<PAGE>

                                 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 June 30, 2001   Commission file number 1-5951



                                CMI CORPORATION
                                ---------------
            (Exact name of registrant as specified in its charter)


           Oklahoma                                       73-0519810
  --------------------------              --------------------------------------
   (State of Incorporation)                (I.R.S. Employer Identification No.)



     I-40 & Morgan Road, P.O. Box 1985
          Oklahoma City, Oklahoma                         73101
  ----------------------------------------              ----------
  (Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code:  (405) 787-6020


     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 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
filing requirements for the past 90 days.

Yes  X   No____
    ---


     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Voting Class A Common Stock Par Value $.10                21,690,886
Voting Common Stock Par Value $.10                           602
------------------------------------------   --------------------------------
         (Title of each class)               (Outstanding at August 13, 2001)

                                    1 of 28
<PAGE>

                                CMI CORPORATION
                              Index to Form 10-Q


<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
PART I.  Financial Information

     Item 1. Financial Statements

Condensed Consolidated Balance Sheets -
            June 30, 2001(Unaudited), December 31, 2000
            and June 30, 2000(Unaudited)                                                  3

          Condensed Consolidated Statements of Operations -
            Three Months and Six Months Ended June 30, 2001
            and 2000(Unaudited)                                                           4

          Condensed Consolidated Statements of Changes in Common
            Stock and Other Capital -
            Six Months Ended June 30, 2001 (Unaudited), and the
            Years Ended December 31, 2000 and December 31, 1999                           5

          Consolidated Statements of Cash Flows -
            Six Months Ended June 30, 2001 and 2000(Unaudited)                            6

          Notes to Condensed Consolidated Financial Statements                            7

     Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations                              19

     Item 3.  Quantitative and Qualitative Disclosures About
              Market Risk                                                                24


PART II.  Other Information

          Item 1.  Legal Proceedings                                                    24

          Item 2.  Changes in Securities and Use of Proceeds                            27

          Item 3.  Defaults Upon Senior Securities                                      27

          Item 4.  Submission of Matters to a Vote of                                   27
                   Security Holders

          Item 5.  Other Information                                                    27

          Item 6.  Exhibits and Reports on Form 8-K                                     27

Signatures                                                                              27
</TABLE>

                                    2 of 28
<PAGE>

                         PART I - FINANCIAL INFORMATION

                        CMI CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                    June 30    December 31     June 30
                                                      2001        2000*          2000
                                                  (Unaudited)                (Unaudited)
                                                  -----------  ------------  -----------
<S>                                               <C>          <C>           <C>
Current assets:
 Cash & cash equivalents                            $  1,090        13,637       17,296
 Receivables, net                                     30,018        27,972       35,096
 Inventories
  Finished equipment                                  32,259        42,382       43,600
  Work-in-process                                      9,789        16,130       18,179
  Raw materials & parts                               42,906        46,683       52,353
                                                    --------       -------      -------
     Total inventories                                84,954       105,195      114,132
 Other current assets                                  1,319           696          981
 Deferred tax assets                                       -             -       10,470
                                                    --------       -------      -------
     Total current assets                            117,381       147,500      177,975

Property, plant & equipment                           78,865        78,079       73,462
Less accumulated depreciation                         47,947        45,153       41,557
                                                    --------       -------      -------
 Net property, plant & equipment                      30,918        32,926       31,905

Long-term receivables                                  1,358           964          919
Marketable securities, at fair value                     765         1,465        1,617
Other assets, principally patents and goodwill         9,566        10,045        9,663
Deferred tax assets                                        -             -        1,778
                                                    --------       -------      -------

                                                    $159,988       192,900      223,857
                                                    ========       =======      =======

Current liabilities:
 Current maturities of long-term debt and
  long-term debt in default                         $ 81,728       110,062      116,488
 Accounts payable                                     14,536        12,342       23,644
 Accrued liabilities                                  15,103        18,608       15,171
                                                    --------       -------      -------
     Total current liabilities                       111,367       141,012      155,303

Long-term debt                                         3,670         3,449            -

Minority Interest                                        484           425            -

Common stock & other capital:
 Class A common stock & common stock                   2,169         2,169        2,169
 Other capital                                        42,298        45,845       66,385
                                                    --------       -------      -------
     Total common stock & other capital               44,467        48,014       68,554
                                                    --------       -------      -------

                                                    $159,988       192,900      223,857
                                                    ========       =======      =======
</TABLE>
*  Condensed from audited financial statements.

See notes to condensed consolidated financial statements.

                                    3 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
           (dollars and shares in thousands, except per share data)
<TABLE>
<CAPTION>
                                          Three Months Ended            Six Months Ended
                                                June 30                      June 30
                                          ------------------         -------------------
                                             2001       2000             2001       2000
                                             ----       ----             ----       ----
<S>                                       <C>        <C>              <C>        <C>
Net revenues                              $68,378     65,122          123,803    132,425
                                          -------    -------          -------    -------

Costs and expenses:
  Cost of goods sold                       51,179     60,249           95,918    114,928
  Marketing and administrative              9,530     11,784           19,407     21,681
  Engineering and product development       2,155      2,883            3,918      5,144
                                          -------    -------          -------    -------

                                           62,864     74,916          119,243    141,753
                                          -------    -------         --------    -------

Operating earnings (loss)                   5,514     (9,794)           4,560     (9,328)
                                          -------    -------          -------    -------

Other expense (income):
  Interest expense                          3,330      2,598            7,445      4,875
  Interest income                            (212)      (329)            (623)      (525)
  Other, net                                  195        (98)             217       (101)
                                          -------    -------          -------    -------

Earnings (loss) before income taxes         2,201    (11,965)          (2,479)   (13,577)

Income tax expense (benefit)                  222     (3,645)             268     (4,234)
                                          -------    -------          -------    -------

Net earnings (loss)                       $ 1,979     (8,320)          (2,747)    (9,343)
                                          =======    =======          =======    =======

Share data:
Weighted average outstanding
       common shares:
           Basic                           21,691     21,641           21,691     21,649

           Diluted                         21,693     21,641           21,691     21,649

   Net earnings (loss) per average
       outstanding share:
           Basic                          $   .09      (0.38)            (.13)     (0.43)
                                          =======    =======          =======    =======

           Diluted                        $   .09      (0.38)            (.13)     (0.43)
                                          =======    =======          =======    =======

   Dividends per common share             $     -          -                -          -
                                          =======    =======          =======    =======
 </TABLE>

See notes to condensed consolidated financial statements.

                                    4 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK
                               AND OTHER CAPITAL
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                          Accumulated
                                     Class A Common Stock    Additional      Other
                                     --------------------     Paid-in    Comprehensive   Retained
                                       Shares   Amount        Capital         Loss       Earnings     Total
                                     -------------------------------------------------------------------------
<S>                                  <C>       <C>           <C>         <C>             <C>        <C>
Balance December 31, 1998             21,549   $2,155          $50,057            -      $ 24,014   $ 76,226

Net earnings                               -        -                -            -         2,489      2,489

Unrealized loss on available
 for sale securities, net of
 tax benefit of $113                       -        -                -         (197)            -       (197)
                                                                                                    --------
Comprehensive income                                                                                $  2,292

Retirement of voting common
 stock                                     -        -               (1)           -             -         (1)

Exercise of stock options                 35        3              160            -             -        163

Common stock issued                       57        6              394            -             -        400

Dividends paid, common stock
 ($.045 per share)                         -        -                -            -          (971)      (971)
                                      ------   ------          -------     --------      --------   --------
Balance December 31, 1999             21,641    2,164           50,610         (197)       25,532     78,109

Net loss                                   -        -                -            -       (30,195)   (30,195)

Unrealized loss on available
 for sale securities                       -        -                -          (60)            -        (60)

Foreign currency translation
 adjustments                               -        -                -         (140)            -       (140)
                                                                                                    --------
Comprehensive loss                                                                                  $(30,395)

Common stock issued                       50        5              295            -             -        300
                                      ------   ------          -------     --------      --------   --------

Balance December 31, 2000             21,691    2,169           50,905         (397)       (4,663)    48,014
(all remaining information
   is unaudited)

Net loss                                   -        -                -            -        (2,747)    (2,747)

Unrealized gain on available
 for sale securities                       -        -                -          140             -        140

Foreign currency translation
 adjustments                               -        -                -         (940)            -       (940)
                                                                                                    --------

Comprehensive loss                                                                                    (3,547)

                                      ------   ------          -------     --------      --------   --------
Balance June 30, 2001                 21,691   $2,169          $50,905     $ (1,197)     $ (7,410)  $ 44,467
                                      ======   ======          =======     ========      ========   ========
</TABLE>

See notes to condensed consolidated financial statements.

                                    5 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                            (dollars in thousands)

<TABLE>
<CAPTION>
                                                                              Six Months Ended
                                                                                  June 30
                                                                             ------------------
                                                                          2001               2000
                                                                        ------              ------
<S>                                                                    <C>                  <C>
OPERATING ACTIVITIES
 Net loss                                                              $ (2,747)             (9,343)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
  Depreciation                                                            2,370               2,227
  Amortization                                                              407                 322
  (Gain) loss on sale of assets                                              23                (101)
  Realized loss from sale of marketable securities                          115                   -
  Minority interest in earnings of consolidated subsidiary                   59                   -
  Change in assets and liabilities, net of effects of
  acquisitions of businesses:
     Receivables                                                         (2,046)             (2,596)
     Inventories                                                         19,304               9,803
     Other current assets                                                  (623)                 45
     Accounts payable                                                     2,193               1,353
     Accrued liabilities                                                 (3,505)             (1,693)
     Deferred income taxes                                                    -              (4,296)
     Long-term receivables                                                 (394)               (277)
     Other non-current assets, excluding amortization                        71              (1,037)
                                                                       --------              ------
 Net cash and cash equivalents provided by (used in)
  operating activities                                                   15,227              (5,593)
                                                                       --------              ------

INVESTING ACTIVITIES
 Proceeds from sale of marketable securities                                786                   -
 Purchases of marketable securities                                         (62)                (67)
 Cash paid for business acquisitions                                          -              (3,916)
 Proceeds from the sale of assets                                            17                 109
 Capital expenditures                                                      (402)             (1,886)
                                                                       --------              ------
 Net cash and cash equivalents provided by (used in)
  investing activities                                                      339              (5,760)
                                                                       --------              ------

FINANCING ACTIVITIES
 Payments on notes payable                                               (5,608)               (222)
 Borrowings on long-term debt                                                 -               3,373
 Net borrowings (payments) on revolving line of credit                  (22,504)             12,817
                                                                       --------              ------
 Net cash and cash equivalents provided by (used in)
  financing activities                                                  (28,112)             15,968
                                                                       --------              ------

Increase (decrease) in cash and cash equivalents                        (12,547)              4,615

Cash and cash equivalents at beginning of period                         13,637              12,681
                                                                       --------              ------

Cash and cash equivalents at end of period                             $  1,090              17,296
                                                                       ========              ======

</TABLE>

See notes to condensed consolidated financial statements.

                                    6 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

(1)  Interim Periods and Principles of Consolidation
     -----------------------------------------------
     The interim condensed consolidated financial information has been prepared
     in conformity with accounting principles generally accepted in the United
     States of America applied, in all material respects, on a basis consistent
     with the consolidated financial statements included in the Company's annual
     report filed with the Securities and Exchange Commission for the preceding
     fiscal year. The financial information as of June 30, 2001 and 2000 and for
     the interim periods ended June 30, 2001 and 2000 included herein is
     unaudited; however, such information reflects all adjustments consisting of
     only normal recurring adjustments, which are, in the opinion of management,
     necessary to a fair presentation of the results for the interim periods.

     The results of operations for the six months ended June 30, 2001 are not
     necessarily indicative of the results to be expected for the full year as
     the Company is in a seasonal business.

(2)  Merger Agreement
     ----------------
     On June 27, 2001, the Company entered into a merger agreement with Terex
     Corporation (Terex), whereby the Company will become a wholly-owned
     subsidiary of Terex. Under the merger agreement, which is subject to the
     approval of the Company's shareholders, each share of the Company's common
     stock will be exchanged for 0.16 of a share of Terex common stock, subject
     to a downward adjustment if the consolidated net debt of the Company, as
     defined in the merger agreement, exceeds $75.25 million as of the end of
     the last business day of the last full week immediately preceding the
     closing of the merger.

     Pursuant to the terms the merger agreement, the Company also entered into
     an agreement with Bill Swisher, Chief Executive Officer and Chairman of the
     Board of the Company, whereby Mr. Swisher and a general partnership which
     he controls agreed to transfer to the Company certain real and personal
     properties currently being used by the Company and release all claims they
     may have against the Company. The Company and Mr. Swisher also entered into
     a non-competition agreement pursuant to which Mr. Swisher has agreed, among
     other things, not to compete with the Company or its subsidiaries for a
     period of 10 years. In consideration of the transactions and covenants set
     forth in these agreements, the Company will pay Mr. Swisher $1,800,000. At
     Terex's option, a portion of this consideration may be in the form of CMI
     Corporation common stock. If the merger is not consummated, these
     agreements will have no force or effect.

(3)  Impact of Recently Issued Accounting Standards
     ----------------------------------------------
     On January 1, 2001 the Company adopted the provisions of Statement of
     Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
     Instruments and Hedging Activities" and SFAS No. 138 "Accounting for
     Certain Derivative Instruments and Certain Hedging Activities", and
     Amendment of SFAS No. 133. SFAS No. 133 and SFAS No. 138 establish
     standards for accounting and reporting of derivative instruments, including
     certain derivative instruments embedded in other contracts, and for hedging
     activities. It requires that an entity recognize all derivatives as either
     assets or liabilities in the statement of financial position and measure
     those instruments at fair value. The accounting for changes in fair value
     of a derivative depends on the intended use of the derivative and the

                                    7 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

     resulting designation. Adoption of these statements did not impact the
     Company.

     In July 2001, the Financial Accounting Standards Board (FASB) issued
     Statement No. 141, "Business Combinations," and Statement No. 142 "Goodwill
     and Other Intangible Assets." Statement 141 requires that the purchase
     method of accounting be used for all business combinations initiated after
     June 30, 2001 as well as all purchase method business combinations
     completed after June 30, 2001. Statement 141 also specifies the criteria
     intangible assets acquired in a purchase method business combination must
     meet to be recognized and reported apart from goodwill. Statement 142 will
     require that goodwill and intangible assets with indefinite useful lives no
     longer be amortized, but instead tested for impairment at least annually in
     accordance with the provisions of Statement 142. Statement 142 will also
     require that intangible assets with estimable useful lives be amortized
     over their respective estimated useful lives to their estimated residual
     values, and reviewed for impairment in accordance with SFAS No. 121,
     "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
     Assets to Be Disposed Of."

     The Company is required to adopt the provisions of Statement 141
     immediately, and Statement 142 effective January 1, 2002. Furthermore,
     goodwill and intangible assets determined to have an indefinite useful life
     acquired in a purchase business combination completed after June 30, 2001,
     but before Statement 142 is adopted in full will not be amortized, but will
     continue to be evaluated for impairment in accordance with the appropriate
     pre-Statement 142 accounting literature. Goodwill and intangible assets
     acquired in business combinations completed before July 1, 2001 will
     continue to be amortized and tested for impairment in accordance with the
     appropriate pre-Statement 142 accounting requirements prior to adoption of
     Statement 142.

     Statement 141 will require upon adoption of Statement 142, that the Company
     evaluate its existing intangible assets and goodwill that were acquired in
     a prior purchase business combination, and to make any necessary
     reclassifications in order to conform with the new criteria in Statement
     141 for recognition apart from goodwill. Upon adoption of Statement 142,
     the Company will be required to reassess the useful lives and residual
     values of all intangible assets acquired, and make any necessary
     amortization period adjustments by the end of the first interim period
     after adoption. In addition, to the extent an intangible asset is
     identified as having an indefinite useful life, the Company will be
     required to test the intangible asset for impairment in accordance with the
     provisions of Statement 142 within the first interim period. Any impairment
     loss will be measured as of the date of adoption and recognized as the
     cumulative effect of a change in accounting principle in the first interim
     period.

     In connection with Statement 142's transitional goodwill impairment
     evaluation, the Statement will require the Company to perform an assessment
     of whether there is an indication that goodwill is impaired as of the date
     of adoption. To accomplish this, the Company must identify its reporting
     units and determine the carrying value of each reporting unit by assigning
     the assets and liabilities, including the existing goodwill and intangible
     assets, to those reporting units as of the date of adoption. The Company

                                    8 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

     will then have up to six months from the date of adoption to determine the
     fair value of each reporting unit and compare to the reporting unit's
     carrying amount. To the extent a reporting unit's carrying amount exceeds
     its fair value, an indication exists that the reporting unit's goodwill may
     be impaired and the Company must perform the second step of the
     transitional impairment test. In the second step, the Company must compare
     the implied fair value of the reporting unit's goodwill, determined by
     allocating the reporting unit's fair value to all of its assets (recognized
     and unrecognized) and liabilities in a manner similar to a purchase price
     allocation in accordance with Statement 141, to its carrying amount, both
     of which would be measured as of the date of adoption. This second step is
     required to be completed as soon as possible, but no later than the end of
     the year of adoption. Any transitional impairment loss will be recognized
     as the cumulative effect of a change in accounting principle in the
     Company's statement of earnings.

     Finally, any unamortized negative goodwill existing at the date Statement
     142 is adopted must be written off as the cumulative effect of a change in
     accounting principle.

     As of the date of adoption, the Company expects to have unamortized
     goodwill of approximately $5.3 million, which will be subject to the
     transition provisions of Statements 141 and 142. Amortization expense
     related to goodwill was approximately $500,000 and $268,000 for the year
     ended December 31, 2000 and the six months ended June 30, 2001,
     respectively. Because of the extensive effort needed to comply with
     adopting Statements 141 and 142, it is not practicable to reasonably
     estimate the impact of adopting these Statements on the Company's financial
     statements at the date of this filing, including whether the Company will
     be required to recognize any transitional impairment losses as the
     cumulative effect of a change in accounting principle.

(4)  Liquidity and Indebtedness
     --------------------------
     During most of 2000, the Company was not in compliance with certain
     provisions of its senior notes agreement, its revolving credit agreement,
     and its Oklahoma Development Finance Authority (ODFA) note. In addition,
     the Company did not make a required payment on the senior notes in the
     third quarter of 2000. Compliance with these provisions is determined each
     quarter based on the results of the trailing four quarters ending on each
     determination date. Noncompliance with these provisions permits the lenders
     to accelerate the Company's debt under the senior note agreement, the
     revolving credit agreement, and the ODFA note.

     In May 2001, the Company received a waiver from the ODFA waiving compliance
     with the financial covenants of the note agreement until September 30,
     2002. In addition, the Company obtained forbearance agreements with the
     senior notes and revolving line of credit lenders on September 26, 2000,
     November 15, 2000, and January 15, 2001. Among other things, the
     forbearance agreements prevent the Company's lenders from exercising their
     acceleration rights, provided that the Company complies with the terms and
     conditions of the forbearance agreements, discussed further below. The
     forbearance period currently extends until September 30, 2001. The Company
     has the option to further extend the forbearance period through January 31,
     2002, contingent upon payment of

                                    9 pf 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

     additional fees and meeting certain terms and conditions, which are
     discussed further below.

     The January 15, 2001 forbearance agreements provide for several consecutive
     forbearance periods as discussed above and divided the $74.0 million
     balance on the revolving line of credit into three new debt facilities.
     This new debt structure is as follows: $49.5 million for a revolving loan,
     $15.3 million for a term loan and $9.2 million for an additional term loan.
     This debt accrues interest at prime rate plus 2.5% per annum and is paid
     monthly. The revolving line is an asset-based loan in which the face
     commitment of $49.5 million is reduced to $41.5 million by December 2,
     2001. In addition, the total principal amount outstanding on the revolving
     line cannot exceed the "borrowing base" as defined in the forbearance
     agreements. The forbearance agreements specify certain monthly principal
     reductions on the term loans. The first term loan requires monthly
     principal reductions of $182,476 from February 2001 through August 2001
     increasing to $681,897 from September 2001 through December 2001, and a
     balloon payment of $11,323,110 in January 2002. The other term loan
     requires monthly principal reductions of $1,223,364 from February 2001
     through August 2001 and a final payment of $637,386 in September 2001. At
     June 30, 2001, the balances on the revolving loan, term loan and additional
     term loan were $32,566,755, $14,598,127, and $4,307,478, respectively. At
     June 30, 2001, there was approximately $12.3 million available for advances
     on the Company's revolving line of credit.

     The senior notes balance at June 30, 2001 was $24,312,553. Interest accrues
     at prime rate plus 2.5% and is payable monthly. Under the terms of the
     January 15, 2001 forbearance agreements, $8,514,136 in aggregate principal
     payments are required from February 2001 through December 2001, with the
     remaining balance of $20,308,294 due January 2002. The principal payment
     dates discussed in this paragraph and the previous paragraph apply only if
     the Company is entitled to extend the forbearance agreements through
     January 31, 2002. This right to extend is contingent upon the Company
     making all of the scheduled payments of principal and interest, as well as
     paying approximately $1.4 million in fees to the lenders. Should the
     Company fail to make any of the payments described above, the lenders will
     have the right to accelerate the indebtedness. As a result, the
     indebtedness covered under these forbearance agreements has been classified
     as current. See also Note 2.

     Under the forbearance agreements, the Company also granted security
     interests to its lenders in substantially all of its assets including
     receivables, inventories, patents, machinery and equipment, and real
     estate.

     Management has taken steps in order to assist the Company in maintaining
     compliance with the forbearance agreements. The Company conducted an
     extensive operations review in May 2000. Based on this review, it was
     determined that the Company's overhead costs and cost of goods sold had
     risen beyond levels which could be tolerated given the Company's industry,
     history and volume of business. Cost cuts have been

                                   10 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

     made in selling, general and administrative expenses and in manufacturing
     overhead. These cost cuts were achieved by reductions in workforce and
     discretionary spending.

     The Company is also continuing its efforts to lower its debt by reducing
     its inventory to market demand levels. In addition, the Company is
     marketing for quick sale raw materials no longer used in the manufacturing
     process, as well as used, slow-moving and obsolete inventory.

     The Company is also exploring the possibility of selling certain ancillary
     divisions in order to lower its debt and to maintain compliance with the
     forbearance agreements. In March 2001, management retained the services of
     an investment banking firm to begin searching for potential lenders to
     refinance the Company's debt and also to assist with identification of
     prospective buyers for certain divisions within the Company. As of the date
     of this report, the Company was in compliance with all terms and conditions
     of the forbearance agreements.

     The minimum principal payments required during 2001, which are discussed
     above, total approximately $30 million and must be made in order to
     maintain compliance with the forbearance agreements and in order to have
     the right to exercise the option to extend the forbearance period until
     January 31, 2002. Due to the Company's reliance on these debt financing
     arrangements for working capital, compliance with the forbearance
     agreements currently in place or additional forbearance by its lenders is
     necessary for the Company to meet its obligations as they become due and to
     avoid material adverse effects on the Company's financial position, results
     of operations, and liquidity.

(5)  Reclassifications
     -----------------
     Certain reclassifications have been made to the prior interim period to
     conform to the 2001 presentation. The primary reclassification relates to
     freight billed to customers. During 2000, the Company adopted the
     provisions of EITF Issue 00-10 "Accounting for Shipping and Handling Fees
     and Costs." This EITF Issue requires that all amounts billed to a customer
     in a sale transaction related to shipping and handling be classified as
     revenues. Accordingly, net revenues include approximately $794,000, and
     $1.2 million related to shipping and handling charges billed to customers
     during the three months ended June 30, 2001 and June 30, 2000,
     respectively, and $1.7 million and $2.4 million for the six months ended
     June 30, 2001 and June 30, 2000, respectively. The related costs associated
     with shipping and handling are included as a component of cost of goods
     sold.

(6)  Related Party Transactions
     --------------------------
     There have been no material changes in related party transactions since the
     annual report filed for the preceding fiscal year except as discussed in
     Note 2.

                                   11 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

(7)  Commitments and Contingencies
     -----------------------------
     The Company and its subsidiaries are parties to various leases relating to
     plants, warehouses, office facilities, transportation vehicles, and certain
     other equipment. Real estate taxes, insurance, and maintenance expenses are
     normally obligations of the Company. It is expected that in the normal
     course of business, the majority of the leases will be renewed or replaced
     by other leases. Leases do not restrict dividends, debt, or future leasing
     arrangements. All leasing arrangements contain normal leasing terms without
     unusual purchase options or escalation clauses.

     At June 30, 2001 the Company was contingently liable as guarantor for
     certain accounts receivable sold with recourse of approximately $3.0
     million through September 2009.

(8)  Earnings Per Share
     ------------------
     Basic earnings (loss) per share is computed by dividing net earnings (loss)
     applicable to common stock by the weighted average number of common shares
     outstanding for the period. Diluted earnings per share reflects the
     potential dilution that could occur if the Company's outstanding stock
     options were exercised (calculated using the treasury stock method).

     The following table reconciles the weighted average common shares
     outstanding used in the calculation of basic earnings (loss) per common
     share to the number of shares used in the calculation of diluted earnings
     (loss) per share (shares in thousands):

                                            Three Months Ended  Six Months Ended
                                                   June 30       June 30
                                            ------------------  ----------------
                                             2001        2000    2001    2000
                                             ----        ----    ----    ----

       Weighted average number of
         Common shares outstanding-basic    21,691      21,641  21,691  21,649

       Dilutive effect of potential
         common shares issuable upon
         exercise of employee stock
         options                                 2           -       -       -
                                            ------    --------  ------  ------

       Weighted average number of
         common shares outstanding -
         diluted                            21,693      21,641  21,691  21,649
                                            ======    ========  ======  ======

     Options to purchase 552,500 shares of common stock at $1.94 - $6.81 per
     share were outstanding at June 30, 2001. The dilutive effect of potential
     common shares issuable upon exercise of employee stock options was 2,357
     shares for the six months ended June 30, 2001, but these shares were not
     included in the computation of diluted loss per share because the effect
     would have been anti-dilutive. Options to purchase 295,000 shares of common
     stock at $4.13 - $6.81 per share were outstanding at June 30, 2000. The
     dilutive effect of potential common shares issuable upon exercise of
     employee stock options was 844 shares and 26,865 for the three and six
     months ended June 30, 2000, respectively, but these shares were not
     included in the computation of diluted loss per share because the effect
     would have been anti-dilutive.

                                   12 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

(9)  Litigation
     ----------
     Since 1996, the Company has been involved in litigation in the U. S.
     District Court for the Western District of Oklahoma (the District Court)
     with Cedarapids, Inc. (Cedarapids), which was acquired by Terex Corporation
     in August 1999. The Company sued Cedarapids seeking a declaratory judgement
     that a patent held by Cedarapids was invalid, or, in the alternative, that
     the Company was not infringing the patent. Cedarapids subsequently filed a
     counterclaim against the Company, alleging that the Company's Triple-Drum
     Mixer infringes this same patent. During February 2001, the District Court
     ruled that one configuration of the Company's Triple-Drum Mixer (used on
     approximately 100 Triple-Drums) infringed the patent held by Cedarapids.
     The District Court enjoined the Company from selling this particular
     configuration of Triple-Drum. On March 20, 2001, the District Court awarded
     damages and prejudgment interest to Cedarapids of approximately
     $11,700,000.

     In April 2001, the Company gave notice of its intent to appeal the judgment
     to the United States Court of Appeals for the Federal Circuit (the Federal
     Circuit). The Company also filed a motion with the District Court
     requesting a stay of execution during the pendency of the appeal. The
     District Court denied this motion. In addition, the District Court ruled
     that, unless the Company posted a supersedeas bond in favor of Cedarapids
     in the amount of the judgment by June 1, 2001, Cedarapids could proceed to
     execute on its judgment. The Company's lenders subsequently advised the
     Company that they would not issue a letter of credit to allow the Company
     to obtain a full or partial supersedeas bond in favor of Cedarapids.

     In April 2001, based upon a recent decision by the Federal Circuit, the
     Company asked the District Court to reduce the amount of the judgment
     awarded to Cedarapids. On July 19, 2001, the District Court certified its
     intention to grant the Company's motion for reduction of damages should the
     case be remanded back to the District Court. Based on the number of Triple-
     Drum mixers sold in the time period covered by the court's order, the
     Company estimates that the judgment would be reduced from approximately
     $11.7 million to approximately $2.5 million.

     It is the opinion of management and legal counsel that the Company will
     ultimately have no liability for infringement in this case. The Company has
     a number of defenses which, in the opinion of management and counsel, will
     result in the judgment being overturned upon appeal. Accordingly, no
     accrual has been established for this judgment. In addition, the Company
     has capitalized approximately $1.7 million in legal fees incurred in
     defense of the Triple-Drum patent. These costs are being amortized over the
     remaining life of the patent. In the event that the Federal Circuit does
     not overturn the District Court's ruling, these costs will be expensed in
     the period when the final decision is rendered.

     Under the injunction issued by the court, the Company can continue selling
     Triple-Drum Mixers with total air burners. The costs associated with using
     the total air burners are not significant. Therefore, management does not
     expect that the injunction will have a material impact on future sales.

                                   13 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

     In September 1998, Cedarapids filed a separate suit against the Company in
     the U. S. District Court for the Northern District of Iowa alleging that
     the Company has infringed upon a second patent held by Cedarapids.
     Cedarapids is seeking damages in excess of $10 million in this case. The
     Company, together with its legal counsel, believes that this claim is
     without merit, and intends to vigorously contest this lawsuit. Since the
     likelihood of an unfavorable outcome in this case has not been determined
     to be probable by the Company and its legal counsel no liability has been
     recorded for this case.

     On August 10, 2001, the Company, Terex and Cedarapids agreed that, so long
     as the merger agreement between the Company and Terex is in effect, they
     will not take any further action in connection with either of the patent
     infringement cases described above (including appeals), except to the
     extent necessary to avoid substantial prejudice to a party. In addition,
     Terex and Cedarapids agreed not to take any action to enforce the judgment
     entered in favor of Cedarapids until the twentieth day after the
     termination of the merger agreement. Furthermore, CMI and Cedarapids agreed
     to file a joint motion with the Federal Circuit seeking a stay of the
     Oklahoma case pending the consummation of the transactions contemplated by
     the merger agreement or the termination of the merger agreement. If,
     however, the Board of Directors of CMI withdraws, modifies or changes its
     recommendation of the merger agreement or CMI receives a "takeover
     proposal," as that term is defined in the merger agreement, Terex may
     terminate these agreements by giving five days notice to the Company.

     In February 2001, Mecom Distribution, Ltd., a California limited
     partnership, brought an action against the Company in the U.S. District
     Court for the Eastern District of California. Mecom, a former distributor
     of certain Company products, alleges, among other things, that the
     Company's conduct in terminating Mecom as a distributor of the Company's
     products violated the California Equipment Dealer's Act, Oklahoma law and
     various agreements between the parties. Mecom further alleges that CMI
     violated the terms of its agreements with Mecom by selling equipment and
     parts directly to customers located in California. The remedies sought by
     Mecom include compensatory damages in excess of $2,000,000, punitive
     damages, attorneys' fees and costs. The Company denies that it has any
     liability to Mecom. Since the likelihood of an unfavorable outcome in this
     case is not considered probable by the Company and its legal counsel, no
     liability has been recorded.

     In December 2000, Melvin L. Black Incorporated (Black) notified the Company
     that it believed the Company had breached the terms of a license agreement,
     dated May 27, 1997, between Black and the Company. No lawsuit was ever
     filed, but in connection with the execution of the merger agreement with
     Terex, the Company entered into a settlement agreement with Black and
     certain of its affiliates. Under the terms of the settlement agreement, the
     Company has agreed, among other things, to pay $2.25 million to Black
     within ten business days after the closing of the proposed merger with
     Terex. The amounts paid to Black will be treated as a non-refundable
     advance on royalties payable by the Company under the license agreement. If
     the proposed merger with Terex is not consummated, the settlement agreement
     with Black will have no force or effect, in

                                   14 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

      which case Black has indicated that it will file suit against the Company.
      Since this royalty payment is contingent upon successful completion of the
      proposed merger between the Company and Terex, no liability related to the
      settlement has been accrued by the Company as of June 30, 2001. However,
      since the Company plans to pursue the technology underlying this license
      agreement, the amounts paid to Black will offset future royalty payments,
      and will accordingly be capitalized in the period when the settlement is
      paid. If the settlement is paid, future royalty payments earned by Black
      will be expensed in the period earned, with an appropriate reduction in
      the prepaid royalty.

      There are numerous other claims and pending legal proceedings that
      generally involve product liability and employment issues. These cases
      are, in the opinion of management, ordinary matters incidental to the
      normal business conducted by the Company. In the opinion of the Company's
      management after consultation with outside legal counsel, the ultimate
      disposition of such other proceedings will not have a material adverse
      effect on the Company's consolidated financial position, liquidity or
      future results of operations.

(10)  Segment Information
      -------------------
      The Company currently manages its business by operating location. As such,
      the Company identifies its segments based on its individual manufacturing
      facilities. The Company has three reportable segments, its main Oklahoma
      City manufacturing facility, its Bid-Well facility and its Johnson-Ross
      facilities. These facilities manufacture and market products in the mobile
      and materials processing equipment categories as well as parts for the
      products.

      The specific products manufactured at the Oklahoma City plant are as
      follows: (i) mobile equipment - the Company's primary line of concrete
      paving systems, pavement profiling and reclaiming/stabilizing equipment,
      weighing equipment, municipal landfill compactors, and industrial and
      green waste grinding machines; and (ii) materials processing equipment -
      hot-mix asphalt production systems, and thermal systems for remediating
      contaminated soils and sanitizing medical waste. The products manufactured
      at the Bid-Well facility fall into the mobile equipment category and
      include lightweight weight grading and concrete paving and finishing
      machines. The Johnson-Ross facilities manufacture concrete batching plants
      which fall into the processing equipment category. The products
      manufactured at the "Other" facilities include custom heavy hauling and
      heavy-duty trailers and small utility sized pavement profilers and
      pavement reclaiming machines, all of which fall into the mobile equipment
      category.

      Following is certain financial information regarding the Company's
      segments. The revenues reported below are all from external customers.
      General corporate expenses are not allocated to the operating segments;
      rather, such expenses are included as a reconciling item to reported
      operating earnings (dollars in thousands).

                                   15 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)

<TABLE>
<CAPTION>
                                          Oklahoma             Johnson        All
                                            City     Bid-Well   -Ross        Other       Total
                                          -----------------------------------------------------
     <S>                                  <C>        <C>       <C>          <C>        <C>
     As of June 30, 2001:
       Total assets                       $114,744      4,118    12,781      28,345     159,988

     Three months ended June 30, 2001:
       Net revenues                       $ 42,903      3,244     5,010      17,221      68,378
       Costs and expenses                   39,566      2,306     4,918      14,613      61,403
                                          --------   --------   -------     -------    --------
          Segment measure of
          operating profit                $  3,337        938        92       2,608       6,975
                                          ========   ========   =======     =======
            General corporate expenses                                                   (1,461)
                                                                                       --------
            Operating earnings                                                            5,514

       Interest expense                                                                  (3,330)
       Interest income                                                                      212
       Other, net                                                                          (195)
                                                                                       --------
          Earnings before income taxes                                                    2,201
       Income tax expense                                                                   222
                                                                                       --------
       Net earnings                                                                    $  1,979
                                                                                       ========
       Capital expenditures               $    206         30        29          66         331
                                          ========   ========   =======     =======    ========
       Depreciation and amortization      $    990         24       108         193       1,315
                                          ========   ========   =======     =======    ========

<CAPTION>
     <S>                                  <C>        <C>       <C>          <C>        <C>
     As of June 30, 2000:
       Total assets                       $177,483      4,227    19,970      22,177     223,857

     Three months ended June 30, 2000:
       Net revenues                       $ 48,614      2,462     5,130       8,916      65,122
       Costs and expenses                   56,918      1,786     6,031       7,866      72,601
                                          --------   --------   -------     -------    --------
          Segment measure of
          operating profit (loss)         $ (8,304)       676      (901)      1,050      (7,749)
                                          ========   ========   =======     =======
            General corporate expenses                                                   (2,315)
                                                                                       --------
            Operating loss                                                               (9,794)

       Interest expense                                                                  (2,598)
       Interest income                                                                      329
       Other, net                                                                            98
                                                                                       --------
          Loss before income taxes                                                      (11,965)
       Income tax benefit                                                                (3,645)
                                                                                       --------
       Net loss                                                                        $ (8,320)
                                                                                       ========
       Capital expenditures               $    508         52        40         228         828
                                          ========   ========   =======     =======    ========
       Depreciation and amortization      $    940         27        87         236       1,290
                                          ========   ========   =======     =======    ========
</TABLE>

                                   16 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
       Notes to Condensed Consolidated Financial Statements (Continued)


<TABLE>
<CAPTION>
                                          Oklahoma             Johnson         All
                                            City     Bid-Well   -Ross         Other     Total
                                          -----------------------------------------------------
     <S>                                  <C>        <C>         <C>         <C>        <C>
     Six months ended June 30, 2001:
       Net revenues                       $ 92,345      4,558      8,875      18,025    123,803
       Costs and expenses                   86,683      3,562      9,184      16,973    116,402
                                          --------   --------    -------     -------   --------
          Segment measure of
          operating profit (loss)         $  5,662        996       (309)      1,052      7,401
                                          ========   ========    =======     =======
            General corporate expenses                                                   (2,841)
                                                                                       --------
            Operating earnings                                                            4,560

       Interest expense                                                                  (7,445)
       Interest income                                                                      623
       Other, net                                                                          (217)
                                                                                       --------
          Loss before income taxes                                                       (2,479)

       Income tax expense                                                                   268
                                                                                       --------
       Net loss                                                                        $ (2,747)
                                                                                       ========
       Capital expenditures               $    321         42         28          11        402
                                          ========   ========    =======     =======   ========
       Depreciation and amortization      $  1,952         51        197         577      2,777
                                          ========   ========    =======     =======   ========

<CAPTION>
     <S>                                  <C>        <C>         <C>         <C>        <C>
     Six months ended June 30, 2000:
       Net revenues                       $101,637      3,842      9,683      17,263    132,425
       Costs and expenses                  109,179      3,011     10,295      15,721    138,206
                                          --------      -----    -------     -------   --------
          Segment measure of
          operating profit (loss)         $ (7,542)       831       (612)      1,542     (5,781)
                                          ========      =====    =======     =======
            General corporate expenses                                                   (3,547)
                                                                                       --------
            Operating loss                                                               (9,328)

       Interest expense                                                                  (4,875)
       Interest income                                                                      525
       Other, net                                                                           101
                                                                                       --------
          Loss before income taxes                                                      (13,577)

       Income tax benefit                                                                (4,234)
                                                                                       --------
       Net loss                                                                        $ (9,343)
                                                                                       ========
       Capital expenditures               $  1,443        102         80         261      1,886
                                          ========      =====    =======     =======   ========
       Depreciation and amortization      $  1,882         55        174         438      2,549
                                          ========      =====    =======     =======   ========
</TABLE>

                                   17 of 28
<PAGE>

                        CMI CORPORATION AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Continued)

     At June 30, 2001 the Company had one operating location in Belgium, and
     another in Brazil. The Company's United Kingdom location was closed during
     the second quarter of 2001. The Belgium location, which manufactures a
     high-tech line of midrange concrete slipform pavers, has approximately $2.7
     million of long-lived assets comprised primarily of property, plant and
     equipment, intangibles, and other assets. The Brazilian location, which
     manufactures asphalt plants, asphalt pavers and surface finishing machines,
     has approximately $2.9 million of long-lived assets comprised primarily of
     property, plant and equipment, intangibles and other assets. At June 30,
     2001, all remaining assets were located in the United States.

     Revenues for products were as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                       Three Months Ended        Six Months Ended
                                            June 30                  June 30
                                       ------------------        ----------------
<S>                                    <C>        <C>            <C>       <C>
                                          2001      2000           2001      2000
                                          ----      ----           ----      ----

      Mobile Equipment                 $22,475    23,834         41,378    49,247
      Material Processing Equipment     36,648    31,148         64,655    64,652
      Parts and Used Equipment           9,255    10,140         17,770    18,526
                                       -------    ------        -------   -------
                                       $68,378    65,122        123,803   132,425
                                       =======    ======        =======   =======
</TABLE>

(11) Supplemental Cash Flow Information
     ----------------------------------

     Cash paid for interest was $8.6 million for the six months ended June 30,
     2001 compared to $4.5 million for the six months ended June 30, 2000. Cash
     paid for income taxes was $40,000 for the six months ended June 30, 2001
     compared to $150,000 for the six months ended June 30, 2000.

(12) Comprehensive Loss
     ------------------

     Comprehensive loss for the three and six months ended June 30, 2001 and
     2000 was as follows:

<TABLE>
<CAPTION>

                                       Three Months Ended        Six Months Ended
                                            June 30                  June 30
                                       ------------------        ----------------
                                          2001      2000           2001      2000
                                          ----      ----           ----      ----
 <S>                                    <C>       <C>            <C>       <C>
     Net income (loss)                  $ 1,979   (8,320)        (2,747)   (9,343)
     Unrealized gain on available
       for sale securities, net of
       reclassification adjustments          74       85            140        85
     Foreign currency translation
       adjustments                         (706)    (398)          (940)     (597)
                                        -------   ------         ------    ------
     Comprehensive income (loss)        $ 1,347   (8,633)        (3,547)   (9,855)
                                        =======   ======         ======    ======
</TABLE>

                                    18 of 28
<PAGE>

                       CMI CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS


Proposed Merger
---------------

On June 27, 2001, the Company entered into a merger agreement with Terex
Corporation (Terex), whereby the Company will become a wholly-owned subsidiary
of Terex.  Under the merger agreement, which is subject to the approval of the
Company's shareholders, each share of the Company's common stock will be
exchanged for 0.16 of a share of Terex common stock, subject to a downward
adjustment if the consolidated net debt of the Company, as defined in the merger
agreement, exceeds $75.25 million as of the end of the last business day of the
last full week immediately preceding the closing of the merger.

The discussions included in this Item 2 - "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and in Item 3 - "Quantitative
and Qualitative Disclosures About Market Risks" do not reflect the effect the
proposed merger would have on the Company.

Results of Operations
---------------------

Net revenues increased 5.0% to $68.4 million for the three months ended June 30,
2001 compared to $65.1 million for the three months ended June 30, 2000. Net
revenues for international shipments increased 20.3% to $6.9 million for the
three months ended June 30, 2001 compared to $5.8 million for the three months
ended June 30, 2000.  Net revenues for domestic shipments increased 3.5% to
$61.5 million for the three months ended June 30, 2001 compared to $59.3 million
for the three months ended June 30, 2000.  The Company's net earnings were $2
million, or 9 cents per share, for the three months ended June 30, 2001,
compared to a net loss of $8.3 million, or 38 cents per share, for the three
months ended June 30, 2000.

The Company's net revenue increase quarter over quarter was due to the
acquisition of Cifali & CIA LTDA., the Company's Brazilian facility, which was
acquired in July 2000.

Net revenues decreased 6.5% to $123.8 million for the six months ended June 30,
2001 compared to $132.4 million for the six months ended June 30, 2000. Net
revenues for international shipments increased 45.5% to $13.4 million for the
six months ended June 30, 2001 compared to $9.2 million for the six months ended
June 30, 2000.  Net revenues for domestic shipments decreased 10.4% to $110.4
million for the six months ended June 30, 2001 compared to $123.2 million for
the six months ended June 30, 2000.  The Company's net loss was $2.7 million, or
13 cents per share, for the six months ended June 30, 2001, compared to a net
loss of $9.3 million, or 43 cents per share, for the six months ended June 30,
2000.

The Company's net revenue decrease year over year consisted of a $6.1 million
decrease in the Company's hot mix asphalt production systems, a $3.7 million
decrease in the Company's trailer line, a $3.0 million decrease in the Roto-Mill
line, and a $1.5 million decrease in the Company's paving and trimming line.
These declines were partially offset by $5.7 million in revenues provided by the
Company's Brazilian facility which was acquired in July 2000.

Gross margins for the three months ended June 30, 2001 averaged 25.2% compared
to 7.5% for the three months ended June 30, 2000.  Gross margins for the six
months ended June 30, 2001 averaged 22.5% compared to 13.2% for the six months
ended June 30, 2000.  The increase in margins was due to inventory write downs

                                    19 of 28
<PAGE>

of approximately $5.2 million taken in the second quarter of 2000. In addition,
second quarter 2000 margins were adversely impacted by $1.5 million of equipment
sold during the second quarter of 1999 which was returned during the second
quarter of 2000. The Company continues to aggressively implement a lean
manufacturing program at its Oklahoma City facility. All employees are being
trained in the principles of lean manufacturing. The Company has already seen
productivity improvements in the areas in which lean manufacturing has been
implemented. Management expects margins to improve as this program becomes more
fully implemented.

Marketing and administrative expenses decreased $2.3 million for the three
months ended June 30, 2001, and decreased $2.3 million for the six months ended
June 30, 2001.  As a percentage of net revenues, marketing and administrative
expenses were 13.9% for the three months ended June 30, 2001 compared to 18.1%
for the three months ended June 30, 2000, and were 15.7% for the six months
ended June 30, 2001 compared to 16.4% for the six months ended June 30, 2000.
Marketing and administrative expenses decreased due to the cost-cutting
initiatives taken during the last half of 2000; however, a portion of the
decline was offset due to the additional administrative expenses of Cifali,
which is the Brazilian facility acquired in July of 2000, as well as much higher
utility costs at all locations.  Management is continuing to monitor the
Company's marketing and administrative expenses in an effort to reduce non-value
added expenses.

Engineering and product development expenses decreased $728,000 for the three
months ended June 30, 2001, and decreased $1.2 million for the six months ended
June 30, 2001.  As a percentage of net revenues, engineering and product
development expenses were 3.2% for the three months ended June 30, 2001 compared
to 4.4% for the three months ended June 30, 2000, and were 3.2% for the six
months ended June 30, 2001 compared to 3.9% for the six months ended June 30,
2000. Engineering and product development expenses decreased due to a project to
redesign the Company's Series 3000 and 6000 paver lines which was started and
completed during 2000.  These costs did not continue into 2001.  In addition, in
June 2000, approximately $680,000 in prototype inventory was written off.

Interest expense increased to $3.3 million for the three months ended June 30,
2001 compared to $2.6 million for the three months ended June 30, 2000, and
increased to $7.4 million for the six months ended June 30, 2001 compared to
$4.9 million for the six months ended June 30, 2000. The Company's average
effective interest rate (including fees) increased to approximately 15.1% for
the three months ended June 30, 2001 compared to 9.8% for the three months ended
June 30, 2000.  The increase in interest expense was due to the higher effective
interest rates on the Company's outstanding debt (12.1%) as well as the
forbearance fees paid to the Company's senior notes and revolving credit
lenders.

Income tax expense was $222,000 for the three months ended June 30, 2001
compared to an income tax benefit of $3.6 million for the three months ended
June 30, 2000.  Due to the Company's operating losses during 2000 and the first
quarter of 2001, a 100% valuation allowance has been established against the
approximately $17.3 million in net deferred tax assets.  This caused the
increase in income tax expense.  The Company had a 37% effective tax rate for
the three months ended June 30, 2000.  The expense recorded for the three months
ended June 30, 2001 relates primarily to the Company's Brazilian operations. The
Company's quarterly tax rates are estimates of its expected annual effective
federal and state income tax rates.

                                    20 of 28
<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company amended its revolving line of credit agreement on February 3, 2000
to increase the Company's borrowing capacity from $70 million to $100 million.
Under the forbearance agreements discussed below, the line was reduced to $80
million on September 26, 2000, and further reduced to $77 million on November
15, 2000.  As of December 31, 2000, the Company had utilized approximately $74
million of the revolving line of credit. Other long-term debts have maturity
dates through September 2010.  However, the majority of the Company's long-term
debt is classified as current at June 30, 2001 based on the defaults occurring
on the majority of the Company's financing arrangements.

During most of 2000, the Company was not in compliance with certain provisions
of its senior notes agreement, its revolving credit agreement, and its Oklahoma
Development Finance Authority (ODFA) note. In addition, the Company did not make
a required payment on the senior notes in the third quarter of 2000. Compliance
with these provisions is determined each quarter based on the results of the
trailing four quarters ending on each determination date. Noncompliance with
these provisions permits the lenders to accelerate the Company's debt under the
senior note agreement, the revolving credit agreement, and the ODFA note.

In May 2001, the Company received a waiver from the ODFA waiving compliance with
the financial covenants of the note agreement until September 30, 2002. In
addition, the Company obtained forbearance agreements with the senior notes and
revolving line of credit lenders on September 26, 2000, November 15, 2000, and
January 15, 2001.   Among other things, the forbearance agreements prevent the
Company's lenders from exercising their acceleration rights, provided that the
Company complies with the terms and conditions of the forbearance agreements,
discussed further below. The forbearance period currently extends until
September 30, 2001. The Company has the option to further extend the forbearance
period through January 31, 2002, contingent upon payment of additional fees and
meeting certain terms and conditions, which are discussed further below.

The January 15, 2001 forbearance agreements provide for several consecutive
forbearance periods as discussed above and divided the $74.0 million balance on
the revolving line of credit into three new debt facilities.  This new debt
structure is as follows:  $49.5 million for a revolving loan, $15.3 million for
a term loan and $9.2 million for an additional term loan.  This debt accrues
interest at prime rate plus 2.5% per annum and is paid monthly.  The revolving
line is an asset-based loan in which the face commitment of $49.5 million is
reduced to $41.5 million by December 2, 2001. In addition, the total principal
amount outstanding on the revolving line cannot exceed the "borrowing base" as
defined in the forbearance agreements. The forbearance agreements specify
certain monthly principal reductions on the term loans. The first term loan
requires monthly principal reductions of $182,476 from February 2001 through
August 2001 increasing to $681,897 from September 2001 through December 2001,
and a balloon payment of $11,323,110 in January 2002. The other term loan
requires monthly principal reductions of $1,223,364 from February 2001 through
August 2001 and a final payment of $637,386 in September 2001. At June 30, 2001,
the balances on the revolving loan, term loan and additional term loan were
$32,566,755, $14,598,127, and $4,307,478, respectively. At June 30, 2001 there
was approximately $12.3 million available for advances on the Company's
revolving line of credit.

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<PAGE>

The senior notes balance at June 30, 2001 was $24,312,553. Interest accrues at
prime rate plus 2.5% and is payable monthly. Under the terms of the January 15,
2001 forbearance agreements, $8,514,136 in aggregate principal payments are
required to be paid from February 2001 through December 2001, with the remaining
balance of $20,308,294 due January 2002. The principal payment dates discussed
in this paragraph and the previous paragraph apply only if the Company is
entitled to extend the forbearance agreements through January 31, 2002. This
right to extend is contingent upon the Company making all of the scheduled
payments of principal and interest, as well as paying approximately $1.4 million
in fees to the lenders. Should the Company fail to make any of the payments
described above, the lenders will have the right to immediately accelerate the
indebtedness. As a result, the indebtedness covered under these forbearance
agreements has been classified as current.

Under the forbearance agreements, the Company also granted security interests to
its lenders in substantially all of its assets including receivables,
inventories, patents, machinery and equipment, and real estate.

Management has taken steps in order to assist the Company in maintaining
compliance with the forbearance agreements. The Company conducted an extensive
operations review in May 2000.  Based on this review, it was determined that the
Company's overhead costs and cost of goods sold had risen beyond levels which
could be tolerated given the Company's industry, history and volume of business.
Annualized cost cuts of approximately $12.4 million have been made which were
comprised of approximately $5.3 million in selling, general and administrative
expenses and approximately $7.1 million in manufacturing overhead. During the
first six months of 2001, these cost cuts were achieved by reductions in
workforce and discretionary spending.  These cost cuts were largely offset by
increases in administrative costs at the Brazilian facility, as well as
increases in utility costs. Management continues to evaluate and eliminate non-
value added expenses as they are identified.

The Company is also continuing its efforts to lower its debt by reducing its
inventory to market demand levels. In addition, the Company is marketing for
quick sale raw materials no longer used in the manufacturing process, as well as
used, slow-moving and obsolete inventory.

The Company is also exploring the possibility of selling certain ancillary
divisions in order to lower its debt and to maintain compliance with the
forbearance agreements. In March 2001, management retained the services of an
investment banking firm to begin searching for potential lenders to refinance
the Company's debt and also to assist with identification of prospective buyers
for certain divisions within the Company. As of the date of this report, the
Company was in compliance with all terms and conditions of the forbearance
agreements.

The minimum principal payments required during 2001, which are discussed above,
total approximately $30 million and must be made in order to maintain compliance
with the forbearance agreements, and in order to have the right to exercise the
option to extend the forbearance period until January 31, 2002. Due to the
Company's reliance on these debt financing arrangements for working capital,
compliance with the forbearance agreements currently in place or additional
forbearance by its lenders is necessary for the Company to meet its obligations
as they become due and to avoid material adverse effects on the Company's
financial position, results of operations, and liquidity.

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<PAGE>

Additionally, as discussed in note 9 to the condensed consolidated financial
statements, a judgment of approximately $11.7 million has been entered against
the Company in its long-standing patent infringement case with Cedarapids, a
wholly owned subsidiary of Terex Corporation. The Company has appealed this
decision to the United States Court of Appeals for the Federal Circuit; however,
the Company and Terex have agreed to stay further proceedings in this case
pending the consummation of the transactions contemplated by the merger
agreement or the termination of the merger agreement. See Note 9 to the
condensed consolidated financial statements. It is the opinion of management and
legal counsel that, if the Company must renew its appeal, the Company will
ultimately have no liability to Cedarapids in this case. There can be no
assurance, however, that the Company will be successful in its appeal.

The debt-to-total-capital percentage decreased to 65.7% at June 30, 2001
compared to 70.3% at December 31, 2000.  This decrease is the result of debt
reduction for the six months ended June 30, 2001. For the six months ended June
30, 2001 the Company reduced its outstanding debt by $28.1 million from $113.5
million to $85.4 million.

The current ratio was 1.05:1 at both June 30, 2001 and December 31, 2000.
Working capital at June 30, 2001 was $6.0 million compared to $6.5 million at
December 31, 2000.

Cash provided by operating activities for the six months ended June 30, 2001 was
$15.2 million compared to cash used in operating activities of $5.6 million for
the six months ended June 30, 2000. The increase in cash provided by operating
activities is due to significant inventory reductions. Financing activities for
the six months ended June 30, 2001 used approximately $28.1 million in cash. The
Company continues to pay down its debt according to the terms of the forbearance
agreements entered into with its lenders in January 2001.

Capital expenditures for the six months ended June 30, 2001 were $400,000
compared to $1.9 million for the six months ended June 30, 2000. Capital
expenditures are budgeted at $4.2 million for the remainder of 2001 and are
expected to be financed using internally generated funds. These capital
expenditures are being used to improve the Company's manufacturing and product
support efficiencies through its lean manufacturing program.

Federal Highway Legislation
---------------------------

The Company has assessed the longer-range impact of the $217 billion national
highway bill (TEA-21) which currently has guaranteed appropriations over the
next three years.  The Company believes that its significant investment in
capital improvements and plant modernization efforts have positioned the Company
to take advantage of any increase in business resulting from this legislation.

Forward-Looking Statements
--------------------------

Statements of the Company's or management's intentions, beliefs, anticipations,
expectations and similar expressions concerning future events contained in this
report constitute "forward-looking statements," as that term is defined in the
U. S. federal securities laws.  You can identify these statements by forward-
looking words such as "may," "will," "expect," "anticipate," "believe,"
"estimate," and "continue" or similar words. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause the Company's actual performance and
operating results to differ materially from the Company's expectations include,
among others, levels of funding for

                                    23 of 28
<PAGE>

highway construction and rehabilitation; the outcome of the Company's patent
infringement lawsuits with Cedarapids, Inc.; the Company's ability to comply
with its forbearance agreements with its lenders and extend or replace existing
financing; adverse weather conditions; the level of protection provided by
patents and other proprietary rights issued, licensed, or sublicensed to the
Company; the impact of various types of governmental regulation, domestic and
foreign; competitive factors; the Company's ability to successfully integrate
and manage profitably the businesses acquired in 2000; the overall economic
environment, domestically and overseas; whether the investments and cost-cutting
initiatives implemented by the Company in 2000 are successful; and the outcome
of the pending merger with Terex.

Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------

The primary objective of the following information is to provide forward-looking
quantitative and qualitative information about the Company's potential exposure
to market risks. The term "market risk" for the Company refers to the risk of
increased interest expense and decreased earnings arising from adverse changes
in interest rates. These disclosures are not meant to be precise indicators of
expected future decreases in earnings, but rather indicators of reasonably
possible decreases in earnings. This forward-looking information provides
indication of how the Company views and manages its ongoing market risk
exposures.

At June 30, 2001, the Company had total debt outstanding of $85.4 million. At
June 30, 2001, substantially all of this debt was bearing interest at variable
rates approximating 9.5%.  The Company had $28.1 million less variable rate
borrowings at June 30, 2001 than at December 31, 2000, and the average rate at
which the variable rate borrowings were accruing interest was approximately 50
basis points (0.50%) lower at June 30, 2001 than at December 31, 2000.  A 10%
increase in short-term interest rates on the variable rate debt outstanding at
June 30, 2001 would approximate 95 basis points.  Such an increase in interest
rates would increase the Company's interest expense by approximately $406,000
for the remainder of the year ending December 31, 2001 assuming the amount of
debt outstanding remains constant.

The above sensitivity analysis for interest rate risk excludes accounts
receivable, accounts payable and accrued liabilities because of the short-term
maturity of such instruments.  The analysis does not consider the effect this
movement may have on other variables including changes in revenue volumes that
could be indirectly attributed to changes in interest rates.  The actions that
management would take in response to such a change are also not considered.  If
it were possible to quantify this impact, the results could well be different
than the sensitivity effects shown above.

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Since 1996, the Company has been involved in litigation in the U. S. District
Court for the Western District of Oklahoma (the District Court) with Cedarapids,
Inc. (Cedarapids), which was acquired by Terex Corporation in August 1999.  The
Company sued Cedarapids seeking a declaratory judgement that a patent held by
Cedarapids was invalid, or, in the alternative, that the Company was not
infringing the patent. Cedarapids subsequently filed a counterclaim against the
Company, alleging that the Company's Triple-Drum Mixer infringes this same
patent. During February 2001, the District Court ruled that one configuration of
the Company's Triple-Drum Mixer (used on approximately 100 Triple-Drums)

                                    24 of 28
<PAGE>

infringed the patent held by Cedarapids. The District Court enjoined the Company
from selling this particular configuration of Triple-Drum. On March 20, 2001,
the District Court awarded damages and prejudgment interest to Cedarapids of
approximately $11,700,000.

In April 2001, the Company gave notice of its intent to appeal the judgment to
the United States Court of Appeals for the Federal Circuit (the Federal
Circuit). The Company also filed a motion with the District Court requesting a
stay of execution during the pendency of the appeal. The District Court denied
this motion.  In addition, the District Court ruled that, unless the Company
posted a supersedeas bond in favor of Cedarapids in the amount of the judgment
by June 1, 2001, Cedarapids could proceed to execute on its judgment.  The
Company's lenders subsequently advised the Company that they would not issue a
letter of credit to allow the Company to obtain a full or partial supersedeas
bond in favor of Cedarapids.

In April 2001, based upon a recent decision by the Federal Circuit, the Company
asked the District Court to reduce the amount of the judgment awarded to
Cedarapids.  On July 19, 2001, the District Court certified its intention to
grant the Company's motion for reduction of damages should the case be remanded
back to the District Court. Based on the number of Triple-Drum mixers sold in
the time period covered by the court's order, the Company estimates that the
judgment would be reduced from approximately $11.7 million to approximately $2.5
million.

It is the opinion of management and legal counsel that the Company will
ultimately have no liability for infringement in this case.  The Company has a
number of defenses which, in the opinion of management and counsel, will result
in the judgment being overturned upon appeal. Accordingly, no accrual has been
established for this judgment.  In addition, the Company has capitalized
approximately $1.7 million in legal fees incurred in defense of the Triple-Drum
patent. These costs are being amortized over the remaining life of the patent.
In the event that the Federal Circuit does not overturn the District Court's
ruling, these costs will be expensed in the period when the final decision is
rendered.

Under the injunction issued by the court, the Company can continue selling
Triple-Drum Mixers with total air burners. The costs associated with using the
total air burners are not significant.  Therefore, management does not expect
that the injunction will have a material impact on future sales.


In September 1998, Cedarapids filed a separate suit against the Company in the
U.S. District Court for the Northern District of Iowa alleging that the Company
has infringed upon a second patent held by Cedarapids. Cedarapids is seeking
damages in excess of $10 million in this case. The Company, together with its
legal counsel, believes that this claim is without merit, and intends to
vigorously contest this lawsuit.  Since the likelihood of an unfavorable outcome
in this case has not been determined to be probable by the Company and its legal
counsel no liability has been recorded for this case.

On August 10, 2001, the Company, Terex and Cedarapids agreed that, so long as
the merger agreement between the Company and Terex is in effect, they will not
take any further action in connection with either of the patent infringement
cases described above (including appeals), except to the extent necessary to
avoid substantial prejudice to a party.  In addition, Terex and Cedarapids
agreed not to take any action to enforce the judgment entered in favor of

                                    25 of 28
<PAGE>

Cedarapids until the twentieth day after the termination of the merger
agreement. Furthermore, CMI and Cedarapids agreed to file a joint motion with
the Federal Circuit seeking a stay of the Oklahoma case pending the consummation
of the transactions contemplated by the merger agreement or the termination of
the merger agreement. If, however, the Board of Directors of CMI withdraws,
modifies or changes its recommendation of the merger agreement or CMI receives a
"takeover proposal," as that term is defined in the merger agreement, Terex may
terminate these agreements by giving five days notice to the Company.

In February 2001, Mecom Distribution, Ltd., a California limited partnership,
brought an action against the Company in the U.S. District Court for the Eastern
District of California. Mecom, a former distributor of certain Company products,
alleges, among other things, that the Company's conduct in terminating Mecom as
a distributor of the Company's products violated the California Equipment
Dealer's Act, Oklahoma law and various agreements between the parties. Mecom
further alleges that CMI violated the terms of its agreements with Mecom by
selling equipment and parts directly to customers located in California.  The
remedies sought by Mecom include compensatory damages in excess of $2,000,000,
punitive damages, attorneys' fees and costs.  The Company denies that it has any
liability to Mecom. Since the likelihood of an unfavorable outcome in this case
is not considered probable by the Company and its legal counsel, no liability
has been recorded.

In December 2000, Melvin L. Black Incorporated (Black) notified the Company that
it believed the Company had breached the terms of a license agreement, dated May
27, 1997, between Black and the Company. No lawsuit was ever filed, but in
connection with the execution of the merger agreement with Terex,  the  Company
entered into a settlement agreement with Black and certain of its affiliates.
Under the terms of the settlement agreement, the Company has agreed, among other
things, to pay $2.25 million to Black within ten business days after the closing
of the proposed merger with Terex.  The amounts paid to Black will be treated as
a non-refundable advance on royalties payable by the Company under the license
agreement.  If the proposed merger with Terex is not consummated, the settlement
agreement with Black will have no force or effect, in which case Black has
indicated that it will file suit against the Company.  Since this royalty
payment is contingent upon successful completion of the proposed merger between
the Company and Terex, no liability related to the settlement has been accrued
by the Company as of June 30, 2001. However, since the Company plans to pursue
the technology underlying this license agreement, the amounts paid to Black will
offset future royalty payments, and will accordingly be capitalized in the
period when the settlement is paid.  If the settlement is paid, future royalty
payments earned by Black will be expensed in the period earned, with an
appropriate reduction in the prepaid royalty.

There are numerous other claims and pending legal proceedings that generally
involve product liability and employment issues.  These cases are, in the
opinion of management, ordinary matters incidental to the normal business
conducted by the Company.  In the opinion of the Company's management after
consultation with outside legal counsel, the ultimate disposition of such other
proceedings will not have a material adverse effect on the Company's
consolidated financial position, liquidity or future results of operations.

                                    26 of 28
<PAGE>

Item 2.  Changes in Securities and Use of Proceeds.

None.

Item 3.  Defaults Upon Senior Securities.

See note 4 to condensed consolidated financial statements.

Item 4.  Submission of Matters to a Vote of Security Holders.

On May 18, 2001, the annual meeting of shareholders of the Company was held at
the Company's corporate offices in Oklahoma City, Oklahoma.  The sole item of
business considered at the annual meeting was the election of Larry D. Hartzog
and Thomas P. Stafford to serve as directors of the Company for a term of three
years. Bill Swisher, Joseph J. Finn-Egan, Jeffrey A. Lipkin, Kenneth J. Barker,
J. Larry Nichols, and Ronald A. Kahn continue to serve as directors pursuant to
their prior election.

At the annual meeting, 12,126,317 votes were cast by the shareholders FOR the
election of Mr. Hartzog and 114,913 votes were WITHHELD; 12,122,080 votes were
cast by the shareholders FOR the election of Mr. Stafford and 115,936 votes were
WITHHELD.

Item 5.  Other information.

None.

Item 6.  Exhibits and Reports on Form 8-K.

(a)    The exhibits set forth on the accompanying exhibit index have been filed
       as part of the Form 10-Q.

(b)    The Company filed a report on Form 8-K on June 27, 2001 to announce a
       merger agreement entered into with Terex Corporation.


                                   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 thereunto duly authorized.


Date:     August 13, 2001       /s/ Jim D. Holland
       ---------------------    -------------------------------------
                                    Jim D. Holland
                                    Senior Vice President,
                                    Chief Financial Officer & Treasurer

                                    27 of 28
<PAGE>

EXHIBIT INDEX


3.1  Amended and Restated Certificate of Incorporation, as amended (incorporated
     by reference to Exhibit 2 to the Form 8-K filed with the Commission on
     February 18, 1992 and Exhibit 3i to the Form 10-Q for the quarter ended
     June 30, 1995).

3.2  Amended and Restated Bylaws (incorporated by reference to Exhibit 6 to the
     Form 10-Q for the quarter ended June 30, 1999).

4.1  Notes Purchase Agreement, dated September 1, 1996, between CMI Corporation
     and Principal Life Insurance Company (incorporated by reference to Exhibit
     4.1 to the Form 10-K for the year ended December 31, 1998).

4.2  Restated Credit Agreement, dated February 3, 2000, between CMI Corporation
     and Bank of Oklahoma, N.A. (incorporated by reference to Exhibit 4.2 to the
     Form 10-K for the year ended December 31, 1999).

4.3  The Registrant, by signing this report, agrees to furnish the Commission,
     upon its request, a copy of any instrument which defines the rights of
     holders of long-term debt of the Registrant and all of its subsidiaries for
     which consolidated or unconsolidated financial statements are required to
     be filed, and which authorizes a total amount of securities not in excess
     of 10 percent of the total assets of the Registrant and its subsidiaries on
     a consolidated basis.

4.4  Third Loan Modification and Forbearance Agreement, dated January 15, 2001,
     among CMI Corporation, Bank of Oklahoma, N.A. and certain other parties
     (incorporated by reference to Exhibit 4.4 to the Form 10-K for the year
     ended December 31, 2000).

4.5  Third Forbearance Agreement, dated January 15, 2001, among CMI Corporation,
     Principal Life Insurance Company and certain other parties (incorporated by
     reference to Exhibit 4.5 to the Form 10-K for the year ended December 31,
     2000).

10.4 Agreement and Plan of Merger, dated June 27, 2001, among CMI Corporation,
     Terex Corporation and Claudius Acquisition Corp. (incorporated by reference
     to Exhibit 2.1 to the Form 8-K filed with the Commission on June 29, 2001).

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