MVCO (12.80) reports a solid Q4 with backlog up 31% y/y to $89M. EPS of $0.31 vs $0.30 a year ago - share count has increased. Net income up 17%.
PHOENIX--(BUSINESS WIRE)--Meadow Valley Corporation (NASDAQ:MVCO - News) today announced financial results for the fourth quarter and year ended December 31, 2006.
Chief Executive Officer Bradley Larson said, "Meadow Valley posted higher revenue in both our construction services and construction materials businesses in the fourth quarter of 2006 compared to the fourth quarter of 2005, and net income increased 17.4% to $0.31 per diluted share from $0.30 per diluted share for the prior year. This growth is especially noteworthy in view of the nationwide slowdown in residential construction during the period, and demonstrates the success of our efforts to increase our commercial, industrial and public sector work and expand our production and delivery capacity.
"Construction services provided a significant boost to our results in the second half of the year, as several large new contract wins contributed to a 30.8% increase in our backlog to $89.5 million at the end of 2006 compared to $68.4 million at the end of 2005. The key to this increase in backlog was the increase in our bonding limits to $200 million at the end of 2006 compared to $120 million at the end of 2005, which was made possible by our profitable operating performance and the $7.35 million private equity offering we completed in October 2006. We are pleased by the progress of all of the projects in our current backlog."
Fourth Quarter Results
For the three months ended December 31, 2006, consolidated revenue increased 14.6% to $49.8 million compared to $43.4 million for the fourth quarter of 2005. Construction services revenue increased 17.3% to $31.0 million compared to $26.4 million for the same period last year. Construction materials revenue increased 9.4% to $18.6 million from $17.0 million a year earlier, reflecting a 14.8% increase in average sales price and a 3.5% decrease in units of ready mix concrete sold. Revenue from the Company's new construction materials testing segment, which began operations in the second quarter of 2006, was $0.15 million for the fourth quarter of 2006.
Consolidated gross margin was 11.6% for the fourth quarter of 2006 versus 11.7% for the fourth quarter of 2005. Construction services gross margin was 12.9% compared to 13.6%, and construction materials gross margin improved to 9.5% compared to 8.7%.
General and administrative expenses increased to $3.3 million for the fourth quarter of 2006 compared to $3.0 million a year earlier.
Net income after minority interest for the fourth quarter of 2006 increased 17.4% to $1.5 million, or $0.31 per diluted share, based on approximately 5.1 million diluted shares outstanding. This compares to net income after minority interest for the fourth quarter of 2005 of $1.3 million, or $0.30 per diluted share, based on approximately 4.4 million diluted shares outstanding. Meadow Valley's construction materials subsidiary, Ready Mix, Inc. (AMEX:RMX - News), 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.
At December 31, 2006, Meadow Valley reported working capital of $27.3 million, including cash, cash equivalents and restricted cash of $30.0 million. At December 31, 2005, working capital was $21.9 million, including cash, cash equivalents and restricted cash of $24.9 million. Shareholders' equity increased to $31.3 million compared to $19.8 million at December 31, 2005.
Twelve Months Results
For the twelve months ended December 31, 2006, consolidated revenue increased 6.3% to $195.5 million from $183.9 million for 2005. Construction services revenue for 2006 decreased 4.2% to $111.9 million from $116.8 million for 2005. Construction materials revenue for 2006 increased 24.0% to $83.2 million from $67.1 million for 2005.
Consolidated gross margin for 2006 increased to 9.9% compared to 8.3% for 2005. Construction services gross margin was 9.0% compared to 7.0%, and construction materials gross margin improved to 11.1% compared to 10.6%.
Net income after minority interest for 2006 was $4.2 million, or $0.90 per diluted share, based on approximately 4.6 million diluted shares outstanding. This compares to net income after minority interest for 2005 of $4.2 million, or $1.01 per diluted share, based on approximately 4.2 million diluted shares outstanding.
Claims Update
In 2006 Meadow Valley settled one of its outstanding claims that contributed to a decrease in claims receivable to $1.7 million as of September 30, 2006 from $3.5 million at December 31, 2005. During the fourth quarter of 2006 the Company formally filed its claim related to the now completed Gooseberry Project, which increased claims receivable to approximately $2.5 million at December 31, 2006. "As of now, Meadow Valley's portion of all outstanding claims is approximately $15.1 million, against which we have booked $2.5 million of claims receivable. We remain confident in the validity of our claims and the chances for significant recovery of costs expended in prior periods," Larson said.
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 # 21327397 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, Arizona and southern Utah. 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 on Form 10-K for the year ended December 31, 2005 and quarterly report on Form 10-Q for the three months ended September 30, 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.
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------- ---------------------------
2006 2005 2006 2005
------------ ------------ ------------- -------------
Revenue:
Construction
services $30,997,445 $26,420,592 $111,936,285 $116,822,072
Construction
materials 18,603,124 16,999,780 83,151,938 67,050,791
Construction
materials
testing 150,823 -- 433,728 --
------------ ------------ ------------- -------------
Total revenue 49,751,392 43,420,372 195,521,951 183,872,863
------------ ------------ ------------- -------------
Cost of revenue:
Construction
services 26,993,203 22,837,462 101,866,540 108,706,174
Construction
materials 16,831,319 15,523,054 73,945,571 59,979,110
Construction
materials
testing 174,901 -- 399,752 --
------------ ------------ ------------- -------------
Total cost of
revenue 43,999,423 38,360,516 176,211,863 168,685,284
------------ ------------ ------------- -------------
Gross profit 5,751,969 5,059,856 19,310,088 15,187,579
General and
administrative
expenses 3,339,257 3,037,608 11,161,819 8,666,573
------------ ------------ ------------- -------------
Income from
operations 2,412,712 2,022,248 8,148,269 6,521,006
------------ ------------ ------------- -------------
Other income
(expense):
Interest
income 384,269 210,372 1,010,144 562,914
Interest
expense (91,886) (88,336) (338,886) (362,326)
Other income 33,250 211,849 73,628 341,603
------------ ------------ ------------- -------------
325,633 333,885 744,886 542,191
------------ ------------ ------------- -------------
Income before
income taxes
and minority
interest in
consolidated
subsidiary 2,738,345 2,356,133 8,893,155 7,063,197
Income tax
expense (914,384) (876,412) (3,163,785) (2,570,955)
------------ ------------ ------------- -------------
Income before
minority
interest in
consolidated
subsidiary 1,823,961 1,479,721 5,729,370 4,492,242
Minority
Interest in
consolidated
subsidiary 280,991 165,590 1,563,449 288,523
------------ ------------ ------------- -------------
Net income $1,542,970 $1,314,131 $4,165,921 $4,203,719
============ ============ ============= =============
Basic net income
per common
share $0.32 $0.32 $0.96 $1.11
============ ============ ============= =============
Diluted net
income per
common share $0.31 $0.30 $0.90 $1.01
============ ============ ============= =============
Basic weighted
average common
shares
outstanding 4,830,704 4,065,489 4,328,160 3,783,089
============ ============ ============= =============
Diluted weighted
average common
shares
outstanding 5,056,513 4,405,220 4,621,124 4,151,096
============ ============ ============= =============
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
Assets: 2006 2005(1)
------------- ------------
(Unaudited)
Current assets:
Cash and cash equivalents $29,354,582 $23,565,317
Restricted cash 605,243 1,267,090
Accounts receivable, net 25,990,763 25,139,640
Prepaid expenses and other 2,820,768 3,171,670
Inventory, net 1,366,534 776,978
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,254,860 1,991,993
Note receivable 106,499 --
Deferred tax asset 561,199 760,724
------------- ------------
Total current assets 62,060,448 56,673,412
Property and equipment, net 35,553,000 26,228,073
Refundable deposits 1,492,967 478,965
Note receivable, less current portion 535,360 --
Claims receivable 2,463,880 3,521,080
Other receivables -- 115,000
------------- ------------
Total assets $102,105,655 $87,016,530
============= ============
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $13,298,114 $18,521,558
Accrued liabilities 7,569,928 5,878,595
Notes payable 4,837,628 3,518,892
Obligations under capital leases 332,898 546,801
Income tax payable 399,536 391,202
Billings in excess of costs and estimated
earnings on uncompleted contracts 8,366,754 5,903,087
------------- ------------
Total current liabilities 34,804,858 34,760,135
Notes payable, less current portion 13,894,382 11,423,044
Obligations under capital leases, less
current portion 102,100 434,998
Deferred tax liability 2,974,857 3,177,771
------------- ------------
Total liabilities 51,776,197 49,795,948
------------- ------------
Commitments and contingencies
Minority interest in consolidated
subsidiary 18,988,244 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 5,098,679
and 4,136,912 issued and outstanding 5,099 4,137
Additional paid-in capital 21,197,456 13,818,913
Capital adjustments (799,147) (799,147)
Retained earnings 10,937,806 6,771,884
------------- ------------
Total stockholders' equity 31,341,214 19,795,787
------------- ------------
Total liabilities and stockholders'
equity $102,105,655 $87,016,530
============= ============
(1) Certain balances for 2005 have been reclassified to conform to the
current year's presentation.
