UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
Commission File No 0-25428
MEADOW VALLEY CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 88-0328443
(State or other Jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
4411 South 40th Street, Suite D-11
Phoenix, Arizona 85040
(602) 437-5400
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filings
requirements for the past 90 days. Yes [X] No [ ]
Number of shares outstanding of each of the registrant's classes of common
stock as of April 30, 2002:
Common Stock, $.001 par value
3,559,938 shares
MEADOW VALLEY CORPORATION
INDEX
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2002
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited) - Three Months Ended
March 31, 2002 and March 31, 2001 3
Condensed Consolidated Balance Sheets - As of March 31, 2002 (Unaudited) and
December 31, 2001 4
Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended
March 31, 2002 and March 31, 2001 5
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosure About Market Risk 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 6. Exhibits and Reports on Form 8-K 20
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------------------------------------
2002 2001
------------------ -----------------
Revenue $ 35,005,133 $ 35,353,537
Cost of revenue 33,362,759 35,162,933
------------------ -----------------
Gross profit 1,642,374 190,604
General and administrative expenses 1,528,277 1,738,681
------------------ -----------------
Income (loss) from operations 114,097 (1,548,077)
------------------ -----------------
Other income (expense):
Interest income 25,652 62,571
Interest expense (101,338) (80,544)
Other expense (5,920) (61,726)
------------------ -----------------
(81,606) (79,699)
------------------ -----------------
Income (loss) before income taxes 32,491 (1,627,776)
Income tax benefit (expense) (12,184) 610,417
------------------ -----------------
Net income (loss) $ 20,307 $ (1,017,359)
================== =================
Basic net income (loss) per common share $ 0.01 $ (0.29)
================== =================
Diluted net income (loss) per common share $ 0.01 $ (0.29)
================== =================
Basic weighted average common shares outstanding 3,559,938 3,559,938
================== =================
Diluted weighted average common shares outstanding 3,559,938 3,559,938
================== =================
3
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2002 2001
------------------ ------------------
Assets: (Unaudited)
Current Assets:
Cash and cash equivalents $ 321,473 $ 2,228,506
Restricted cash 2,101,459 2,401,548
Accounts receivable, net 22,923,434 21,377,904
Prepaid expenses and other 276,610 404,780
Inventory 3,274,282 3,365,750
Costs and estimated earnings in excess of billings on
uncompleted contracts 6,061,046 5,294,054
------------------ ------------------
Total Current Assets 34,958,304 35,072,542
Property and equipment, net 15,840,588 15,267,791
Assets held for sale 3,501,092 3,213,484
Deferred tax asset 1,957,923 1,957,923
Refundable deposits 55,110 55,110
Mineral rights and pit development, net 532,402 533,608
Claims receivable 5,968,026 5,968,026
Other assets 80,558 80,558
------------------ ------------------
Total Assets $ 62,894,003 $ 62,149,042
================== ==================
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable $ 24,380,105 $ 27,025,984
Accrued liabilities 2,340,328 1,811,998
Notes payable 2,362,712 1,685,634
Obligations under capital leases 1,113,047 1,118,055
Income tax payable 12,184 -
Billings in excess of costs and estimated earnings on
uncompleted contracts 6,990,256 4,625,657
------------------ ------------------
Total Current Liabilities 37,198,632 36,267,328
Deferred tax liability 2,718,734 2,718,734
Notes payable, less current portion 9,558,636 9,484,479
Obligations under capital leases, less current portion 2,683,388 2,964,195
------------------ ------------------
Total Liabilities 52,159,390 51,434,736
------------------ ------------------
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,
3,559,938 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 586,590 566,283
------------------ ------------------
Total Stockholders' Equity 10,734,613 10,714,306
------------------ ------------------
Total Liabilities and Stockholders' Equity $ 62,894,003 $ 62,149,042
================== ==================
4
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
--------------------------------------
2002 2001
------------------ ----------------
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers $ 35,051,290 $ 30,432,046
Cash paid to suppliers and employees (36,446,783) (33,316,446)
Interest received 25,652 62,571
Interest paid (101,338) (80,544)
------------------ ----------------
Net cash used in operating activities (1,471,179) (2,902,373)
------------------ ----------------
Cash flows from investing activities:
Decrease (increase) in restricted cash 300,089 (354)
Proceeds from sale of property and equipment 89,424 65,634
Purchase of property and equipment (33,442) (112,966)
Purchase of mineral rights and pit development - 41,417
------------------ ----------------
Net cash provided by (used in) investing activities 356,071 (6,269)
------------------ ----------------
Cash flows from financing activities:
Proceeds received from note payable - 2,004,126
Repayment of notes payable (506,110) (364,909)
Repayment of capital lease obligations (285,815) (273,873)
------------------ ----------------
Net cash provided by (used in) financing activities (791,925) 1,365,344
------------------ ----------------
Net decrease in cash and cash equivalents (1,907,033) (1,543,298)
Cash and cash equivalents at beginning of period 2,228,506 1,822,598
------------------ ----------------
Cash and cash equivalents at end of period $ 321,473 $ 279,300
================== ================
5
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
Three Months Ended
March 31,
-------------------------------------
2002 2001
----------------- ----------------
Increase (Decrease) in Cash and Cash Equivalents (Continued):
Reconciliation of Net Income (Loss) to Net Cash Used in
Operating Activities:
Net Income (Loss) $ 20,307 $ (1,017,359)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization 685,651 640,257
Gain on sale of property and equipment (57,484) (3,554)
Allowance for doubtful accounts 30,973 42,226
Changes in Operating Assets and Liabilities:
Accounts receivable (1,576,503) (3,562,692)
Prepaid expenses and other 128,170 67,061
Inventory (194,535) (63,168)
Income tax receivable - (610,417)
Costs and estimated earnings in excess of billings on
uncompleted contracts (766,992) (1,636,199)
Refundable deposits - 31,731
Accounts payable (2,645,879) 2,796,911
Accrued liabilities 528,330 112,376
Income tax payable 12,184 -
Billings in excess of costs and estimated earnings on
uncompleted contracts 2,364,599 300,454
----------------- ----------------
Net cash used in operating activities $ (1,471,179) $ (2,902,373)
================= ================
6
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business:
Nature of Corporation:
Meadow Valley Corporation (the "Company") was organized under the laws of
the State of Nevada on September 15, 1994. The principal business purpose of the
Company is to operate as the holding company of Meadow Valley Contractors, Inc.
("MVCI") and Ready Mix, Inc. ("RMI"). MVCI is a general contractor, primarily
engaged in the construction of structural concrete highway bridges and
overpasses, and the paving of highways and airport runways in the states of
Nevada, Arizona and Utah. RMI manufactures and distributes ready mix concrete in
the Las Vegas, NV and Phoenix, AZ metropolitan areas. Formed by the Company, RMI
commenced operations in 1997.
Liquidity:
The Company incurred income (loss) from operations for the three months
ended March 31, 2002 and 2001 of $20,307 and $(1,017,359) and has used cash in
operating activities of $(1,471,179) and $(2,902,373) for the three months ended
March 31, 2002 and 2001. In order to improve working capital, the Company
executed a definite agreement on March 22, 2002 to sell certain pit assets to
United Metro Materials Inc. ("United Metro"). On May 9, 2002, the Company closed
the transaction with United Metro. The transaction was for a sale price of
$3,000,000 subject to a $250,000 hold-back that may be paid within the next
twenty-four months if sales volumes, measured in tons of materials sold, meet or
exceed a stipulated minimum amount. In addition, within seven days of closing,
the ending inventory of finished product will be measured and paid for and is
expected to be between $1.0 and $1.5 million. After deduction of the hold-back
amount and approximately $212,000 of debt paid off by United Metro, the net cash
received by the Company in conjunction with this transaction, depending upon
final inventory quantities, will range from $3.5 to $4.0 million. United Metro
also assumed approximately $1.5 million in operating lease obligations.
Accordingly, $3,501,092 of assets consisting primarily of inventory and
equipment, have been classified as assets held for sale on the accompanying 2002
balance sheet. During 2002, the Company may also consider the disposal of other
assets as a means to increase working capital. In addition, the Company has
engaged the services of AMG Financing Capital, Inc. to find potential sources of
financing to meet future financial obligations. Should the Company not be able
to sell other assets or raise additional financing to generate sufficient cash
flows from operations, management of the Company will need to develop
alternative strategies that may ultimately impact the operations and financial
condition of the Company.
2. Presentation of Interim Information:
The amounts included in this report are unaudited; however, in the opinion
of management, all adjustments necessary for a fair statement of results for the
stated periods have been included. These adjustments are of a normal recurring
nature. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted as permitted by SEC rules and
regulations. It is suggested that these condensed consolidated financial
statements be read in conjunction with the audited financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001 under the Securities Exchange Act of 1934 as filed with
the Securities and Exchange Commission. The results of operations for the three
months ended March 31, 2002 are not necessarily indicative of operating results
for the entire year.
7
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Revenue and Cost Recognition:
Revenues and costs from fixed-price and modified fixed-price construction
contracts are recognized for each contract on the percentage-of-completion
method, measured by the percentage of costs incurred to date to the estimated
total direct costs. Direct costs include, among other things, direct labor,
field labor, equipment rent, subcontracting, direct materials and direct
overhead. General and administrative expenses are accounted for as period costs
and are, therefore, not included in the calculation of the estimates to complete
construction contracts in progress. Project losses are provided in the period in
which such losses are determined, without reference to the
percentage-of-completion. As contracts can extend over one or more accounting
periods, revisions in costs and earnings estimated during the course of the work
are reflected during the accounting period in which the facts that required such
revision become known.
Claims for additional contract revenue are recognized only to the extent
that contract costs relating to the claim have been incurred and evidence
provides a legal basis for the claim. As of March 31, 2002, the total amount of
claims that have been submitted or soon-to-be submitted was approximately
$44,016,324. Of that sum, the Company's portion of the claims total was
approximately $27,454,956 and the balance of $16,561,368 pertains to prime
contractor or subcontractors' claims. Total claim amounts reported by the
Company in its filings are approximate and are subject to revision as final
documentation progresses. Accordingly, the approximate total claim amount is now
$44,016,324 of which $27,454,956 pertains to the Company and the balance of
$16,561,368 applies to subcontractors or the prime contractor. This revised
approximation of total claim amount compares to previously reported amounts of
$54,407,238, $29,396,539 and $25,010,699 respectively. Relative to the
aforementioned claims, the Company has recorded $7,754,448 in claim revenue to
offset costs incurred to-date on the claims. In the accompanying March 31, 2002
balance sheet, claims receivable in the amount of $5,968,026 has been recorded
in connection with claims filed. In addition, the Company has also recorded
approximately $1,817,831 for unpaid quantities, unpaid change orders, and
pending change orders in advance of receipt. Although the Company believes these
amounts represent a reasonably conservative posture, any claims proceeds and
payments for previously unpaid quantities, unpaid change orders and pending
change orders ultimately paid to the Company less than $9,572,279 will reduce
net income. Conversely, a payment for those same items in excess of $9,572,279
will increase net income.
4. Recent Accounting Pronouncements:
In June 2001, the Financial Accounting Standard Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142, the Company reclassify the carrying amounts
of intangible assets and goodwill based on the criteria in SFAS 141.
SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and to the
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.
8
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Recent Accounting Pronouncements (Continued):
SFAS 143, Accounting for Asset Retirement Obligations, was issued in
June 2001 and is effective for fiscal years beginning after June 15, 2002. SFAS
143 requires that any legal obligation related to the retirement of long-lived
assets be quantified and recorded as a liability with the associated asset
retirement cost capitalized on the balance sheet in the period it is incurred
when a reasonable estimate of the fair value of the liability can be made.
SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, was issued in August 2001 and is effective for fiscal years beginning
after December 15, 2001. SFAS 144 provides a single, comprehensive accounting
model for impairment and disposal of long-lived assets and discontinued
operations.
The adoption of SFAS 141, SFAS 142 and SFAS 144 did not have a material
effect on the Company's financial statements.
The Company does not anticipate the adoption of SFAS 143 to have a
material effect on the Company's financial statements.
5. Notes Payable:
Summary of first quarter additions to notes payable and its balance at
March 31, 2002:
Note payable, interest rate at 6.65%, with monthly
payments of $25,515, due 1/18/05, collateralized
by equipment $ 788,686
Note payable, interest rate at 6.9%, with monthly
payments of $10,238, due 3/1/05, collateralized
by equipment 323,720
Note payable, interest rate at 7.9%, with monthly
payments of $3,496, due 2/10/04, collateralized
by equipment 77,891
Note payable, interest rate at 0%, with monthly
payments of $1,344, due 2/7/03, collateralized
by equipment 13,441
-----------------
1,203,738
Less: current portion (419,709)
-----------------
$ 784,029
=================
Following are maturities of the above long-term debt for each of the
next 3 years:
2003 $ 419,709
2004 427,667
2005 356,362
-----------------
$ 1,203,738
=================
9
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Line of Credit:
In July 2000, the Company entered into a revolving loan agreement
("line of credit"). Under the terms of the agreement, the Company may borrow up
to $7,000,000 at Chase Manhattan Bank's prime, plus .25% through December 31,
2001 at which time the line of credit was to convert to a term agreement
requiring monthly principal and interest payments through December 31, 2005. The
line of credit is collateralized by all of the Company's assets. Under the terms
of the line of credit, the Company is required to maintain a certain level of
tangible net worth. In addition, the Company is also required to maintain a
ratio of total debt to tangible net worth. As of March 31, 2002, the Company was
not in compliance with the tangible net worth covenant, but was in compliance
with the ratio of total debt to tangible net worth. Effective March 2002, the
Company amended the line of credit agreement. Under the terms of the amended
agreement, the interest rate increased to Chase Manhattan Bank's prime, plus
1.5% through January 1, 2003 at which time the line of credit converts to a term
agreement requiring monthly principal and interest payments through December 31,
2006. In connection with the amendment, the Company obtained a waiver from
non-compliance with the tangible net worth covenant for the period from December
31, 2001 to January 1, 2003. As of March 31, 2002, the Company had withdrawn the
entire $7,000,000 from the line of credit.
7. Statement of Cash Flows:
Non-Cash Investing and Financing Activities:
The Company recognized investing and financing activities that
affected assets, liabilities, and equity, but did not result in cash receipts or
payments. These non-cash activities are as follows:
During the three months ended March 31, 2002, the Company financed the
purchase of equipment in the amount of $1,257,345.
8. Litigation and Claim Matters:
The Company is a party to legal proceedings in the ordinary course of its
business. With the exception of those matters detailed below, the Company
believes that the nature of these proceedings (which generally relate to
disputes between the Company and its subcontractors, material suppliers or
customers regarding payment for work performed or materials supplied) are
typical for a construction firm of its size and scope, and no other pending
proceedings are material to its financial condition.
The following proceedings represent matters that may become material
and have already been or may soon be referred to legal counsel for further
action:
Requests for Equitable Adjustment to Construction Contracts. The Company has or
-----------------------------------------------------------
will make claims as described below on the following contracts:
(1) Five contracts with the New Mexico State Highway and
Transportation Department - The approximate total value of claims
on these projects is $24,880,927 of which approximately
$21,204,824 is on behalf of MVCI and the balance of $3,676,103 is
on behalf of the prime contractor or subcontractors. The primary
issues are changed conditions, plan errors and omissions,
contract modifications and associated delay costs. In addition,
the projects were not completed within the adjusted contract time
because of events giving rise to the claims. The prosecution of
the claims will include the appropriate extensions of contract
time to offset any potential liquidated damages.
(2) Clark County, Nevada - The approximate total value of claims on
this project is $19,135,397 of which approximately $12,885,265 is
on behalf of subcontractors. The primary issues are changed
conditions, plan errors and omissions, contract modifications and
associated delay costs.
10
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Litigation and Claim Matters (Continued):
The above claims combined total approximately $44,016,324. Of that
sum, the Company's portion of the claims total approximately $27,454,956 and the
balance of $16,561,368 pertains to prime contractor or subcontractors' claims.
Total claim amounts reported by the Company in its filings are approximate and
are subject to revision as final documentation progresses. Accordingly, the
approximate total claim amount is now $44,016,324 of which $27,454,956 pertains
to the Company and the balance of $16,561,368 applies to subcontractors or the
prime contractor. This revised approximation of total claim amount compares to
previously reported amounts of $54,407,238, $29,396,539 and $25,010,699
respectively. Relative to the aforementioned claims, the Company has recorded
approximately $7,754,448 in claim revenue to offset costs incurred to-date on
the claims. In addition, the Company has also recorded approximately $1,817,831
for unpaid quantities, unpaid change orders, and pending change orders in
advance of receipt. Although the Company believes these amounts represent a
reasonably conservative posture, any claims proceeds and payments for previously
unpaid quantities, unpaid change orders and pending change orders ultimately
paid to the Company less than $9,572,279 will reduce net income. Conversely, a
payment for those same items in excess of $9,572,279 will increase net income.
Lawsuits Filed Against Meadow Valley Contractors, Inc. or Meadow Valley
-----------------------------------------------------------------------
Corporation
-----------
(1) Innovative Construction Systems, Inc. ("ICS"), District Court,
Clark County, NV - ICS was a subcontractor to MVCI on several
projects. ICS failed to make payments of payroll, pension fund
contributions and other taxes for which the Internal Revenue
Service garnished any future payments due ICS on MVCI projects.
As a result, ICS failed to supply labor to perform its work and
defaulted on its subcontracts. MVCI terminated the ICS
subcontracts and performed the work with MVCI personnel. ICS
alleges it was wrongfully terminated and is asserting numerous
claims for damages. ICS claims against MVCI total approximately
$15,000,000. The Company does not believe ICS' claims have merit
and intends to vigorously defend against these claims and will
eventually seek to recover the damages ICS has caused the Company
through its failure to perform.
(2) Independent from, but related to the ICS issue, the Nevada State
Labor Commissioner ("Commission") filed a lawsuit against MVCI to
seek payment from MVCI, as the prime contractor, for wages and
fringes owed but not paid by ICS, MVCI's subcontractor. The
Commission seeks payment of approximately $452,921 in alleged
unpaid wages and fringe benefits. Prior to the filing of the
complaint by the Commission, MVCI was attempting to reach
settlement as the Company believes that its liabilities are less
than the $452,921 being sought by the Commission. Accordingly,
the Company intends to defend itself against the excessive
assessment of liability and seek to reduce the liability.
(2) AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV -
AnA supplied equipment to MVCI on a project under terms of a
variety of agreements. AnA is suing MVCI for non-payment. MVCI
has counter-sued for cost overruns deemed to be the
responsibility of AnA. AnA's suit against MVCI is for
approximately $3,245,289. MVCI's countersuit against AnA is for
approximately $2,000,000. AnA has also filed a complaint on two
other projects completed in 1997 where they were a subcontractor
to MVCI in the same jurisdiction in the amount of approximately
$715,000 for changed conditions. The Company does not believe
AnA's claims have merit and intends to vigorously defend against
these claims.
(3) Progressive Contracting Inc. ("PCI"), District Court, Clark
County, NV - PCI was a subcontractor to MVCI on a project where
there is a dispute with the owner regarding delays to the
project. PCI claims they were damaged by these delays in an
amount in excess of $300,000. The Company believes that under the
terms of the contract with PCI they are only entitled to
compensation for the delays if MVCI is compensated by the owner.
MVCI has submitted PCI's claims to the owner and they are
included in the total claim amount.
(4) The Company is defending a claimed preference in connection with
a payment made to it by an insurance company in the approximate
amount of $100,000. The Company believes that the payment is not
a preference, and is vigorously defending the action.
11
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Litigation and Claim Matters (Continued):
(5) The Company and all of its directors were served with a civil
complaint by Silver State Materials Corp. ("Silver State") and
Cyrus Spurlino (collectively "Plaintiffs"). The complaint
primarily alleges that the Company's October 1995 Registration
Statement on Form S-1 was misleading in stating that the
Company's directors were elected on a staggered basis because the
Company's Bylaws, providing for such staggered term, were not so
amended until April 1997, and that such amendment was not filed
with the Securities and Exchange Commission. The complaint seeks
(i) to terminate all of the Company's directors for cause, (ii)
to elect a new Board of Directors, (iii) to cause the Company to
enact amended and restated bylaws, (iv) for monetary damages in
an undisclosed amount, (v) for interest, fees and costs, and (vi)
for such other relief as the District Court may deem appropriate.
The Company believes that the complaint is without merit and
intends to vigorously defend it. On December 17, 2001, the
Company and the Plaintiffs stipulated to an open extension of
time for the Company to respond to the complaint as the Company
and the Plaintiffs were engaged in settlement discussions that
included the possible sale of the Ready Mix, Inc. ("RMI")
subsidiary. NRS 78.416(2) prohibits the Company from selling more
than 5 percent or more of the aggregate market value of all its
assets to an interested stockholder. Due to this restriction, the
Company's board of directors concluded that the transaction would
not be in the best interests of the Company or its shareholders.
The Plaintiffs continue to threaten litigation (as an interested
stockholder), against the Company's board attempting to pressure
the Company to sell RMI or its assets. As of this filing, the
extension of time to respond to the complaint remains open and
the Plaintiffs have not filed an amended complaint, but it
appears that anything short of selling RMI and buying back the
Plaintiff's stock will likely result in further legal action
against the Company.
9. Subsequent Events:
In April 2002, the Company refinanced 8 mixer trucks for $266,160. The
note payable obligation has an interest rate of 9%, with monthly payments of
$12,069, and is due March 15, 2004
In April 2002, the Company completed the compilation of final
documentation supporting the claim against the New Mexico State Highway and
Transportation Department for the contract on the Alamogordo Relief Route, Phase
II, NM project No. SP-4916(202). In May 2002, the Company completed the
compilation of final documentation supporting the claim against the New Mexico
State Highway and Transportation Department for the contract on the Alamogordo
Relief Route, Phase IA, NM project No. SP-4916(200). Having now submitted final
documentation to the state, claims receivable will increase in the second
quarter by $1,786,422.
On May 9, 2002, the Company closed the transaction with United Metro
Materials Inc. ("United Metro") to sell certain pit assets in Prescott, Arizona.
The transaction was for a sale price of $3,000,000 subject to a $250,000
hold-back that may be paid within the next twenty-four months if sales volumes,
measured in tons of materials sold, meet or exceed a stipulated minimum amount.
In addition, within seven days of closing, the ending inventory of finished
product will be measured and paid for and is expected to be between $1.0 and
$1.5 million. After deduction of the hold-back amount and approximately $212,000
of debt paid off by United Metro, the net cash received by the Company in
conjunction with this transaction, depending upon final inventory quantities,
will range from $3.5 to $4.0 million. United Metro also assumed approximately
$1.5 million in operating lease obligations.
On May 1, 2002, the Company announced that its aggregate bonding
capacity had been reduced to $75 million until such time as its working capital
improved. On May 14, 2002, the Company announced that its aggregate bonding
capacity had been increased to approximately $100 million, based upon the merits
of each individual project as determined between the Company and its bonding
company.
12
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Segment Information:
The Company manages and operates two segments, construction services
and construction materials. The construction services segment provides
construction services to a broad range of public and some private customers
primarily in the western states of Arizona, Nevada and Utah. Through this
segment, the Company performs heavy civil construction such as the construction
of bridges and overpasses, channels, roadways, highways and airport runways. The
construction materials segment manufactures and distributes ready mix concrete
and sand and gravel products in the Las Vegas, NV and Phoenix, AZ markets.
Material customers include concrete subcontractors, prime contractors,
homebuilders, commercial and industrial property developers, pool builders and
homeowners. The construction materials segment operates out of two locations in
the Las Vegas, NV vicinity, one location in the Moapa, NV vicinity and two
locations in the Phoenix, AZ vicinity.
Three Months Ended March 31,
-------------------------------------------------------------------
(dollars in thousands) 2002 2001
------------------------------- -------------------------------
Construction Construction
Services Materials Services Materials
------------- ------------- ------------- -------------
Gross revenue $ 26,629 $ 9,259 $ 29,022 $ 6,829
Intercompany revenue - 883 - 498
Cost of revenue 25,803 8,443 28,875 6,786
Interest income 22 4 56 6
Interest expense 63 38 45 36
Depreciation and amortization 424 261 443 197
Income (loss) before taxes (283) 315 (1,172) (456)
Income tax benefit (expense) 106 (118) 440 171
Net income (loss) (177) 197 (732) (285)
Total assets 48,128 14,766 45,652 13,360
There are no differences in accounting principals between the segments.
All centrally incurred costs are allocated to the construction services segment.
Intercompany revenue is eliminated at cost to arrive at consolidated revenue and
cost of revenue.
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The following is management's discussion and analysis of certain
significant factors affecting the Company's financial position and operating
results during the periods included in the accompanying condensed consolidated
financial statements.
Except for the historical information contained herein, the matters set
forth in this report are forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially. The Company disclaims any
intent or obligation to update these forward-looking statements.
The Company's backlog (anticipated revenue from the uncompleted
portions of awarded projects) was approximately $63.5 million at March 31, 2002,
compared to approximately $84.0 million at March 31, 2001. At March 31, 2002,
the Company's backlog included approximately $55 million of work that is
scheduled for completion during 2002. Accordingly, revenue in the future will be
significantly reduced if the Company is unable to obtain substantial new
projects in 2002.
Revenue on uncompleted fixed price contracts is recorded under the
percentage-of-completion method of accounting. The Company begins to recognize
revenue on its contracts when it first accrues direct costs. Contracts often
involve work periods in excess of one year and revisions in cost and profit
estimates during construction are reflected in the accounting period in which
the facts that require the revisions become known. Losses on contracts, if any,
are provided in total when determined, regardless of the percent complete.
Claims for additional contract revenue are recognized only to the extent that
contract costs relating to the claim have been incurred and evidence provides a
legal basis for the claim. As of March 31, 2002, the total amount of claims that
have been submitted or soon-to-be submitted was approximately $44,016,324. Of
that sum, the Company's portion of the claims total was approximately
$27,454,956 and the balance of $16,561,368 pertains to prime contractor or
subcontractors' claims. Total claim amounts reported by the Company in its
filings are approximate and are subject to revision as final documentation
progresses. Accordingly, the approximate total claim amount is now $44,016,324
of which $27,454,956 pertains to the Company and the balance of $16,561,368
applies to subcontractors or the prime contractor. This revised approximation of
total claim amount compares to previously reported amounts of $54,407,238,
$29,396,539 and $25,010,699 respectively. Relative to the aforementioned claims,
the Company has recorded approximately $7,754,448 in claim revenue to offset
costs incurred to-date on the claims. In the accompanying March 31, 2002 balance
sheet, claims receivable in the amount of $5,968,026 has been recorded in
connection with claims filed. In addition, the Company has also recorded
approximately $1,817,831 for unpaid quantities, unpaid change orders, and
pending change orders in advance of receipt. Although the Company believes these
amounts represent a reasonably conservative posture, any claims proceeds and
payments for previously unpaid quantities, unpaid change orders and pending
change orders ultimately paid to the Company less than $9,572,279 will reduce
net income. Conversely, a payment for those same items in excess of $9,572,279
will increase net income.
14
Results of Operations
The following table sets forth, for the three months ended March 31,
2002 and 2001, certain items derived from the Company's Condensed Consolidated
Statements of Operations expressed as a percentage of revenue.
Three Months Ended
March 31,
-----------------------------
2002 2001
------------ ------------
Revenue 100.0% 100.0%
Gross profit 4.7% 0.5%
General and administrative expenses 4.4% 4.9%
Interest income 0.1% 0.2%
Interest expense -0.3% -0.2%
Other expense 0.0% -0.2%
Income (loss) before income taxes 0.1% -4.6%
Income tax benefit (expense) 0.0% 1.7%
Net income (loss) 0.1% -2.9%
Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001
Revenue and Backlog. Revenue for the three months ended March 31, 2002
("interim 2002") was $35.0 million compared to $35.4 million for the three
months ended March 31, 2001 ("interim 2001"). The decrease in revenue was the
result of a $2.4 million decrease in construction services, offset by a $2.0
million increase in revenue generated from construction materials production and
manufacturing sold to non-affiliates. Backlog decreased 25% to $63.5 million at
March 31, 2002 from $84.0 million at March 31, 2001. Revenue may be impacted in
any one period by the backlog at the beginning of the period.
Gross Profit. Consolidated gross profit increased to $1.6 million for
interim 2002 from $.2 million for interim 2001 and consolidated gross margin, as
a percent of revenue, increased to 4.7% in interim 2002 from .5% in interim
2001. Gross profit from construction services increased to $.8 million in
interim 2002 from $.1 million in interim 2001 and the gross profit margin
increased to 3.1% from .5% in the respective periods. The increase in the
construction services gross profit was the result of increased profit
recognition related to several projects nearing completion at March 31, 2002.
Gross profit margins are affected by a variety of factors including construction
delays and difficulties due to weather conditions, availability of materials,
the timing of work performed by other subcontractors and the physical and
geological condition of the construction site. Gross profit from construction
materials increased to $.8 million in interim 2002 from $.04 million in interim
2001 and the gross profit margin increased to 9.7% from .6% in the respective
periods. The improved performance for the construction materials segment during
interim 2002 is the result of a 32% increase in revenue from interim 2001 that
results from the expansion of construction materials operations.
General and Administrative Expenses. General and administrative
expenses decreased to $1.5 million for interim 2002 from $1.7 million for
interim 2001. The decrease resulted primarily from a $.1 million reduction of
general and administrative expenses related to various employee incentive plans
and a decrease of $.1 million in legal expenses.
Interest Income and Expense. Interest income for interim 2002 decreased
to $.03 million from $.06 million for interim 2001 resulting primarily from a
decrease in invested cash reserves. Interest expense for interim 2002 increased
to $.1 million from $.08 million for interim 2001, due primarily to the Company
borrowing on the line of credit.
Net Income (Loss). Net income (loss) was $.02 million in interim 2002
as compared to a net loss of $(1.0) million for interim 2001.
15
Liquidity and Capital Resources
The Company's primary need for capital has been to finance growth in
its core business as a heavy construction contractor and its expansion into the
construction materials business. Historically, the Company's primary source of
cash has been from operations.
The following table sets forth for the three months ended March 31,
2002 and 2001, certain items from the condensed consolidated statements of cash
flows.
Three Months Ended
March 31,
--------------------------------------
2002 2001
----------------- ----------------
Cash Flows Used in Operating Activities $ (1,471,179) $ (2,902,373)
Cash Flows Provided by (Used in) Investing Activities 356,071 (6,269)
Cash Flows Provided by (Used in) Financing Activities (791,925) 1,365,344
Recently cash has been consumed by the costs incurred on contracts for
which claim compensation is being sought and the start-up costs of the
construction materials expansion. Accordingly, during the year ended December
31, 2000, the Company entered into a revolving loan agreement ("line of
credit"). Under the terms of the agreement, the Company may borrow up to
$7,000,000 at Chase Manhattan Bank's prime, plus 0.25% through December 31, 2001
at which time the line of credit was to convert to a term agreement requiring
monthly principal and interest payments through December 31, 2005. The line of
credit is collateralized by all of the Company's assets. Under the terms of the
line of credit, the Company is required to maintain a certain level of tangible
net worth. In addition, the Company is also required to maintain a ratio of
total debt to tangible net worth. As of March 31, 2002, the Company was not in
compliance with the tangible net worth covenant, but was in compliance with the
ratio of total debt to tangible net worth. Effective March 2002, the Company
amended the line of credit agreement. Under the terms of the amended agreement,
the interest rate increased to Chase Manhattan Bank's prime, plus 1.5% through
January 1, 2003 at which time the line of credit converts to a term agreement
requiring monthly principal and interest payments through December 31, 2006. In
connection with the amendment, the Company obtained a waiver from non-compliance
with the tangible net worth covenant for the period from December 31, 2001 to
January 1, 2003. As of March 31, 2002, the Company had withdrawn the entire
$7,000,000 from the line of credit.
Cash used in operating activities during interim 2002 amounted to $1.5
million, primarily the result of an increase in accounts receivable of $1.6
million and a decrease in accounts payable of $2.7 million, offset, in part, by
an increase in net billings in excess of costs of $1.6 million, depreciation and
amortization of $.7 million and an increase in accrued liabilities of $.5
million.
Cash used in operating activities during interim 2001 amounted to $2.9
million, primarily the result of a increase in accounts receivable of $3.6
million, an increase in income tax receivable of $.6 million, a decrease in net
billings in excess of costs of $1.3 million, a net loss of $1.0 million, offset,
in part, by an increase in accounts payable of $2.8 million and depreciation and
amortization of $.6 million.
Cash provided by investing activities during interim 2002 amounted to
$.4 million related primarily to a decrease in restricted cash of $.3 million
and proceeds from the sale of property and equipment in the amount of $.1
million.
Cash used in investing activities during interim 2001 amounted to
approximately $6,000 related primarily to the purchase of property and equipment
of $.1 million, offset by proceeds from the sale of property and equipment in
the amount of $.06 million and an increase of pit development of $.04 million.
Cash used in financing activities during interim 2002 amounted to $.8
million related primarily to the repayment of notes payable and capital lease
obligations of $.8 million.
16
Cash provided by financing activities during interim 2001 amounted to
$1.4 million related primarily to the proceeds received from the line of credit
of $2.0 million, offset by the repayment of notes payable and capital lease
obligations of $.6 million.
Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standard Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142, the Company reclassify the carrying amounts
of intangible assets and goodwill based on the criteria in SFAS 141.
SFAS 142 requires, among other things, that companies no longer
amortize goodwill, but instead test goodwill for impairment at least annually.
In addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and to the
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.
SFAS 143, Accounting for Asset Retirement Obligations, was issued in
June 2001 and is effective for fiscal years beginning after June 15, 2002. SFAS
143 requires that any legal obligation related to the retirement of long-lived
assets be quantified and recorded as a liability with the associated asset
retirement cost capitalized on the balance sheet in the period it is incurred
when a reasonable estimate of the fair value of the liability can be made.
SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, was issued in August 2001 and is effective for fiscal years beginning
after December 15, 2001. SFAS 144 provides a single, comprehensive accounting
model for impairment and disposal of long-lived assets and discontinued
operations.
The adoption of SFAS 141, SFAS 142 and SFAS 144 did not have a material
effect on the Company's financial statements.
The Company does not anticipate the adoption of SFAS 143 to have a
material effect on the Company's financial statements.
17
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Market risk generally represents the risk that losses may occur in the
values of financial instruments as a result of movements in interest rates,
foreign currency exchange rates and commodity prices. The Company does not have
foreign currency exchange rate and commodity price market risk.
Interest Rate Risk - From time to time the Company temporarily invests
its cash and restricted cash in interest-bearing securities issued by
high-quality issuers. The Company's management monitors risk exposure to monies
invested in securities of any one financial institution. Due to the short time
the investments are outstanding and their general liquidity, these instruments
are classified as cash equivalent in the consolidated balance sheet and do not
represent a material interest rate risk to the Company. The Company's primary
market risk to exposure for changes in interest rates relates to the Company's
long-term debt obligations. The Company manages its exposure to changing
interest rates principally through the use of a combination of fixed and
floating rate debt.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to legal proceedings in the ordinary course of
its business. With the exception of those matters detailed below, the Company
believes that the nature of these proceedings (which generally relate to
disputes between the Company and its subcontractors, material suppliers or
customers regarding payment for work performed or materials supplied) are
typical for a construction firm of its size and scope, and no other pending
proceedings are material to its financial condition.
The following proceedings represent matters that may become material
and have already been or may soon be referred to legal counsel for further
action:
Requests for Equitable Adjustment to Construction Contracts. The Company has or
-----------------------------------------------------------
will make claims as described below on the following contracts:
(1) Five contracts with the New Mexico State Highway and
Transportation Department - The approximate total value of claims
on these projects is $24,880,927 of which approximately
$21,204,824 is on behalf of MVCI and the balance of $3,676,103 is
on behalf of the prime contractor or subcontractors. The primary
issues are changed conditions, plan errors and omissions,
contract modifications and associated delay costs. In addition,
the projects were not completed within the adjusted contract time
because of events giving rise to the claims. The prosecution of
the claims will include the appropriate extensions of contract
time to offset any potential liquidated damages.
(2) Clark County, Nevada - The approximate total value of claims on
this project is $19,135,397 of which approximately $12,885,265 is
on behalf of subcontractors. The primary issues are changed
conditions, plan errors and omissions, contract modifications and
associated delay costs.
The above claims combined total approximately $44,016,324. Of that
sum, the Company's portion of the claims total approximately $27,454,956 and the
balance of $16,561,368 pertains to prime contractor or subcontractors' claims.
Total claim amounts reported by the Company in its filings are approximate and
are subject to revision as final documentation progresses. Accordingly, the
approximate total claim amount is now $44,016,324 of which $27,454,956 pertains
to the Company and the balance of $16,561,368 applies to subcontractors or the
prime contractor. This revised approximation of total claim amount compares to
previously reported amounts of $54,407,238, $29,396,539 and $25,010,699
respectively. Relative to the aforementioned claims, the Company has recorded
approximately $7,754,448 in claim revenue to offset costs incurred to-date on
the claims. In addition, the Company has also recorded approximately $1,817,831
for unpaid quantities, unpaid change orders, and pending change orders in
advance of receipt. Although the Company believes these amounts represent a
reasonably conservative posture, any claims proceeds and payments for previously
unpaid quantities, unpaid change orders and pending change orders ultimately
paid to the Company less than $9,572,279 will reduce net income. Conversely, a
payment for those same items in excess of $9,572,279 will increase net income.
18
Lawsuits Filed Against Meadow Valley Contractors, Inc. or Meadow Valley
-----------------------------------------------------------------------
Corporation
-----------
(1) Innovative Construction Systems, Inc. ("ICS"), District Court,
Clark County, NV - ICS was a subcontractor to MVCI on several
projects. ICS failed to make payments of payroll, pension fund
contributions and other taxes for which the Internal Revenue
Service garnished any future payments due ICS on MVCI projects.
As a result, ICS failed to supply labor to perform its work and
defaulted on its subcontracts. MVCI terminated the ICS
subcontracts and performed the work with MVCI personnel. ICS
alleges it was wrongfully terminated and is asserting numerous
claims for damages. ICS claims against MVCI total approximately
$15,000,000. The Company does not believe ICS' claims have merit
and intends to vigorously defend against these claims and will
eventually seek to recover the damages ICS has caused the Company
through its failure to perform.
(2) Independent from, but related to the ICS issue, the Nevada State
Labor Commissioner ("Commission") filed a lawsuit against MVCI to
seek payment from MVCI, as the prime contractor, for wages and
fringes owed but not paid by ICS, MVCI's subcontractor. The
Commission seeks payment of approximately $452,921 in alleged
unpaid wages and fringe benefits. Prior to the filing of the
complaint by the Commission, MVCI was attempting to reach
settlement as the Company believes that its liabilities are less
than the $452,921 being sought by the Commission. Accordingly,
the Company intends to defend itself against the excessive
assessment of liability and seek to reduce the liability.
(2) AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV -
AnA supplied equipment to MVCI on a project under terms of a
variety of agreements. AnA is suing MVCI for non-payment. MVCI
has counter-sued for cost overruns deemed to be the
responsibility of AnA. AnA's suit against MVCI is for
approximately $3,245,289. MVCI's countersuit against AnA is for
approximately $2,000,000. AnA has also filed a complaint on two
other projects completed in 1997 where they were a subcontractor
to MVCI in the same jurisdiction in the amount of approximately
$715,000 for changed conditions. The Company does not believe
AnA's claims have merit and intends to vigorously defend against
these claims.
(3) Progressive Contracting Inc. ("PCI"), District Court, Clark
County, NV - PCI was a subcontractor to MVCI on a project where
there is a dispute with the owner regarding delays to the
project. PCI claims they were damaged by these delays in an
amount in excess of $300,000. The Company believes that under the
terms of the contract with PCI they are only entitled to
compensation for the delays if MVCI is compensated by the owner.
MVCI has submitted PCI's claims to the owner and they are
included in the total claim amount.
(4) The Company is defending a claimed preference in connection with
a payment made to it by an insurance company in the approximate
amount of $100,000. The Company believes that the payment is not
a preference, and is vigorously defending the action.
(5) The Company and all of its directors were served with a civil
complaint by Silver State Materials Corp. ("Silver State") and
Cyrus Spurlino (collectively "Plaintiffs"). The complaint
primarily alleges that the Company's October 1995 Registration
Statement on Form S-1 was misleading in stating that the
Company's directors were elected on a staggered basis because the
Company's Bylaws, providing for such staggered term, were not so
amended until April 1997, and that such amendment was not filed
with the Securities and Exchange Commission. The complaint seeks
(i) to terminate all of the Company's directors for cause, (ii)
to elect a new Board of Directors, (iii) to cause the Company to
enact amended and restated bylaws, (iv) for monetary damages in
an undisclosed amount, (v) for interest, fees and costs, and (vi)
for such other relief as the District Court may deem appropriate.
The Company believes that the complaint is without merit and
intends to vigorously defend it. On December 17, 2001, the
Company and the Plaintiffs stipulated to an open extension of
time for the Company to respond to the complaint as the Company
and the Plaintiffs were engaged in settlement discussions that
included the possible sale of the Ready Mix, Inc. ("RMI")
subsidiary. NRS 78.416(2) prohibits the Company from selling more
than 5 percent or more of the aggregate market value of all its
assets to an interested stockholder. Due to this restriction, the
Company's board of directors concluded that the transaction would
not be in the best interests of the Company or its shareholders.
The Plaintiffs continue to threaten litigation (as an interested
stockholder), against the Company's board attempting to pressure
the Company to sell RMI or its assets. As of this filing, the
extension of time to respond to the complaint remains
19
open and the Plaintiffs have not filed an amended complaint, but
it appears that anything short of selling RMI and buying back the
Plaintiff's stock will likely result in further legal action
against the Company.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
10.187 Security Agreement with Key Equipment Finance, a Division of
Key Corporate Capital Inc.
b. Reports on Form 8-K:
The Company filed a Form 8-K during the three months ended March 31,
2002.
20
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act as of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEADOW VALLEY CORPORATION
(Registrant)
By /s/ Bradley E. Larson
-------------------------------------------
Bradley E. Larson
President and Chief Executive Officer
By /s/ Nicole R. Smith
-------------------------------------------
Nicole R. Smith
Principal Accounting Officer
21