million compared to $45.7 million for the first quarter of 2006.

     Construction services revenue decreased to $22.7 million compared to $24.6 million, as project schedules required less work to be performed in this year’s first quarter than last year. “We are encouraged by prospects for renewed growth in construction services this year based on the increase in backlog and continued strength in the non-residential sectors of the construction industry. The increase in our bonding capacity has improved our ability to compete for new contracts. Many new projects are scheduled to come up for bid in coming months, which is another encouraging sign for the future,” said Chief Executive Officer Bradley Larson. Contract backlog at March 31, 2007 increased to $90.2 million, compared to $64.5 million at March 31, 2006. In April 2007, Meadow Valley was awarded new construction contracts totaling approximately $47.5 million.

     Construction materials revenue decreased to $19.7 million compared to $21.1 million, primarily reflecting the return to a more normal winter weather pattern this year compared to last, when unusually fine and dry conditions resulted in minimal weather-related delivery disruptions, as well as the slowdown in the housing industry which began to affect demand for construction materials in the second quarter of 2006. Cubic yards of concrete sold decreased approximately 12.0% compared to last year’s first quarter, and average unit sales price increased 9.5%. “Residential construction activity in our primary Phoenix and Las Vegas markets improved slightly in the first quarter of 2007 compared to the fourth quarter of 2006, and we continue to believe that the worst of the decline is behind us,” Larson said.

     Consolidated gross margin was 9.3% for the first quarter of 2007 compared to 10.4% for the first quarter of 2006. Construction services gross margin was 8.4% for this year’s first quarter, unchanged compared to the first quarter of 2006. Construction materials gross margin was 10.7% compared to 12.6%, reflecting lower volume and higher fixed costs associated with expansion programs initiated in 2006.

     General and administrative expenses were $3.0 million for the first quarter of 2007 compared to $2.8 million a year earlier.

     Net income after minority interest for the first quarter of 2007 decreased to $0.5 million, or $0.10 per diluted share, based on approximately 5.3 million diluted shares outstanding. This compares to net income after minority interest for the first quarter of 2006 of $0.9 million, or $0.19 per diluted share, based on approximately 4.5 million diluted shares outstanding. Meadow Valley’s construction materials subsidiary, Ready Mix, Inc. (AMEX:RMX), completed an initial public offering of its common stock in August 2005. 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.

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Meadow Valley Reports First Quarter Results
May 9, 2007
Page Two

     At March 31, 2007, Meadow Valley reported working capital of $28.3 million, including cash, cash equivalents and restricted cash of $29.9 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 $32.1 million compared to $31.3 million at December 31, 2006.

Conference Call

     Meadow Valley has scheduled a conference call today at 12:00 p.m. ET. 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. ET at these same Internet addresses. For a telephone replay, dial (800) 633-8284, reservation # 21337002 after 2:00 p.m. ET.

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, 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, 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.

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MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three months ended
	March 31,
	2007			2006
Revenue:
Construction services	$	22,723,694		$	24,619,028
Construction materials		19,710,557			21,130,640
Construction materials testing		214,424			—
Total revenue		42,648,675			45,749,668
Cost of revenue:
Construction services		20,812,675			22,544,073
Construction materials		17,609,543			18,457,682
Construction materials testing		273,487			—
Total cost of revenue		38,695,705			41,001,755
Gross profit		3,952,970			4,747,913
General and administrative expenses		3,016,976			2,758,942
Income from operations		935,994			1,988,971
Other income (expense):
Interest income		369,283			189,256
Interest expense		(78,264	)		(75,125	)
Other income		101,705			20,738
		392,724			134,869
Income before income taxes and minority interest in consolidated subsidiary		1,328,718			2,123,840
Income tax expense		(471,793	)		(784,326	)
Income before minority interest in consolidated subsidiary		856,925			1,339,514
Minority interest in consolidated subsidiary		327,031			475,556
Net income	$	529,894		$	863,958
Basic net income per common share	$	0.10		$	0.21
Diluted net income per common share	$	0.10		$	0.19
Basic weighted average common shares outstanding		5,120,296			4,154,444
Diluted weighted average common shares outstanding		5,295,852			4,476,559

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2007			2006
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	29,456,428		$	29,354,582
Restricted cash		477,389			605,243
Accounts receivable, net		29,866,664			25,990,763
Prepaid expenses and other		2,256,174			2,820,768
Inventory, net		1,184,462			1,366,534
Costs and estimated earnings in excess of billings on uncompleted contracts		1,614,975			1,254,860
Note receivable		107,565			106,499
Deferred tax asset		568,444			561,199
Total current assets		65,532,101			62,060,448
Property and equipment, net		37,657,826			35,553,000
Refundable deposits		501,023			1,492,967
Note receivable, less current portion		508,066			535,360
Claims receivable		2,463,880			2,463,880
Total assets	$	106,662,896		$	102,105,655
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	15,664,869		$	13,298,114
Accrued liabilities		4,887,985			7,569,928
Notes payable		5,105,870			4,837,628
Obligations under capital leases		216,924			332,898
Income tax payable		325,483			399,536
Billings in excess of costs and estimated earnings on uncompleted contracts		10,966,391			8,366,754
Total current liabilities		37,167,522			34,804,858
Notes payable, less current portion		15,014,748			13,894,382
Obligations under capital leases, less current portion		76,043			102,100
Deferred tax liability		2,974,857			2,974,857
Total liabilities		55,233,170			51,776,197
Commitments and contingencies
Minority interest in consolidated subsidiary		19,315,275			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, 5,125,760 and 5,098,679 issued and outstanding		5,126			5,099
Additional paid-in capital		21,440,772			21,197,456
Capital adjustments		(799,147	)		(799,147	)
Retained earnings		11,467,700			10,937,806
Total stockholders’ equity		32,114,451			31,341,214
Total liabilities and stockholders’ equity	$	106,662,896		$	102,105,655