<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K

           (x)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT of 1934
                                        
                  For the fiscal year ended December 31, 1998

                                      OR

         ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number:  1-5951

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

                Oklahoma                                   73-0519810
       (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                  Identification No.)
                                        
         I-40 & Morgan Road
            P.O. Box 1985
          Oklahoma City, OK                                     73101
(Address of principal executive offices)                     (Zip Code)

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

          Securities registered pursuant to Section 12(b) of the Act:

                                                          Name of Each Exchange
      Title of Each Class                                  on Which Registered
      -------------------                                  -------------------
 Voting Class A Common Stock Par Value $.10             New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

                                     NONE
     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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [   ]

     The aggregate market value of the Voting Class A Common Stock (Class A
Common Stock) and the Voting Common Stock (Common Stock) held by non-affiliates
of the registrant on March 19, 1999 was $79,990,417.

     The number of shares of the registrant outstanding on March 19, 1999 was
21,548,883 shares of Class A Common Stock and 602 shares of Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

                 Documents                                  Form 10-K Reference
                 ---------                                  -------------------

Proxy Statement for the Annual Meeting of Shareholders            Part III
            to be held on May 14, 1999
<PAGE>
 
                                CMI CORPORATION
                                   FORM 10-K
                                        
                               December 31, 1998

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
 
           PART I                                                          PAGE
<S>        <C>                                                             <C>
Item 1.          Business................................................     3
 
Item 2.          Properties..............................................    10
 
Item 3.          Legal Proceedings.......................................    10
 
Item 4.          Submission of Matters to a Vote of Security Holders.....    11
 
                 Executive Officers of the Registrant....................    11
 
           PART II
 
Item 5.          Market for the Registrant's Common Stock and
                 Related Shareholder Matters.............................    13
 
Item 6.          Selected Financial Data.................................    14
 
Item 7.          Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.....................    15
 
Item 7A.         Quantitative and Qualitative Disclosures About
                 Market Risk.............................................    22
 
Item 8.          Financial Statements and Supplementary Data.............    23
 
Item 9.          Changes in and Disagreements with Accountants on
                 Accounting and Financial Disclosure.....................    49
 
           PART III
 
Items 10.-13.    All Items are Incorporated by Reference to the Company's
                 Proxy Statement for the Annual Meeting of Shareholders
                 to be held on May 14, 1999..............................    49
 
           PART IV
 
Item 14.         Exhibits, Consolidated Financial Statement Schedules,
                 and Reports on Form 8-K.................................    49
 
                 SIGNATURES..............................................    52
</TABLE>
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================
                                    PART I
Item 1.   Business
          --------

(a)  General Development of Business
     -------------------------------

Unless the context requires otherwise, as used herein, the term "Company" means
CMI Corporation and its consolidated subsidiaries.  Information regarding 1998
business developments is located in Item 1(c).

(b)  Financial Information About Operating Segments
     ----------------------------------------------

The Company primarily operates in the road and heavy construction industry and
information regarding this and other products is located in Item 1(c). The
Company's operating segments are defined by operating locations. See note 13 of
the Notes to Consolidated Financial Statements (Item 8).

(c)  Narrative Description of Business
     ---------------------------------
The Company manufactures a wide variety of equipment for the road and heavy
construction industry.  These products are divided into two primary categories:
mobile equipment and materials processing equipment.  Regarding mobile
equipment, the Company is an industry leader in the design and manufacture of
automated machines for the construction and maintenance of highways, city
streets, airport runways, county roads, bridges, and parking lots. The Company's
mobile equipment includes concrete pavers; machines for concrete placing and
spreading, finishing, texturing, and curing; pavement profiling machines;
pavement reclaimers; automated fine grading, materials spreading and placing
equipment; soil stabilizers and soil compacting machines; trailers used by the
construction and mining industries; industrial scales; bridge and canal paving
equipment. The Company's materials processing equipment includes a wide variety
of paving materials production plants for the manufacture of both hot mix
asphalt and concrete pavements.  The Company also makes plants that recycle old
pavements and thermal systems for remediating contaminated soils and sanitizing
medical waste. Waste industry products included in material processing equipment
include municipal landfill compactors and industrial and green waste grinding
machines. The Company has won market recognition by producing products
emphasizing recycling and energy conservation.

During the fourth quarter 1997, the Company expanded its product offerings by
acquiring the operations of two manufacturers of concrete production plants and
two product  lines from a third manufacturer.  The Company first acquired the
Ross Company of Brownwood, Texas, a nearly 50-year-old  manufacturer  of
concrete  central and ready mix plants.  Ross had built a

                                       3
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================
strong reputation for innovative ready mix plants, both portable and stationery.
The Company also acquired substantially all of the assets of the successor to
the 75-year-old C.S. Johnson Company of Champaign, Illinois.  C.S. Johnson was
the pioneer in the design and manufacture of large mass pour concrete central
mix plants used on some of the world's giant  construction projects.  Notable
past projects include  the Hoover and Grand Coulee Dams.  Johnson plants are
currently providing the concrete for the world's largest construction project of
modern times, the Three Gorges Dam in China.  Finally, the Company acquired the
TRASHMASTER Landfill compaction line and three hard materials grinding machines
for the demolition and wood wastes industry from Rexworks, Inc. of Milwaukee,
Wisconsin.

Additional information regarding the Company's operating segments including the
products produced by its segments is contained in note 13 of the Notes to
Consolidated Financial Statements (Item 8).

The largest single impactor of Company business is the United States national
highway construction program, which is funded in multiyear blocks.  The current
program, TEA-21 (Transportation Efficiency Act for the 21st Century) began
October 1, 1998 and extends through September 30, 2003.  TEA-21 provides $175
billion for highway construction and rehabilitation for the six-year period, an
increase of 43 percent over the previous six-year program.  A significant
addition to the current program sets mandatory funding levels and guarantees all
additional revenues of the Federal Highway Trust Fund. Regardless of this
possible additional funding, the mandatory funding levels are having a strong,
favorable impact upon customers who now can plan and prepare for an extended
period of market expansion. Provisions of TEA-21 favor the recycling of worn
pavement materials. The Company has been a leader in providing equipment for
pavement recycling.

Principal product information is as follows:
     Hot Mix Asphalt Production Systems
     ----------------------------------
     The Company manufactures and markets, primarily in North America, a wide
     variety of portable and stationary hot mix asphalt production and recycling
     plants including batch plants and parallel and counter-flow continuous mix
     drum plants.

     The Company's most popular plants are marketed under the trade name 
     "TRIPLE-DRUM." Production tests show this plant has superior heat transfer
     performance compared to other counter-flow plant designs, especially for
     recycle operations. The ease with which TRIPLE-DRUMs are passing tough
     exhaust emissions standards with high production rates, even under adverse
     production conditions, has been noticed by the industry and is resulting in
     stronger sales.

                                       4
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

     The Company manufactures the entire plant system including components for
     aggregate feeding, liquid asphalt cement and additive metering, material
     mixing and heating, finished material storage and truck loading, exhaust
     cleaning and computerized control packages for operating the complete
     system.

     Concrete Plants
     ---------------

     The Company's concrete batching plants are manufactured and marketed by CMI
     Johnson/Ross, with plants in Champaign, Illinois and Brownwood, Texas. The
     Company offers the industry's largest range of ready-mix and central-mix
     plants offered by a single manufacturer. The Company is the world leader in
     providing large mass pour plants for dams, power plants, and other giant
     concrete facilities.

     Concrete Paving Systems
     -----------------------

     The Company introduced the industry's first automated grading and concrete
     paving machines in the 1960's. Today, the Company manufactures and markets
     worldwide a complete line of automated street and highway class concrete
     slipform paving and paving train support machines. The popularity of these
     machines relates directly to job site performance, which often has resulted
     in contractors earning performance bonuses for pavement smoothness as
     recorded by profileograph measuring.

     The Company's highway class pavers incorporate machine improvements into
     the basic machine design, making features like computerized crowning and
     automatic placement of dowel bars less costly to add. The Company also
     manufactures and markets a line of curb and gutter pavers and smaller
     slipform pavers for residential, parking lot and building site paving
     requirements.

     Pavement Profiling Equipment
     ----------------------------
     The Company introduced the industry's first dedicated pavement milling
     machine in 1976. Since that time, the Company's line of "ROTO-MILL"
     Pavement Profilers has set the standards for the fast developing pavement
     restoration and recycling market. The Company offers a wide range of models
     from small utility machines to the PR-1200, the world's largest pavement
     profiling machine. Current models include the PR-500C, PR-650, and PR-800-
     7, all half-lane width machines; the PR-1050, and PR-1200, full lane width
     machines; and two

                                       5
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

     utility rubber tire models, the PRT-225 and PRT-525. Several mid-size and
     larger ROTO-MILL models have been configured for surface mining. The
     Company is gauging customer acceptance of these units and plans to further
     refine models for mining use and take appropriate marketing steps to build
     product awareness and sales.

     Reclaiming/Stabilizing Equipment
     --------------------------------
     The Company's popular road reclamation and soil stabilization machines,
     beginning with the RS-500 introduced in 1991, have had excellent market
     acceptance. Now marketed under the trade name, ROTO-MIXER, the productivity
     and versatility of these machines have created new work classifications and
     markets for recycling and pavements; and have dramatically increased the
     productivity of older methods. Current models include the RS-425, RS-450,
     RS-500B and RS-650.

     Weighing Equipment
     ------------------

     The Company manufactures and distributes a broad line of electronic scales
     for construction, transportation, material processing, mining, energy,
     agricultural, and industrial applications. These systems permit direct
     linkage to data processing equipment to speed material processing, record
     keeping, and billing. The Company also markets high technology automatic
     computer controls for continuous material blending, weighing, record
     keeping, inventory tracking, invoicing, and report writing. These control
     systems are marketed with the Company's hot mix asphalt production plants
     and soil remediation systems.

     Waste, Construction and Demolition Equipment
     --------------------------------------------

     The Company's TRASHMASTER landfill compactors enjoy strong market
     acceptance. Their unique design offers full width compaction resulting in
     10% to 15% greater landfill densities over conventional waste compactors.
     The Company offers three green-waste and heavy materials grinding models
     that are sold to the timber, landscaping, construction and demolition and
     waste recycling industries. The Company's grinders have patented features
     that provide excellent productivity and minimal downtime.

                                       6
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

     Load King Division
     ------------------
     Load King, headquartered in Elk Point, South Dakota, manufactures a broad
     line of heavy-duty trailers for equipment and material hauling. Bottom
     discharge material trailers and a family of redesigned rock hauler trailers
     have been added to the broad line of folding gooseneck and lightweight
     detachable gooseneck trailers engineered to meet individual state weight
     distribution requirements. Load King also responds to customer requirements
     for custom heavy-haul trailers. During 1995, the Company began
     manufacturing its popular bottom dump trailers at its Oklahoma City
     manufacturing facility. During 1996, the newly designed rock hauler
     trailers were added to production at the Oklahoma City manufacturing
     facility. The added production at the Oklahoma City manufacturing facility
     has reduced Load King's response time for filling dealer orders for these
     products and has permitted the Elk Point manufacturing facility to
     concentrate on the production of custom heavy-hauling units.

     Bid-Well Division
     -----------------

     Bid-Well, headquartered in Canton, South Dakota, is an industry leader in
     the development and manufacture of a wide variety of specialized
     lightweight grading and concrete paving and finishing machines for
     construction markets. This equipment includes bridge deck pavers and
     concrete overlay machines, building floor pavers and finishers, and
     specialized graders, pavers, and finishers for slope and canal paving.

     Remediation Equipment
     ---------------------
     Soil remediation is a process whereby non-hazardous contaminates like oil,
     jet fuel, and other hydrocarbon-based pollutants are removed from the soil
     in a thermal process. Soil remediation systems use similar equipment and
     processes as the Company's asphalt production systems.

     The Company has engineered and is marketing remediation systems with
     production ranges from 80 to 160 tons per hour. The Company's systems have
     been used at military and industrial sites, where they have set new
     production records, doubling the tons per hour produced on any previous
     jobs of similar nature.

                                       7
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Marketing and Distribution.  The Company's construction equipment is sold
--------------------------                                               
directly to end users and through independent dealers.  The Company's scale and
trailer products are sold through independent dealers.  All products are sold in
the United States and in foreign markets, except for weighing equipment and
products manufactured by the Load King Division which are sold primarily in the
United States.

Sources and Availability of Raw Materials.  The principal component parts used
-----------------------------------------                                     
in the Company's manufacturing of its pavement maintenance and construction
equipment that  are supplied by others primarily include gas  and diesel
engines, hydraulic cylinders, tires, bearings, and raw steel.  The Company has
not  experienced  any  delays  in  its  component  parts deliveries or received
inferior component parts that have adversely affected its business.  In
addition, the Company purchases many of these components from a variety of
outside suppliers and believes that alternate sources of supply exist for
substantially all items.

Importance of Patents.  The Company has obtained patent protection on certain
---------------------                                                        
components and features incorporated into its products, which expire on various
dates.  The Company's patents, together with licenses under patents owned by
others, are considered by the Company to be adequate for the conduct of its
business.  The Company is of the opinion that the loss of any single patent or
group of related patents would not materially affect the Company's business.

Seasonal Nature of the Business.  The Company's business is seasonal in nature
-------------------------------                                               
and precedes the months in which highway and road construction and restoration
generally occur.  A large portion of the Company's orders for its products are
received in the months of November through July, with heavy shipments occurring
in the months of March through August.

Practices Relating to Working Capital.  The Company recognizes revenue when
-------------------------------------                                      
sales transactions are completed, which is when products are shipped or title
has transferred to the customer.  Sales generally require a down payment or
trade allowance and are due within normal trade terms.  The Company also sells
certain products under installment sales contracts. Inventories are carried in
proportion to customer requirements and fluctuate in relation to the seasonal
nature of the Company's business.

Dependence Upon a Single Customer or a Few Customers.  The Company was not
----------------------------------------------------                      
dependent on any single customer or group of customers during 1996 through 1998.

                                       8
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Competitive Conditions.  The Company is one of the largest producers of pavement
----------------------                                                          
maintenance and construction equipment in the United States. The Company has won
substantial market recognition in the pavement maintenance and construction
industry by producing products emphasizing recycling and energy conservation.
The Company also has received market recognition for the quality and
productivity of its equipment and believes improvements can be made in
aftermarket services (i.e. parts availability and services). Numerous companies
produce equipment with similar features and the construction equipment market
remains competitive. Competition is based primarily on price, product quality,
financing, productivity, quality of construction, service, and availability of
replacement parts.

Company-Sponsored Engineering and Product Development Activities.  The Company
----------------------------------------------------------------              
invests significant resources in the development, enhancement, refinement, and
production of new technologies for the road and heavy construction industry.
The Company patents new technologies relating to significant changes and
development of finished products. See discussion regarding current engineering
and product development activities under principal product information and also
see Management's Discussion and Analysis of Financial Conditions and Results of
Operations (Item 7).

Environmental Laws and Regulations.  The Company is subject to various
----------------------------------                                    
environmental laws and regulations, none of which have a current or expected
future material financial impact on the Company.

Employees.  The Company had approximately 1,890 employees as of December 31,
----------                                                                  
1998.

(d)  Financial Information About Geographic Areas
     --------------------------------------------

Information regarding revenues from external customers in different geographical
areas is as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                  1998     1997     1996
                                                --------  -------  -------
<S>                                             <C>       <C>      <C>
 
   United States                                $177,402  132,865  109,349
 
   North and Central America, other than the
       United States                              15,322    8,043   11,904
 
   South America                                     962    6,764    5,177
 
   Asia                                            8,173    3,954    4,284
 
   Australia                                       1,740    1,453    5,071
</TABLE>

                                       9
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

<TABLE>
<CAPTION>
                                                  1998     1997     1996
                                                --------  -------  -------
<S>                                             <C>       <C>      <C>
   Europe                                          2,055      928    2,607  
   Other regions                                      32        7      396
                                                --------  -------  -------
       Total net revenues                       $205,686  154,014  138,788
                                                ========  =======  =======
</TABLE>

Sales of Company products outside the United States are denominated in U.S.
dollars.  International sales are generally secured by letters of credit from
financial institutions to reduce credit risk. Additional information about the
Company's operating segments is incorporated by reference from note 13 of the
Notes to Consolidated Financial Statements (Item 8).

Item 2.   Properties
          ----------

The Company has total plant, office, and warehouse areas of approximately
923,000 square feet, which are located in four states.

The largest manufacturing plant (utilized by the Company's Oklahoma City
operating segment), including the corporate headquarters, has approximately
619,000 square feet and is located in Oklahoma City, Oklahoma.  Other  principal
manufacturing plants and  offices owned by the Company, aggregating
approximately 304,000 square feet, are located in South Dakota, Texas, and Iowa.
The Company also leases approximately 95,000 square feet of manufacturing plants
and offices located in Illinois.  These facilities are adequate for the current
and expected near future operations of the Company.

In addition, the Company owns 110 acres of land in Tennessee currently being
held for sale.

Item 3.   Legal Proceedings
          -----------------

As previously disclosed, on November 22, 1995, a Chicago law firm, previously
engaged by the Company in connection with prior patent litigation, filed suit
against the Company in the Circuit Court of Cook County, Illinois.  On December
20, 1995, the case was removed to the United States District Court for the
Northern District of Illinois, Eastern Division.  The law firm is seeking to
recover approximately $1.4 million of legal fees and costs alleged to be owing
by the Company, together with prejudgment and postjudgment interest and other
costs. The Company has denied these allegations and will continue to defend this
lawsuit.

                                       10
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Since 1996, the Company has been involved in litigation in the U.S. District
Court for the Western District of Oklahoma with Cedarapids, Inc.  The Company
sued Cedarapids seeking a declaratory judgement that a patent held by Cedarapids
is invalid or, in the alternative, that the Company was not infringing upon the
patent.  Cedarapids subsequently filed a counterclaim against the Company
alleging that the Company was infringing Cedarapids' patent and seeking
unspecified monetary damages.  In January 1997, the District Court issued an
order staying this lawsuit pending the resolution of litigation between
Cedarapids and Gencor, Industries involving the same patent. This stay was
lifted in December 1997 upon settlement of patent and other non-related
litigation between Cedarapids and Gencor, Industries.  The Company anticipates
this lawsuit going to trial in mid 1999.

In September 1998, Cedarapids filed 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
unspecified monetary damages.  The Company intends to vigorously defend both
lawsuits involving Cedarapids.

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 routine 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 proceedings, including the cases above, will not have a materially adverse
effect on the Company's consolidated financial position, liquidity or future
results of operations.

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

Not applicable.

Executive Officers of the Registrant
------------------------------------

Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered item in Part I of this Form 10-K in lieu of being
included in the Company's Proxy Statement for the Annual Meeting of Shareholders
to be held on May 14, 1999.

                                       11
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

The following is a list of names and ages of all the executive officers of the
registrant indicating all positions and offices with the registrant held by each
such person and each such person's principal occupations or employment during
the past five years.

<TABLE>
<CAPTION>
                            Age as of
Name                      March 19, 1999        Offices and Positions Held
----                      --------------  --------------------------------------
<S>                       <C>             <C>         
 
Bill Swisher                    68        Chairman of the Board and director (1)
 
Tom Engelsman                   48        Chief Executive Officer since October
                                          1998 (2) and director
 
Albert L. Basey                 61        President and Chief Operating Officer
                                          since February 1997
 
Jim D. Holland                  54        Senior Vice President, Treasurer,       
                                          and Chief Financial Officer since  
                                          August 1984
 
Robert L. Curtis                59        Vice President, Sales and Marketing     
                                          since November 1996
 
Thane Swisher                   42        Vice President and Secretary since
                                          October 1987
</TABLE>

(1)  Mr. Swisher served as the Company's Chief Executive Officer from 1965 to
     October 1998.

(2)  Mr. Engelsman has held general management positions with industrial
     companies for over 25 years including the most recent position of president
     and chief operating officer for Beloit Corporation.

                                       12
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

                                    PART II

Item 5.   Market for the Registrant's Common Stock and Related Shareholder
        ------------------------------------------------------------------
Matters 
-------

Principal Market and Stock Prices:
----------------------------------

The Company's Class A Common Stock is traded on the New York Stock Exchange
under the symbol "CMI."  The closing market price for the Company's Class A
Common Stock on March 19, 1999, was $7.25.  The table below presents the high
and low market prices for the Company's Class A Common Stock for each three
month period in 1998 and 1997.  The following information was obtained from the
monthly market statistics report prepared by the New York Stock Exchange.

<TABLE>
<CAPTION>
                               1998                      1997
                   ------------------------   -----------------------
<S>               <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>
                   3/31   6/30  9/30  12/31   3/31  6/30  9/30  12/31
                   ----   ----  ----  -----   ----  ----  ----  -----
 
Common shares:
     High         $7.13  10.00  9.31   9.38  $5.13  4.75  5.50   6.50
     Low           4.56   6.25  5.75   5.31   4.25  3.88  3.94   4.13

</TABLE>

Approximate Number of Shareholders:
-----------------------------------

The number of holders of record of the Company's common shares as of March 19,
1999, was 1,565.

Dividend Information:
-------------------- 

The Company has authorized and paid a one cent per common share dividend
beginning in the fourth quarter of 1996 through the first quarter of 1999. It is
the Board of Director's present intention to continue paying regular quarterly
cash dividends.

See Management's Discussion and Analysis of Financial Condition and Results of
Operations (Item 7) and Notes to Consolidated Financial Statements (Item 8).

                                      13
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Item 6.   Selected Financial Data
          -----------------------

The following selected financial data should be read in conjunction with the
consolidated financial statements of the Company, including notes and
supplementary information appearing elsewhere herein.

Five-Year Selected Financial Data - (dollars in thousands, except per share
data)

<TABLE>
<CAPTION>
                                     1998     1997     1996     1995     1994
                                     ----     ----     ----     ----     ----
<S>                                <C>       <C>      <C>      <C>      <C>
Net revenues                       $205,686  154,014  138,788  130,578  128,005
 
Operating earnings                   13,890    6,746   10,987   11,743   15,032
 
Net earnings (1)                      6,217    3,165    5,461   17,501   22,618
 
Earnings per common share -
     diluted (1)                        .29      .15      .25      .82     1.07
 
Total assets (2)                    189,711  144,428  113,454  109,219   89,744
 
Long-term debt and redeemable
     preferred stock (2)             77,049   49,274   34,103   27,628   27,599
 
Cash dividends per common share    $    .04      .04      .01        -        -

</TABLE>

 (1) Included in 1995 and 1994 net earnings are deferred tax benefits of
     approximately $8.8 million and $10 million, respectively, relating to
     previously unrecognized tax benefits related to Statement of Financial
     Accounting Standards No. 109.

 (2) Total assets and long-term debt for 1997 reflects the impact of
     acquisitions of businesses (See Notes to Consolidated Financial Statements,
     Item 8).

     The acquisitions did not have a material impact on net revenues, operating
     earnings or net earnings in 1997.

                                      14
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Item 7.   Management's Discussion and Analysis of Financial Condition and
          ---------------------------------------------------------------
Results of Operations
---------------------
Changes in Financial Condition, Liquidity, and Capital Resources
----------------------------------------------------------------
The Company's $30 million unsecured senior notes issued in September 1996 mature
from September 2000 to September 2006. The Company amended its revolving line of
credit agreement on October 13, 1998 which increased its borrowing line from $40
million to $60 million. As of December 31, 1998, the Company had utilized $43
million of the unsecured revolving line of credit. On March 12, 1999 the
borrowing line of credit was increased to $70 million for a period of 120 days
and will return to $60 million at the end of this period.  As of March 19, 1999,
the Company had utilized $48 million of the unsecured revolving line of credit.
The line of credit matures September 2001. Other long-term debts have maturity
dates through September 2010 and are expected to be paid or refinanced when due.
As of December 31, 1998 the Company was in compliance with all debt covenants.

The Company maintains a fleet financing agreement with a third party lender
related to the rental of finished products to customers.  Generally, these
financings range from three months to three years and are secured by the
specific finished product. These financing arrangements provide the Company with
additional short-term working capital and the ability to offer more attractive
financing to its customers. The fleet financing agreement provides for interest
at the prime rate.  At December 31, 1998, the Company had no outstanding
obligations under this agreement.

The debt-to-total-capital percentage increased to 50.4% at December 31, 1998
compared to 41.2% at December 31, 1997. This increase is primarily the result of
funding the increase in inventories at December 31, 1998. The Company's
financing agreements should provide the Company with sufficient working capital
to finance its operations.

Other Changes in Financial Condition, Liquidity, and Capital Resources
----------------------------------------------------------------------
The Company's current ratio at December 31, 1998 was 4.19-to-1 compared to 4.42-
to-1 at December 31, 1997. Working capital increased to approximately $116.2
million at December 31, 1998 from $84.0 million at December 31, 1997. The
increase in working capital is primarily the result of increased cash of $6.4
million and increased inventories of approximately $34.2 million, offset by an
increase in current liabilities of approximately $11.9 million. The increase in
inventories, primarily raw materials and purchased parts, from December 31, 1997
is largely the result of increased production and the working capital required
for operations related to the 1997 fourth quarter acquisitions.  The Company's
finished goods inventories also increased in preparation for the 1999 selling
season.

                                      15
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Cash used in operating activities was $7.8 million for the year ended December
31, 1998, compared to cash provided by operating activities of $8.5 million for
the year ended December 31, 1997.  This significant change in cash from
operating activities is primarily attributed to the increased investment in
inventories.  Financing activities for the year ended December 31, 1998 provided
$27.2 million, which included $28.0 million of borrowings from the Company's
revolving line of credit. These additional borrowings were used to fund the
increase in inventories.

Capital expenditures were $13.3 million, an increase of $8 million from the
prior year. Principal capital expenditures consisted primarily of computer
software and hardware, construction of a new paint facility in Oklahoma City and
equipment for use in manufacturing facilities. Capital expenditures for 1999 are
budgeted at $6.0 million. Capital expenditures are financed using internally
generated funds and debt.

During 1998, the Company paid a quarterly cash dividend of one cent per share.
During the first quarter of 1999, the Company's Board of Directors authorized
payment of a quarterly cash dividend of one cent per share. It is the Board of
Director's present intention to continue paying regular quarterly cash
dividends.

Accounting for Income Taxes
---------------------------
Income taxes are accounted for using the asset and liability method under which
deferred income taxes are recognized for the tax consequences of "temporary
differences" by applying enacted statutory tax rates applicable to future years
to differences between the financial statement carrying amounts and the tax
bases of existing assets and liabilities and operating loss and tax credit
carryforwards.  The effect on deferred taxes for a change in tax rates is
recognized as income in the period that includes the enactment date.

The Company has a net deferred tax asset after consideration of the valuation
allowance of approximately $9.1 million and $12.2 million at December 31, 1998
and 1997, respectively. The benefit of future tax deductions and credits not
utilized by the Company in the past is reflected as an asset to the extent that
the Company assesses that future operations will "more likely than not" be
sufficient to realize such benefits. The Company has assessed its past earnings
history and trends, sales backlog, budgeted sales, reversing taxable temporary
differences and expiration dates of carryforwards.  As a result, the Company has
determined it is "more likely than not" that the $9.1 million of net deferred
tax assets will be realized.  The ultimate realization of future tax deductions
and credits will require aggregate taxable income of approximately $17 million
to $22 million in future years.

                                      16
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Results of Operations
---------------------
Years ended December 31, 1998 and 1997. During the fourth quarter of 1997, the
Company acquired all the outstanding stock of Brownwood Ross Company, a concrete
plant manufacturing company; certain assets of the successor of CS Johnson
Corporation, a concrete plant manufacturing company; and certain assets related
to the landfill and embankment compactor and material reduction grinder product
lines from Rexworks, Inc. The results of operations for the year ended December
31, 1998 include these operations.

Revenues increased 33.6 percent to $205.7 million for the year ended December
31, 1998 from $154.0 million for the year ended December 31, 1997. The revenue
increase for the year ended December 31, 1998 was primarily generated through
the newly acquired operations. Net earnings were $6.2 million in 1998 compared
to $3.2 million in 1997, or 29 cents per share for 1998 compared to 15 cents per
share for 1997.

The Company's international sales were $28.3 million in 1998 compared to $21.1
million in 1997, resulting in a increase of approximately 34% from 1997. The
Company's domestic sales were $177.4 million in 1998 and $132.9 million in 1997,
an increase of approximately 33%.  The increase in net revenues both
internationally and domestically was primarily attributable to acquisitions
completed during the fourth quarter of 1997.

The increase in international revenues from 1997 is primarily attributed to
North and Central America (other than the United States) and Asia, offset by a
decrease in South America. International revenues as a percentage of the
Company's total revenues were 13.8% in 1998 and 13.7% in 1997.

Gross margin, as a percentage of net revenues, was 26.0% for the year ended
December 31, 1998, up from 25.2% for the year ended December 31, 1997. The
Company has improved its gross margins quarter over quarter during 1998.

Marketing and administrative expenses increased $5.0 million in 1998. The
majority of the increased expenses are the result of marketing efforts related
to the newly acquired operations.  As a percentage of net revenues, marketing
and administrative expenses were 14.8% in 1998 compared to 16.5% in 1997.

                                      17
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================
Engineering and product development expense increased $1.2 million in 1998. The
Company's increased expenses are the result of newly acquired operations and
increased product development. During 1998, the Company introduced the RS-450, a
new higher production road reclaimer and soil stabilization machine for
governmental and smaller project markets.  Also, the Company substantially
completed the design of a Medical Waste Grinder for the health care industry.
Additional products including new and upgraded models will be introduced to the
industry during the CONEXPO trade show held in Las Vegas in March 1999. As a
percentage of net revenues, engineering and product development expenses were
3.8% percent in 1998 compared to 4.3% in 1997.

Product line relocation costs for the year ended December 31, 1998 were $1.4
million.  These costs were incurred by the Company to move the landfill and
embankment compactor and material reduction grinder product lines from Rexworks,
Inc. in Milwaukee, Wisconsin to our Oklahoma City facility in the first and
second quarters of 1998. Future periods will not be impacted by relocation costs
related to this 1997 acquisition.

Interest expense increased $2.1 million from the prior year. The Company's
effective interest rate was approximately 7.87% in 1998 compared to
approximately 8.22% in 1997.  The increase in interest expense is due to
additional borrowings on the Company's revolving line of credit primarily for
the acquisitions completed during the fourth quarter of 1997, capital
expenditures and increased working capital requirements, primarily inventories,
for the year ended December 31, 1998.

Income tax expense was $3.6 million in 1998 compared to $2.0 million in 1997.
The Company's financial effective tax rate in 1998 and 1997 was 36.9% and 39.1%,
respectively. Excluding losses of the Company's foreign subsidiary the Company's
financial effective tax rate was 36.5% in 1998 and 1997.  The effective rate of
36.5% differs from the statutory federal rate of 35% primarily due to state
income taxes.

Years ended December 31, 1997 and 1996. Revenues for the year ended December 31,
1997 rose to $154.0 million from $138.8 million for the year ended December 31,
1996.  Net earnings for 1997 were $3.2 million compared to $5.5 million in 1996,
or 15 cents per share for 1997 versus 25 cents per share for 1996.

The Company's international sales were $21.1 million in 1997 compared to $29.4
million in 1996, resulting in a decrease of approximately 28% over 1996. The
Company's  domestic sales were $132.9 million in 1997 and $109.4 million  in
1996,  an increase  of approximately  21%.  The increase in net revenues was
primarily attributable to increased volume from the Company's core products.
The acquisitions completed during the fourth quarter of 1997 did not
significantly impact 1997 net revenues.

                                       18
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================
The decrease in international sales is primarily attributed to declines in
Australia and North and Central America (other than the United States) offset by
an increase in South America.  The declines are primarily a result of unusually
strong sales realized in 1996.

The Company's gross margins were 25.2% for the year ended December 31, 1997,
compared to 28.9% for the year ended December 31, 1996. One reason for the
decline is the Company's strategy to gain market share in the asphalt arena and
the associated pricing pressures encountered.  However, the primary cause for
the decrease is the plant reengineering program that began in 1997 with a long
term goal of lowering costs of goods sold primarily by controlling labor costs
while maximizing productivity and efficiency. In addition, in connection with
the reengineering efforts, the Company focused on improving the quality of its
products and ensuring stringent quality standards were met prior to shipping
equipment.  These efforts required significant commitment of capital and man
hours during the transition and resulted in increases in costs of sales during
the first six months of 1997.  The costs improved in the third and fourth
quarters, but the impact on overall 1997 margins was negative.

Marketing and administrative expenses increased $2.4 million in 1997 due to
increased sales efforts.  As a percentage of net revenues, marketing and
administrative expenses were 16.5% in 1997 compared to 16.6% in 1996.

Engineering and product development expense increased $637,000 in 1997. As a
percentage of net revenues, engineering and product development costs remained
level at 4.3% for the year ended December 31, 1997 and 1996, respectively. The
Company continues to be committed to setting standards of quality within the
industry. During 1997 the Company introduced the PR-525, a track version of the
highly mobile PRT-525 mill.

Interest expense decreased $27,000 from the prior year.  The Company's average
borrowings increased over 1996 largely due to the $30.0 million private
placement completed in September 1996 and the $15.0 million funding from the
Company's line-of-credit in December 1997. The Company's effective interest rate
was approximately 8.22% in 1997 compared to approximately 10.80% in 1996.  The
increase in average borrowings in 1997 was partially offset by more favorable
borrowing rates under the Company's new financing arrangements.

Income tax expense was $2.0 million in 1997 compared to $3.2 million in 1996.
The Company's financial effective tax rate in 1997 and 1996 was 39.1% and 36.7%,
respectively. Excluding losses of the Company's foreign subsidiary the Company's
financial effective tax rate was 36.5% in 1997 and 1996.  The effective rate of
36.5% differs from the statutory federal rate of 35% primarily due to state
income taxes.

                                      19
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================

Impact of Recently Issued Accounting Standards Not Yet Adopted
--------------------------------------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities."  SFAS No. 133 is effective for fiscal years
beginning after June 15, 1999.  SFAS No. 133 establishes standards for
accounting and reporting for 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 resulting designation.  Adoption
of SFAS No. 133 is not expected to impact the Company.

Impact of Year 2000 Issue
-------------------------
An issue exists for all companies that rely on computers as the Year 2000 (Y2K)
approaches.  The Y2K problem is the result of past practices in the computer
industry of using two digits rather than four to identify the applicable year.

The Company is addressing the need to ensure that its operations will not be
adversely impacted by software or other system failures related to Y2K.  The
Company has formed an oversight committee made up of key management positions
and has developed a plan to coordinate identification, evaluation and
implementation of any necessary changes to internal computer systems,
applications, and business processes.

As of December 31, 1998, the Y2K committee had identified the Company's
information systems (IT) and non-information systems (non IT) that could
potentially be impacted by Y2K.  The Company plans to be complete with all Y2K
readiness and contingency planning by June 1999.

The Y2K process began in early 1996 when the Company began the software and
hardware selection and evaluation process for manufacturing and financial
reporting  applications.  During  the  third  quarter of 1998 the Company
replaced the primary IT operations at the Oklahoma City location.  Approximately
$2 million was spent by the Company on this phase of the Y2K project for new
computer software and hardware which was also part of the Company's factory
modernization plan.  These costs were capitalized and will be amortized over
future periods.

The Company has also obtained a vendor readiness statement from approximately
99% of the Company's active vendors.  These statements indicated that 95% were
either Y2K compliant or would be by June 1999.  The Company has determined that
an alternative supply source exists for the vendors who do not appear to be
addressing the Y2K problem.

                                      20
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================
Non IT systems being considered include communication technologies.  The Company
has determined its communication technologies require certain upgrades to meet
Y2K requirements.  The Company anticipates Y2K compliance in this area by June
1999 at an estimated cost of $75,000.

The Company has been testing its systems using internal programming staff and
outside computer consultants and intends to continue making any necessary
modifications to prevent disruption to its operations. The Company has not
identified the most reasonably likely worst case scenario in the event the
Company does not obtain Y2K readiness.  This will be performed during
contingency planning which will occur during 1999. The Company does not 
anticipate incurring any material outside costs for future Y2K activities. All 
remaining remediation efforts will be performed primarily utilizing existing 
employees. The Company does not separately identify internal costs related to 
Y2K efforts.

No assurances can be given that the Company will be able to completely identify
or address all Year 2000 compliance issues. Additionally, no assurances can be
given that third parties with whom the Company does business will not experience
system failures as a result of the Year 2000 issue, nor can the Company fully
predict the consequences of noncompliance.

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 five to six years.  The Company's significant investment in capital
improvements and plant modernization efforts should have the Company positioned
to take advantage of the anticipated increased business as a result of this new
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 defined  in the  Private
Securities Litigation Reform Act of 1995. You can identify these statements by
forward-looking words such as "may," "will," "expect," "anticipate," "believe,"
"estimate," and "continue" or similar words. As with any future event, there can
be no assurance that the events described in forward looking statements made in
this report will occur or that the results of future events will not vary
materially from those described in the forward looking statements made in this
report.  Important factors that could cause the Company's actual performance and
operating results to differ materially from the forward looking statements
include, but are not limited to, highway funding, adverse weather conditions,
general economic conditions and political changes both domestically and
overseas.

                                      21
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998
================================================================================
Clean Air Act
-------------
In 1990, the United States Congress passed certain amendments to the National
Clean Air Act. The 1990 amendments have required certain products manufactured
by the Company to be equipped with new pollution control devices. Additional
products manufactured by the Company include pollution control devices.  The
Company believes that it will continue to be able to meet the implementation
dates as required by the Clean Air Act.

Inflation
---------
The Company did not experience any significant inflationary impact on its costs
of materials.

Item 7A.  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
loss arising from adverse changes in interest rates.  The disclosures are not
meant to be precise indicators of expected future losses, but rather indicators
of reasonably possible losses.  This forward-looking information provides
indicators of how the Company views and manages its ongoing market risk
exposures.

At December 31, 1998, the Company had long-term debt outstanding of $77.3
million.  Of this amount, $30 million bears interest at a fixed rate of 7.68%,
and $4.3 million bears interest at fixed rates averaging approximately 8%.  The
remaining $43 million bears interest at variable rates which averaged
approximately 7.15% at the end of 1998.  A 10% increase in short-term interest
rates on the variable rate debt outstanding at the end of 1998 would approximate
72 basis points.  Such an increase in interest rates would increase the
Company's interest expense by approximately $310,000 assuming borrowed amounts
remain outstanding.

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.

                                      22
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Item 8.   Financial Statements and Supplementary Data
          -------------------------------------------

================================================================================

                                                                            PAGE

Independent Auditors' Report............................................      24


Consolidated Financial Statements
---------------------------------
 
  Consolidated Statements of Earnings,
   Years ended December 31, 1998, 1997, and 1996........................      25
 
  Consolidated Balance Sheets, December 31, 1998 and 1997...............      26
 
  Consolidated Statements of Changes in Common Stock and Other Capital,
   Years ended December 31, 1998, 1997, and 1996........................      28
 
  Consolidated Statements of Cash Flows,
   Years ended December 31, 1998, 1997, and 1996........................      29
 
  Notes to Consolidated Financial Statements,
   December 31, 1998, 1997, and 1996....................................      30
 



                                       23
<PAGE>
 
                         INDEPENDENT AUDITORS' REPORT
                         ----------------------------



The Board of Directors and Stockholders
CMI Corporation:


We have audited the consolidated financial statements of CMI Corporation and
subsidiaries (the Company) as listed in the accompanying index. These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CMI Corporation and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1998, in conformity with generally accepted accounting
principles.



                                                  KPMG LLP

Oklahoma City, Oklahoma
February 22, 1999



                                       24
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Earnings

                 Years ended December 31, 1998, 1997, and 1996
                 (dollars in thousands, except per share data)
 
================================================================================
                                                1998      1997      1996
                                                ----      ----      ----  
 
Net revenues                                  $205,686   154,014   138,788
                                              --------   -------   -------
 
Costs and expenses:
  Cost of goods sold                           152,116   115,172    98,694
  Marketing and administrative                  30,445    25,450    23,098
  Engineering and product development            7,816     6,646     6,009
  Product line relocation costs                  1,419         -         -
                                              --------   -------   -------
                                               191,796   147,268   127,801
                                              --------   -------   -------
  Operating earnings                            13,890     6,746    10,987
                                              --------   -------   -------
 
Other expense (income):
  Interest expense                               5,000     2,906     2,933
  Interest income                                 (934)   (1,351)     (616)
  Other, net                                       (35)       (4)       44
                                              --------   -------   -------
 
Earnings before income taxes                     9,859     5,195     8,626
 
Income tax expense                               3,642     2,030     3,165
                                              --------   -------   -------
 
Net earnings                                  $  6,217     3,165     5,461
                                              ========   =======   =======
 
Share data:
  Net earnings applicable to common shares    $  6,217     3,165     5,189
  Weighted average outstanding common
  shares:
    Basic                                       21,523    21,225    20,426
 
    Diluted                                     21,660    21,318    20,708
 
  Net earnings per average outstanding
  common share:
    Basic                                     $    .29       .15       .25
                                              ========   =======   =======
 
    Diluted                                   $    .29       .15       .25
                                              ========   =======   =======
 

See notes to consolidated financial statements.

                                       25
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                          Consolidated Balance Sheets

                          December 31, 1998 and 1997
                            (dollars in thousands)

================================================================================
 
                     Assets                                 1998     1997
                     ------                                 ----     ----  
 
Current assets:
  Cash and cash equivalents                               $ 13,559    7,131
  Receivables less allowance for doubtful accounts
     of $907 and $1,035 at December 31, 1998 and 1997,
     respectively                                           28,013   26,917
  Inventories:
     Finished equipment                                     37,409   28,618
     Work-in-process                                        14,189   14,910
     Raw materials and parts                                51,293   25,143
                                                          --------  -------
       Total inventories                                   102,891   68,671
 
  Other current assets                                         923      579
  Deferred tax asset                                         7,200    5,300
                                                          --------  -------
       Total current assets                                152,586  108,598
                                                          --------  -------
 
Property, plant, and equipment:
  Land                                                       2,109    2,086
  Buildings                                                 16,870   14,995
  Machinery and equipment                                   49,725   37,697
  Other                                                        535    1,961
                                                          --------  -------
                                                            69,239   56,739
  Less accumulated depreciation and amortization            39,692   37,288
                                                          --------  -------
       Net property, plant, and equipment                   29,547   19,451
 
Long-term receivables                                          356    2,509
 
Deferred tax asset                                           1,900    6,900
 
Other assets, principally goodwill                           5,322    6,970
                                                          --------  -------
 
       Total assets                                       $189,711  144,428
                                                          ========  =======
 
See notes to consolidated financial statements.



                                       26
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                    Consolidated Balance Sheets, Continued

                          December 31, 1998 and 1997
                            (dollars in thousands)

================================================================================
 
Liabilities, Common Stock and Other Capital               1998     1997
-------------------------------------------               ----     ----
 
Current liabilities:
  Current maturities of long-term debt                   $   268     259
  Accounts payable                                        21,551  14,655
  Accrued liabilities                                     14,617   9,647
                                                         -------  ------
     Total current liabilities                            36,436  24,561
                                                         -------  ------
 
Long-term debt                                            77,049  49,274
 
Common stock and other capital:
  Common stock:
     Par value $.10; shares issued and outstanding
     - 602 and 621 at December 31, 1998 and 1997,
     respectively                                              -       -
  Class A common stock:
     Par value $.10; shares issued
     - 21,548,883 and 21,506,383 at December 31, 1998
     and 1997, respectively                                2,155   2,151
Additional paid-in capital                                50,057  49,816
Retained earnings                                         24,014  18,658
Treasury stock, 6,340 Class A common shares at
 December 31, 1997, at cost                                    -     (32)
                                                         -------  ------
                                                          76,226  70,593

Commitments and contingencies (notes 14 and 15)           
                                                         -------  ------

  Total liabilities, common stock and other capital     $189,711  144,428
                                                         =======  =======



See notes to consolidated financial statements.



                                       27
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
     Consolidated Statements of Changes in Common Stock and Other Capital

                 Years ended December 31, 1998, 1997, and 1996
                            (dollars in thousands)

================================================================================
<TABLE> 
<CAPTION>  
                                                                   
                            Common Stock    Class A Common Stock   Additional                      
                            ------------    --------------------     Paid-in    Treasury   Retained 
                           Shares   Amount     Shares     Amount     Capital      Stock    Earnings
                           ------------------------------------------------------------------------ 
<S>                        <C>      <C>     <C>           <C>      <C>          <C>        <C>
 
Balance December 31,
 1995                         621     $  -   20,381,383   $2,038     $46,001       $  -    $11,360
 
Net earnings                    -        -            -        -           -          -      5,461
 
Dividends declared
 and accretion on
 preferred stock                -        -            -        -           -          -       (272)
Dividends paid, common
 stock ($.01 per share)         -        -            -        -           -          -       (205)
 
Exercise of stock
 options                        -        -       86,000        9         111          -          -
                           ------   ------  -----------  -------  ----------   --------   --------
 
Balance December 31,
 1996                         621        -   20,467,383    2,047      46,112          -     16,344
 
Net earnings                    -        -            -        -           -          -      3,165
 
Purchase of treasury
 stock                          -        -            -        -           -        (32)         -
 
Dividends paid, common
 stock ($.04 per share)         -        -            -        -           -          -       (851)
 
Common stock issued             -        -       75,000        8         367          -          -
 
Exercise of stock
 warrants                       -        -      600,000       60       2,190          -          -
 
Exercise of stock
 options                        -        -      364,000       36       1,147          -          -
                           ------   ------  -----------  -------  ----------   --------   --------
 
Balance December 31,
 1997                         621        -   21,506,383    2,151      49,816        (32)    18,658
 
Net earnings                    -        -            -        -           -          -      6,217
 
Retirement of voting
 common stock                 (19)       -          (20)       -           -          -          -
 
Retirement of treasury
 stock                          -        -       (6,340)       -         (32)        32          -
 
Exercise of stock
 options                        -        -       48,860        4         273          -          -
 
Dividends paid, common
 stock ($.04 per share)         -        -            -        -           -          -       (861)

Balance December 31,
 1998                         602     $  -   21,548,883   $2,155     $50,057       $  -    $24,014
                           ======   ======  ===========  =======  ==========   ========   ========
</TABLE>
See notes to consolidated financial statements.

                                       28
<PAGE>
 
                        CMI CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows

                 Years ended December 31, 1998, 1997, and 1996
                             (dollars in thousands)

================================================================================
<TABLE>
<CAPTION>
                                                             1998      1997      1996
                                                             ----      ----      ----
<S>                                                        <C>        <C>       <C>  
Operating activities:
 Net earnings                                              $  6,217     3,165     5,461
 Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
   Depreciation                                               2,944     2,527     2,199
   Amortization                                                 300        47       176
   Loss (gain) on sale of assets                                (36)       (4)       59
   Change in assets and liabilities net of effects
   of acquisitions of businesses:
     Receivables                                             (1,096)   (1,645)   (6,126)  
     Inventories                                            (34,220)      532     4,402
     Other, current assets                                     (344)     (249)      202
     Accounts payable                                         6,896     5,414    (5,008)
     Accrued liabilities                                      4,970      (203)     (252)
     Deferred tax asset                                       3,100     2,343     3,000
     Long-term receivables                                    2,153    (2,157)      783
     Other, non-current assets                                1,348    (1,275)     (610)
                                                           --------   -------   -------
      Net cash and cash equivalents provided by
       (used in) operating activities                        (7,768)    8,495     4,286
                                                           --------   -------   -------
 
Investing activities:
 Sale of cash equivalents - restricted                            -         -       150
 Proceeds from sale of assets                                   305       113        41
 Capital expenditures                                       (13,309)   (5,259)   (3,413)
 Payments made for acquisitions of businesses                     -   (19,876)        -
                                                           --------   -------   -------
      Net cash and cash equivalents used in
       investing activities                                 (13,004)  (25,022)   (3,222)
                                                           --------   -------   -------
 
Financing activities:
 Payments on long-term debt                                    (216)   (1,052)   (3,449)
 Borrowings on long-term debt                                     -         -    30,000
 Net borrowings (payments) on revolving credit note          28,000    15,000   (14,526)
 Net borrowings (payments) on fleet financing agreement           -         -    (3,097)
 Proceeds from stock options exercised                          277     1,183       120
 Proceeds from stock warrants exercised                           -     2,250         -
 Payment of common stock dividends                             (861)     (851)     (205)
 Payment of preferred stock dividends                             -         -      (272)
 Redemption of preferred stock                                    -         -    (4,537)
 Purchase of treasury stock                                       -       (32)        -
                                                           --------   -------   -------
      Net cash and cash equivalents provided by
       financing activities                                  27,200    16,498     4,034
                                                           --------   -------   -------
 
Increase (decrease) in cash and cash equivalents              6,428       (29)    5,098
 
Cash and cash equivalents at beginning of year                7,131     7,160     2,062
                                                           --------   -------   -------
 
Cash and cash equivalents at end of year                   $ 13,559     7,131     7,160
                                                           ========   =======   =======
</TABLE>
See notes to consolidated financial statements.

                                       29
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

                       December 31, 1998, 1997, and 1996

================================================================================

(1)  Description of Business and Summary of Significant Accounting Policies
     ----------------------------------------------------------------------
     Description of Business
     -----------------------

     Since 1964, CMI Corporation and its subsidiaries (the Company) have
     manufactured and marketed equipment for the road and heavy construction
     industry.  The Company's construction equipment has a wide variety of uses
     in the maintenance, construction, paving, and resurfacing of highways, city
     streets, parking lots, airport runways, tunnels, and bridges. With the
     acquisition discussed in note 2, the Company entered the landfill
     compaction industry and significantly expanded their product line offering
     for industrial grinders which are utilized in numerous industries,
     including the road and heavy construction industry. The Company's raw
     materials are readily available, and the Company is not dependent on a
     single supplier or only a few suppliers.

     Seasonal Nature of the Business
     -------------------------------

     The Company's business is seasonal in nature and precedes the months in
     which highway and road construction and restoration generally occur.  A
     large portion of the Company's orders for its products are received in the
     months of November through July, with heavy shipments occurring in the
     months of March through August.

     Principles of Consolidation
     ---------------------------

     The consolidated financial statements include the accounts of CMI
     Corporation and its subsidiaries. All significant intercompany balances and
     transactions have been eliminated in consolidation.

     Cash and Cash Equivalents
     -------------------------

     For purposes of the statements of cash flows, the Company considers
     unrestricted cash and cash equivalents with maturities of less than three
     months to be cash equivalents.

     Business and Credit Concentrations
     ----------------------------------

     The Company's customers are not concentrated in any specific geographic
     region, but are concentrated in the road and heavy construction business.
     No single customer accounted for a significant amount of the Company's
     sales, and there were no significant accounts receivable from a single
     customer.  The Company reviews a customer's credit history before extending
     credit.  The Company establishes an allowance for doubtful accounts based
     upon factors surrounding the credit risk of specific customers, historical
     trends, and other information.  To reduce credit risk, the Company
     generally requires a down payment on large equipment orders, and
     international sales are generally secured by letters of credit.

                                       30
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     The Company had short-term notes receivable and sales-type lease payments
     due from customers included in accounts receivable of approximately
     $1,771,000 and $5,874,000 at December 31, 1998 and 1997, respectively.

     Inventories
     -----------

     Inventories are stated at the lower of cost or market, cost being
     determined using the first-in, first-out (FIFO) method.  Costs included in
     inventories consist of materials, labor, and manufacturing overhead which
     are related to the purchase and production of inventories.

     Property, Plant, and Equipment
     ------------------------------

     Property, plant, and equipment, stated at cost or the present value of
     minimum lease payments for assets under capital leases, are depreciated
     over the estimated useful lives of the assets using the straight-line
     method.  Estimated useful lives for buildings, machinery and equipment, and
     other property, plant, and equipment range from 3 to 33, 3 to 15, and 2 to
     10 years, respectively.  Significant improvements and betterments are
     capitalized if they extend the useful life of the asset.  Routine repairs
     and maintenance are expensed when incurred.

     The Company reviews long-lived assets and certain identifiable intangibles
     for impairment whenever events or changes in circumstances indicate that
     the carrying amount of an asset may not be recoverable. Recoverability of
     assets to be held and used is measured by a comparison of the carrying
     amount of an asset to future net cash flows expected to be generated by the
     asset.  If such assets are considered to be impaired, the impairment
     recognized is measured by the amount by which the carrying amount of the
     assets exceed the fair value of the assets.  Assets to be disposed of are
     reported at the lower of the carrying amount or fair value less costs to
     sell.

     Other Assets
     ------------

     Other assets include loan acquisition costs and other intangible assets.
     Loan acquisition costs are being amortized on a straight-line basis over
     the life of the related loan agreement.  Also included in other assets is
     the excess of acquisition costs over the fair value of net assets acquired
     (goodwill).  Goodwill is being amortized on a straight-line basis over
     fifteen years.  Accumulated amortization for goodwill was $253,000 at
     December 31, 1998.  Intangible assets are evaluated periodically, and if
     conditions warrant, an impairment valuation allowance is provided.

     Revenue Recognition
     -------------------
     Revenue is recognized when sales transactions are completed, which is when
     products are shipped or title has transferred to the customer.

                                       31
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     Income Taxes
     ------------

     Income taxes are accounted for using the asset and liability method under
     which deferred income taxes are recognized for the tax consequences of
     "temporary differences" by applying enacted statutory tax rates applicable
     to future years to differences between the financial statement carrying
     amounts and the tax bases of existing assets and liabilities and operating
     losses and tax credit carry forwards.  The effect on deferred taxes for a
     change in tax rates is recognized in income in the period that includes the
     enactment date.

     Stock Options
     -------------

     On January 1, 1996, the Company adopted Statement of Financial Accounting
     Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," which
     permits entities to recognize as expense over the vesting period the fair
     value of all stock-based awards on the date of grant. Alternatively, SFAS
     No. 123 also allows entities to continue to apply the provisions of APB
     Opinion No. 25 and provide pro forma net income and pro forma earnings per
     share disclosures for employee stock option grants made in 1995 and
     thereafter as if the fair-value-based method defined in SFAS No. 123 had
     been applied.  The Company has elected to continue to apply the provisions
     of APB Opinion No. 25 and provide the pro forma disclosure provisions of
     SFAS No. 123.  Under APB Opinion No. 25, compensation expense is recorded
     on the date of grant only if the current market price of the underlying
     stock exceeds the exercise price.

     Use of Estimates
     ----------------

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period.  Actual results could differ from those
     estimates.

     Fair Value of Financial Instruments
     -----------------------------------

     The carrying amounts of cash and cash equivalents, receivables, accounts
     payable, and accrued liabilities approximate fair value because of the
     short maturity of these instruments. The carrying amounts of long-term
     receivables and long-term debt approximates fair value as the effective
     rates for these instruments are comparable to market rates at year-end.



                                       32
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued
                                        
================================================================================
     Earnings Per Common Share
     -------------------------

     Basic earnings per share is computed by dividing net earnings 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 net earnings to net earnings applicable to
     common shares and weighted average common shares outstanding used in the
     calculation of basic earnings per common share to the number of shares used
     in the calculation of diluted earnings per share for the years 1998, 1997
     and 1996 (dollars in thousands, except per share data):

                                                    Year ended December 31
                                                    -----------------------
                                                     1998     1997    1996
                                                     ----     ----    ---- 
 
     Net earnings                                   $ 6,217   3,165   5,461
 
     Less dividends on preferred stock and
       accretion of preferred stock discount              -       -     272
                                                    -------  ------  ------
 
     Net earnings applicable to common shares,
       basic and diluted                            $ 6,217   3,165   5,189
                                                    =======  ======  ======
 
     Weighted average number of common
       shares outstanding - basic                    21,523  21,225  20,426
 
     Dilutive effect of potential common shares
       issuable upon exercise of employee
       stock options and stock purchase warrants        137      93     282
                                                    -------  ------  ------
 
     Weighted average number of common
       shares outstanding - diluted                  21,660  21,318  20,708
                                                    =======  ======  ======
 
     Earnings per share
       Basic                                        $  0.29    0.15    0.25
       Diluted                                      $  0.29    0.15    0.25

     Comprehensive Income
     --------------------

     In 1998 the Company adopted SFAS No. 130, "Reporting Comprehensive Income."
     SFAS No. 130 establishes standards for reporting and display of
     "comprehensive income" and its components in a set of financial statements.
     It requires that all items that are required to be recognized under
     accounting standards as components of comprehensive income be reported in a
     financial statement that is displayed with the same prominence as other
     financial statements.  The Company currently does not have any components
     of comprehensive income that are not included in net earnings.  Therefore
     no separate statement is presented.

                                       33
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
(2)  Acquisition of Businesses and Product Lines
     -------------------------------------------

     On December 17, 1997, the Company acquired substantially all of the assets
     of Rexworks, Inc's TRASHMASTER Landfill compaction product line and three
     hard materials grinding machines for approximately $20.5 million which
     included assumption of certain liabilities related to the product lines.
     The purchase price was allocated to the assets acquired based on their
     estimated fair values, and approximately $16 million was allocated to
     receivables and inventory.  The excess of the purchase price over the fair
     value of the net assets acquired (goodwill) was approximately $3.8 million
     and is being amortized on a straight-line basis over 15 years.  The Company
     moved the production of these product lines to its principal manufacturing
     location in 1998.  The costs associated with integration were approximately
     $1.4 million and were expensed as incurred.

     In October 1997, the Company acquired all of the outstanding stock of
     Brownwood Ross Company for $2.4 million in cash, and certain assets of the
     successor of CS Johnson Corporation for $425,000 in cash and 75,000 shares
     of the Company's common stock (valued at $375,000), and the assumption of
     approximately $321,000 in liabilities.  The purchase price was allocated to
     the assets acquired based on their estimated fair values.

     The 1997 acquisitions described above were accounted for by the purchase
     method of accounting for business combinations.  Accordingly, the
     accompanying consolidated statements of earnings do not include any
     revenues or expenses related to these acquisitions prior to the respective
     closing dates.  The cash portions of the acquisitions were financed through
     available cash and borrowings from the Company's line of credit.  Following
     are the Company's unaudited pro forma results for 1997 and 1996 assuming
     the acquisitions occurred on January 1, 1996 (dollars in thousands, except
     for per share data):
 
                                                      1997      1996
                                                      ----      ----  
 
     Net revenues                                   $189,199  $176,635
 
     Net earnings                                      4,146     6,566
 
     Net earnings per common share:
       Basic                                             .19       .32
 
       Diluted                                           .19       .32
 
     Weighted average outstanding common shares:
       Basic                                          21,281    20,501
 
       Diluted                                        21,375    20,783

                                       34
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     These unaudited pro forma results have been prepared for comparative
     purposes only and do not purport to be indicative of the results of
     operations which would have actually resulted had the combinations been in
     effect on January 1, 1996, or of future results of operations.

(3)  Long-Term Debt and Notes Payable
     --------------------------------

     Long-term debt and notes payable at December 31 are summarized as follows
     (dollars in thousands):

                                                                1998    1997
                                                                ----    ----
 
     Series A Senior Notes, unsecured, with interest at
     7.68%, due from September 2000 to September 2006         $30,000  30,000
 
     Revolving line of credit, unsecured, with weighted
     average interest of 7.15% at December 31, 1998 and
     7.66% at  December 31, 1997, due September 2001           43,000  15,000
 
     4.4% to 8.25% (8.1% weighted average rate) fixed rate
     bonds, collateralized by a first security interest
     in certain real property, due September 2010               3,895   4,092
 
     Lease-purchase obligations and notes payable due
     through September 2008, with interest from 6.25% to
     10.25%, collateralized by certain buildings and
     equipment                                                    422     441
                                                              -------  ------
 
                                                               77,317  49,533
 
     Less current maturities of long-term debt                    268     259
                                                              -------  ------
 
                                                              $77,049  49,274
                                                              =======  ======

     In September 1996, the Company completed a $30 million private placement of
     unsecured Series A Senior Notes and established an unsecured line of
     credit. A portion of the proceeds from the senior notes were used to retire
     higher-interest debt and to redeem the Company's preferred stock.  The
     Company amended its revolving line of credit agreement on October 13, 1998
     which increased its borrowing line from $40 million to $60 million.  The
     $60 million unsecured revolving line of credit provides for interest at the
     LIBOR rate plus 1.25% to 2.0% or prime rate less 0.5% to 1.25%. The rate is
     determined based on the ratio of funded debt to earnings before interest,
     taxes, depreciation and amortization and is adjusted every ninety days.



                                       35
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     The Company maintains a fleet financing agreement which allows the Company
     to borrow 100 percent of the net sales price of specific equipment under
     lease contracts.  The terms of the individual borrowings under the
     financing agreement are consistent with the lease contracts and generally
     range from three months to three years.  Borrowings under the fleet
     financing agreement are secured by the specific equipment. As of December
     31, 1998 and 1997, the Company had no borrowings outstanding under the
     fleet financing agreement.

     Certain debt agreements contain restrictions on working capital, net worth
     (minimum of approximately $52.4 million at December 31, 1998), and other
     restrictive covenants.  At December 31, 1998, the Company was in compliance
     with these covenants.

     The aggregate maturities of long-term debt for each of the five years
     subsequent to December 31, 1998, are as follows (dollars in thousands):
 
                    1999                                    $   268
                    2000                                      4,551
                    2001                                     47,574
                    2002                                      4,596
                    2003                                      4,610
                    Thereafter                               15,718
                                                            -------

                                                            $77,317
                                                            =======

(4)  Redeemable Preferred Stock
     --------------------------

     In connection with a 1985 acquisition, the Company issued 4,800 shares of
     7% Series B Preferred Stock with a $4.8 million redemption value. The
     preferred stock accrued dividends at the rate of $70 per share per year.
     The cumulative dividends were payable each January and July and had to be
     fully paid or declared with funds set aside for payment before any dividend
     could be declared or paid on any other class of the Company's stock. The
     preferred stock carried a redemption price of $1,000 per share. During the
     period from 1988 to 1995, 1,350 shares of the preferred stock were redeemed
     and certain dividends were accrued and paid.  During 1996, the Company paid
     approximately $4.8 million for the redemption of 3,450 shares of preferred
     stock plus accrued dividends. As of December 31, 1996 the Company had
     redeemed all outstanding preferred shares.



                                       36
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

(5)  Common Stock and Other Capital
     ------------------------------

     In 1991, the Company entered into an Investment Agreement with Recovery
     Equity Investors, L.P. (REI) pursuant to which, the Company sold REI
     6,666,667 shares of Common Stock (subsequently Class A Common Stock) at
     $.75 per share.  The Investment Agreement contains various covenants and
     restricts the Company from taking certain actions without the prior written
     consent of REI.

     On February 14, 1992, the Company filed an amended and restated certificate
     of incorporation, which authorizes 20,000 shares of common stock and
     45,000,000 shares of Class A Common Stock. Additionally, the Company
     effected a 1-for-2,000 reverse split of the  common  stock and declared a
     stock dividend of 1,999 shares of Class A Common Stock for each whole share
     of common stock outstanding following the reverse split.  Owners of the
     remaining common stock could exchange each share of common stock for one
     share of Class A Common Stock. The exchange offer expired on April 30,
     1992.  At December 31, 1998 602 shares of common stock had not been
     exchanged.  The Class A Common Stock has certain transfer restrictions in
     order to prevent a change in ownership, which could limit or eliminate the
     Company's income tax net operating loss carryforwards (see note 8).

     In January 1993, the Company entered into separate loan agreements with
     REI, a shareholder, and Mr. Larry Hartzog, a shareholder and member of the
     Company's board of directors. The loan agreements included the issuance of
     stock purchase warrants entitling REI and Mr. Hartzog to purchase up to
     600,000 aggregate shares of the Company's Class A Common Stock. In January
     1997, REI and Mr. Hartzog exercised the stock purchase warrants at an
     exercise price of $3.75 per share purchasing 600,000 shares of the
     Company's Class A Common Stock.

(6)  Stock Option Plans
     ------------------

     The Company has established the 1992 Incentive Stock Option Plan (the Plan)
     for its employees, as approved by the shareholders.  The Plan has two
     features:  (1) stock options and (2) stock appreciation rights.  The Plan
     is administered by the Compensation Committee of the Board of Directors.
     The granting of stock options and/or appreciation rights is at the sole
     discretion of the Compensation Committee.  Board members are not allowed to
     participate in the Plan.  A maximum of 1,000,000 stock options and/or
     appreciation rights may be granted under the Plan.  The exercise price of
     the stock options is the market


                                       37
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     value of Class A Common Stock at the date of grant.  Generally, the options
     vest and become exercisable ratably over a four-year period, commencing six
     months after the grant date. The Compensation Committee is entitled in its
     discretion to grant options with vesting periods which are different from
     the standard four year period.  In a limited number of instances, the
     Compensation Committee has exercised its discretion and has granted options
     with both shorter and longer vesting periods than the standard four year
     period.

     The Company granted options for 500,000 shares of Class A Common Stock
     under the 1992 Incentive Stock Option Plan to the Company's new chief
     executive officer in October 1998. This grant is subject to approval of
     certain amendments to the Plan by stockholders of the Company at the next
     annual meeting.  If the stockholers of the Company do not approve the
     necessary amendments, the options will be deemed to have been granted
     outside the 1992 Incentive Stock Option Plan.  Excluding the 500,000
     options granted in 1998 there were 271,348 options available for grant
     under the plan.

     The per share weighted-average fair value of stock options granted during
     1998, 1997, and 1996 was $3.77, $2.21, and $2.14 respectively, on the date
     of grant using the Black Scholes option-pricing model with the following
     assumptions: 1998 - expected volatility 55%, expected dividend yield .6%,
     risk-free interest rate of 5.5%, and an expected life of 7.3 years; 1997 -
     expected volatility 56%, expected dividend yield .9%, risk-free interest
     rate of 5.5%, and an expected life of 4.7 years; 1996 - expected volatility
     58%, expected dividend yield 1%, risk-free interest rate of 5.5%, and an
     expected life of 5 years.

     The Company applies APB Opinion No. 25 in accounting for its stock options
     and, accordingly, no compensation cost has been recognized for stock
     options in the financial statements.  Had the Company determined
     compensation cost based on the fair value at the grant date for its stock
     options under SFAS No. 123, the Company's net earnings would have been
     reduced to the pro forma amounts indicated below:
 
                                                    1998    1997   1996
                                                    ----    ----   ---- 
 
     Net earnings                    As reported   $6,217  3,165  5,461
                                     Pro forma      6,040  2,942  5,405
 
     Earnings per share - diluted    As reported   $ 0.29   0.15   0.25
                                     Pro forma       0.28   0.14   0.25
 

                                       38
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     Pro forma net earnings reflects only options granted from January 1, 1995
     through December 31, 1998.  Therefore, the full impact of calculating
     compensation cost for stock options under SFAS No. 123 is not reflected in
     the pro forma net earnings amounts presented above because compensation
     cost is reflected over the options' vesting period and compensation cost
     for options granted prior to January 1, 1995 is not considered.

     Stock appreciation rights may be issued with stock options or separately,
     at the sole discretion of the Compensation Committee.  Stock appreciation
     rights, if granted, would be payable in shares of Class A Common Stock over
     the same vesting period as the stock options.  At December 31, 1998, no
     stock appreciation rights had been granted.

     Stock option activity during the periods indicated is as follows:
 
                                        Number of      Weighted-Average
                                         Shares         Exercise Price
                                         ------         -------------- 
 
       Balance at December 31, 1995      500,000             $3.89
 
            Granted                      150,000              4.17
            Exercised                      1,000              3.25
                                         -------
 
       Balance at December 31, 1996      649,000             $3.95
 
            Granted                      185,000              4.50
            Exercised                    364,000              3.25
            Expired                       35,000              3.25
                                         -------
 
       Balance at December 31, 1997      435,000             $4.83
 
            Granted                      550,000              6.25
            Exercised                     48,860              5.66
            Forfeited                     51,140              4.61
                                         -------
 
       Balance at December 31, 1998      885,000             $5.68
                                         =======

     At December 31, 1998, the range of exercise prices and weighted-average
     remaining contractual life of outstanding options was $4.125 - $6.75 and
     6.3 years, respectively.

     At December 31, 1998, 1997, and 1996, the number of options exercisable was
     243,533, 183,764, and 374,125, respectively, and the weighted-average
     exercise price of those options was $5.04, $5.08, and $3.46, respectively.

                                       39
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

     In 1992, a consulting firm, of which a former board member is a director,
     received options for the purchase of up to 100,000 shares of Class A Common
     Stock for past services rendered.  These options were immediately
     exercisable at an exercise price of $1.38 per share.  The Company recorded
     approximately $125,000 in expense in 1992 for these options. These options
     were exercised in 1996.

(7)  Leases
     ------

     The Company leases equipment to customers under short-term and long-term
     contracts. Short-term contracts generally range from three to six months.
     Rental income from short-term leases was approximately $1,384,000,
     $1,961,000, and $2,935,000, for the years ended December 31, 1998, 1997,
     and 1996, respectively.

     The Company's long-term leases generally qualify as sales-type leases.  The
     net investment in such leases is included in receivables.  Future minimum
     lease payments to be received for long-term leases are as follows (dollars
     in thousands):
 
                    1999                          $1,771
                    2000                             105
                    2001                             114
                    2002                             107
                    2003                              30
                                                  ------
 
                                                  $2,127
                                                  ======

(8)  Income Taxes
     ------------
 
     Income tax expense consisted of the following (dollars in thousands):

                                              1998     1997    1996
                                              ----     ----    ----
 
          Current tax expense                $  542      173     165
 
          Deferred tax expense                3,100    1,857   3,000
                                              -----    -----   -----
 
                                             $3,642    2,030   3,165
                                              =====    =====   =====

     Income tax expense differed from the amounts computed by applying the U.S.
     federal income tax rate of 35% to earnings before income taxes in 1998,
     1997, and 1996, as a result of the following (dollars in thousands):


                                       40
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued
 
================================================================================
                                                   1998      1997      1996
                                                   ----      ----      ----
 
          Computed expected tax expense           $3,451     1,818     3,019
          State income taxes                         410       185       336   
          Reduction of valuation allowance          (177)     (357)      (37)
          Other, net                                 (42)      384      (153)
                                                  ------     -----     -----
 
                                                  $3,642     2,030     3,165
                                                  ======     =====     =====
 
     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and liabilities at December 31, 1998
     and 1997 are as follows (dollars in thousands):

                                                              1998     1997
                                                              ----     ----
 
     Net operating loss and other carryforwards             $ 7,124   11,735
     Other, primarily accrued liabilities                     4,804    3,255
                                                            -------   ------
     Deferred tax assets                                     11,928   14,990
     Deferred tax liability (plant and equipment
      temporary differences)                                 (2,362)  (2,147)
                                                            -------   ------
                                                              9,566   12,843
     Less valuation allowance                                   466      643
                                                            -------   ------
 
      Net deferred tax asset                                $ 9,100   12,200
                                                            =======   ======
 
     The net deferred tax asset at December 31, 1998 and 1997 was $9.1 million
     and $12.2 million, respectively. The recognized deferred tax asset is based
     on expected utilization of net operating loss and other carryforwards and
     reversal of certain taxable temporary differences.  The ultimate
     realization of the deferred tax asset will require aggregate taxable income
     of approximately $17 million to $22 million in future years.

     The estimated taxable income for 1998 before utilization of income tax net
     operating loss carryforwards was approximately $14 million.  The estimated
     taxable income for 1997 before utilization of income tax net operating loss
     carryforwards was approximately $5.8 million.

     The Company has assessed its past earnings history and trends, sales
     backlog, budgeted sales, reversing taxable temporary differences and
     expiration dates of carryforwards and has determined that it is more likely
     than not that the $9,100,000 of net deferred tax assets will be realized.
     The remaining valuation allowance of approximately $466,000 is maintained
     against deferred tax assets which the Company has determined are
     potentially not realizable.

                                       41
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     At December 31, 1998 the Company has tax net operating loss carry forwards
     of approximately $6,800,000 for federal income tax purposes.  Such
     carryforwards, which may provide future tax benefits, expire in 2010. At
     December 31, 1998 the Company also has tax net operating loss carryforwards
     of approximately $33,500,000 for state income tax purposes.  Such
     carryforwards expire as follows: $4,100,000 in 1999; $1,300,000 in 2001;
     $100,000 in 2002; $4,100,000 in 2004; $7,300,000 in 2005; $4,400,000 in
     2006; and $12,200,000 in 2010. Future changes in ownership, as defined by
     section 382 of the Internal Revenue Code, could limit the amount of net
     operating loss carryforwards used in any one year (see note 5).

     At December 31, 1998 the Company has tax credit carryforwards of
     approximately $1,600,000 which expire in varying amounts from 2000 to 2010,
     and depletion carryforwards and AMT credit carryforwards of approximately
     $1,900,000 and $1,300,000, respectively, which do not expire.

(9)  Export Sales
     ------------

     The Company had export sales of approximately $28.3 million, $21.1 million,
     and $29.4 million in 1998, 1997, and 1996, respectively.  These sales were
     made through foreign dealers and representatives.  A significant portion of
     these sales were made in Asia, Australia,  South America, and North and
     Central America, excluding the United States.

(10) Employee Benefit Plan
     ---------------------

     The Company has a defined contribution plan whereby eligible employees may
     contribute pre-tax wages in accordance with the provisions of the plan.  At
     the discretion of the Board of Directors, the Company matches certain
     contributions made by eligible employees.  Discretionary matching
     contributions of approximately $346,000, $269,000, and $155,000 were made
     in 1998, 1997, and 1996, respectively.

(11) Supplemental Quarterly Financial Information (Unaudited)
     --------------------------------------------------------

     Following is a summary of the unaudited interim results of operations for
     the years ended December 31 (dollars in thousands, except per share data):



                                       42
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================

                                              1998
                           --------------------------------------------
                            First    Second    Third   Fourth     Full
                           Quarter   Quarter  Quarter  Quarter    Year
                           -------   -------  -------  -------    ----  
 
     Net revenues          $44,022    65,892   48,860   46,912  205,686
     Net earnings(loss)    $  (667)    4,368    1,851      665    6,217
     Net earnings(loss)
      per common share:
        Basic              $  (.03)      .20      .09      .03      .29
        Diluted            $  (.03)      .20      .09      .03      .29

     In the fourth quarter of 1998, the Company recorded adjustments to reduce
     the carrying value of inventory and to increase accrued liabilities for
     legal contingencies. The after-tax effect of the fourth quarter adjustments
     decreased net income by approximately $830,000.
 
                                              1997
                           --------------------------------------------
                            First    Second    Third   Fourth     Full
                           Quarter   Quarter  Quarter  Quarter    Year
                           -------   -------  -------  -------    ----  
 
     Net revenues          $41,713   46,105   36,078   30,118   154,014
     Net earnings(loss)    $ 1,424    2,230    1,433   (1,922)    3,165
     Net earnings(loss)
      per common share:
        Basic              $   .07      .11      .07     (.09)      .15
        Diluted            $   .07      .11      .07     (.09)      .15

     In the fourth quarter of 1997, the Company recorded adjustments to reduce
     the carrying value of inventory and accounts receivable, and to increase
     accrued liabilities for warranty and legal contingencies. The after-tax
     effect of the fourth quarter adjustments  increased the net loss by
     approximately $1.6 million.

(12) Supplemental Cash Flow Information
     ----------------------------------

     Cash paid for interest approximated $4,731,000, $2,804,000, and $2,346,000
     in 1998, 1997, and 1996, respectively.

     Cash paid for income taxes approximated $229,000, $249,000 and $315,000 in
     1998, 1997, and 1996, respectively.

     A 1997 acquisition (see note 2) included consideration in the form of the
     Company's Voting Class A Common Stock.  The fair value of stock issued was
     approximately $375,000.



                                       43
<PAGE>
 
                        CMI CORPORATION AND SUBSIDIARIES
              Notes to Consolidated Financial Statements, Continued

================================================================================
(13) Segment Information
     -------------------

     The Company currently manages its business by operating location.  As such,
     the Company identifies its segments based on the geographic locations of
     its manufacturing facilities.  The Company has one reportable segment, its
     Oklahoma City manufacturing facility. The manufacturing 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:  mobile
     equipment - the Company's primarily line of concrete paving systems, and
     pavement profiling and reclaiming/ stabilizing equipment, specific lines of
     heavy-duty trailers, weighing equipment, municipal landfill compactors, and
     industrial and green waste grinding machines;  materials processing
     equipment - hot-mix asphalt production systems, and thermal systems for
     remediating contaminated soils and sanitizing medical waste. The specific
     products manufactured at the other geographic locations are as follows:
     mobile equipment - lightweight grading and concrete paving and finishing
     machines, and custom heavy hauling trailers; processing equipment -
     concrete batching plants.

     Following is certain financial information regarding the Company's
     segments. The specific lines of heavy-duty trailers manufactured in
     Oklahoma City are transferred to another operating segment through
     intercompany accounts at cost and are excluded from net revenues. As a
     result, the revenues reported below are all from external customers.
     General corporate expenses are not allocated to the other operating
     segments; therefore, are included as a reconciling item to reported
     operating earnings.
 
                                                 Oklahoma    All
                                                   City     Other    Total
                                                 --------------------------
 
     As of December 31, 1998:
       Total assets                              $162,493   27,218  189,711
                                                 ========   ======  =======
 
     Year ended December 31, 1998:
       Net revenues                              $161,190   44,496  205,686
       Costs and expenses                         146,685   40,083  186,768
                                                 --------   ------  -------
 
          Segment measure of operating profit    $ 14,505    4,413   18,918
                                                 ========   ======
 
       General corporate expenses                                     5,028
                                                                    -------
 
          Operating earnings                                         13,890
 
       Interest expense                                              (5,000)
       Interest income                                                  934
       Other, net                                                        35
                                                                    -------
 
          Earnings before income taxes                                9,859

                                       44
<PAGE>
 
                        CMI CORPORATION AND SUBSIDIARIES
              Notes to Consolidated Financial Statements, Continued

================================================================================
                                                 Oklahoma    All
                                                   City     Other    Total
                                                 --------------------------
 
     Year ended December 31, 1998 (cont.):
       Income tax expense                                             3,642
                                                                    -------
 
       Net earnings                                                $  6,217
                                                                    =======
 
       Capital expenditures                      $ 12,804     505    13,309
                                                  =======  ======   =======
 
       Depreciation and amortization             $  2,520     724     3,244
                                                  =======  ======   =======
 
 
     As of December 31, 1997:
       Total assets                              $117,053  27,375   144,428
                                                  =======  ======   =======
 
     Year ended December 31, 1997:
       Net revenues                              $122,043  31,971   154,014
       Costs and expenses                         112,353  30,402   142,755
                                                  -------  ------   -------
 
          Segment measure of operating profit    $  9,690   1,569    11,259
                                                  =======  ======   
 
       General corporate expenses                                     4,513
                                                                    -------
 
          Operating earnings                                          6,746
 
       Interest expense                                              (2,906)
       Interest income                                                1,351
       Other, net                                                         4
                                                                    -------
 
          Earnings before income taxes                                5,195
 
       Income tax expense                                             2,030
                                                                    -------
 
       Net earnings                                                $  3,165
                                                                    =======
 
       Capital expenditures                      $  4,376     883     5,259
                                                  =======  ======   =======
 
       Depreciation and amortization             $  2,093     481     2,574
                                                  =======  ======   =======
 

                                       45
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
                                                 Oklahoma    All
                                                   City     Other    Total
                                                 --------------------------
     As of December 31, 1996:
       Total assets                             $ 91,003    22,451  113,454
                                                 =======   =======  =======
 
     Year ended December 31, 1996:
       Net revenues                             $109,873    28,915  138,788
       Costs and expenses                         97,114    27,765  124,879
                                                 -------    ------  -------
 
          Segment measure of operating profit   $ 12,759     1,150   13,909
                                                 =======    ======
 
 
       General corporate expenses                                     2,922
                                                                    -------
 
          Operating earnings                                         10,987
 
       Interest expense                                              (2,933)
       Interest income                                                  616
       Other, net                                                       (44)
                                                                    -------
 
          Earnings before income taxes                                8,626
 
       Income tax expense                                             3,165
                                                                    -------
 
       Net earnings                                                $  5,461
                                                                    =======
 
       Capital expenditures                      $  2,930     483     3,413
                                                  =======  ======   =======
 
       Depreciation and amortization             $  1,997     378     2,375
                                                  =======  ======   =======

     The Company has one operating location in the United Kingdom. The location
     serves as a sales office and has approximately $600,000 of assets comprised
     primarily of inventory, receivables, and property, plant and equipment.
     All remaining assets are located in the United States. See note 9 for
     information on export sales.

     Revenues for products in 1998, 1997 and 1996 were as follows (dollars in
     thousands):

                                           1998     1997     1996
                                           ----     ----     ----
 
       Mobile Equipment                  $ 78,528   82,349   80,709
       Materials Processing Equipment      95,257   44,806   37,716
       Parts and Used Equipment            31,901   26,859   20,363
                                          -------  -------  -------
 
                                         $205,686  154,014  138,788
                                          =======  =======  =======

                                       46
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
(14) 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. Rent expense was $1,402,000
     in 1998, $715,000 in 1997, and $419,000 in 1996.

     Minimum rental commitments under all non-cancelable leases for five years
     subsequent to December 31, 1998, are approximately as follows:  $716,000 in
     1999, $286,000 in 2000, $270,000 in 2001, $270,000 in 2002, and $117,000 in
     2003.

     At December 31, 1998, the Company was contingently liable as guarantor for
     certain accounts receivable sold with recourse of approximately $3,292,000
     through September 2006.

(15) Litigation
     ----------

     As previously disclosed, on November 22, 1995, a Chicago law firm,
     previously engaged by the Company in connection with prior patent
     litigation, filed suit against the Company in the Circuit Court of Cook
     County, Illinois. On December 20, 1995 the case was removed to the United
     States District Court for the Northern District of Illinois, Eastern
     Division. The law firm is seeking to recover approximately $1.4 million of
     legal fees and costs alleged to be owing by the Company, together with
     prejudgment and postjudgment interest and other costs. The Company has
     denied these allegations and will continue to defend this lawsuit.

     Since 1996, the Company has been involved in litigation in the U.S.
     District Court for the Western District of Oklahoma with Cedarapids, Inc.
     The Company sued Cedarapids seeking a declaratory judgement that a patent
     held by Cedarapids is invalid or, in the alternative, that the Company was
     not infringing upon the patent.  Cedarapids subsequently filed a
     counterclaim against the Company alleging that the Company was infringing
     Cedarapids' patent and seeking unspecified monetary damages.  In January
     1997, the District Court issued an order staying this lawsuit pending the
     resolution of litigation between Cedarapids and Gencor, Industries
     involving the same patent. This stay was lifted in December 1997 upon
     settlement of patent and other non-related litigation between Cedarapids
     and Gencor, Industries.  The Company anticipates this lawsuit going to
     trial in mid 1999.

                                       47
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements, Continued

================================================================================
     In September 1998, Cedarapids filed 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 unspecified monetary damages.  The Company intends to vigorously
     defend both lawsuits involving Cedarapids.

     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 routine 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 proceedings, including the cases above, will
     not have a materially adverse effect on the Company's consolidated
     financial position, liquidity or future results of operations.

(16) Related Party Transactions
     --------------------------

     During 1997, the Company leased certain manufacturing plants and offices
     located in Champaign, Illinois, from the now active President of CMI
     Johnson-Ross.  The current lease is for twenty-four months at a rate of
     $15,000 per month.  Aggregate lease payments for the years ended December
     31, 1998 and 1997 were $150,000 and $33,500, respectively.



                                       48
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998

================================================================================

Item 9.   Changes in and Disagreements With Accountants on Accounting and
          ---------------------------------------------------------------    
          Financial Disclosure
          --------------------

          None.

                                   PART III

In accordance with the provisions of General Instruction G(3), Items 10, 11, 12,
and 13 are incorporated herein by reference to the Company's Proxy Statement for
the Annual Meeting of Shareholders to be held on May 14, 1999.

                                    PART IV

Item 14.  Exhibits, Consolidated Financial Statement Schedules, and Reports
          -----------------------------------------------------------------  
          on Form 8-K
          -----------

(a)  Consolidated Financial Statements and Consolidated Financial Statement
     -----------------------------------------------------------------------
     Schedules
     ---------

1.   Consolidated Financial Statements:
     ----------------------------------

     See Index to Consolidated Financial Statements at Item 8 on Page 23 of this
     Form 10-K.

2.   Consolidated Financial Statement Schedules:
     -------------------------------------------

     Information required by schedules called for under Regulation S-X is either
     not applicable, not material, or is included in the consolidated financial
     statements or notes thereto.
 
3.   Exhibits
     --------
                                                           Page Number or
Exhibit                                                   Incorporation by
Number    Description                                       Reference to
------    -------------------------------------------  ----------------------
 
 (3.1)    Amended and Restated Certificate             Exhibit 2 on Form 8-K,
          of Incorporation                             dated February 18, 1992;
                                                       and Exhibit (3i) on Form
                                                       10-Q dated August 14,
                                                       1995
 

                                       49
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998

================================================================================

                                                           Page Number or
Exhibit                                                   Incorporation by
Number    Description                                       Reference to
------    -------------------------------------------  ----------------------
 
 (3.2)    Amended and Restated By-Laws                 Exhibit 6 on Form 8-K,
                                                       dated August 26, 1991

 (4.1)    Series A Senior Notes Loan Agreement         Exhibit 4.1 of this
                                                       Form 10-K
 
 (4.2)    Revolving Line of Credit Loan Agreement      Exhibit 4.2 of this
          and Amendments                               Form 10-K

 (4.3)    The registrant, by signing this report,
          agrees to furnish the Securities and
          Exchange Commission, upon its request,
          a copy of any instrument which defines
          the right 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.

(10.1)    Employment Agreement dated October 1, 1998   Exhibit 10.1 of this
          between the Company and Tom Engelsman.       Form 10-K

(10.2)    Employment Agreement dated October 1, 1998   Exhibit 10.2 of this
          between the Company and Jim Holland.         Form 10-K

(10.3)    Asset Purchase Agreement dated October 1,    Exhibit 10.1 of Form
          1997 between Rexworks, Inc. and CMI          8-K dated December 31,
          Corporation.                                 1997


                                       50
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998

================================================================================
 
(21) Subsidiaries of the Registrant:

                                                  Place of Incorporation
                   Name                           or Organization
                   ----                           ---------------
     
     CMI Limited Partnership                      Oklahoma
     CMI Sales Co.                                Oklahoma
     Product Support, Inc.                        Oklahoma
     Machinery Investment Corporation             Oklahoma
     CMI International (U.K.), Ltd.               England
     CMI Energy Conversion Systems, Inc.          Oklahoma
     CMI OIL Corporation                          Oklahoma
     CMI Dakota Co.                               South Dakota
     CMI Metro-Pav, Inc.                          Iowa
     Transport Trailer Manufacturing Company      Oklahoma
     Brownwood Ross Company                       Texas
     CMI Johnson Corporation                      Illinois

(23) Consent of Independent Auditors              Exhibit 23 of this
                                                  Form 10-K

(27) Financial Data Schedule                      Exhibit 27 on this
                                                  Form 10-K

(b)  Reports on Form 8-K
     -------------------

     No reports on Form 8-K were filed during the last quarter of 1998.









                                       51
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998

================================================================================
    
                                  SIGNATURES
    
Pursuant to the requirements of Section 13 or 15(d) 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:
    
(Registrant)
CMI CORPORATION
    
By:  /s/ Tom Engelsman                       Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Tom Engelsman
     Chief Executive Officer and Director
    
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
 
By:  /s/ Kenneth J. Barker                   Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Kenneth J. Barker
     Director
 
By:  /s/ Albert L. Basey                     Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Albert L. Basey
     President and Chief Operating Officer
 
By:  /s/ Robert L. Curtis                    Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Robert L. Curtis
     Vice President, Sales and Marketing
 
By:  /s/ Joseph J. Finn-Egan                 Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Joseph J. Finn-Egan
     Director
 
By:  /s/ Larry D. Hartzog                    Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Larry D. Hartzog
     Director
 
By:  /s/Jim D. Holland                       Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Jim D. Holland
     Senior Vice President, Treasurer
     and Chief Financial Officer



                                       52
<PAGE>
 
CMI CORPORATION
FORM 10-K
December 31, 1998

================================================================================
 
                                  SIGNATURES

 
By:  /s/ David Jolly                         Dated:  March 19,1999
     ------------------------------------          -----------------------------
     David Jolly
     Corporate Controller
 
By:  /s/ Jeffrey A. Lipkin                   Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Jeffrey A. Lipkin
     Director
 
By:  /s/ J. Larry Nichols                    Dated:  March 19,1999
     ------------------------------------          -----------------------------
     J. Larry Nichols
     Director
 
By:  /s/ Matthew J. Rohwer                   Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Matthew J. Rohwer
     Assistant Treasurer
 
By:  /s/ Thomas P. Stafford                  Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Thomas P. Stafford
     Director
 
By:  /s/ Bill Swisher                        Dated:  March 19,1999
     ------------------------------------          -----------------------------
     Bill Swisher
     Chairman of the Board




                                       53