8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 8, 2006

MEADOW VALLEY CORPORATION

(Exact name of registrant as specified in charter)

Nevada
(State or other jurisdiction of incorporation)

0-25428
(Commission File Number) 88-0328443
(IRS Employer Identification Number)

4411 South 40^th Street D-11, Phoenix, AZ
(Address of principal executive offices) 85040
(Zip Code)

Registrant’s telephone number, including area code: (602) 437-5400

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

     On March 8, 2006, Meadow Valley Corporation (the “Company,” or “we”) issued a press release with respect to its earnings for the year ended and quarter ended December 31, 2005, a copy of which is attached as Exhibit 99.1.

     The information set forth in this Item 2.02, “Results of Operations and Financial Condition” and the Exhibit hereto shall not be deemed “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, nor shall the information, including the Exhibit, be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing.

Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

     On March 2, 2006 our audit committee completed a review of the valuation allowance against deferred tax asset and income tax provision calculations. In light of the historical operating losses of our construction services segment, management deemed it prudent to decrease the deferred tax asset by creating an allowance against deferred tax assets. The primary purpose of the allowance was to minimize the risk of carrying net operating losses that could potentially expire unutilized. After review, and with the concurrence of our independent auditors, it was determined that the valuation allowance should have been limited to amounts in excess of the deferred tax liability amount. The review also encountered an error in a prior year’s tax return that misstated the amount of income tax loss in 2004. Accordingly, in our Annual Report on Form 10-K for the year ended December 31, 2005, we will be restating certain income tax related line items for the periods ended December 31, 2004 and 2003 and for the quarter ended September 30, 2005. Since the deferred tax liabilities exceeded the deferred tax assets, we believe that the net operating loss valuation allowance will be entirely eliminated.

     Therefore, as of December 31, 2004, we anticipate the effect of the restatement pertinent to the net operating loss valuation allowance will be to restate, into prior periods, a total of approximately $544,000 of income tax benefits and to increase the amount of income tax expense in 2005 by approximately $544,000. We believe there will be no cumulative change to our net income (loss) over the periods or to our retained earnings or shareholders’ equity.

     We believe that the effect of the restatement pertinent to the previously misstated income tax loss will be to increase income tax expense in the quarter ended September 30, 2005 by approximately $335,000. We believe there will be no change to previously reported revenue, pre-tax earnings or cash flow.

     The following table summarizes the effect that we believe the changes will have on the respective periods and shows a comparison to what was previously reported in the Company’s financial statements.

	Nine months ended					For the years ended
In thousands, except per share data.	September 30,					December 31,
	2005			2004		2004			2003
	(unaudited)			(unaudited)		(unaudited)			(unaudited)
Net income, as previously reported	$	3,768		$	48	$	600		$	121
Net income tax expense adjustment		(879	)		—		(26	)		(29	)
Net income, as restated	$	2,889		$	48	$	574		$	92
Earnings per fully diluted share (as reported)	$	0.93		$	0.01	$	0.16		$	0.03
Effect of Amendment		(0.22	)		—		(0.01	)		—
Earnings per fully diluted share (as restated)	$	0.71		$	0.01	$	0.15		$	0.03

     The condensed consolidated statements of operations and balance sheets contained in Exhibit 99.1 referenced in Item 2.02 above reflect the effect of the restatement.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits. The following exhibit is attached hereto and furnished herewith:

Exhibit
Number	Exhibit Description
99.1	Press Release of Registrant dated March 8, 2006.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Meadow Valley Corporation
Date: March 8, 2006	By:	/s/ Clint Tryon
		Clint Tryon
		Secretary, Treasurer and Principal Accounting Officer

EX-99.1

Exhibit 99.1

4411 South 40th St., Ste. D11
Phoenix, Arizona 85040
Telephone: (602) 437-5400
Fax: (602) 437-1681

	Investor Contact:	Company Contact:
	Neil Berkman Associates	Bradley E. Larson
	(310) 277-5162	Chief Executive Officer
FOR IMMEDIATE RELEASE	info@BerkmanAssociates.com	www.MeadowValley.com

Meadow Valley Reports 2005 Net Income of $1.01 Per Share
Versus $0.15 Per Share and Fourth Quarter Net Income of
$0.29 Per Share Versus $0.14 Per Share for 2004

Announces Restatement to Adjust Deferred Tax Allowance and Income Tax Provision

     PHOENIX, ARIZONA, March 8, 2005 . . . MEADOW VALLEY CORPORATION (NASDAQ:MVCO) today announced operating results for the fourth quarter and calendar year 2005.

Twelve Month Results

     For the twelve months ended December 31, 2005, revenue increased 10.2% to $183.9 million from $166.8 million for 2004. Net income for 2005 increased to $4.2 million, or $1.01 per diluted share. This compares to net income for 2004 of $0.6 million, or $0.15 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 8.0% to $116.8 million for 2005 from $108.2 million for 2004. Construction materials revenue increased 14.3% to $67.1 million from $58.7 million for 2004.

     At December 31, 2005, Meadow Valley reported working capital of $21.0 million, including cash and cash equivalents of $23.6 million. Shareholders’ equity increased to $18.9 million at December 31, 2005 compared to $12.7 million at December 31, 2004.

Fourth Quarter Results

     For the three months ended December 31, 2005, revenue increased 3.8% to $43.4 million from $41.9 million for the fourth quarter of 2004. Gross profit more than doubled for the three months ended December 31, 2005 to $5.1 million, or 11.7% of revenue, compared to $2.0 million, or 4.7% of revenue, for the same period a year earlier. Net income for the fourth quarter of 2005 increased 150% to $1.3 million, or $0.29 per diluted share. This compares to net income for the fourth quarter of 2004 of $0.5 million, or $0.14 per diluted share.

     Construction services revenue decreased 5.1% to $26.4 million for the fourth quarter of 2005 compared to $27.8 million for the fourth quarter of 2004.

     Contract backlog in the construction services segment was approximately $68.4 million at December 31, 2005, including approximately $63.0 million scheduled for completion in 2006. Meadow Valley is the apparent low bidder on an additional $17.4 million of contracts that have yet to be awarded. Contract backlog was $73.9 million at September 30, 2005 and $93.6 million at December 30, 2004.

     “Given the natural swings in scheduled bid lettings and the timing of contract awards, fluctuations in backlog are a normal feature of our construction services business. What’s important is that activity in our primary Arizona and Southern Nevada markets remains robust, and many attractive new jobs are scheduled to bid over the coming months. The recent increase in our bonding capacity to an aggregate program total of approximately $120 million from $100 million, and a maximum single-project limit of $30 million up from $15 million, confirms our optimism about continuing improvements in the performance of our construction services business,” said Chief Executive Officer Brad Larson.

     Construction materials revenue increased 21.4% to $17.0 million for the fourth quarter of 2005 from $14.0 million for the fourth quarter of 2004.

(more)

Meadow Valley Reports 2005 Net Income of $1.01 Per Share Versus $0.15 Per Share and
Fourth Quarter Net Income of $0.29 Per Share Versus $0.14 Per Share for 2004
March 8, 2006
Page Two

     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 representing a market value of approximately $34 million as of March 2, 2006. Accordingly, RMI’s operating results are consolidated in Meadow Valley’s financial statements for financial reporting purposes.

Restatement

     In connection with the audit of its financial results, the Company completed a review of the valuation allowance against its deferred tax asset and income tax provision calculations. In light of the historical operating losses of the Company’s construction services segment, management deemed it prudent to decrease the deferred tax asset by creating an allowance against deferred tax assets. The primary purpose of the allowance was to minimize the risk of carrying net operating losses that could potentially expire unutilized. After review, and with the concurrence of the Company’s independent auditors, it was determined that the valuation allowance should have been limited to amounts in excess of the deferred tax liability amount. The review also encountered an error in a prior year’s tax return that misstated the amount of income tax loss in 2004. Accordingly, in our Annual Report on Form 10-K for the year ended December 31, 2005, we will be restating certain income tax related line items for the periods ended December 31, 2004 and 2003 and for the quarter ended September 30, 2005. Since the deferred tax liabilities exceeded the deferred tax assets, the Company believes that the net operating loss valuation allowance will be entirely eliminated.

     Therefore, as of December 31, 2004, the Company anticipates the effect of the restatement pertinent to the net operating loss valuation allowance will be to restate, into prior periods, a total of approximately $544,000 of income tax benefits and to increase the amount of income tax expense in 2005 by approximately $544,000. The Company believes there will be no cumulative change to its net income (loss) over the periods or to its retained earnings or shareholders’ equity.

     The Company believes that the effect of the restatement pertinent to the previously misstated income tax loss will be to increase income tax expense in the quarter ended September 30, 2005 by approximately $335,000. The Company expects there will be no change to previously reported revenue, pre-tax earnings or cash flow.

     The following table summarizes the effect that the Company believes the changes will have on the respective periods and shows a comparison to what was previously reported in the Company’s financial statements.

	Nine months ended					For the years ended
In thousands, except per share data	September 30,					December 31,
	2005			2004		2004			2003
	(unaudited)					(unaudited)
Net income, as previously reported	$	3,768		$	48	$	600		$	121
Net income tax expense adjustment		(879	)		—		(26	)		(29	)
Net income, as restated	$	2,889		$	48	$	574		$	92
Earnings per fully diluted share (as reported)	$	0.93		$	0.01	$	0.16		$	0.03
Effect of Amendment		(0.22	)		—		(0.01	)		—
Earnings per fully diluted share (as restated)	$	0.71		$	0.01	$	0.15		$	0.03

     The amounts reported in the attached statements of operations and balance sheets reflect the above-referenced adjustments.

(more)

Meadow Valley Reports 2005 Net Income of $1.01 Per Share Versus $0.15 Per Share and
Fourth Quarter Net Income of $0.29 Per Share Versus $0.14 Per Share for 2004
March 8, 2006
Page Three

Conference Call

     Meadow Valley has scheduled a conference call at 12:00 p.m. EST on Thursday, March 9th. A simultaneous webcast of the conference call may be accessed online at the Investor Information link of www.MeadowValley.com or at www.CompanyBoardroom.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 # 21282699 after 2:00 p.m. EST.

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 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.

(tables attached)

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2005			2004			2005			2004
	(unaudited)						(unaudited)
Revenue:
Construction services	$	26,420,592		$	27,847,983		$	116,822,072		$	108,168,921
Construction materials		16,999,780			14,003,027			67,050,791			58,662,743
Total revenue		43,420,372			41,851,010			183,872,863			166,831,664
Cost of revenue:
Construction services		22,837,462			27,633,837			108,706,174			107,827,853
Construction materials		15,523,054			12,252,687			59,979,110			52,036,021
Total cost of revenue		38,360,516			39,886,524			168,685,284			159,863,874
Gross profit		5,059,856			1,964,486			15,187,579			6,967,790
General and administrative expenses		3,037,608			1,823,816			8,666,573			6,509,839
Income from operations		2,022,248			140,670			6,521,006			457,951
Other income (expense):
Interest income		210,372			37,826			562,914			85,864
Interest expense		(88,336	)		(88,529	)		(362,326	)		(348,229	)
Other income		211,849			723,652			341,603			694,857
		333,885			672,949			542,191			432,492
Income before income taxes		2,356,133			813,619			7,063,197			890,443
Income tax expense		(876,412	)		(287,995	)		(2,570,955	)		(316,804	)
		1,479,721			525,624			4,492,242			573,639
Minority interest in consolidated subsidiary		165,590			—			288,523			—
Net income	$	1,314,131		$	525,624		$	4,203,719		$	573,639
Net income per common share
Basic	$	0.32		$	0.15		$	1.11		$	0.16
Diluted	$	0.29		$	0.14		$	1.01		$	0.15
Weighted average
common shares outstanding
Basic		4,065,489			3,601,250			3,783,089			3,601,250
Diluted		4,493,688			3,887,900			4,173,213			3,780,597

MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	December 31,
	2005			2004
	(unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	23,565,317		$	10,164,218
Restricted cash		1,267,090			1,268,449
Accounts receivable, net		25,139,640			22,163,719
Prepaid expenses and other		3,171,670			2,818,395
Inventory, net		776,978			871,112
Costs and estimated earnings in excess of billings on uncompleted contracts		1,991,993			449,358
Deferred tax asset		425,124			2,141,731
Total current assets		56,337,812			39,876,982
Property, equipment and land, net		26,033,096			21,541,946
Refundable deposits		478,965			21,780
Mineral rights and pit development, net		194,977			252,044
Claims receivable, less current portion		3,521,080			3,521,080
Other receivables		115,000			115,000
Total assets	$	86,680,930		$	65,328,832
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	18,521,558		$	19,711,571
Accrued liabilities		5,878,595			4,907,554
Notes payable		3,518,892			5,212,187
Obligations under capital leases		546,801			531,746
Income tax payable		939,685			—
Billings in excess of costs and estimated earnings on uncompleted contracts		5,903,087			7,219,762
Total current liabilities		35,308,618			37,582,820
Notes payable, less current portion		11,423,044			10,804,017
Obligations under capital leases, less current portion		434,998			981,799
Deferred tax liability		3,177,771			3,244,008
Total liabilities		50,344,431			52,612,644
Commitments and contingencies
Minority interest in consolidated subsidiary		17,424,795			—
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, 4,136,912 and 3,601,250 issued and outstanding		4,137			3,601
Additional paid-in capital		12,934,830			10,943,569
Capital adjustments		(799,147	)		(799,147	)
Retained earnings		6,771,884			2,568,165
Total stockholders’ equity		18,911,704			12,716,188
Total liabilities and stockholders’ equity	$	86,680,930		$	65,328,832