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                                 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 AND EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

         [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                      SECURITIES AND EXCHANGE ACT OF 1934
                For the transition period from ______ to ______

                         Commission file number 0-25428


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

           Nevada                                             88-0328443
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                            Identification Number)

4411 SOUTH 40TH STREET, SUITE D-11, PHOENIX, AZ                 85040
(Address of principal executive offices)                      (Zip Code)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (602) 437-5400

Securities registered pursuant to Section 12(b) of the Act: None

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

     Title of each class:                Name of exchange on which registered:
     -------------------                 ------------------------------------
Common stock, $.001 par value                   Nasdaq SmallCap Market
Common stock purchase warrants                  Nasdaq SmallCap Market

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. [X]

  On March 6, 2002, the aggregate market value of the registrant's voting stock
held by non-affiliates was $5,636,863

  On March 6, 2002, there were 3,559,938 shares of Common Stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

     The registrant incorporates by reference into Part III of this Report,
information contained in its definitive proxy statement to be disseminated in
connection with its Annual Meeting of Shareholders for the year ended December
31, 2001.

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                           MEADOW VALLEY CORPORATION
                           ANNUAL REPORT ON FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 2001

                               TABLE OF CONTENTS


                                     PART I                             PAGE

 Item 1.          Business                                                3
 Item 2.          Properties                                             10
 Item 3.          Legal Proceedings                                      11
 Item 4.          Submission of Matters to a Vote of Security Holders    12

                                    PART II

 Item 5.          Market for the Registrant's Common Stock and Related
                   Stockholders Matters                                  12
 Item 6.          Selected Financial Data                                13
 Item 7.          Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                  14
 Item 7A.         Quantitative and Qualitative Disclosures About
                    Market Risk                                          21
 Item 8.          Financial Statements and Supplementary Data            22
 Item 9.          Change in and Disagreements with Accountants on
                    Accounting and Financial Disclosure                  22

                                   PART III

 Item 10.         Directors and Executive Officers of the Registrant     22
 Item 11.         Executive Compensation                                 22
 Item 12.         Security Ownership of Certain Beneficial Owners and
                    Management                                           22
 Item 13.         Certain Relationships and Related Transactions         22

                                    PART IV

 Item 14.         Exhibits, Financial Statement Schedule and Reports
                    on Form 8-K                                          23



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                                     PART I

ITEM 1.  BUSINESS

RECENT DEVELOPMENTS

     Two consecutive years of operating losses, due primarily to losses on
projects in New Mexico and one project in Clark County, Nevada and start-up
costs related to the expansion of the ready mix business have greatly impaired
working capital and caused cash shortages. As a result, payment of payables is
slower than normal and the Company has borrowed the full amount available under
its line of credit. The Company has filed, or will file, claims to recoup costs
incurred on projects where the Company believes it is due compensation under the
terms of the respective contract. Prosecution of these claims through the
obligatory administrative levels and then, if necessary, through mediation,
arbitration or litigation is a time-consuming process and, therefore, the
Company's working capital will likely remain at decreased levels until final
resolution of the claims. The resultant decline in working capital has also
reduced the Company's bonding capacity that determines the size and number of
projects the Company can bid on and obtain.

     Given these circumstances, the Company has acted to improve working capital
by, among other things, considering the sale of certain assets.  Accordingly, on
March 22, 2002, the Company executed a definitive agreement to sell certain pit
assets that include the quarry near Prescott Valley, Arizona and the gravel pit
near Chino Valley, Arizona.  The Company previously announced entering into a
non-binding letter of intent with RMI Enterprises, LLC for the stock sale of
Ready Mix, Inc., the Company's ready mix concrete subsidiary, but that letter of
intent was terminated on March 26, 2002.  The termination stemmed from the
conclusion that the purchase price offer significantly undervalued Ready Mix,
Inc.; that the Company could not obtain a clean opinion of legal counsel
acceptable to the Board of Directors certifying that the transaction, as
proposed, would fully conform to Nevada laws; and the Board's determination
that, at this time, the sale of pit assets was preferable to the sale of Ready
Mix, Inc. The transaction proposed by the definitive agreement will, depending
upon final inventory stockpile measurement, yield approximately $4.1 to $4.4
million in cash and eliminate approximately $.2 million in debt and $1.7 million
in future operating lease payments.

HISTORY

     The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein.  Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995.  These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially.  These risks and uncertainties are detailed throughout this Report
and will be further discussed from time to time in the Company's periodic
reports filed with the Commission.  The forward-looking statements included in
this Report speak only as of the date hereof.

     Meadow Valley Corporation (the "Company") was incorporated in Nevada on
September 15, 1994.  In October and November 1995, the Company sold 1,926,250
Units of its securities to the public at $6.00 per Unit (the "Public Offering").
Each Unit consisted of one share of $.001 par value common stock and one common
stock purchase warrant exercisable to purchase one additional share of common
stock at $7.20 per share until October 16, 2000.  In September 2000, the
exercise price of the warrants was reduced to $5.00 per share and the exercise
period was extended until June 30, 2002.   The Company currently has two wholly
owned subsidiaries, Meadow Valley Contractors, Inc. and Ready Mix, Inc.

     On October 1, 1994, the Company purchased all of the outstanding Common
Stock of Meadow Valley Contractors, Inc. ("MVCI") for $11.5 million comprised of
a $10 million promissory note and $1.5 million paid by the issuance of 500,000
restricted shares of the Company's Common Stock valued at $3.00 per share.  On
January 4, 1999, the $10 million promissory note was paid in full.  MVCI was
founded in 1980 as a heavy construction contractor and has been engaged in that
activity since inception.  References to the Company's history include the
history of MVCI.

     Through MVCI, the Company primarily operates as a heavy construction
contractor.  MVCI specializes in public infrastructure projects including the
construction of bridges and overpasses, channels, roadways, highways and airport
runways.  MVCI generally serves as the prime contractor for public sector
customers (such as federal, state and local governmental authorities) in the
states of Nevada, Arizona, and Utah.   MVCI primarily seeks public sector
customers

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because public sector projects are less cyclical than private sector projects,
payment is more reliable, work required by the project is generally standardized
and little marketing expense is incurred in obtaining projects.

     In 1996, the Company expanded into the materials segment of the
construction industry with the formation of Ready Mix, Inc. ("RMI").  RMI
manufactures and distributes ready mix concrete and owns and operates four ready
mix concrete batch plants - two in the Las Vegas, NV area and two in the
Phoenix, AZ area and 95 ready mix trucks.  RMI also produces the majority of its
own rock and sand for its Nevada plants from a crushing and screening plant in
Moapa, NV.  RMI primarily targets prospective customers such as concrete
subcontractors, prime contractors, homebuilders, commercial and industrial
property developers, pool builders and homeowners.  RMI began its ready mix
concrete operation from its first location in North Las Vegas in March 1997,
began processing rock and sand from its Moapa pit in November 1999 and expanded
into the Phoenix market with two plants in 2000.

     Consistent with the Company's dual interests in construction services and
construction materials, the Company owns and leases two portable hot mix asphalt
plants, a rubberized asphalt plant, and related asphalt paving equipment.  The
portability of these asphalt paving capabilities provides the Company with an
opportunity to expand its existing geographic market, enhance its construction
operations in its existing market, improve its competitiveness and generate
increased revenues on projects that call for large quantities of asphaltic
concrete, recycled asphalt, or rubberized asphalt.  These capabilities also
afford the Company the opportunity to provide construction materials or to
subcontract its services to other construction companies.

     The Company's backlog (anticipated revenue from the uncompleted portions of
awarded projects) was approximately $76 million at December 31, 2001, compared
to $75 million at December 31, 2000, and consists of various projects in Nevada,
Arizona and Utah.  Approximately $65 million of the Company's backlog is
scheduled for completion during 2002.   The Company has acted as the prime
contractor on projects funded by a number of governmental authorities, including
the Federal Highway Administration, the Arizona Department of Transportation,
the Nevada Department of Transportation, the Utah Department of Transportation,
the Clark County (Nevada) Department of Public Works, the Salt Lake City (Utah)
Airport Authority, the New Mexico State Highway and Transportation Department
and the City of Phoenix.

     In 1996, the Company formed Prestressed Products Incorporated ("PPI") as a
wholly owned subsidiary to design, manufacture and erect precast prestressed
concrete building components for use on commercial, institutional and public
construction projects throughout the Southwest.  Product lines included
architectural and structural building components and prestressed bridge girders
for highway construction.  During 1997, PPI began operations with a precast yard
and concrete batch plant located on leased property adjacent to the Company's
office in Moapa, Nevada.  As a result of continuing operating losses, in June
1998, the Company adopted a formal plan (the "Plan") to discontinue the
operations of PPI.  The Plan included the completion of approximately $2.8
million of uncompleted contracts and the disposition of approximately $1.2
million of equipment.  The Company recorded an estimated loss of $1,950,000 (net
of income tax benefit of $1,300,000), related to the disposal of assets of PPI,
which included a provision of $1,350,000 for estimated losses during the phase-
out period of July 1, 1998 through June 30, 1999.  During the twelve months
ended December 31, 1999 the Company incurred $598,172 of the expected losses
(net of income tax benefit of $398,743).

BUSINESS STRATEGY

     The Company seeks to grow revenue and improve profitability by pursuing the
following business strategy:

     (i) Continue to actively bid in the construction markets in Arizona, Nevada
and Utah and improve construction project profitability.  The Company will
continue to actively bid on transportation infrastructure and other related
heavy civil projects in its core geographic market of Arizona, Nevada and Utah.
The difficulties experienced in getting paid by the New Mexico State Highway and
Transportation Department has caused the Company to cease operations in the New
Mexico market with the exception of the ongoing prosecution of claims which is
performed from the Phoenix, AZ office.  The Company will strive to increase
margins on new work bidding.

     (ii) Due to the need for additional working capital, the Company may seek
to sell the mineral leases in New Mexico, or alternatively, to form a strategic
alliance to operate the pits as commercial sources for aggregate sales to third
parties.  In addition, the Company entered into a definitive agreement, due to
the attractiveness of the offer, to sell certain pit

                                       4
<PAGE>

assets near Chino Valley and Prescott Valley, Arizona. The Company may also
consider the disposal of other assets as a means to increase working capital.

      (iii) Diligently pursue the successful resolution of the Company's
construction claims.  The Company has incurred substantial cost in completing
certain projects in New Mexico and Clark County, Nevada and strongly believes
that the costs are compensable due to changed conditions, owners' plan errors
and omissions, conflicting utilities, other causes for delays and
misadministration by third party construction managers employed by the owners.
The total amount of claims that have been submitted or soon-to-be submitted is
approximately $54.4 million.  This amount includes costs that are attributable
to subcontractors and to a prime contractor.  The Company's portion of the
claims is approximately $29.4 million.  To date, the Company has recorded
approximately $7.8 million in claim revenue to offset costs incurred on the
claims.  In addition, the Company has also recorded approximately $1.8 million
for unpaid quantities, unpaid change orders and pending change orders in advance
of receipt.  On the average, the Company has recorded approximately 26.4% of the
total claim amount into revenue.  Management acknowledges that successful
resolution to claims constitutes the most important strategic course of action
to restoring financial health and increased surety credit.  See "Insurance and
Bonding".

     (iv) Maintain operating costs and SG&A costs at competitive levels.  The
Company has adjusted to its recent decline in contract backlog by reducing
personnel, consolidating functions at the area and corporate office levels and
disposing of under-utilized equipment.  Costs are continually monitored to
identify trends that may require timely management action.

MARKET OVERVIEW

     In spite of the current recession, the total construction market for 2002
is expected to decline only slightly from the robust levels experienced over
most of the past decade.  While this decline in the total construction market
will likely have some affect on the Company, it is believed that it will be
minimal due to the fact that public works represent the primary source of the
Company's revenue.  The Transportation Equity Act for the 21st Century ("TEA
21"), enacted in 1998, and the annual appropriation levels authorized under this
legislation give some assurance of continued federal funding through 2003 for
transportation infrastructure.  The actual flow of funds from TEA 21,
approximately 40% more than previous funding levels from 1993 to 1997, has
improved in recent years after a slow start.  However, 2003 TEA-21 authorization
levels are expected to decline due to decreased tax revenues.  In spite of this,
the anticipated flow in 2002 of federal funds from TEA-21 combined with the
existing high volume of infrastructure work in the healthy construction economy
of the Company's three-state market leads the Company to concur with most
construction forecasts that infrastructure construction (primarily highways,
bridges, overpasses, tunnels, airport runways and taxiways and other
transportation and heavy civil projects) in the western United States will
increase slightly, by about 4%, over 2001 levels.  (Source: Fails Management
Institute - Construction Forecast 2002)  The Nevada Department of Transportation
has announced that 2002 and 2003 will significantly surpass previous years'
spending levels while Arizona Department of Transportation is expecting about a
20% decline in highway contract lettings for 2002 compared to 2001 and Utah
Department of Transportation looks unchanged for the same period.

     For the decade from 1990 to 2000, Maricopa County, Arizona (Phoenix
metropolitan area) and Clark County, Nevada (Las Vegas metropolitan area) ranked
number 1 and number 3 respectively in the nation for the number of new
residents.  For the same period, Nevada led all states in population growth
percentage at 66.3% with Arizona second at 40% and Utah's 29.6% growth rate was
fourth behind Colorado.  Population growth is a key indicator for the
construction industry as it drives increases in housing and commercial and
industrial construction, not to mention transportation facilities.  Freeway
construction programs, funded by sales tax measures, continue to create
opportunities for the Company in Phoenix and Las Vegas.

     The Company's construction materials operations are impacted to a greater
degree by the conditions of the residential and commercial sectors of the
construction economy.  Residential construction activity in 2001 in Phoenix,
Arizona was the highest in recent years.  Consequently, if interest rate levels
remain low, there appears to be sufficient momentum in the housing markets to
carry 2002 to a successful year for RMI sales in both Phoenix and Las Vegas.

OPERATIONS

     In addition to the construction of highways, bridges, overpasses and
airport runways, the Company constructs other heavy civil projects.  From its
Phoenix, Arizona corporate office and area offices in Phoenix, Arizona, Las
Vegas, Nevada,

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North Las Vegas, Nevada and Springville, Utah, the Company markets (primarily by
responding to solicitations for competitive bids) and manages all of its
projects. Project management is also located on-site to provide direct
supervision for operations.

     In addition to profitability, the Company considers a number of factors
when determining whether to bid on a project, including the location of the
project, likely competitors and the Company's current and projected workloads.
The Company uses a computer-based project estimating system which reflects its
bidding and construction experience and performs detailed quantity take-offs
from bidding documents, which the Company believes helps identify a project's
risks and opportunities.  The Company develops comprehensive estimates with each
project divided into phases and line items for which separate labor, equipment,
material, subcontractor and overhead cost estimates are compiled.   Once a
project begins, the estimate provides the Company with a budget against which
ongoing project costs are measured.  There can be no assurance that every
project will attain its budgeted costs.  A number of factors can affect a
project's profitability including weather, availability of a quality workforce
and actual productivity rates.  Each month the project manager updates the
project's projected performance at completion by using actual costs-to-date and
re-forecasted costs-to-complete for the balance of the work remaining.  Regular
review of these estimated costs-at-completion reports allow project, area and
corporate management to be as responsive as possible to cost overruns or other
problems that may affect profitability.

     The Company owns most of the equipment used in its business lines,
including cranes, backhoes, graders, loaders, trucks, trailers, pavers, rollers,
construction material processing plants, batch plants and related equipment.
The net book value of the Company's equipment at December 31, 2001 was
approximately $15.3 million.  The Company leases a significant portion of its
equipment and attempts to keep the equipment as fully utilized as possible.
Equipment owned by the Company may be rented on a short-term basis to third
parties.

     The Company's corporate management oversees operational and strategic
issues and, through the corporate accounting staff, provides administrative
support services to subsidiary managers, area managers and individual project
management at the project site.  The latter are responsible for planning,
scheduling and budgeting operations, equipment maintenance and utilization and
customer satisfaction.  Subsidiary managers, area managers and project managers
monitor project costs on a daily and weekly basis while corporate management
monitors such costs monthly.

     Raw materials (primarily concrete, aggregate and steel) used in the
Company's operations are available from a number of sources. There are a
sufficient number of materials suppliers within the Company's market area to
assure the Company of adequate competitive bids for supplying such raw
materials.  Generally, the Company will obtain several bids from competing
concrete, asphalt or aggregate suppliers whose reserves of such materials will
normally extend beyond the expected completion date of the project.  Costs for
raw materials vary depending upon project duration, construction season, and
other factors; but, generally, prices quoted to the Company for raw materials
are fixed for the project's duration.

     The Company initiated its commercial construction materials operations in
the first quarter 1997 with the start-up of RMI.  RMI currently operates four
ready mix concrete batch plants - two in the Las Vegas, NV area and two in the
Phoenix, AZ area and a total of 95 ready mix trucks.  Most of RMI's internal
sand and gravel requirements in the Las Vegas market are manufactured from its
rock quarry in Moapa, Nevada.  Production capacity at the Moapa quarry was
increased substantially during 1999 with further refinements added in 2000.  A
fulltime sales staff promotes sales of ready mix concrete, rock and sand
products and landscape rock.

     Through mineral leases, the Company also controls pits or quarries in or
near Nephi, UT, Ruidoso, NM, Alamogordo, NM, Oro Grande, NM, Albuquerque, NM, El
Paso, TX, Yuma, AZ, Chino Valley, AZ and Prescott Valley, AZ.  These locations
operate under the Meadow Valley Contractors, Inc. subsidiary since most of the
products are used on MVCI projects.  From these locations, MVCI manufactures and
sells rock and sand products, and from time to time asphalt or concrete from
portable plants, to its own projects or to third parties.  In January 2002, the
Company entered into an agreement that terminates all legal issues at the
Prescott quarry and also provides access to the Town of Prescott Valley's
reliable water supply.  Due to the need for additional working capital and the
exit from the New Mexico market, the Company may seek to sell the mineral leases
in New Mexico, or alternatively, to form a strategic alliance to operate the
pits as commercial sources for aggregate sales to third parties.  In addition,
the Company entered into a definitive agreement, due to the attractiveness of
the offer, to sell certain pits assets near Chino Valley and Prescott Valley,
Arizona.

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PROJECTS AND CUSTOMERS

     The Company specializes in public sector construction projects and its
principal customers are the state departments of transportation in Nevada,
Arizona and Utah and bureaus and departments of municipal and county governments
in those states.  Since completing the final contracts in New Mexico, the
Company has ceased operations in New Mexico.  For the year ended December 31,
2001, revenue generated from five projects in Nevada, Arizona and Utah
represented approximately 30% of the Company's revenue.  The discontinuance of
any projects, a general economic downturn or a reduction in the number of
projects let out for bid in any of the states in which the Company operates,
could have an adverse effect on its future results of operations.  For the years
ended December 31, 2001, 2000 and 1999, the Company recognized a significant
portion of its consolidated revenue from four customers (shown as an approximate
percentage of consolidated revenue):

                                       For the Years Ended December 31,
                                       --------------------------------
                                          2001        2000        1999
                                       ---------    --------    --------
Arizona Department of Transportation      21.9%      17.5%       26.2%
Clark County General Services             12.5%      16.3%       28.7%
Nevada Department of Transportation        9.6%      23.0%       17.2%
Utah Department of Transportation         14.7%       6.1%        5.8%


BACKLOG

     The Company's backlog (anticipated revenue from the uncompleted portions of
awarded projects) was approximately $76 million at December 31, 2001, compared
to approximately $75 million at December 31, 2000.  At December 31, 2001, the
Company's backlog included approximately $65 million of work that is scheduled
for completion during 2002.  Accordingly, revenue in the future will be
significantly reduced if the Company is unable to obtain substantial new
projects in 2002.  The Company includes a construction project in its backlog at
such time as a contract is awarded or a firm letter of commitment is obtained.
The Company believes that its backlog figures are firm, subject to provisions
contained in its contracts, which allow customers to modify or cancel the
contracts at any time upon payment of a relatively small cancellation fee.  The
Company has not been materially adversely affected by contract cancellations or
modifications in the past.  Revenue is impacted in any one period by the backlog
at the beginning of the period.  The Company's backlog depends upon the
Company's success in the competitive bid process.  Bidding strategies and
priorities may be influenced and changed from time to time by the level of the
Company's backlog and other internal and external factors.  A portion of the
Company's anticipated revenue in any year is not reflected in its backlog at the
start of the year because some projects are initiated and completed in the same
year.

COMPETITION

     The Company believes that the primary competitive factors as a prime
contractor in the heavy construction industry are price, reputation for quality
work, financial strength, knowledge of local market conditions and estimating
abilities.  The Company believes that it competes favorably with respect to each
of the foregoing factors on projects that it is able to bid.  Most of the
Company's projects involve public sector work for which contractors are first
pre-qualified to bid and then are chosen by a competitive bidding process,
primarily on the basis of price.  The Company competes with a large number of
small owner/operator contractors that tend to dominate smaller  (under $4
million) projects.  When bidding on larger infrastructure projects, the Company
also competes with larger, well capitalized regional and national contractors
(including Granite Construction Incorporated, Peter Kiewit Sons', Inc., Sundt
Corp., among others), many of whom have larger net worth, higher bonding
capacity and more construction personnel than the Company.  In the event of a
decrease of work available in the private construction market, it is foreseeable
that contractors may exit the private market and enter the public market segment
resulting in increased competition.

     Operating losses over the last two years and reduced liquidity due to the
Company's collections problems with New Mexico and Clark County, Nevada have
resulted in a change of the Company's surety credit.  Currently the Company is
limited to a single project bond approval of up to $10 million and an aggregate
program bond capacity of approximately $100 million.  The Company believes its
bonding capacity is sufficient to sustain operations, but will limit growth.
Larger competitors typically have unlimited bonding capacity and, therefore, are
able to bid on more work than the Company.  Except for bonding capacity and
liquidity, the Company does not believe it is at a competitive disadvantage in
relation to its

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larger competitors. With respect to its smaller competitors, the Company
believes that its current bonding capacity and long relationships with
subcontractors and suppliers may be competitive advantages.

     Often, the Company faces the same competitors for sales of construction
materials as it does for its contracting work.  It is common for prime
contractors in the heavy highway construction industry to develop some degree of
vertical integration into construction materials.  Companies such as Granite
Construction, Kiewit, Oldcastle and LaFarge, among others, provide contracting
services and produce construction materials.  The quality of the product and the
customer service are often just as important, if not more so, than price in
successfully marketing construction materials.  Vertical integration into
construction materials may occasionally allow the Company to be more competitive
in its bidding for construction contracts.  However, the Company's marketing
strategy is to make third party sales a top priority.  To accomplish this, the
Company recognizes it must provide quality products and service to its
construction materials customers.

THE CONTRACT PROCESS

     The Company's projects are obtained primarily through competitive bidding
and negotiations in response to advertisements by federal, state and local
government agencies and solicitations by private parties.  The Company submits
bids after a detailed review of the project specifications, an internal review
of the Company's capabilities and equipment availability and an assessment of
whether the project is likely to attain targeted profit margins.  The Company
owns, leases, or is readily able to rent, most equipment necessary to complete
the projects upon which it bids.  After computing estimated costs of the project
to be bid, the Company adds its desired profit margin before submitting its bid.
The Company believes that success in the competitive bidding process involves
(i) being selective on projects bid upon in order to conserve resources, (ii)
identifying projects which require the Company's specific expertise, (iii)
becoming familiar with all aspects of the project to avoid costly bidding errors
and (iv) analyzing the local market to determine the availability and cost of
labor and the degree of competition.  Since 1995, the Company has been awarded
contracts for approximately 19.29% of the projects upon which it has bid.  A
substantial portion of the Company's revenue is derived from projects that
involve "fixed unit price" contracts under which the Company is committed to
provide materials or services at fixed unit prices (such as dollars per cubic
yard of earth or concrete, or linear feet of pipe).  The unit price is
determined by a number of factors including haul distance between the
construction site and the warehouses or supply facilities of local material
suppliers and to or from disposal sites, site characteristics and the type of
equipment to be used.  While the fixed unit price contract generally shifts the
risk of estimating the quantity of units for a particular project to the
customer, any increase in the Company's unit cost over its unit bid price,
whether due to inefficiency, faulty estimates, weather, inflation or other
factors, must be borne by the Company.

     Most public sector contracts provide for termination of the contract at the
election of the customer.  In such event the Company is generally entitled to
receive a small cancellation fee in addition to reimbursement for all costs it
incurred on the project.  Many of the Company's contracts are subject to
completion requirements with liquidated damages assessed against the Company if
schedules are not met.  These provisions in the past have not materially
adversely affected the Company.

     The contractor is also obligated to perform work as directed to do so by
the owner.  If the contractor believes the directives to be outside the scope of
the original bid documents, or if the physical conditions as found on the
project are different than provided in the bid documents, or for any variety of
reasons the contractor believes the directive to perform the work creates costs
that could not reasonably be ascertained from the bid documents, the contract
permits the contractor to make a claim for equitable adjustment to the contract
price.  Such equitable adjustment requests are often called contract claims.
The process for resolving claims may vary from one contract to another, but in
general there is a process to attempt resolution at the project supervisory
level or with higher levels of management within the organizations of the
contractor and the owner.  Depending upon the terms of the contract, claim
resolution may employ a variety of resolution methods including mediation,
arbitration, binding arbitration, litigation or other methods.  Regardless of
the process, it is typical that when a potential claim arises on a project, the
contractor fulfills the obligation to perform the work and must incur the costs
in doing so.  The contractor does not recoup the costs until the claim is
resolved.  It is not uncommon for the claim resolution process to take months,
or, if it entails litigation, years to resolve.

     Contracts often involve work periods in excess of one year. Revenue on
uncompleted fixed price contracts is recorded under the percentage of completion
method of accounting.  The Company begins to recognize revenue on its contracts
when it first incurs direct costs.  Pursuant to common construction industry
practice, the customer may retain a

                                       8
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portion of billings, generally not exceeding 10%, until the project is completed
satisfactorily and all obligations of the contractor are paid.

     The Company acts as prime contractor on most of its construction projects
and subcontracts certain activities such as electrical, mechanical, guardrail
and fencing, signing and signals, foundation drilling, steel erection and other
specialty work to others.  As prime contractor, the Company bills the customer
for work performed and pays the subcontractors from funds received from the
customer.  Occasionally the Company provides its services as a subcontractor to
another prime contractor.  As a subcontractor, the Company will generally
receive the same or similar profit margin as it would as a prime contractor,
although revenue to the Company will be smaller because the Company only
contracts a part of the project.  As prime contractor, the Company is
responsible for the performance of the entire contract, including work assigned
to subcontractors.  Accordingly, the Company is subject to liability associated
with the failure of subcontractors to perform as required under the contract.
The Company occasionally requires its subcontractors to furnish bonds
guaranteeing their performance, although affirmative action regulations require
the Company to use its best efforts to hire minority subcontractors for a
portion of the project and some of these subcontractors may not be able to
obtain surety bonds.  On average, the Company has required performance bonds for
less than 10% of the dollar amount of its subcontracted work, but will likely
increase the percentage of bonded subcontractors in the future.  The Company is
generally aware of the skill levels and financial condition of its
subcontractors through its direct inquiry of the subcontractors and contract
partners of the subcontractors, as well as its review of financial information
provided by the subcontractors and third party reporting services including
credit reporting agencies and bonding companies.

     In connection with public sector contracts, the Company is required to
provide various types of surety bonds guaranteeing its own performance.  The
Company's ability to obtain surety bonds depends upon its net worth, working
capital, past performance, management expertise and other factors.  Surety
companies consider such factors in light of the amount of the Company's surety
bonds then outstanding and the surety companies' current underwriting standards,
which may change from time to time.  See "Insurance and Bonding".

INSURANCE AND BONDING

     The Company maintains general liability and excess liability insurance
covering its owned and leased construction equipment and workers' compensation
insurance in amounts it believes are consistent with its risks of loss and in
compliance with specific insurance coverage required by its customers as a part
of the bidding process.  The Company carries liability insurance of $11 million
per occurrence, which management believes is adequate for its current operations
and consistent with the requirements of projects currently under construction by
the Company.  The Company carries builders risk insurance on a limited number of
projects and depends upon management's assessment of individual project risk
versus the cost of insurance.

     The Company is required to provide a surety bond on most of its projects.
The Company's ability to obtain bonding, and the amount of bonding required, is
primarily determined by the Company's management experience, net worth, liquid
working capital (consisting of cash and accounts receivable in excess of
accounts payable and accrued liabilities), the Company's performance history,
the number and size of projects under construction and other factors.  Surety
companies consider such factors in light of the amount of the Company's surety
bonds then outstanding and the surety companies' current underwriting standards,
which may change from time to time.  The larger the project and/or the more
projects, in which the Company is engaged, the greater the Company's bonding,
net worth and liquid working capital requirements. Bonding requirements vary
depending upon the nature of the project to be performed.  The Company generally
pays a fee to bonding companies based upon the amount of the contract to be
performed.  Because these fees are generally payable at the beginning of a
project, the Company must maintain sufficient working capital to satisfy the fee
prior to receiving revenue from the project.  Operating losses for the past two
years and reduced liquidity due to the Company's collections problems with New
Mexico and Clark County, Nevada have resulted in a change in the Company's
surety credit.  Currently the Company has surety credit up to $10 million on a
single project and an aggregate program bond capacity of approximately $100
million.  The Company believes its bonding capacity is  sufficient to sustain
existing levels of workload but will limit growth.  If working capital can be
increased by the sale of assets or additional financing, if structured
favorably, the Company may be able to obtain additional surety credit that may
permit bidding on more numerous and larger projects and improve the likelihood
of increasing revenue and profit.

                                       9
<PAGE>

MARKETING

     The Company obtains its projects primarily through the process of
competitive bidding.  Accordingly, the Company's marketing efforts are limited
to subscribing to bid reporting services and monitoring trade journals and other
industry sources for bid solicitations by various government authorities. In
response to a bid request, the Company submits a proposal detailing its
qualifications, the services to be provided and the cost of the services to the
soliciting entity which then, based on its evaluation of the proposals
submitted, awards the contract to the successful bidder.  Generally, the
contract for a project is awarded to the lowest bidder, although other factors
may be taken into consideration such as the bidder's track record for compliance
with bid specifications and procedures and its construction experience.

     A more focused marketing effort and greater emphasis on customer care and
service are important tools in promoting sales of construction materials.
Membership and participation in selected industry associations help increase the
Company's exposure to potential clients and are two means by which the Company
stays informed on industry developments and future prospects within the
marketplace.  Building and maintaining customer relations and reputation for
quality work are essential elements to the marketing efforts of RMI.

GOVERNMENT REGULATION

     The Company's operations are subject to compliance with regulatory
requirements of federal, state and municipal authorities, including regulations
covering labor relations, safety standards, affirmative action and the
protection of the environment including requirements in connection with water
discharge, air emissions and hazardous and toxic substance discharge.  Under the
Federal Clean Air Act and Clean Water Act, the Company must apply water or
chemicals to reduce dust on road construction projects and to contain water
contaminants in run-off water at construction sites.  The Company may also be
required to hire subcontractors to dispose of hazardous wastes encountered on a
project.  The Company believes that it is in substantial compliance with all
applicable laws and regulations.  However, future amendments to current laws or
regulations imposing more stringent requirements could have a material adverse
effect on the Company.

EMPLOYEES

     On December 31, 2001, the Company employed approximately 87 salaried
employees (including its management personnel and executive officers) and
approximately 454 hourly employees. The number of hourly employees varies
depending upon the amount of construction in progress.  For the year ended
December 31, 2001, the number of hourly employees ranged from approximately 472
to approximately 759 and averaged approximately 616.   At December 31, 2001, the
Company was party to six project agreements in Arizona with the Arizona State
District Council of Carpenters, AFL-CIO that covers approximately 7% of the
Company's hourly workforce.  At December 31, 2001, the Company believed its
relations with its employees are satisfactory.

ITEM 2.  PROPERTIES

    The Company leased the following properties at December 31, 2001:

(1)  8,315 square feet of executive office space at 4411 South 40th Street,
     Suites D-8, D-10 and D-11, Phoenix, Arizona, 85040, pursuant to a lease
     that expires in December 2003, at a monthly rental rate of $8,280 through
     December 2001, $8,694 from January 2002 through December 2002 and $9,108
     from January 2002 through December 2003.
(2)  2,000 square feet of office space for the Company's ready mix operations,
     at 3430 E. Flamingo, Suite 100, Las Vegas, Nevada, 89118, pursuant to a
     lease that expires in April 2002, at a monthly rental rate of $3,400.
(3)  2,260 square feet of office space for the Company's ready mix operations,
     at 2601 E. Thomas Road, Suite 235, Phoenix, Arizona, 89121, pursuant to a
     lease that expires August 2003, at a average monthly rental rate of $3,074.
(4)  4,000 square feet of office space at 2250 West Center St. Bldg. 1, Suite A,
     Springville, Utah, 84663, pursuant to a lease that expires April 2003, at a
     monthly rental rate of $3,400 per month with a 5% increase each year.
(5)  4,320 square feet of office space at 4635 Andrews Street, North Las Vegas,
     Nevada, 89031, pursuant to a lease that expires November 2006, at a monthly
     rental rate of $2,998 with a 3% increase each year.

                                       10
<PAGE>

     The Company owns approximately five acres of land at 109 W. Delhi, North
Las Vegas, Nevada 89030, which is used for the manufacturing of ready mix
concrete.

     The Company owns approximately 24.5 acres of land in Moapa, Nevada.

     The Company has determined that the above properties are sufficient to meet
the Company's current needs.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is a party to legal proceedings in the ordinary course of its
business.  With the exception of those matters detailed below, the Company
believes that the nature of these proceedings (which generally relate to
disputes between the Company and its subcontractors, material suppliers or
customers regarding payment for work performed or materials supplied) are
typical for a construction firm of its size and scope, and no other pending
proceedings are material to its financial condition.

     The following proceedings represent matters that may become material and
have already been or may soon be referred to legal counsel for further action:

Requests for Equitable Adjustment to Construction Contracts.  The Company has or
will make claims as described below on the following contracts:

(1)  Five contracts with the New Mexico State Highway and Transportation
     Department - The approximate total value of claims on these projects is
     $35,271,841 of which approximately $23,146,407 is on behalf of MVCI and the
     balance of $12,125,434 is on behalf of the prime contractor or
     subcontractors.  The primary issues are changed conditions, plan errors and
     omissions, contract modifications and associated delay costs.  In addition,
     the projects were not completed within the adjusted contract time because
     of events giving rise to the claims.  The prosecution of the claims will
     include the appropriate extensions of contract time to offset any potential
     liquidated damages.
(2)  Clark County, Nevada - The approximate total value of claims on this
     project is $19,135,397 of which approximately $12,885,265 is on behalf of
     subcontractors.  The primary issues are changed conditions, plan errors and
     omissions, contract modifications and associated delay costs.

     The above claims combined total approximately $54,407,238.  Of that sum,
the Company's portion of the claims total approximately $29,396,539 and the
balance of approximately $25,010,699 pertains to prime contractor or
subcontractors' claims.  Relative to the aforementioned claims, the Company has
recorded approximately $7,754,448 in claim revenue to offset costs incurred to-
date on the claims.  In addition, the Company has also recorded approximately
$1,817,831 for unpaid quantities, unpaid change orders, and pending change
orders in advance of receipt.  Although the Company believes these amounts
represent a reasonably conservative posture, any claims proceeds and payments
for previously unpaid quantities, unpaid change orders and pending change orders
ultimately paid to the Company less than $9,572,279 will reduce net income.
Conversely, a payment for those same items in excess of $9,572,279 will increase
net income.

Lawsuits Filed Against Meadow Valley Contractors, Inc. or Meadow Valley
Corporation

(1)  Innovative Construction Systems, Inc. ("ICS"), District Court, Clark
     County, NV - ICS was a subcontractor to MVCI on several projects. ICS
     failed to make payments of payroll, pension fund contributions and other
     taxes for which the Internal Revenue Service garnished any future payments
     due ICS on MVCI projects. As a result, ICS failed to supply labor to
     perform its work and defaulted on its subcontracts. MVCI terminated the ICS
     subcontracts and performed the work with MVCI personnel. ICS alleges it was
     wrongfully terminated and is asserting numerous claims for damages. ICS
     claims against MVCI total approximately $15,000,000. The Company does not
     believe ICS' claims have merit and intends to vigorously defend against
     these claims and will eventually seek to recover the damages ICS has caused
     the Company through its failure to perform.
(2)  AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV - AnA
     supplied equipment to MVCI on a project under terms of a variety of
     agreements. AnA is suing MVCI for non-payment. MVCI has

                                       11
<PAGE>

     counter-sued for cost overruns deemed to be the responsibility of AnA.
     AnA's suit against MVCI is for approximately $3,000,000. MVCI's countersuit
     against AnA is for approximately $2,000,000. AnA has also filed a complaint
     on two other projects completed in 1997 where they were a subcontractor to
     MVCI in the same jurisdiction in the amount of approximately $715,000 for
     changed conditions. The Company does not believe AnA's claims have merit
     and intends to vigorously defend against these claims.
(3)  Progressive Contracting Inc. ("PCI"), District Court, Clark County, NV- PCI
     was a subcontractor to MVCI on a project where there is a dispute with the
     owner regarding delays to the project. PCI claims they were damaged by
     these delays in an amount in excess of $300,000. The Company believes that
     under the terms of the contract with PCI they are only entitled to
     compensation for the delays if MVCI is compensated by the owner. MVCI has
     submitted PCI's claims to the owner and they are included in the total
     claim amount.
(4)  The Company is defending a claimed preference in connection with a payment
     made to it by an insurance company in the approximate amount of $100,000.
     The Company believes that the payment is not a preference, and is
     vigorously defending the action.
(5)  The Company and all of its directors were served with a civil complaint by
     Silver State Materials Corp. and Cyrus Spurlino. The complaint primarily
     alleges that the Company's October 1995 Registration Statement on Form S-1
     was misleading in stating that the Company's directors were elected on a
     staggered basis because the Company's Bylaws, providing for such staggered
     term, were not so amended until April 1997, and that such amendment was not
     filed with the Securities and Exchange Commission. The complaint seeks (i)
     to terminate all of the Company's directors for cause, (ii) to elect a new
     Board of Directors, (iii) to cause the Company to enact amended and
     restated bylaws, (iv) for monetary damages in an undisclosed amount, (v)
     for interest, fees and costs, and (vi) for such other relief as the
     District Court may deem appropriate. The Company believes that the
     complaint is without merit and intends to vigorously defend it.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the year
ended December 31, 2001.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock was listed on the Nasdaq National Market from
October 1995 to August 2001.  In August 2001, the Company's securities were
transferred to the Nasdaq SmallCap Market and are traded under the symbol
"MVCO".  The following table represents the high and low closing prices for the
Company's Common Stock on the Nasdaq SmallCap Market and the Nasdaq National
Market.

                                   2001                   2000
                               -----------------   -----------------
                                High      Low       High       Low
                                ----      ---       ----       ---
       First Quarter             3.36     2.31      4.00       3.50
       Second Quarter            2.81     1.81      4.02       3.13
       Third Quarter             2.54     1.95      3.44       2.13
       Fourth Quarter            2.17     1.93      3.13       2.39


HOLDER OF RECORD

     As of March 6, 2002, there were 462 record and beneficial owners of the
Company's Common Stock.

                                       12
<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                                                                             Years Ended December 31,
                                                   --------------------------------------------------------------------------------
                                                        2001             2000             1999             1998            1997
                                                   ------------     ------------     -----------     -----------      -------------
<S>                                               <C>              <C>              <C>             <C>              <C>
STATEMENT OF OPERATIONS DATA:

Revenue                                            $174,063,148     $163,573,258     $210,002,272    $187,036,077     $146,273,286
Gross profit                                          4,658,361        4,638,155        9,931,446       9,444,231        7,861,972
Income (loss) from operations                        (3,404,262)      (2,139,685)       3,260,411       3,084,983        3,172,430
Interest Expense                                        485,937          250,996          209,872         435,358          624,048
Income (loss) from continuing operations
 before income taxes                                 (3,192,562)      (1,859,447)       3,930,586       3,592,019        3,235,458
Net income (loss) from continuing operations         (2,523,931)      (1,574,586)       2,340,106       2,169,579        2,072,567
Discontinued Operations:
 Loss from discontinued operations (1)                        -                -                -        (635,246)        (860,952)
 Estimated loss on disposal of net assets
   of discontinued operations (2)                             -                -                -      (1,950,000)               -
Net income (loss)                                    (2,523,931)      (1,574,586)       2,340,106        (415,667)       1,211,615
Basic net income (loss) per common share:
 Income (loss) from continuing operations          $      (0.71)    $      (0.44)    $       0.67    $       0.60     $       0.58
 Loss from discontinued operations                            -                -                -           (0.18)           (0.24)
 Estimated loss on disposal of net assets
   of discontinued operations                                 -                -                -           (0.54)               -
Basic net income (loss) per common share           $      (0.71)    $      (0.44)    $       0.67    $      (0.12)    $       0.34
Diluted net income (loss) per common share:
 Income (loss) from continuing operations          $      (0.71)    $      (0.44)    $       0.66    $       0.60     $       0.57
 Loss from discontinued operations                            -                -                -           (0.17)           (0.24)
 Estimated loss on disposal of net assets
   of discontinued operations                                 -                -                -           (0.54)               -
Diluted net income (loss) per common share         $      (0.71)    $      (0.44)     $      0.66    $      (0.11)    $       0.33
Basic weighted average common shares
 outstanding                                          3,559,938        3,549,458        3,518,510       3,601,250        3,601,250
Diluted weighted average common shares
 outstanding                                          3,559,938        3,549,458        3,529,705       3,644,651        3,651,360
FINANCIAL POSITION DATA:
Working capital                                    $ (1,194,786)     $ 4,946,174      $ 5,780,599    $  5,760,414     $  5,152,550
Total assets                                         62,149,042       55,386,030       58,554,822      49,297,063       47,737,762
Long-term debt                                       12,448,674       11,278,148        7,121,634       5,977,643        5,847,659
Stockholders' equity                                 10,714,306       13,238,237       14,812,823      12,472,717       12,888,384
</TABLE>


(1)  Includes the net income tax benefit of $423,497 and $443,520 for the years
     ended December 31, 1998 and 1997 for the discontinued operations of
     Prestressed Products Incorporated.
(2)  Estimated loss on disposal of net assets of Prestressed Products
     Incorporated (net of income tax benefit of $1,300,000), including
     $1,350,000 for operating losses during the phase-out period.

                                       13
<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

INTRODUCTION

     The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein.  Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995.  These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially.  These risks and uncertainties are detailed throughout the Report
and will be further discussed from time to time in the Company's periodic
reports filed with the Commission.  The forward-looking statements included in
the Report speak only as of the date hereof.

     Fiscal year 2001 began with disappointing results in the first quarter.
Improving results in the second and third quarter gave rise to optimism for
profitably completing the year, but significant declines and adjustments during
the fourth quarter resulted in a loss for the year.

     The first quarter results of operations were impacted by the continuing
losses on projects in New Mexico, lingering effects of a subcontractor default
on several projects in Nevada, continuing losses from the expanding ready mix
business and normal seasonal losses from Utah.  For the quarter, the
construction segment reported gross profit of $.15 million on contract revenue
of $29 million.  The materials segment expansion helped produce a 64% increase
in sales over the same period of the previous year, but gross profit declined
from about $.5 million in first quarter of FY 2000 to $.04 million in first
quarter of FY 2001.

     During the second and third quarter, the ready mix business began to
benefit from the expansion that began in mid-2000.  Materials sales, for the two
quarters combined, increased almost 74% over sales volumes for the same period
in 2000; sales increased to approximately $16.0 million in the combined second
quarter and third quarter of 2001 from approximately $9.2 million in the
combined second quarter and third quarter of 2000.  First and second quarter
construction results also improved in spite of continuing losses in New Mexico.
Contract revenue improved from the first quarter's $29 million to $37.4 million
and $44.7 million in the second and third quarter, respectively, while gross
profit also improved to approximately $1.6 million and $1.8 million for the same
periods.  Collectively, these improvements inspired optimism that the fourth
quarter would follow the trend established in the year's middle two quarters.

     During the fourth quarter, however, costs from various sources combined to
create a loss from operations of approximately $3.0 million.  The loss from
operations resulted primarily from the impairment of goodwill, underutilization
of equipment and health insurance costs.  The carrying value of goodwill is
periodically reviewed by the Company and impairments, if any, are recognized
when expected future operating cash flows derived from goodwill is less than its
carrying value.  Based on this analysis, the Company determined that the fair
value of goodwill as of December 31, 2001 was zero.  Accordingly, a goodwill
impairment loss of approximately $1.4 million was recorded in the fourth quarter
of 2001 in accordance with the Statement of Financial Accounting Standard No.
121.  The Company recorded approximately $0.6 million of expenses from the
underutilization of equipment which costs are particularly sensitive to usage of
portable asphalt plants and paving equipment due to high monthly fixed costs and
repair costs.  The Company recorded approximately $0.6 million of expenses from
health insurance costs.  Action has been taken in 2002 to reduce the health
insurance costs by decreasing the level of plan coverage and increasing the
amount paid by the employee for elective dependent coverage.  Besides the
aforementioned adjustments, the fourth quarter was also impacted by a decrease
in construction services gross profit offset by an increase in construction
materials segment gross profit.  The quarter's construction services gross
profit was not materially affected by the impact of the bankruptcy filing of the
prime contractor on a project in New Mexico as mentioned in Note 8 to the
condensed consolidated financial statements as filed in the Company's 10-Q for
the quarter ending September 30, 2001.

  The Company continues to press forward with the prosecution of its
construction claims.  Progress is slow on claims with the New Mexico State
Highway and Transportation Department ("NMSHTD").  The Company plans to employ
increasingly aggressive methods to overcome the delay and stall tactics used by
the NMSHTD.  The Clark County, NV claim also progresses slowly through the final
administrative review level.

                                       14
<PAGE>

     Non-payment of claim costs is the primary cause for the Company's decreased
working capital and weakened financial condition, which in turn, has decreased
the Company's bonding capacity.  While the Company's backlog at December 31,
2001 of $76 million remained nearly unchanged from the preceding year's $75
million, decreased bonding capacity has already limited the Company's ability to
bid on contracts for which the Company would historically compete.  These
circumstances create a very real challenge to maintain, let alone increase,
backlog.  Necessarily, the Company is working on all reasonable and available
options to improve cash balances and working capital, including the sale or
disposition of assets, cost cutting and containment, personnel reductions,
financing alternatives or attracting capital.  To the degree that the Company
succeeds in that effort, bonding capacity may improve.

RESULTS OF OPERATIONS

The following table sets forth statement of operations data expressed as a
percentage of revenues for the periods indicated:

                                          Years Ended December 31,
                                         ---------------------------
                                           2001     2000      1999
                                         -------   -------   -------
Revenue                                  100.00%   100.00%   100.00%
Cost of revenue                           97.32     97.16     95.27
Gross profit                               2.68      2.84      4.73
General and administrative expenses        4.63      4.14      3.18
Income (loss) from operations             (1.96)    (1.30)     1.55
Interest income                            0.18      0.40      0.32
Interest expense                           (.28)     (.15)     (.10)
Other income (expense)                     0.22      (.07)     0.10
Net income (loss)                         (1.45)     (.96)     1.11


YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

     Revenue and Backlog.  Revenue increased 6.4% to $174.1 million for the year
ended December 31, 2001 (2001) from $163.6 million for the year ended December
31, 2000 (2000).  The increase was the result of a $12.0 million increase in
revenue generated from construction materials production and manufacturing sold
to non-affiliates offset by a $1.5 million decrease in contract revenue.
Backlog increased to $76.0 million at December 31, 2001 compared to $75.0
million at December 31, 2000.  Revenue is impacted in any one period by the
backlog at the beginning of the period.

     Gross Profit.  As a percentage of revenue, consolidated gross profit margin
decreased from 2.84% for 2000 to 2.68% for 2001.  The decrease in the
construction services gross profit margin was the result of costs related to
claims and costs overruns on certain projects offset, in part, by increased
profit recognition related to several projects nearing completion at December
31, 2001.  Gross profit margins are affected by a variety of factors including
construction delays and difficulties due to weather conditions, availability of
materials, the timing of work performed by other subcontractors and the physical
and geological condition of the construction site.  The decrease in the
construction services gross profit margin was offset by an increase in the
construction materials gross profit margin.

     General and Administrative Expenses.  General and administrative expenses
increased to $8.06 million for 2001 from $6.78 million for 2000.  The increase
resulted primarily from the Company recording an impairment loss of goodwill in
the amount of $1.4 million, a $.1 million increase in various employee incentive
plans, offset by a $.3 million decrease in bad debt expense.

     Interest Income and Expense. Interest income for 2001 decreased to $.3
million from $.6 million for 2000 resulting primarily from a decrease in
invested cash reserves.  Interest expense increased for 2001 to $.5 million from
$.3 million for 2000, due primarily to the Company borrowing on the line of
credit.

     Net Income (loss). Net loss was $(2.5) million for 2001 as compared to
$(1.6) million for 2000.  The increase in net loss resulted primarily from the
Company recording a goodwill impairment loss of $(1.4) million, offset by a $.4
million increase in other income (expense).

                                       15
<PAGE>

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

     Revenue and Backlog.  Revenue decreased 22.1% to $163.6 million for the
year ended December 31, 2000 (2000) from $210.0 million for the year ended
December 31, 1999 (1999).  The decrease was the result of a $51.0 million
decrease in contract revenue offset by a $4.6 million increase in revenue
generated from construction materials production and manufacturing sold to non-
affiliates.  Backlog decreased to $75.0 million at December 31, 2000 compared to
$104.0 million at December 31, 1999.  Revenue is impacted in any one period by
the backlog at the beginning of the period.

     Gross Profit.  As a percentage of revenue, consolidated gross profit margin
decreased from 4.73% for 1999 to 2.84% for 2000. The decrease in gross profit
margin was the result of costs related to claims and cost overruns on certain
projects, offset, in part, by increased profit recognition related to several
projects nearing completion at December 31, 2000.  Gross profit margins are
affected by a variety of factors including construction delays and difficulties
due to weather conditions, availability of materials, the timing of work
performed by other subcontractors and the physical and geological condition of
the construction site.

     General and Administrative Expenses.  General and administrative expenses
increased to $6.78 million for 2000 from $6.67 million for 1999.  The increase
resulted primarily from a $1 million increase in general and administrative
expenses attributable to expanding construction material operations offset, in
part, by a $.9 million reduction of general and administrative expenses related
to heavy construction and home office of which various employee incentive plans
amounted to approximately $.8 million.

     Interest Income and Expense. Interest income for 2000 decreased to $.6
million from $.7 million for 1999 resulting primarily from a decrease in
invested cash reserves. Interest expense increased for 2000 to $.3 million from
$.2 million for 1999, due primarily to the Company borrowing on the line of
credit.

     Net Income (loss) from Continuing Operations After Income Taxes. Net income
(loss) from continuing operations after income taxes was $(1.6) million for 2000
as compared to $2.3 million for 1999.  The decrease resulted from lower revenues
along with decreased gross profit margins.

     Discontinued Operations. In June 1998, due to continuing operating losses,
the Company decided to dispose of its wholly owned subsidiary Prestressed
Products Incorporated.  Accordingly, the Company has reclassified the operations
of Prestressed Products Incorporated as discontinued operations in the
accompanying financial statements.  In June 1998, the Company accrued a $1.95
million charge (net of income tax benefit of $1.3 million), related to the
disposal of assets for the Prestressed Products business, which included a
provision of $1.35 million for estimated operating losses during the phase-out
period.  During the year ended December 31, 1999, $.6 million of the expected
losses was incurred (net of income tax benefit of $.4 million).

     Net Income (loss).  Net income (loss), after discontinued operations, for
1999 was $2.3 million as compared to $(1.6) million for 2000.

                                       16
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary need for capital has been to finance growth in its
core business as a heavy construction contractor and its expansion into the
other construction and construction related businesses previously discussed.
Historically, the Company's primary source of cash has been from operations.

     The following table sets forth, for the periods presented, certain items
from the Statements of Cash Flows of the Company.
<TABLE>
<CAPTION>

                                                           For the Years Ended December 31,
                                                     ------------------------------------------
                                                         2001           2000            1999
                                                     ------------   ------------     -----------
<S>                                                  <C>            <C>              <C>
Cash Provided By (Used in) Operating Activities      $   94,449     $(3,031,916)    $(1,774,214)
Cash Provided By (Used in) Investing Activities       1,124,921      (1,662,667)        207,362
Cash Provided By (Used in) Financing activities        (813,462)        339,692      (3,248,684)

</TABLE>

     More recently, however, cash has been consumed by the costs incurred on
contracts for which claim compensation is being sought and the start-up costs of
the construction materials expansion.  Accordingly, during the year ended
December 31, 2000, the Company entered into a revolving loan agreement ("line of
credit").  Under the terms of the agreement, the Company may borrow up to
$7,000,000 at Chase Manhattan Bank's prime, plus 0.25% through December 31, 2001
at which time the line of credit was to convert to a term agreement requiring
monthly principal and interest payments through December 31, 2005.   The line of
credit is collateralized by all of the Company's assets.  Under the terms of the
line of credit, the Company is required to maintain a certain level of tangible
net worth.  In addition, the Company is also required to maintain a ratio of
total debt to tangible net worth.  As of December 31, 2001, the Company was not
in compliance with the tangible net worth covenant. Effective March 2002, the
Company amended the line of credit agreement. Under the terms of the amended
agreement, the interest rate increased to Chase Manhattan Bank's prime, plus
1.5% through January 1, 2003 at which time the line of credit converts to a term
agreement requiring monthly principal and interest payments through December 31,
2006. In connection with the amendment, the Company obtained a waiver from
non-compliance with the tangible net worth covenant as of December 31, 2001. As
of December 31, 2001, the Company had withdrawn the entire $7,000,000 from the
line of credit.

     Cash provided by operating activities during 2001 amounted to $.09 million,
primarily the result of an increase in accounts payable of $9.4 million, a
decrease in costs in excess of billings of $4.5 million, a decrease in income
tax receivable of $.8 million and the impairment of goodwill of $1.4 million and
depreciation and amortization of $2.8 million, offset by, an increase in
accounts receivable of $7.2 million, a decrease in billings in excess of costs
of $1.4 million, an increase in claims receivable of $6.0 million, an increase
in inventory of $1.2 million, an increase in net deferred taxes of $.6 million
and a net loss of $2.5 million.

     Cash used in operating activities during 2000 amounted to $3.0 million,
primarily the result of a decrease in billings in excess of costs of $2.4
million, a decrease in accounts payable of $3.2 million, an increase in
inventory of $1.1 million, a decrease in accrued liabilities of $1.1 million, an
increase in costs in excess of billings of $1.0 million, an increase in income
tax receivable of $.8 million, a net loss of $1.6 million, offset in part by a
decrease in accounts receivable of $4.7 million, a decrease in prepaid expenses
and other of $.6 million and depreciation and amortization of $2.7 million.

     Cash used in operating activities during 1999 amounted to $1.8 million,
primarily the result of an increase in billings in excess of costs of $2.9
million, an increase in inventory of $3.2 million, a decrease in costs in excess
of billings of $5.0 million, an increase in accounts receivable of $3.9 million,
offset in part by an increase in accounts payable of $7.0 million, an increase
in accrued liabilities of $.3 million, a decrease in prepaid expense and other
of $.6 million, an increase in net deferred taxes of $.6 million, depreciation
and amortization of $2.1 million and a net income of $2.3 million.

     Cash provided by investing activities during 2001 amounted to $1.1 million
related primarily to the proceeds from the sale of property and equipment in the
amount of $2.4 million, offset by the increase in restricted cash of $.6
million, the purchase of property and equipment of $.5 million and the increase
in pit development of $.1 million.

     Cash used by investing activities during 2000 amounted to $1.7 million
related primarily to the purchase of property and equipment of $1.6 million, an
increase in pit development of $.7 million, offset by proceeds from the sale of
property and equipment in the amount of $.3 million and a decrease in restricted
cash of $.3 million.

                                       17
<PAGE>

     Cash provided by investing activities during 1999 amounted to $.2 million
related primarily to a decrease in restricted cash of $1.5 million, the
collection of a note receivable of $.2 million, proceeds from the sale of
property and equipment of $.4 million and a decrease in net assets of
discontinued operations of $.2 million, offset by the purchase of property and
equipment of $1.4 million and the purchase of mineral rights and pit development
of $.7 million.

     Cash used in financing activities during 2001 amounted to $.8 million
related primarily to repayment of notes payable and capital lease obligations in
the amount of $5.0 million, offset by the proceeds received from a note payable
of $4.2 million.

     Cash provided by financing activities during 2000 amounted to $.3 million
related primarily to the proceeds received from a note payable of $6.0 million,
offset by the repayment of notes payable and lease obligations in the amount of
$5.7 million.

     Cash used in financing activities during 1999 amounted to $3.2 million
including the $1.0 million prepayment of a loan from a related party and the
repayments of notes payable and capital lease obligations in the amount of $2.2
million.  The aforementioned note payable related party was due to a principal
shareholder of the Company, the Richard C. Lewis Family Revocable Trust I.

IMPACT OF INFLATION

     The Company believes that inflation has not had a material impact on its
operations.  However, substantial increases in labor costs, worker compensation
rates and employee benefits, equipment costs, material or subcontractor costs
could adversely affect the operations of the Company for future periods.

SIGNIFICANT ACCOUNTING POLICIES

     Our significant accounting policies are described in Note 1 to the
consolidated financial statements included in Item 8 of this Form 10-K.  We
believe our most critical accounting policy is the revenue recognition and cost
estimation on certain contracts for which we use a percentage of completion
accounting method. This accounting method is applied by our Construction
Services Operations to heavy construction projects executed under multi-year
contracts with various customers. Approximately 82%, 88% and 93% of total net
revenue was recognized under the percentage of completion method of accounting
during 2001, 2000 and 1999, respectively.

     Revenues and costs from fixed-price and modified fixed-price construction
contracts are recognized for each contract on the percentage-of-completion
method, measured by the percentage of costs incurred to date to the estimated
total of direct costs. Direct costs include, among other things, direct labor,
field labor, equipment rent, subcontracting, direct materials, and direct
overhead.  General and administrative expenses are accounted for as period costs
and are, therefore, not included in the calculation of the estimates to complete
construction contracts in progress.  Project losses are provided in the period
in which such losses are determined, without reference to the percentage-of-
completion.  As contracts can extend over one or more accounting periods,
revisions in costs and earnings estimated during the course of the work are
reflected during the accounting period in which the facts that required such
revisions become known.

     The asset "costs and estimated earnings in excess of billings on
uncompleted contracts" represents revenue recognized in excess of amounts
billed.  The liability "billings in excess of costs and estimated earnings on
uncompleted contracts" represents billings in excess of revenues recognized.


                                       18
<PAGE>

     The complexity of the estimation process and all issues related to the
assumptions, risks and uncertainties inherent with the application of the
percentage of completion method of accounting affects the amounts reported in
our financial statements. A number of internal and external factors affect our
percentage of completion estimates, including labor rate and efficiency
variances, estimated future material prices and customer specification changes.
If our business conditions were different, or if we used different assumptions
in the application of this accounting policy, it is likely that materially
different amounts would be reported in our financial statements.

SUMMARY OF CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

  Contractual obligations at December 31, 2001, and the effects such obligations
are expected to have on liquidity and cash flow in future periods, are
summarized as follows:

<TABLE>
<CAPTION>
                                                           Payments Due by Period
                                   --------------------------------------------------------------------
                                                    Less than       1 - 3         4 - 5        After
                                       Total          1 Year        Years         Years       5 Years
                                   ------------   ------------  -------------  ------------  ----------
<S>                                <C>            <C>           <C>            <C>           <C>
CONTRACTUAL OBLIGATIONS
Long-term debt                      $ 4,170,113    $1,685,634    $ 2,379,629    $  104,850   $        -
Capital Lease Obligations             4,754,952     1,400,875      2,939,360       414,717            -
Operating Leases                     24,299,009     5,594,036     13,286,551     2,994,399    2,424,023
                                    -----------    ----------    -----------    ----------   ----------
Total Contractual Obligations       $33,224,074    $8,680,545    $18,605,540    $3,513,966   $2,424,023
                                    ===========    ==========    ===========    ==========   ==========

</TABLE>


<TABLE>
<CAPTION>

                                            Amount of Commitment Expiration Per Period

                                     Total Amounts    Less than     1 - 3         4 - 5        Over
                                       Committed       1 Year       Years         Years       5 Years
                                     -------------  -----------   ----------    ---------    ---------
<S>                                  <C>            <C>          <C>            <C>          <C>
OTHER COMMERICAL COMMITMENTS

Line of Credit                      $7,000,000      $        -   $5,116,928     $1,883,072   $      -
                                    ===========     ==========   ===========    ==========   ========
</TABLE>



                                       19
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standard Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142).  SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001.  SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria.  SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001.  It also
requires, upon adoption of SFAS 142, the Company reclassify the carrying amounts
of intangible assets and goodwill based on the criteria in SFAS 141.

     SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.  In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life.  An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142.  SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and to the
intangible assets recognized at that date, regardless of when those assets were
initially recognized.  SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption.  The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

     The Company's previous business combinations were accounted for using the
purchase method.  As of December 31, 2000, the carrying amount of the goodwill
was $1,500,733.  Amortization expense during the year ended December 31, 2001
was $80,029.  The carrying value of goodwill is periodically reviewed by the
Company and impairments, if any, are recognized when expected future operating
cash flows derived from goodwill is less than its carrying value.  Based on this
analysis, the Company determined that the fair value of goodwill as of December
31, 2001 was zero.  Accordingly, a goodwill impairment loss of $1,420,704 was
recorded in the fourth quarter of 2001 in accordance with the Statement of
Financial Accounting Standard No. 121 and is included in the loss from
continuing operations.  We anticipate the adoption of SFAS 141 and SFAS 142
to not have a material impact on the financial statements of the Company.

     SFAS 143, Accounting for Asset Retirement Obligations, was issued in June
2001 and is effective for fiscal years beginning after June 15, 2002.  SFAS 143
requires that any legal obligation related to the retirement of long-lived
assets be quantified and recorded as a liability with the associated asset
retirement cost capitalized on the balance sheet in the period it is incurred
when a reasonable estimate of the fair value of the liability can be made.

     SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
was issued in August 2001 and is effective for fiscal years beginning after
December 15, 2001.  SFAS 144 provides a single, comprehensive accounting model
for impairment and disposal of long-lived assets and discontinued operations.

     SFAS 143 and SFAS 144 will be adopted on their effective dates, and
adoption is not expected to result in any material effects on the Company's
financial statements.

KNOWN AND ANTICIPATED FUTURE TRENDS AND CONTINGENCIES

     Subject to the Company's success in improving profitability and efforts to
increase working capital, it is anticipated that its bonding limits will
increase proportionately, thereby allowing the Company to bid on and perform
more and larger projects.

     The Company believes that government at all levels will continue to be the
primary source of funding for infrastructure work.  The national transportation
legislation, TEA-21, establishes a total budget authority of $215 billion over
the six-year period 1998-2003.  TEA-21 ensures that tax revenue deposited into
the Highway Trust Fund will be spent on transportation improvements by
guaranteeing $165 billion for highways and $35 billion for transit and by
further stipulating that appropriators can spend trust fund dollars only on
transportation.  Annual spending authorizations under TEA-21 have been
consistent with anticipated levels, however, a component of the TEA-21
legislation called Revenue Aligned Budget Authority ("RABA"), may increase or
decrease funding proportionate to tax proceeds increases or decreases.  Declines
in tax

                                       20
<PAGE>

revenues, due to the recession, may create a downward adjustment in funding from
the RABA component of TEA-21. The flow of TEA-21 has begun to normalize, and
with the exception of RABA adjustments, will likely be steady throughout the
remainder of its funding horizon of 2003. See "Market Overview".

     The competitive bidding process will continue to be the dominant method for
determining contract award.  However, other innovative bidding methods will be
tried and may gain favor, namely "A Plus B" contracts, where the bidders'
proposals are selected on both price and scheduling criteria.  Design-build
projects are becoming more common and are likely to increase in frequency.
Design-build projects also tend to be of more worth to the owner when the
contract size is substantial, usually $50 million or more.

     In light of the rising needs for infrastructure work throughout the nation
and the tendency of the current needs to out-pace the supply of funds, it is
anticipated that alternative funding sources will continue to be sought.
Funding for infrastructure development in the United States is coming from a
growing variety of innovative sources.  An increase of funding measures is being
undertaken by various levels of government to help solve traffic congestion and
related air quality problems.  Sales taxes, fuel taxes, user fees in a variety
of forms, vehicle license taxes, private toll roads and quasi-public toll roads
are examples of how transportation funding is evolving.  Transportation norms
are being challenged by federally mandated air quality standards. Improving
traffic movement, eliminating congestion, increasing public transit, adding or
designating high occupancy vehicle (HOV) lanes to encourage car pooling and
other solutions are being considered in order to help meet EPA-imposed air
quality standards.  There is also a trend toward local and state legislation
regulating growth and urban sprawl.  The passage of such legislation and the
degree of growth limits imposed by it could dramatically affect the nature of
the Company's markets.

SEASONALITY

     The construction industry is seasonal, generally due to inclement weather
occurring in the winter months.  Accordingly, the Company may experience a
seasonal pattern in its operating results with lower revenue in the first and
fourth quarters of each calendar year than other quarters.  Quarterly results
may also be affected by the timing of bid solicitations by governmental
authorities, the stage of completion of major projects and revenue recognition
policies.  Results for any one quarter, therefore, may not be indicative of
results for other quarters or for the year.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk generally represents the risk that losses may occur in the
values of financial instruments as a result of movements in interest rates,
foreign currency exchange rates and commodity prices.  The Company does not have
foreign currency exchange rate and commodity price market risk.

     Interest Rate Risk - From time to time the Company temporarily invests its
excess cash and restricted cash in interest-bearing securities issued by high-
quality issuers.  The Company's management monitors risk exposure to monies
invested in securities of any one financial institution.  Due to the short time
the investments are outstanding and their general liquidity, these instruments
are classified as cash equivalents in the consolidated balance sheet and do not
represent a material interest rate risk to the Company.  The Company's primary
market risk exposure for changes in interest rates relates to the Company's
long-term debt obligations.  The Company manages its exposure to changing
interest rates principally through the use of a combination of fixed and
floating rate debt.

     The Company evaluated the potential effect that near term changes in
interest rates would have had on the fair value of its interest rate risk
sensitive financial instruments at December 31, 2001.  Assuming a 100 basis
point increase in the prime interest rate at December 31, 2001 the potential
increase in the fair value of the Company's debt obligations would have been
approximately $77,971 at December 31, 2001.  See notes 8 and 9 in the
accompanying consolidated financial statement.

                                       21
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's Consolidated Financial Statements are indexed on page F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     Not Applicable


                                   PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information on directors and executive officers of the Company will be
included under the caption "Directors and Executive Officers" of the Company's
definitive Proxy Statement relating to the Annual Meeting of Shareholders for
the year ended December 31, 2001, which is hereby incorporated by reference.

ITEM 11.  EXECUTIVE COMPENSATION

     Information on executive compensation will be included under the caption
"Compensation of Executive Officers" of the Company's definitive Proxy Statement
relating to the Annual Meeting of Shareholders for the year ended December 31,
2001, which is hereby incorporated by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information on beneficial ownership of the Company's voting securities by
each director and all officers and directors as a group, and by any person known
to beneficially own more than 5% of any class of voting security of the Company
will be included under the caption "Beneficial Ownership of the Company's
Securities" of the Company's definitive Proxy Statement relating to the Annual
Meeting of the Shareholders for the year ended December 31, 2001, which is
hereby incorporated by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information on certain relationships and related transactions including
information with respect to management indebtedness will be included under the
caption "Certain Relationships and Related Transactions" and "Information
Regarding Indebtedness of Management to the Company" of the Company's definitive
Proxy Statement relating to the Annual Meeting of Shareholders for the year
ended December 31, 2001, which is hereby incorporated by reference.

                                       22
<PAGE>

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

  (a)(1)   Financial Statements
             See Item 8 of Part II hereof.

  (a)(2)   Financial Statement Schedules
             The schedules specified under Regulation S-X are either not
             applicable or immaterial to the Company's consolidated financial
             statements for the years ended December 31, 2001, 2000 and 1999.

  (b)      Reports on Form 8-K
             The Company filed a Form 8-K during the fourth quarter ended
             December 31, 2001.

  (c)      Exhibits


EXHIBIT
  NO.                                 TITLE
-------                               -----
  1.01     Form of Underwriting Agreement with Spelman & Co., Inc (1)
  1.02     Form of Selected Dealer Agreement (1)
  1.03     Form of Representatives' Warrant (1)
  1.04     Consulting Agreement with the Representative (1)
  1.05     Form of Amended Underwriting Agreement (Spelman & Co., Inc.) (1)
  1.06     Form of Amended Representatives' Warrant (Spelman & Co., Inc.) (1)
  1.07     Form of Underwriting Agreement (H D Brous & Co., Inc.) (1)
  1.08     Form of Selected Dealer Agreement (H D Brous & Co., Inc.) (1)
  1.09     Form of Representatives' Unit Warrant ( H D Brous & Co., Inc.) (1)
  1.10     Warrant Agreement (1)
  1.11     Agreement Among Underwriters (1)
  1.12     Form of Underwriting Agreement (H D Brous & Co., Inc. and
           Neidiger/Tucker/Bruner, Inc.) (1)
  1.13     Form of Agreement Among Underwriters (H D Brous & Co., Inc. and
           Neidiger/Tucker/Bruner, Inc.) (1)
  1.14     Form of Selected Dealer Agreement (H D Brous & Co., Inc. and
           Neidiger/Tucker/Bruner, Inc.) (1)
  1.15     Form of Representatives' Warrant Agreement, including Form of
           Representatives' Warrant (H D Brous & Co., Inc. and
           Neidiger/Tucker/Bruner, Inc.) (1)
  3.01     Articles of Incorporation and Amendments thereto of the
           Registrant (1)
  3.02     Bylaws of the Registrant (1)
  3.03     Bylaws of the Registrant Effective October 20, 1995 (1)
  3.04     Bylaws of the Registrant Effective April 28, 1997
  5.01     Opinion of Gary A. Agron, regarding legality of the Common Stock
           (includes Consent) (1)
  5.02     Opinion of Gary A. Agron, regarding legality of the Units, Common
           Stock and Warrants (1)
 10.01     Incentive Stock Option Plan (1)
 10.02     Office lease of the Registrant (1)
 10.03     Office lease of the Registrant (1)
 10.04     Contract between the State of Arizona and the Registrant dated
           October 22, 1993 (1)
 10.05     Surety Bond between the Registrant and St. Paul Fire & Marine
           Insurance Company (1)
 10.06     Surety Bond between the Registrant and United States Fidelity and
           Guaranty Company (1)
 10.07     Contract between Clark County, Nevada and the Registrant dated
           October 6, 1992 (1)
 10.08     Surety Bond between the Registrant and St. Paul Fire and Marine
           Insurance Company (1)
 10.09     Agreement between Salt Lake City Corporation and the Registrant dated
           May 5, 1993 (1)


                                       23
<PAGE>

EXHIBIT
  NO.                                 TITLE
-------                               -----

 10.10     Contract between Clark County, Nevada and the Registrant dated July
           21, 1993 (1)
 10.11     Contract between Clark County, Nevada and the Registrant dated August
           17, 1993 (1)
 10.12     Promissory Note executed by Robert C. Lewis and Richard C. Lewis (1)
 10.13     Promissory Note executed by Moapa Developers, Inc. (1)
 10.14     Promissory Note executed by Paul R. Lewis (1)
 10.15     Contract between Clark County, Nevada and the Registrant dated
           September 7, 1993 (1)
 10.16     Agreement between Salt Lake City Corporation and the Registrant
           dated February 11, 1994 (1)
 10.17     Contract between Northwest/Cheyenne Joint Venture and the Registrant
           dated March 16, 1994 (1)
 10.18     Contract between Clark County, Nevada and the Registrant dated April
           5, 1994 (1)
 10.19     Statutory Payment Bond dated September 8, 1994 (1)
 10.20     Employment Agreement with Mr. Lewis (1)
 10.21     Employment Agreement with Mr. Black (1)
 10.22     Employment Agreement with Mr. Terril (1)
 10.23     Employment Agreement with Mr. Nelson (1)
 10.24     Employment Agreement with Ms. Danley (1)
 10.25     Employment Agreement with Mr. Jessop (1)
 10.26     Employment Agreement with Mr. Larson (1)
 10.27     Stock Purchase Agreement (1)
 10.28     Form of Lockup Letter (1)
 10.29     Revolving Credit Loan Agreement (1)
 10.30     Contract Award Notification - Arizona Department of
           Transportation (1)
 10.31     Contract Award Notification - McCarran International Airport (1)
 10.32     Contract Award Notification - City of Henderson (1)
 10.33     Contract between Registrant and Arizona Department of
           Transportation (1)
 10.34     Contract between Registrant and Arizona Department of
           Transportation (1)
 10.35     Office Lease of the Registrant (1)
 10.36     Contract between Registrant and Arizona Department of
           Transportation (2)
 10.37     Contract Award Notification - Clark County (2)
 10.38     Joint Venture Agreement (2)
 10.39     Employment Agreement with Mr. Grasmick (2)
 10.40     Contract between Registrant and Clark County, Nevada (2)
 10.41     Contract between Registrant and Clark County, Nevada (2)
 10.42     Contract between Registrant and Utah Department of Transportation (2)
 10.43     Contract between Registrant and Arizona Department of
           Transportion (2)
 10.44     Promissory Note executed by Nevada State Bank (2)
 10.45     Escrow Settlement Documents and related Promissory Note (2)
 10.46     Conveyor Sales Contract and Security Agreement (2)
 10.47     CAT Financial Installment Sale Contract (2)
 10.48     Second and Third Amendments to Office Lease of Registrant (2)
 10.49     Lease Agreement with US Bancorp (2)
 10.50     Lease Agreement with CIT Group (2)
 10.51     CAT Financial Installment Sale Contract (3)
 10.52     CAT Financial Installment Sale Contract (3)
 10.53     CAT Financial Installment Sale Contract (3)
 10.54     CAT Financial Installment Sale Contract (3)
 10.55     CAT Financial Installment Sale Contract (3)

                                       24
<PAGE>

EXHIBIT
  NO.                                 TITLE
-------                               -----
 10.56     Escrow Settlement Documents (3)
 10.57     Promissory Note executed by General Electric Capital Corporation (3)
 10.58     Promissory Note executed by General Electric Capital Corporation (3)
 10.59     Promissory Note executed by General Electric Capital Corporation (3)
 10.60     Promissory Note executed by General Electric Capital Corporation (3)
 10.61     Promissory Note executed by Neveda State Bank (3)
 10.62     KDC Sales Contract (3)
 10.63     Lease Agreement with CIT (3)
 10.64     Lease Agreement with CIT (3)
 10.65     Contract between Registrant and Utah Department of Transportation (3)
 10.66     Contract between Registrant and Clark County, Nevada (3)
 10.67     Contract between Registrant and New Mexico State Highway and
           Transportation Department (3)
 10.68     Contract between Registrant and Salt Lake City Corporation (3)
 10.69     Contract between Registrant and Utah Department of Transportation (3)
 10.70     Contract between Registrant and Arizona Department of
           Transportation (3)
 10.71     Contract between Registrant and Nevada Department of
           Transportation (3)
 10.72     Employment and Indemnification Agreements with Mr. Nelson (3)
 10.73     Employment and Indemnification Agreements with Mr. Terril (3)
 10.74     Employment and Indemnification Agreements with Mr. Lewis (3)
 10.75     Employment and Indemnification Agreements with Mr. Larson (3)
 10.76     Employment and Indemnification Agreements with Mr. Burnell (3)
 10.77     Lease Agreement with Banc One Leasing Corp. (4)
 10.78     Lease Agreement with Banc One Leasing Corp. (4)
 10.79     Lease Agreement with Banc One Leasing Corp. (4)
 10.80     Lease Agreement with US Bancorp (4)
 10.81     Security Agreement with Associates Commercial Corporation (4)
 10.82     Lease Agreement with Caterpillar Financial Services (4)
 10.83     Contract between Registrant and Clark County, Nevada (4)
 10.84     Contract between Registrant and Arizona Department of
           Transportation (4)
 10.85     Contract between Registrant and New Mexico State Highway and
           Transportation Department (4)
 10.86     Contract between Registrant and New Mexico State Highway and
           Transportation Department (4)
 10.87     Contract between Registrant and New Mexico State Highway and
           Transportation Department (4)
 10.88     Joint Venture Agreement between Registrant and R. E. Monks
           Construction Co. (4)
 10.89     Contract between Meadow Valley Contractors, Inc./R. E. Monks
           Construction Co. (JV) and the Arizona Department of
           Transportation (4)
 10.90     Contract between the Registrant and Utah Department of
           Transportation (4)
 10.91     Contract between the Registrant and Clark County, Nevada (4)
 10.92     General Agreement of Indemnity between the Registrant and Liberty
           Mutual Insurance Company (4)
 10.93     Employment Agreement with Mr. Larson (4)
 10.94     Lease Agreement between the Registrant and Ken Nosker (4)
 10.95     Promissory Note executed by General Electric Capital Corporation (5)
 10.96     Promissory Note executed by General Electric Capital Corporation (5)
 10.97     Promissory Note executed by John Deere Construction Equipment
           Company (5)
 10.98     Promissory Note executed by John Deere Construction Equipment
           Company (5)
 10.99     Transfer and Assumption Agreement executed by Associates Leasing,
           Inc. (5)
 10.100    Lease Agreement with Banc One Leasing Corp. (5)
 10.101    Lease Agreement with Caterpillar Financial Services (5)

                                       25
<PAGE>

EXHIBIT
  NO.                                 TITLE
-------                               -----
10.102     Lease Agreement with Trinity Capital Corporation (5)
10.103     Lease Agreement with Banc One Leasing Corp. (5)
10.104     Wheeler Machinery Co. Installment Sale Contract (5)
10.105     Wheeler Machinery Co. Installment Sale Contract (5)
10.106     Bank One, Arizona Restated Revolving Line of Credit Note (5)
10.107     Promissory Note executed by General Electric Capital Corporation (5)
10.108     Employment Agreement with Mr. Larson (5)
10.109     Lease Agreement with Banc One Leasing Corp. (5)
10.110     Master Lease Agreement with Banc One Leasing Corp. (5)
10.111     Contract between Registrant and Arizona Department of
           Transportation (5)
10.112     Contract between Registrant and Arizona Department of
           Transportation (5)
10.113     Contract between Registrant and Utah Department of Transportation (5)
10.114     Contract between Registrant and Flood Control District of Maricopa
           County (5)
10.115     Contract between Registrant and Johnson and Danley Construction Co.,
           Inc. (5)
10.116     Master Lease Agreement with The CIT Group/Equipment Financing,
           Inc. (6)
10.117     Lease Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.118     Lease Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.119     Lease Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.120     Master Lease Agreement with The CIT Group/Equipment Financing,
           Inc. (6)
10.121     Lease Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.122     Master Security Agreement with The CIT Group/Equipment Financing,
           Inc. (6)
10.123     Security Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.124     Security Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.125     Security Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.126     Security Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.127     Security Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.128     Master Security Agreement with The CIT Group/Equipment Financing,
           Inc. (6)
10.129     Security Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.130     Office lease of the Registrant (6)
10.131     Transfer and Assumption Agreement with Caterpillar Financial Services
           Corporation (6)
10.132     Installment Sale Contract with Caterpillar Financial Services
           Corporation (6)
10.133     Property Lease and Aggregate Supply Agreement with Sun State Rock &
           Materials Corp. (6)
10.134     Property Lease and Aggregate Supply Agreement with Clay R. Oliver
           d.b.a. Oliver Mining Company (6)
10.135     Security Agreement with John Deere Construction Equipment Company (6)
10.136     Master Lease Agreement with The CIT Group/Equipment Financing,
           Inc. (6)
10.137     Lease Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.138     Lease Agreement with The CIT Group/Equipment Financing, Inc. (6)
10.139     Security Agreement with Associates Leasing, Inc. (6)
10.140     Revolving Loan Agreement with The CIT Group/Equipment Financing,
           Inc. (6)
10.141     Lease Agreement with Banc One Leasing Corporation (6)
10.142     Office lease of the Registrant (6)
10.143     Security Agreement with John Deere Construction Equipment Company (6)
10.144     Contract between Registrant and Nevada Department of
           Transportation (6)
10.145     Contract between Registrant and Arizona Department of
           Transportation (6)
10.146     Joint Venture Agreement between Registrant and R.E. Monks
           Construction Co., LLC (6)
10.147     Contract between Registrant and Nevada Department of
           Transportation (6)



                                       26
<PAGE>

EXHIBIT
  NO.                                 TITLE
-------                               -----
10.148     Installment Sale Contract with Caterpillar Financial Services
           Corporation (7)
10.149     Lease Agreement with Associates Leasing, Inc. (8)
10.150     Lease Agreement with M&I First National Leasing Corp. (8)
10.151     Lease Agreement with Trinity Capital Corporation (8)
10.152     Security Agreement with FCC Equipment Financing, Inc. (9)
10.153     Lease Agreement with CitiCapital (9)
10.154     Amended and Restated Revolving Loan Agreement with The CIT
           Group/Equipment Financing, Inc. (9)
10.155     Revolving Loan Agreement with The CIT Group/Equipment Financing,
           Inc. (9)
10.156     Lease Agreement with Thomas Mining, LLC (9)
10.157     Employment Agreement with Mr. Kiesel (9)
10.158     Security Agreement with Volvo Commercial Finance LLC The Americas (9)
10.159     Letter of Intent with RMI Enterprises, LLC (12)
10.160     Lease Agreement with The CIT Group/Equipment Financing, Inc.
10.161     Lease Agreement with Associates Leasing, Inc.
10.162     Office Lease Agreement
10.163     Lease Agreement with Caterpillar Financial Services Corporation
10.164     Security Agreement with John Deere Construction Equipment & Forestry
           Company
10.165     Lease Extension with U.S. Bancorp Leasing & Financial
10.166     Security Agreement with The CIT Group/Equipment Financing, Inc.
10.167     Security Agreement with The CIT Group/Equipment Financing, Inc.
10.168     Amendment No. 1 to Restated and Amended Revolving Loan Agreement with
           The CIT Group/Equipment Financing, Inc.
10.169     Security Agreement with The CIT Group/Equipment Financing, Inc.
10.170     Indemnification Agreement with Robert R. Morris
10.171     Indemnification Agreement with Nicole R. Smith
10.172     Indemnification Agreement with Alan A. Terril
10.173     Indemnification Agreement with Bradley E. Larson
10.174     Indemnification Agreement with Kenneth D. Nelson
10.175     Installment Sale Contract with Caterpillar Financial Services
           Corporation
10.176     Contract between Registrant and Clark County, Nevada
10.177     Contract between Registrant and U.S. Army Corp of Engineers
10.178     Contract between Registrant and Utah Department of Transportation
10.179     Contract between Registrant and Clark County, Nevada
10.180     Contract between Registrant and Utah Department of Transportation
10.181     Contract between Registrant and Clark County, Nevada
10.182     Lease Extension with The CIT Group/Equipment Financing, Inc.
10.183     Asset Purchase Agreement between United Metro Materials Inc. and the
           Registrant
10.184     Engagement Letter with AMG Financing Capital, Inc.
10.185     Amendment No. 2 to Restated and Amended Revolving Loan Agreement with
           The CIT Group/Equipment Financing, Inc.
10.186     Notice of Termination of Non-Binding Letter of Intent with RMI
           Enterprises, LLC



                                       27
<PAGE>

EXHIBIT
  NO.                                 TITLE
-------                               -----
 16.01     Letter re: Change in Certifying Accountant (1)
 21.01     Subsidiaries of the Registrant (1)
 23.01     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.02     Consent of Semple & Cooper (Meadow Valley Corporation) (1)
 23.03     Consent of Gary A. Agron, Esq. (See 5.01, above) (1)
 23.04     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.05     Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1)
 23.06     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.07     Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1)
 23.08     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.09     Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
           Valley Contractors, Inc.) (1)
 23.10     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.11     Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
           Valley Contractors, Inc.) (1)
 23.12     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.13     Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
           Valley Contractors, Inc.) (1)
 23.14     Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
 23.15     Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
           Valley Contractors, Inc.) (1)
 99.1      Civil complaint by Silver State Materials Corp., et. al. vs.
           Meadow Valley Corporation, et. al. (10)
 99.2      Exhibits to civil complaint by Silver State Materials Corp., et.
           al. vs. Meadow Valley Corporation, et. al. (11)
 99.3      Press release by Meadow Valley Corporation to sell its Ready Mix
           Subsidiary (12)





 (1) Incorporation by reference to the Company's Registration Statement on Form
     S-1, File Number 33-87750 declared effective on October 16, 1995
 (2) Incorporated by reference to the Company's December 31, 1996 Annual Report
     on Form 10-K
 (3) Incorporated by reference to the Company's December 31, 1997 Annual Report
     on Form 10-K
 (4) Incorporated by reference to the Company's December 31, 1998 Annual Report
     on Form 10-K
 (5) Incorporated by reference to the Company's December 31, 1999 Annual Report
     on Form 10-K
 (6) Incorporated by reference to the Company's December 31, 2000 Annual Report
     on Form 10-K
 (7) Incorporated by reference to the Company's March 31, 2001 Form 10-Q
 (8) Incorporated by reference to the Company's June 30, 2001 Form 10-Q
 (9) Incorporated by reference to the Company's September 30, 2001 Form 10-Q
(10) Incorporated by reference to the Company's November 20, 2001 Form 8-K
(11) Incorporated by reference to the Company's November 20, 2001 Form 8-K/A
(12) Incorporated by reference to the Company's February 14, 2002 Form 8-K

                                       28
<PAGE>

     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.

                                    MEADOW VALLEY CORPORATION

                                    /s/ Bradley E. Larson
                                    -------------------------------------
                                    Bradley E. Larson
                                    President and Chief Executive Officer
                                    Date: April 1, 2002

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

/s/ Bradley E. Larson                        /s/ Earle C. May
---------------------------------            ----------------------------------
Bradley E. Larson                            Earle C. May
Director, President and Chief                Director
Executive Officer                            Date: April 1, 2002
Date: April 1, 2002


/s/ Kenneth D. Nelson                        /s/ Alan A. Terril
---------------------------------            -----------------------------------
Kenneth D. Nelson                            Alan A. Terril
Director, Chief Administrative               Director, Vice President
Officer and Vice President                   and Chief Operating Officer
Date: April 1, 2002                          Date: April 1, 2002


/s/ Charles E. Cowan                         /s/ Gary A. Agron
---------------------------------            -----------------------------------
Charles E. Cowan                             Gary A. Agron
Director                                     Director
Date: April 1, 2002                          Date: April 1, 2002


/s/ Charles R. Norton                        /s/ Nicole R. Smith
---------------------------------            -----------------------------------
Charles R. Norton                            Nicole R. Smith
Director                                     Treasurer, Secretary and Principal
Date: April 1, 2002                          Accounting Officer
                                             Date: April 1, 2002

                                       29
<PAGE>

                         INDEX TO FINANCIAL STATEMENTS


MEADOW VALLEY CORPORATION AND SUBSIDIARIES


Report of Independent Certified Public Accountants                       F-2

Consolidated Balance Sheets at December 31, 2001 and 2000                F-3

Consolidated Statements of Operations for the years ended
  December 31, 2001, 2000 and 1999                                       F-4

Consolidated Statements of Changes in Stockholders' Equity for
  the years ended December 31, 2001, 2000 and 1999                       F-5

Consolidated Statements of Cash Flows for the years ended
  December 31, 2001, 2000 and 1999                                       F-6

Notes to Consolidated Financial Statements                               F-8


                                      F-1
<PAGE>

                       [LETTERHEAD OF BDO SEIDMAN, LLP]

              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
Meadow Valley Corporation
Phoenix, Arizona

We have audited the accompanying consolidated balance sheets of Meadow Valley
Corporation and Subsidiaries as of December 31, 2001 and 2000 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 Meadow Valley
Corporation and Subsidiaries at December 31, 2001 and 2000, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.


/s/ BDO Seidman, LLP

Los Angeles, CA
March 26, 2002

                                      F-2
<PAGE>

                  MEADOW VALLEY CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                             December 31,      December 31,
                                                                                 2001             2000
                                                                             ------------     -------------
<S>                                                                           <C>             <C>
Assets (Note 9):
Current Assets:
 Cash and cash equivalents (Notes 1 and 2)                                     $ 2,228,506     $ 1,822,598
 Restricted cash (Notes 1, 2 and 16)                                             2,401,548       1,783,005
 Accounts receivable, net (Notes 1, 3, 10 and 16)                               21,377,904      14,297,564
 Prepaid expenses and other                                                        404,780         749,708
 Inventory (Note 1)                                                              3,365,750       4,288,235
 Income tax receivable (Notes 1 and 11)                                                  -         774,000
 Costs and estimated earnings in excess of billings on uncompleted
  contracts (Notes 1 and 4)                                                      5,294,054       9,828,009
                                                                               -----------     -----------
   Total Current Assets                                                         35,072,542      33,543,119
Property and equipment, net (Notes 1, 5, 8, and 12)                             15,267,791      18,111,506
Assets held for sale (Note 1)                                                    3,213,484               -
Deferred tax asset (Notes 1 and 11)                                              1,957,923         873,441
Refundable deposits                                                                 55,110         176,565
Goodwill, net (Note 1)                                                                   -       1,500,733
Mineral rights and pit development, net                                            533,608       1,180,666
Claims receivable (Notes 1, 4 and 14)                                            5,968,026               -
Other assets                                                                        80,558               -
                                                                               -----------     -----------
   Total Assets                                                                $62,149,042     $55,386,030
                                                                               ===========     ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
 Accounts payable (Notes 6 and 10)                                             $27,025,984     $17,606,113
 Accrued liabilities (Notes 7 and 10)                                            1,811,998       2,289,698
 Notes payable (Note 8)                                                          1,685,634       1,604,399
 Obligations under capital leases (Note 12)                                      1,118,055       1,041,921
 Billings in excess of costs and estimated earnings on uncompleted
  contracts (Notes 1 and 4)                                                      4,625,657       6,054,814
                                                                               -----------     -----------
   Total Current Liabilities                                                    36,267,328      28,596,945
Deferred tax liability (Notes 1 and 11)                                          2,718,734       2,272,700
Notes payable, less current portion (Notes 8 and 9)                              9,484,479       7,674,608
Obligations under capital leases, less current portion (Note 12)                 2,964,195       3,603,540
                                                                               -----------     -----------
   Total Liabilities                                                            51,434,736      42,147,793
                                                                               -----------     -----------
Commitments and contingencies (Notes 9, 10, 12 and 14)
Stockholders' Equity:
 Preferred stock - $.001 par value; 1,000,000 shares authorized, none
  issued and outstanding (Note 13)                                                       -               -
 Common stock - $.001 par value; 15,000,000 shares authorized, 3,559,938
  issued and outstanding (Notes 13 and 17)                                           3,601           3,601
 Additional paid-in capital                                                     10,943,569      10,943,569
 Capital adjustments                                                              (799,147)       (799,147)
 Retained earnings                                                                 566,283       3,090,214
                                                                               -----------     -----------
   Total Stockholders' Equity                                                   10,714,306      13,238,237
                                                                               -----------     -----------
   Total Liabilities and Stockholders' Equity                                  $62,149,042     $55,386,030
                                                                               ===========     ===========
</TABLE>

    The Accompanying Notes are an Integral Part of the Financial Statements

                                      F-3
<PAGE>

                  MEADOW VALLEY CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED DECEMBER 31,
                                                           ----------------------------------------------
                                                               2001             2000             1999
                                                           ------------     -----------      ------------
<S>                                                        <C>              <C>              <C>
Revenue (Notes 10 and 16)                                  $174,063,148     $163,573,258     $210,002,272
Cost of revenue (Note 10)                                   169,404,787      158,935,103      200,070,826
                                                           ------------     ------------     ------------
Gross profit                                                  4,658,361        4,638,155        9,931,446
General and administrative expenses (Notes 1 and 10)          8,062,623        6,777,840        6,671,035
                                                           ------------     ------------     ------------
Income (loss) from operations                                (3,404,262)      (2,139,685)       3,260,411
                                                           ------------     ------------     ------------
Other income (expense):
 Interest income                                                319,797          646,480          668,928
 Interest expense                                              (485,937)        (250,996)        (209,872)
 Other income (expense)                                         377,840         (115,246)         211,119
                                                           ------------     ------------     ------------
                                                                211,700          280,238          670,175
                                                           ------------     ------------     ------------
Income (loss) before income taxes                            (3,192,562)      (1,859,447)       3,930,586
Income tax benefit (expense)                                    668,631          284,861       (1,590,480)
                                                           ------------     ------------     ------------
Net income (loss) (Note 17)                                $ (2,523,931)    $ (1,574,586)    $  2,340,106
                                                           ============     ============     ============
Basic net income (loss) per common share                        $(0.71)          $(0.44)            $0.67
                                                           ============     ============     ============
Diluted net income (loss) per common share                      $(0.71)          $(0.44)            $0.66
                                                           ============     ============     ============
Basic weighted average common shares
 outstanding (Note 18)                                        3,559,938        3,549,458        3,518,510
                                                           ============     ============     ============
Diluted weighted average common shares
 outstanding (Note 18)                                        3,559,938        3,549,458        3,529,705
                                                           ============     ============     ============
</TABLE>

    The Accompanying Notes are an Integral Part of the Financial Statements

                                      F-4
<PAGE>

                  MEADOW VALLEY CORPORATION AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
             FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                         Common Stock
                                    ---------------------
                                      Number of
                                       Shares                  Paid-in       Capital        Retained
                                    Outstanding    Amount      Capital      Adjustment      Earnings
                                    -----------    ------    -----------   -----------     ----------
<S>                                  <C>           <C>       <C>           <C>             <C>
Balance at January 1, 1999           3,601,250     $3,601    $10,943,569   $(799,147)      $2,324,694
Treasury stock held for funding
 employer retirement plan
 contributions                        (100,000)
Net income                                                                                  2,340,106
                                     ---------     ------    -----------   -----------     ----------
Balance at December 31, 1999         3,501,250      3,601     10,943,569      (799,147)     4,664,800
Treasury stock used in funding
 employer retirement plan
 contributions                          58,688
Net loss                                                                                   (1,574,586)
                                     ---------     ------    -----------   -----------     ----------
Balance at December 31, 2000         3,559,938      3,601     10,943,569      (799,147)     3,090,214
Net loss                                                                                   (2,523,931)
                                     ---------     ------    -----------   -----------     ----------
Balance at December 31, 2001         3,559,938     $3,601    $10,943,569     $(799,147)    $  566,283
                                     =========     ======    ===========   ===========     ==========
</TABLE>


    The Accompanying Notes are an Integral Part of the Financial Statements

                                      F-5
<PAGE>

                  MEADOW VALLEY CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                                  FOR THE YEARS ENDED DECEMBER 31,
                                                           ----------------------------------------------
                                                                2001             2000             1999
                                                           -------------    -------------    ------------
<S>                                                        <C>               <C>              <C>
Increase (Decrease) in Cash and Cash Equivalents:

Cash flows from operating activities:
 Cash received from customers                              $ 164,497,420    $ 164,943,635    $ 198,476,899
 Cash paid to suppliers and employees                       (165,041,014)    (167,857,330)    (199,775,477)
 Interest received                                               319,797          646,480          695,759
 Interest paid                                                  (485,937)        (250,996)        (235,899)
 Income taxes refunded (paid)                                    804,183         (513,705)        (935,496)
                                                           -------------    -------------    -------------
  Net cash provided by (used in) operating activities             94,449       (3,031,916)      (1,774,214)
                                                           -------------    -------------    -------------

Cash flows from investing activities:
 Decrease (increase) in restricted cash                         (618,543)         360,502        1,535,178
 Collection of note receivable - other                                 -                -          208,807
 Proceeds from sale of property and equipment                  2,366,242          320,039          361,138
 Purchase of property and equipment                             (510,516)      (1,625,734)      (1,399,815)
 Purchase of mineral rights and pit development                 (112,262)        (717,474)        (729,289)
 Decrease in net assets of discontinued operations                     -                -          231,343
                                                           -------------    -------------    -------------
  Net cash provided by (used in) investing activities          1,124,921       (1,662,667)         207,362
                                                           -------------    -------------    -------------

Cash flows from financing activities:
 Repayment of capital lease obligations                       (1,105,301)      (1,183,847)        (882,677)
 Proceeds received from notes payable - other                  4,182,533        6,055,556                -
 Repayment of notes payable - other                           (3,890,694)      (4,532,017)      (1,366,007)
 Repayment of notes payable - related party                            -                -       (1,000,000)
                                                           -------------    -------------    -------------
  Net cash provided by (used in) financing activities           (813,462)         339,692       (3,248,684)
                                                           -------------    -------------    -------------
Net increase (decrease) in cash and cash equivalents             405,908       (4,354,891)      (4,815,536)
Cash and cash equivalents at beginning of year                 1,822,598        6,177,489       10,993,025
                                                           -------------    -------------    -------------
Cash and cash equivalents at end of year                   $   2,228,506    $   1,822,598    $   6,177,489
                                                           =============    =============    =============
</TABLE>



    The Accompanying Notes are an Integral Part of the Financial Statements

                                      F-6
<PAGE>

                  MEADOW VALLEY CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


<TABLE>
<CAPTION>
                                                                  FOR THE YEARS ENDED DECEMBER 31,
                                                           ----------------------------------------------
                                                                2001             2000             1999
                                                           -------------    -------------    ------------
<S>                                                        <C>               <C>              <C>
Increase (Decrease) in Cash and Cash Equivalents
  (Continued):
Reconciliation of Net Income (Loss) to Net Cash
 Provided by (Used in) Operating Activities:
  Net Income (Loss)                                        $(2,523,931)    $(1,574,586)    $ 2,340,106
  Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
    Depreciation and amortization                            2,811,042       2,681,037       2,100,151
    (Gain) loss on sale of property and equipment               64,872        (106,280)         11,886
    Deferred taxes, net                                       (638,448)        (24,566)        634,098
    Allowance for doubtful accounts                            163,193         301,895          38,146
    Impairment of goodwill                                   1,420,704               -               -

Changes in Operating Assets and Liabilities:
  Accounts receivable                                       (7,243,533)      4,657,423      (3,860,537)
  Prepaid expenses and other                                   344,928         638,042         643,386
  Inventory                                                 (1,198,218)     (1,071,280)     (3,216,955)
  Income tax receivable                                        774,000        (774,000)         20,886
  Costs and estimated earnings in excess of billings on
   uncompleted contracts                                     4,533,955        (969,076)     (5,008,314)
  Refundable deposits                                          121,455         (92,885)        107,461
  Claims receivable                                         (5,968,026)              -               -
  Other assets                                                 (80,558)              -               -
  Accounts payable                                           9,419,871      (3,201,679)      7,010,356
  Accrued liabilities                                         (477,700)     (1,097,622)        321,985
  Interest payable                                                   -               -         (26,027)
  Billings in excess of costs and estimated earnings on
   uncompleted contracts                                    (1,429,157)     (2,398,339)     (2,890,842)
                                                           -----------     -----------     -----------
Net cash provided by (used in) operating activities        $    94,449     $(3,031,916)    $(1,774,214)
                                                           ===========     ===========     ===========
</TABLE>


    The Accompanying Notes are an Integral Part of the Financial Statements

                                      F-7
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES:

 Nature of the Corporation:

     Meadow Valley Corporation (the "Company") was organized under the laws of
the State of Nevada on September 15, 1994. The principal business purpose of the
Company is to operate as the holding company of Meadow Valley Contractors, Inc.
("MVCI") and Ready Mix, Inc. ("RMI").   MVCI is a general contractor, primarily
engaged in the construction of structural concrete highway bridges and
overpasses, and the paving of highways and airport runways in the states of
Nevada, Arizona, and Utah.  RMI manufactures and distributes ready mix concrete
in the Las Vegas and Phoenix metropolitan areas.  Formed by the Company, RMI
commenced operations in 1997.

 Liquidity:

     The Company incurred income (loss) from operations for the years ended
December 31, 2001, 2000 and 1999 of $(3,404,262), $(2,139,685) and $3,260,411
and has provided (used) cash in operating activities of $94,449, $(3,031,916)
and $(1,774,214) for the years ended December 31, 2001, 2000 and 1999. In order
to improve working capital, the Company executed a definite agreement on March
22, 2002 to sell certain pit assets to United Metro Materials Inc. ("United
Metro"). The purchase price consists of approximately $3.0 million in cash plus
the value of rock and sand inventories, which are expected to be between $1.1
and $1.4 million, also paid in cash, and the assumption by United Metro of
certain obligations and other liabilities. The final purchase price will depend
upon the measurement of rock and sand inventories at closing, which is expected
in April 2002. Accordingly, $3,213,484 of assets consisting primarily of
inventory and equipment, have been classified as assets held for sale on the
accompanying 2001 balance sheet. During 2002, the Company may also consider the
disposal of other assets as a means to increase working capital. In addition,
the Company has engaged the services of AMG Financing Capital, Inc. to find
potential sources of financing to meet future financial obligations. Should the
Company not be able to execute the definite agreement with United Metro, sell
other assets, or raise additional financing to generate sufficient cash flows
from operations, management of the Company will need to develop alternative
strategies that may ultimately impact the operations and financial condition of
the Company.

 Principles of Consolidation:

     The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries MVCI and RMI.  Intercompany
transactions and balances have been eliminated in consolidation.

 Reclassifications:

     Certain balances as of December 31, 2000 and 1999 and the years then ended
have been reclassified in the accompanying consolidated financial statements to
conform with the current year presentation.  These classifications had no effect
on previously reported net income or stockholders' equity.

  Accounting 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 revenue and expenses during the reporting
period.  Actual results could differ materially from those estimates.

     Significant estimates are used when accounting for the percentage of
completion and the estimated gross profit on projects in progress, allowance for
doubtful accounts, depreciation and amortization, accruals, taxes, contingencies
and goodwill, which are discussed in the respective notes to the consolidated
financial statements.

 Revenue and Cost Recognition:

     Revenues and costs from fixed-price and modified fixed-price construction
contracts are recognized for each contract on the percentage-of-completion
method, measured by the percentage of costs incurred to date to the estimated
total of direct costs. Direct costs include, among other things, direct labor,
field labor, equipment rent, subcontracting, direct materials, and direct
overhead.  General and administrative expenses are accounted for as period costs
and are, therefore, not included in the calculation of the estimates to complete
construction contracts in progress.  Project losses are provided in the period
in which such losses are determined, without reference to the percentage-of-
completion.  As contracts can extend over one or more accounting periods,
revisions in costs and earnings estimated during the course of the work are
reflected during the accounting period in which the facts that required such
revisions become known.

     Claims for additional contract revenue are recognized only to the extent
that contract costs relating to the claim have been incurred and evidence
provides a legal basis for the claim.  As of December 31, 2001 and 2000, the
total amount of claims that have been submitted or soon-to-be submitted was
approximately $54,407,238 and $37,909,196, respectively.  Of those sums, the
Company's portion of the claims total was $29,396,539 and $20,536,637 and the
balance of $25,010,699 and $17,372,559 pertains to prime contractor or
subcontractors' claims. Relative to the aforementioned claims, the Company has
recorded approximately $7,754,448 and $5,820,904, respectively, in claim revenue
to offset costs incurred to-date on the claims. In the accompanying December 31,
2001 balance sheet, claims receivable in the amount of $5,968,026 has been
recorded in connection with claims filed. In addition, the Company has also
recorded approximately $1,817,831 for unpaid quantities, unpaid change orders,
and pending change orders in advance of receipt. Although the Company believes
these amounts represent a reasonably conservative posture, any claims proceeds
and payments for previously unpaid quantities, unpaid change orders and pending
change orders ultimately paid to the Company less than $9,572,279 will reduce
net income. Conversely, a payment for those same items in excess of $9,572,279
will increase net income.

     The asset "costs and estimated earnings in excess of billings on
uncompleted contracts" represents revenue recognized in excess of amounts
billed.  The liability "billings in excess of costs and estimated earnings on
uncompleted contracts" represents billings in excess of revenues recognized.

                                      F-8
<PAGE>

                  MEADOW VALLEY CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED):

  Restricted Cash:

     At December 31, 2001 and 2000, funds in the amount of $2,401,548 and
$1,783,005, respectively,  were held in trust, in lieu of retention, on certain
of the Company's construction contracts and will be released to the Company
after the contracts are completed.

  Inventory:

     Inventories, which consist primarily of raw materials, are stated at the
lower of cost, determined by the first-in, first-out method, or market.
Inventory quantities are determined by physical measurements.

 Accounts Receivable, net:

     Included in accounts receivable are trade receivables that represent
amounts billed but uncollected on completed construction contracts and
construction contracts in progress as well as other trade and non-trade
receivables.

     The Company follows the allowance method of recognizing uncollectible
accounts receivable.  The allowance method recognizes bad debt expense based on
a review of the individual accounts outstanding, and the Company's prior history
of uncollectible accounts receivable.  At December 31, 2001 and 2000, the
Company had established an allowance for potentially uncollectible accounts
receivable in the amounts of  $562,412 and $399,219, respectively.  During the
years ended December 31, 2001, 2000 and 1999 the Company incurred bad debt
expense in the amounts of $171,037, $489,379 and $79,681, respectively.

 Property and Equipment:

     Property and equipment are recorded at cost.  Depreciation charged to
operations during the years ended December 31, 2001, 2000 and 1999 was
$2,529,281, $2,422,470 and $1,932,272, respectively.  Depreciation is provided
for on the straight-line method, over the following estimated useful lives.
Leasehold improvements are recorded at cost and are amortized over their
estimated useful lives or the lease term, whichever is shorter.

                  Plants                            6-15 years
                  Computer Equipment                5-7 years
                  Equipment                         5-10 years
                  Vehicles                          5 years
                  Office furniture and equipment    7 years
                  Improvements                      2-10 years


     At December 31, 2001 and 2000, property and equipment with a net book value
of $15,802,984 and $18,111,506, respectively, were pledged as collateral for
notes payable and capital lease obligations.

  Goodwill:

     Goodwill represents the excess of the costs of acquiring Meadow Valley
Contractors, Inc. over the fair value of its net assets and was being amortized
on the straight-line method over twenty-five (25) years.  Amortization expense
charged to operations for each of the years ended December 31, 2001, 2000 and
1999 was $80,029.  The carrying value of goodwill is periodically reviewed by
the Company and impairments, if any, are recognized when expected future
operating cash flows derived from goodwill is less than its carrying value.
Based on this analysis, the Company determined that the fair value of goodwill
as of December 31, 2001 was zero.  Accordingly, a goodwill impairment loss of
$1,420,704 was recorded in the fourth quarter of 2001 in accordance with the
Statement of Financial Accounting Standard No. 121 and is included in the loss
from continuing operations.

                                      F-9
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED):

  Income Taxes:

     The Company accounts for income taxes in accordance with the Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109").  SFAS
109 requires the Company to recognize deferred tax assets and liabilities for
the expected future tax consequences of events that have been recognized in a
Company's financial statements or tax returns.  Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement carrying amounts and tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse.  The Company files consolidated tax returns with MVCI and
RMI for federal and state tax reporting purposes.

  Cash Flow Recognition:

     For purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with an initial maturity of three (3) months
or less to be cash equivalents.

 Fair Value of Financial Instruments:

     The carrying amounts of financial instruments including cash, restricted
cash, costs and estimated earnings in excess of billings on uncompleted
contracts, certain current maturities of long-term debt, billings in excess of
costs and estimated earnings on uncompleted contracts, accrued liabilities and
long-term debt approximate fair value based on borrowing rates currently
available to the Company for loans with similar terms and maturities.

  Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be
  Disposed of:

     Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of" ("SFAS
121") establishes guidelines regarding when impairment losses on long-lived
assets, which include plant and equipment, and certain identifiable intangible
assets, should be recognized and how impairment losses should be measured. The
carrying value of goodwill is periodically reviewed by the Company and
impairments, if any, are recognized when expected future operating cash flows
derived from goodwill is less than its carrying value.  Based on this analysis,
the Company determined that the fair value of goodwill as of December 31, 2001
was zero.  Accordingly, a goodwill impairment loss of $1,420,704 was recorded in
the fourth quarter of 2001 in accordance with the Statement of Financial
Accounting Standard No. 121 and is included in the loss from continuing
operations.

     The Company executed a definite agreement on March 22, 2002 to sell certain
pit assets of MVCI to United Metro Materials Inc. ("United Metro").  The
purchase price consists of approximately $3.0 million in cash plus the value of
rock and sand inventories, which are expected to be between $1.1 and $1.4
million, also paid in cash. In addition, United Metro will assume certain
obligations and other liabilities. The final purchase price will depend upon the
measurement of rock and sand inventories at closing, which is expected in April
2002. Accordingly, $3,213,484 of assets consisting primarily of inventory and
equipment, have been classified as assets held for sale on the accompanying 2001
balance sheet.

  Stock-Based Compensation:

     Statements of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123") establishes a fair value method of
accounting for stock-based compensation plans and for transactions in which an
entity acquires goods or services from nonemployees in exchange for equity
instruments.  SFAS 123 also encourages, but does not require companies to record
compensation cost for stock-based employee compensation.  The Company has chosen
to continue to account for stock-based compensation utilizing the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees".  Accordingly, compensation cost for
stock options is measured as the excess, if any, of the fair market price of the
Company's stock at the date of grant over the amount an employee must pay to
acquire the stock.

  Earnings per Share:

     Statement of Financial Accounting Standards No. 128, "Earnings per Share,"
("SFAS 128") provides for the calculation of Basic and Diluted earnings per
share.  Basic earnings per share includes no dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the period.  Diluted earnings per share reflect
the potential dilution of securities that could share in the earnings of an
entity, similar to fully diluted earnings per share.

                                      F-10
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (CONTINUED):

  Business Combinations and Goodwill and Other Intangible Assets:

     In June 2001, the Financial Accounting Standard Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142).  SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001.  SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria.  SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001.  It also
requires, upon adoption of SFAS 142, the Company reclassify the carrying amounts
of intangible assets and goodwill based on the criteria in SFAS 141.

     SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.  In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life.  An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142.  SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and to the
intangible assets recognized at that date, regardless of when those assets were
initially recognized.  SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption.  The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

     The Company's previous business combinations were accounted for using the
purchase method.  As of December 31, 2000, the net carrying amount of goodwill
was $1,500,733.  Amortization expense during the year ended December 31, 2001
was $80,029.  The carrying value of goodwill is periodically reviewed by the
Company and impairments, if any, are recognized when expected future operating
cash flows derived from goodwill is less than its carrying value.  Based on this
analysis, the Company determined that the fair value of goodwill as of December
31, 2001 was zero.  Accordingly, a goodwill impairment loss of $1,420,704 was
recorded in the fourth quarter of 2001 in accordance with the Statement of
Financial Accounting Standard No. 121 and is included in the loss from
continuing operations.  We anticipate the adoption of SFAS 141 and SFAS 142
to not have a material impact on the financial statements of the Company.

  Accounting for Asset Retirement Obligations and Accounting for the Impairment
  or Disposal of Long-Lived Assets:

     SFAS 143, Accounting for Asset Retirement Obligations, was issued in June
2001 and is effective for fiscal years beginning after June 15, 2002.  SFAS 143
requires that any legal obligation related to the retirement of long-lived
assets be quantified and recorded as a liability with the associated asset
retirement cost capitalized on the balance sheet in the period it is incurred
when a reasonable estimate of the fair value of the liability can be made.

     SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
was issued in August 2001 and is effective for fiscal years beginning after
December 15, 2001.  SFAS 144 provides a single, comprehensive accounting model
for impairment and disposal of long-lived assets and discontinued operations.

     SFAS 143 and SFAS 144 will be adopted on their effective dates, and
adoption is not expected to result in any material effects on the Company's
financial statements.

2.  CONCENTRATION OF CREDIT RISK:

     The Company maintains cash balances at various financial institutions.
Deposits not to exceed $100,000 for each institution are insured by the Federal
Deposit Insurance Corporation.  At December 31, 2001 and 2000, the Company has
uninsured cash, cash equivalents, and restricted cash in the amounts of
$6,603,140 and $5,322,475, respectively.

                                      F-11
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  ACCOUNTS RECEIVABLE:

     Accounts receivable consists of the following:

                                            December 31,    December 31,
                                                 2001           2000
                                            ------------    ------------
Contracts in progress                        $ 9,114,437     $ 6,382,925
Contracts in progress - retention              6,740,547       4,041,781
Completed contracts                                8,775               -
Completed contracts - retention                   83,500         121,376
Other trade receivables                        5,894,753       4,000,003
Other receivables                                 98,304         150,698
                                             -----------     -----------
                                              21,940,316      14,696,783
Less:  Allowance for doubtful accounts          (562,412)       (399,219)
                                             -----------     -----------
                                             $21,377,904     $14,297,564
                                             ===========     ===========

4.  CONTRACTS IN PROGRESS:

     Costs and estimated earnings in excess of billings and billings in excess
of costs and estimated earnings on uncompleted contracts consist of the
following:

                                              December 31,     December 31,
                                                 2001              2000
                                             -------------    -------------
Costs incurred on uncompleted contracts      $ 443,326,113    $ 425,863,961
Estimated earnings to date                      14,792,091       18,838,396
                                             -------------    -------------
                                               458,118,204      444,702,357
Less: billings to date                        (451,481,781)    (440,929,162)
                                             -------------    -------------
                                                 6,636,423        3,773,195
Less:  claims receivable                        (5,968,026)               -
                                             -------------    -------------
                                             $     668,397    $   3,773,195
                                             =============    =============


     Included in the accompanying balance sheets under the following captions:

                                                    December 31,    December 31,
                                                        2001            2000
                                                    ------------    ------------
Costs and estimated earnings in excess of
  billings on uncompleted contracts                 $ 5,294,054     $ 9,828,009

Billings in excess of costs and estimated
  earnings on uncompleted contracts                  (4,625,657)     (6,054,814)
                                                    -----------     -----------
                                                    $   668,397     $ 3,773,195
                                                    ===========     ===========


                                      F-12
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.  PROPERTY AND EQUIPMENT:

     Property and equipment consists of the following:


                                   December 31,     December 31,
                                       2001             2000
                                   ------------     ------------
Land                                $   827,639     $   827,639
Plants                                7,283,099       9,395,274
Computer equipment                      382,962         341,783
Equipment                            12,262,847      12,089,702
Vehicles                              2,431,937       2,068,654
Office furniture and fixtures            61,995          62,420
Improvements                            442,814         364,766
                                    -----------     -----------
                                     23,693,293      25,150,238
Accumulated depreciation             (8,425,502)     (7,038,732)
                                    -----------     -----------
                                    $15,267,791     $18,111,506
                                    ===========     ===========
6.  ACCOUNTS PAYABLE:

     Accounts payable consists of the following:

                                   December 31,     December 31,
                                       2001             2000
                                   ------------     ------------
Trade                               $22,897,786     $14,069,299
Retentions                            4,128,198       3,536,814
                                    -----------     -----------
                                    $27,025,984     $17,606,113
                                    ===========     ===========
7.  ACCRUED LIABILITIES:

   Accrued liabilities consists of the following:

                                   December 31,     December 31,
                                       2001             2000
                                   ------------     ------------
Compensation                        $   715,552     $   765,497
Taxes                                   517,853         641,464
Insurance                               144,616          77,208
Other                                   433,977         805,529
                                    -----------     -----------
                                    $ 1,811,998     $ 2,289,698
                                    ===========     ===========

                                      F-13
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


8.  NOTES PAYABLE:

     Notes payable consists of the following:

<TABLE>
<CAPTION>

                                                                          December 31,               December 31,
                                                                             2001                       2000
                                                                         ------------               ------------
<S>                                                                     <C>                         <C>
Notes payable, interest rates ranging from 3.9% to 9% with
monthly payments of $87,916, due dates ranging from
April 1, 2002 to June 4, 2004, collateralized by equipment               $ 1,377,503                 $ 2,397,756

Notes payable, interest rates ranging from 9.0% to 9.33% with
monthly payments of $9,958, due dates ranging from August
15, 2003 to December 31, 2004, collateralized by land                        218,862                     313,067

Notes payable, interest rates ranging from 0% to 8.11% with
monthly payments of $18,680, due dates ranging from July
5, 2002 to November 1, 2004, collateralized by equipment                     285,890                     484,677

Notes payable, variable interest rate currently at 4.75%, interest
rate is based on Chase Manhattan Bank's prime, with monthly
principal payments of $15,536, due dates ranging from
July 14, 2005 to May 13, 2006, collateralized by equipment                   797,102                   3,045,659

Non-interest bearing note payable, with monthly payments of
$5,012, due September 28, 2004, collateralized by equipment                  165,394                           -

Notes payable, interest rates ranging from 4.5% to 8.84%, with
monthly payments of $33,099, due dates ranging from December
20, 2004 to February 27, 2006, collateralized by equipment                 1,325,362                           -

Note payable, variable interest rate currently at 5.0%, interest
rate is based on Chase Manhattan Bank's prime plus .25%.
Effective March 2002, the line of credit was amended
to bear interest at Chase Manhattan Bank's
prime plus 1.5%, with interest only payments until
January 1, 2003, due December 31, 2006, collateralized
by all assets of the Company (See Note 9)                                  7,000,000                    3,037,848
                                                                        ------------                  -----------
                                                                          11,170,113                    9,279,007
Less:  current portion                                                    (1,685,634)                  (1,604,399)
                                                                        ------------                  -----------
                                                                        $  9,484,479                  $ 7,674,608
                                                                        ============                  ===========
</TABLE>

     Following are maturities of long-term debt for each of the next 5 years:

                           2002       $ 1,685,634
                           2003         2,817,172
                           2004         2,418,334
                           2005         2,261,051
                           2006         1,987,922
                                      -----------
                                      $11,170,113
                                      ===========

                                      F-14
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  LINE OF CREDIT:

     In July 2000, the Company entered into a revolving loan agreement ("line of
credit").  Under the terms of the agreement, the Company may borrow up to
$7,000,000 at Chase Manhattan Bank's prime, plus .25% through December 31, 2001
at which time the line of credit was to convert to a term agreement requiring
monthly principal and interest payments through December 31, 2005.  The line of
credit is collateralized by all of the Company's assets.  Under the terms of the
line of credit, the Company is required to maintain a certain level of tangible
net worth.  In addition, the Company is also required to maintain a ratio of
total debt to tangible net worth.  As of December 31, 2001, the Company was not
in compliance with the tangible net worth covenant.  Effective March 2002, the
Company amended the line of credit agreement.  Under the terms of the amended
agreement, the interest rate increased to Chase Manhattan Bank's prime, plus
1.5% through January 1, 2003 at which time the line of credit converts to a term
agreement requiring monthly principal and interest payments through December 31,
2006. In connection with the amendment, the Company obtained a waiver from non-
compliance with the tangible net worth convenant as of December 31, 2001. As of
December 31, 2001, the Company had withdrawn the entire $7,000,000 from the line
of credit.

10. RELATED PARTY TRANSACTIONS:

     Management believes that the fair value of the following transactions
reflect current amounts that the Company could have consummated transactions
with other third parties.

  Revenue:

     During the years ended December 31, 2001 and 2000, the Company provided
construction materials to various related parties in the amounts of $108,112 and
$26,556, respectively.  Included in accounts receivable at December 31, 2001 and
2000 are amounts due from related parties, in the amounts of $27,337 and
$15,132, respectively.

  Professional Services:

     During the years ended December 31, 2001, 2000 and 1999, a related party
rendered professional services to the Company in the amounts of $14,573, $23,342
and $7,944, respectively.  During the years ended December 31, 2001, 2000 and
1999, the Company paid $30,000, $30,000 and $5,000, respectively, to outside
members of the board of directors.

  Subcontractor/Supplier:

     Various related parties provided materials and equipment used in the
Company's construction business during the years ended December 31, 2001, 2000
and 1999, in the amounts of $4,114,319, $535,694, and $65,441, respectively.
Included in accounts payable at December 31, 2001 and 2000 are amounts due to
related parties, in the amounts of $1,046,908 and $154,861, respectively,
related to supplies.

  Royalties:

     During the years ended December 31, 2001, 2000 and 1999, the Company paid a
related party mining royalties in the amounts of $390,144, $328,310, and
$182,061, respectively. Included in accrued liabilities December 31, 2001 and
2000 are amounts due to related parties, in the amounts of $30,464 and $49,983,
respectively, related to royalties.

 Commitments:

     The Company leased office space in Moapa, Nevada on a month-to-month basis,
at a rental rate of $840 per month, from a related party of the Company. The
lease terms also required the Company to pay common area maintenance, taxes,
insurance and other costs. Rent expense under the lease for the years ended
December 31, 2001, 2000 and 1999 amount to $9,240, $10,080 and $10,080,
respectively.

                                      F-15
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. INCOME TAXES:

     The provisions for income taxes benefit (expense) from continuing
operations consist of the following:


                          For the Years Ended December 31,
                         ------------------------------------
                            2001       2000          1999
                         --------    --------    ------------
Current:
 Federal                 $ 30,183    $231,663    $  (851,180)
 State                          -      28,632       (105,202)
                         --------    --------    -----------
                           30,183     260,295       (956,382)
Deferred                  638,448      24,566       (634,098)
                         --------    --------    -----------
                         $668,631    $284,861    $(1,590,480)
                         ========    ========    ===========

     The Company's deferred tax asset (liability) consists of the following:


                                December 31,    December 31,
                                    2001            2000
                                ------------    ------------
Deferred tax asset:
 Other                           $   613,705     $   269,137
 NOL carryforward                  1,344,218         604,304
                                 -----------     -----------
                                   1,957,923         873,441
Deferred tax liability:
 Depreciation                     (2,718,734)     (2,272,700)
                                 -----------     -----------
Net deferred tax liability       $  (760,811)    $(1,399,259)
                                 ===========     ===========

     For the years ended December 31, 2001, 2000 and 1999, the effective tax
rate differs from the federal statutory rate primarily due to state income taxes
and permanent differences, as follows:



                                        For the Years Ended December 31,
                                     ------------------------------------
                                         2001            2000          1999
                                     -----------     -----------    ---------
Statutory rate applied to income
 (loss) before income taxes          $(1,085,471)    $ (632,212)    $1,334,160

State taxes, net of federal benefit      (35,902)       (61,362)       131,949

Increase (decrease) in income taxes
 resulting from:
  Non-Deductible items                   525,015         50,557              -
  Other                                  (72,273)       358,156        124,731
                                     -----------     ----------     ----------
                                     $  (668,631)    $ (284,861)    $1,590,840
                                     ===========     ==========     ==========

                                      F-16
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. COMMITMENTS:

     The Company is currently leasing office space in Phoenix, Arizona under a
non-cancelable operating lease agreement expiring in December 2003.  During
December 1998, the Company amended the original lease.  The amended lease
agreement provides for monthly payments of $8,280 through December 31, 2001,
$8,694 from January 1, 2002 through December 31, 2002 and $9,108 from January 1,
2003 through December 31, 2003.  The lease also requires the Company to pay
common area maintenance, taxes, insurance and other costs.  Rent under the
aforementioned operating lease was $115,059,  $96,765 and $89,152 for the years
ended December 31, 2001, 2000 and 1999, respectively.

     The Company leases office space, batch plants, equipment, mixer trucks,
property and aggregate supply under leases expiring in various years through
2010.  Rent under the aforementioned operating leases were $8,307,423,
$4,369,138 and $2,374,109 for the years ended December 31, 2001, 2000 and 1999,
respectively.  Minimum future rental payments under non-cancelable operating
leases having remaining terms in excess of one year as of December 31, 2001 for
each of the next five years and in aggregate are:


                        2002                     $ 5,594,036
                        2003                       5,258,727
                        2004                       4,834,046
                        2005                       3,193,778
                        2006                       1,747,355
                        Subsequent to 2006         3,671,067
                                                 -----------
                                                 $24,299,009
                                                 ===========

     The Company has entered into employment contracts with some of its
executive officers that provide for an annual salary, issuance of the Company's
common stock and various other benefits and incentives.  As of the end of
December 31, 2001, 2000 and 1999, the total commitments, excluding benefits and
incentives, amount to $498,875, $870,188 and $1,530,438, respectively.

     The Company is the lessee of batch plants, equipment and vehicles under
capital leases expiring in various years through 2006.  The assets and
liabilities under a capital lease are initially recorded at the lower of the
present value of the minimum lease payments or the fair value of the asset.
Each asset is depreciated over the lower of the expected useful life or the
lease term.  Depreciation on the assets under capital leases charged to expense
in 2001, 2000 and 1999 was $621,147, $762,548 and $559,348, respectively.  At
December 31, 2001 and 2000, property and equipment included $5,017,796 and
$6,895,120, respectively, of vehicles and equipment under capital leases.

    Minimum future lease payments under capital leases as of December 31, 2001
for each of the next five years and in aggregate are:


           2002                                            $ 1,400,875
           2003                                              1,197,078
           2004                                              1,046,391
           2005                                                695,891
           2006                                                414,717
                                                           -----------
           Total minimum payments                            4,754,952
           Less:  executory costs                                 (186)
                                                           -----------
           Net minimum lease payments                        4,754,766
           Less:  amount representing interest                (672,516)
                                                           -----------
           Present value of net minimum lease payment        4,082,250
           Less:  current portion                           (1,118,055)
                                                           -----------
                                                           $ 2,964,195
                                                           ===========


                                      F-17
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. STOCKHOLDERS' EQUITY:

  Preferred Stock:

     The Company has authorized 1,000,000 shares of $.001 par value preferred
stock to be issued, with such rights, preferences, privileges, and restrictions
as determined by the Board of Directors.

  Initial Public Offering:

     During October 1995, the Company completed an initial public offering
("Offering") of Units of the Company's securities.  Each unit consisted of one
share of $.001 par value common stock and one redeemable common stock purchase
warrant ("Warrant").  Each Warrant is exercisable to purchase one share of
common stock at $7.20 per share for a period of 5 years from the date of the
Offering.  The Offering included the sale of 1,926,250 Units at $6.00 per Unit.
Net proceeds of the Offering, after deducting underwriting commissions and
offering expenses of $2,122,080, amounted to $9,435,420.  In connection with the
Offering, the Company granted the underwriters warrants to purchase 167,500
shares of common stock at $7.20 per share for a period of twelve months from the
date of the offering and for a period of four years thereafter.  In September
2000, the exercise price of the warrants was reduced to $5.00 per share and the
exercise period was extended until June 30, 2002.

14. LITIGATION AND CLAIM MATTERS:

     The Company is a party to legal proceedings in the ordinary course of its
business.  With the exception of those matters detailed below, the Company
believes that the nature of these proceedings (which generally relate to
disputes between the Company and its subcontractors, material suppliers or
customers regarding payment for work performed or materials supplied) are
typical for a construction firm of its size and scope, and no other pending
proceedings are material to its financial condition.

     The following proceedings represent matters that may become material and
have already been or may soon be referred to legal counsel for further action:

Requests for Equitable Adjustment to Construction Contracts.  The Company has or
will make claims as described below on the following contracts:

(1)  Five contracts with the New Mexico State Highway and Transportation
     Department - The approximate total value of claims on these projects is
     $35,271,841 of which approximately $23,146,407 is on behalf of MVCI and the
     balance of $12,125,434 is on behalf of the prime contractor or
     subcontractors.  The primary issues are changed conditions, plan errors and
     omissions, contract modifications and associated delay costs.  In addition,
     the projects were not completed within the adjusted contract time because
     of events giving rise to the claims.  The prosecution of the claims will
     include the appropriate extensions of contract time to offset any potential
     liquidated damages.
(2)  Clark County, Nevada - The approximate total value of claims on this
     project is $19,135,397 of which approximately $12,885,265 is on behalf of
     subcontractors.  The primary issues are changed conditions, plan errors and
     omissions, contract modifications and associated delay costs.

     The above claims combined total approximately $54,407,238.  Of that sum,
the Company's portion of the claims total approximately $29,396,539 and the
balance of approximately $25,010,699 pertains to prime contractor or
subcontractors' claims.  Relative to the aforementioned claims, the Company has
recorded approximately $7,754,448 in claim revenue to offset costs incurred to-
date on the claims.  In addition, the Company has also recorded approximately
$1,817,831 for unpaid quantities, unpaid change orders, and pending change
orders in advance of receipt.  Although the Company believes these amounts
represent a reasonably conservative posture, any claims proceeds and payments
for previously unpaid quantities, unpaid change orders and pending change orders
ultimately paid to the Company less than $9,572,279 will reduce net income.
Conversely, a payment for those same items in excess of $9,572,279 will increase
net income.

                                      F-18
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. LITIGATION AND CLAIM MATTERS (CONTINUED):

Lawsuits Filed Against Meadow Valley Contractors, Inc. or Meadow Valley
Corporation

(1)  Innovative Construction Systems, Inc. ("ICS"), District Court, Clark
     County, NV - ICS was a subcontractor to MVCI on several projects.  ICS
     failed to make payments of payroll, pension funds contributions and other
     taxes for which the Internal Revenue Service garnished any future payments
     due ICS on MVCI projects.  As a result, ICS failed to supply labor to
     perform its work and defaulted on its subcontracts.  MVCI terminated the
     ICS subcontracts and performed the work with MVCI personnel.  ICS alleges
     it was wrongfully terminated and is asserting numerous claims for damages.
     ICS claims against MVCI total approximately $15,000,000.  The Company does
     not believe ICS' claims have merit and intends to vigorously defend against
     these claims and will eventually seek to recover the damages ICS has caused
     the Company through its failure to perform.
(2)  AnA Enterprises, LLC ("AnA"), District Court, Clark County, NV - AnA
     supplied equipment to MVCI on a project under terms of a variety of
     agreements.  AnA is suing MVCI for non-payment.  MVCI has counter-sued for
     cost overruns deemed to be the responsibility of AnA.  AnA's suit against
     MVCI is for approximately $3,000,000.  MVCI's countersuit against AnA is
     for approximately $2,000,000.  AnA has also filed a complaint on two other
     projects completed in 1997 where they were a subcontractor to MVCI in the
     same jurisdiction in the amount of approximately $715,000 for changed
     conditions.  The Company does not believe AnA's claims have merit and
     intends to vigorously defend against these claims.
(3)  Progressive Contracting Inc. ("PCI"), District Court, Clark County, NV -
     PCI was a subcontractor to MVCI on a project where there is a dispute with
     the owner regarding delays to the project.  PCI claims they were damaged by
     these delays in an amount in excess of $300,000.  The Company believes that
     under the terms of the contract with PCI they are only entitled to
     compensation for the delays if MVCI is compensated by the owner.  MVCI has
     submitted PCI's claims to the owner and they are included in the total
     claim amount.
(4)  The Company is defending a claimed preference in connection with a payment
     made to it by an insurance company in the approximate amount of $100,000.
     The Company believes that the payment is not a preference, and is
     vigorously defending the action.
(5)  The Company and all of its directors were served with a civil complaint by
     Silver State Materials Corp. and Cyrus Spurlino.  The complaint primarily
     alleges that the Company's October 1995 Registration Statement on Form S-1
     was misleading in stating that the Company's directors were elected on a
     staggered basis because the Company's Bylaws, providing for such staggered
     term, were not so amended until April 1997, and that such amendment was not
     filed with the Securities and Exchange Commission.  The complaint seeks (i)
     to terminate all of the Company's directors for cause, (ii) to elect a new
     Board of Directors, (iii) to cause the Company to enact amended and
     restated bylaws, (iv) for monetary damages in an undisclosed amount, (v)
     for interest, fees and costs, and (vi) for such other relief as the
     District Court may deem appropriate.  The Company believes that the
     complaint is without merit and intends to vigorously defend it.

15. STATEMENT OF CASH FLOWS:

  Non-Cash Investing and Financing Activities:

     The Company recognized investing and financing activities that affected
assets, liabilities, and equity, but did not result in cash receipts or
payments.  These non-cash activities are as follows:

     During the years ended December 31, 2001, 2000 and 1999, the Company
financed the purchase of property, plant and equipment in the amounts of
$2,141,357, $4,044,329 and $4,987,308, respectively.

     During the year ended December 31, 1999, the Company received $135,000
trade in value on equipment.

     During the year ended December 31, 2000, the Company sold a piece of
equipment for a total purchase price of $80,000.  The Company received a cash
payment in the amount of $20,000; a piece of equipment valued at $20,000 and
accepted the remaining $40,000 to be paid in two equal installments of $20,000.
Included in accounts receivable, net at December 31, 2000, is $40,000 related to
the aforementioned sale.  During the first quarter of 2001, the Company had
collected the entire accounts receivable amount.

                                      F-19
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. SIGNIFICANT CUSTOMERS:

     For the years ended December 31, 2001, 2000 and 1999, the Company
recognized a significant portion of its revenue from four Customers (shown as an
approximate percentage of total revenue):


                          For the Years Ended December 31,
                          --------------------------------
                               2001    2000    1999
                               ----    ----    ----
    A                          21.9%   17.5%   26.2%
    B                          12.5%   16.3%   28.7%
    C                           9.6%   23.0%   17.2%
    D                          14.7%    6.1%    5.8%


     At December 31, 2001 and 2000, amounts due from the aforementioned
Customers included in restricted cash and accounts receivables, are as follows:

                       For the Years Ended December 31,
                       --------------------------------
                           2001                 2000
                           ----                 ----
    A                  $3,809,567           $2,968,786
    B                   6,255,403            1,855,666
    C                     350,962            1,124,196
    D                   2,218,976              762,181

17. STOCK OPTION PLAN:

     In November 1994, the Company adopted a Stock Option Plan providing for the
granting of both qualified incentive stock options and non-qualified stock
options.  The Company has reserved 1,200,000 shares of its common stock for
issuance under the Plan.  Granting of the options is at the discretion of the
Board of Directors and may be awarded to employees and consultants.  Consultants
may receive only non-qualified stock options. The maximum term of the stock
options are 10 years and may be exercised as follows: 33.3% after one year of
continuous service, 66.6% after two years of continuous service and 100% after
three years of continuous service.  The exercise price of each option is equal
to the market price of the Company's common stock on the date of grant.

     The following summarized the stock option transactions:




                                                               Weighted Average
                                                Shares          Price per Share
                                              ----------       ----------------
    Outstanding January 1, 1999                 622,075              $5.43
       Granted                                  165,500               5.43
       Forfeited                                (14,700)              5.43
                                               --------
    Outstanding December 31, 1999               772,875               5.12
       Forfeited                               (101,525)              5.23
                                               --------
    Outstanding December 31, 2000               671,350               5.11
       Granted                                  201,300               2.44
       Forfeited                               (101,000)              4.80
                                               --------
    Outstanding December 31, 2001               771,650               4.45
                                               ========

                                      F-20
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. STOCK OPTION PLAN (CONTINUED):

     Information relating to stock options at December 31, 2001 summarized by
exercise price is as follows:


<TABLE>
<CAPTION>
                                           Outstanding                                 Exercisable
                              ---------------------------------------------   ---------------------------
                                                   Weighted Average                      Weighted Average
                                          ---------------------------------              ----------------
                                                Remaining
Exercise Price Per Share       Shares     Life ( In Years)   Exercise Price    Shares     Exercise Price
------------------------       --------   ----------------   --------------    ------     --------------
<S>                            <C>        <C>                <C>               <C>        <C>
$6.25                           139,700                 4          $   6.25    139,700             $ 6.25
$5.41                             2,500                 5              5.41      2,500               5.41
$4.375                          144,050                 5             4.375    144,050              4.375
$5.31                            80,000                 6              5.31     80,000               5.31
$5.875                           91,000                 7             5.875     91,000              5.875
$4.563                           20,000                 8             4.563     13,334              4.563
$4.00                            20,000                 8              4.00     13,333               4.00
$3.875                           83,600                 8             3.875     55,734              3.875
$2.438                          190,800                10             2.438          -              2.438
---------------                 -------                            --------    -------             ------
$2.438 to $6.25                 771,650                            $   4.45    539,651             $ 4.45
===============                 =======                            ========    =======             ======

</TABLE>

     All stock options issued to employees have an exercise price not less than
the fair market value of the Company's Common Stock on the date of grant.  In
accordance with accounting for such options utilizing the intrinsic value
method, there is no related compensation expense recorded in the Company's
financial statements for the years ended December 31, 2001, 2000 and 1999.  Had
compensation cost for stock-based compensation been determined based on the fair
value of the options at the grant dates consistent with the method of SFAS 123,
the Company's net income (loss) and earnings per share for the years ended
December 31, 2001, 2000 and 1999 would have been reduced to the proforma amounts
presented below:

<TABLE>
<CAPTION>

                                                     2001            2000             1999
                                                 -----------      -----------      ----------
<S>                                              <C>              <C>              <C>
Net income (loss)
 As Reported                                     $(2,523,931)     $(1,574,586)     $2,340,106
 Proforma                                         (2,625,728)      (1,721,988)      1,784,024

Basic net income (loss) per common share
 As Reported                                     $     (0.71)     $     (0.44)     $     0.67
 Proforma                                              (0.74)           (0.49)           0.51

Diluted net income (loss) per common share
 As Reported                                     $     (0.71)     $     (0.44)     $     0.66
 Proforma                                              (0.74)           (0.49)           0.51
</TABLE>

     The fair value of option grants is estimated as of the date of grant
utilizing the Black-Scholes option-pricing model with the following weighted
average assumptions for grants in 2001:  expected life of options of 5 years,
expected volatility of 60.85%, risk-free interest rates of 8%, and a 0% dividend
yield and 1999: expected life of options of 5 years, expected volatility of
54.87%, risk-free interest rates of 8.0%, and a 0% dividend yield.  The weighted
average fair value at date of grant for options granted during 2001 and 1999
approximated $.97 and $1.13, respectively.

                                      F-21
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. BASIC EARNINGS (LOSS) PER SHARE:

      The Company's basic net income (loss) per share at December 31, 2001, 2000
and 1999 were computed by dividing net income for the period by 3,559,938,
3,549,458 and 3,518,510, respectively, the basic weighted average number of
common shares outstanding during the period.

      The Company's diluted net loss per common share at December 31, 2001 is
computed based on the weighted average number of shares of common stock
outstanding during the period.  Options to purchase 771,650 at a range of $2.438
to $6.25 per share were outstanding during 2001, but were not included in the
computation of diluted net loss per common shares because the options' exercise
price was greater than the average market price of the common share.

      The Company's diluted net income per common share at December 31, 2000 is
computed based on the weighted average number of shares of common stock
outstanding during the period.  Options to purchase 671,350 at a range of $3.875
to $6.25 per share were outstanding during 2000, but were not included in the
computation of diluted net income per common share because the options' exercise
price was greater than the average market price of the common share.

      The Company's diluted net income per common share at December 31, 1999
includes 11,195 common shares that would be issued upon exercise of outstanding
stock options.  Options to purchase 429,705 at a range of $5.31 to $6.25 per
share were outstanding during 1999, but were not included in the computation of
diluted net income per common share because the options' exercise price was
greater than the average market price of the common share.

19. Discontinued Operations:

      In June 1998, the Company adopted a formal plan (the "Plan") to
discontinue the operations of Prestressed Products Incorporated ("PPI"). The
Plan included the completion of approximately $2.8 million of uncompleted
contracts and the disposition of approximately $1.2 million of equipment.
Accordingly, the Company has reclassified the operations of PPI as discontinued
operations in the accompanying statements of operations. The Company recorded an
estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related
to the disposal of assets for PPI, which included a provision of $1,350,000 for
estimated operating losses during the phase-out period. During the year ended
December 31, 1999, $598,172 of the expected losses was incurred (net of income
tax benefit of $398,743).

      The revenue of PPI for the year ended December 31, 1999 was $1,460,381.
These amounts are not included in revenue in the accompanying statements of
operations.

      The accompanying consolidated balance sheet as of December 31, 1999
reflects the net liabilities and the estimated loss as a single amount as
follows:

                                                   December 31,
                                                      1999
                                                   -----------
      Current assets                               $   653,668
      Non-current assets                                   -
      Liabilities                                     (242,113)
                                                   -----------
         Net assets                                    411,555
      Estimated loss on disposition                   (217,717)
                                                   -----------
      Net asset of discontinued operations         $   193,838
                                                   ===========

                                      F-22
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. SUBSEQUENT EVENTS:

      In January 2002, the Company amended the line of credit agreement.  Under
the terms of the amended agreement, the interest rate increased to Chase
Manhattan Bank's prime, plus .5% through January 1, 2003 at which time the line
of credit converts to a term agreement requiring monthly principal and interest
payments through December 31, 2006.

      In January 2002, the Company refinanced 22 mixer trucks for $830,625.  The
mixer trucks were previously recorded under a operating lease agreement.  The
note payable obligation has an interest rate of 6.65%, with monthly payments of
$25,515, and is due January 2005.

      In February 2002, the Company entered into a non-binding letter of intent
to sell Ready Mix, Inc. to RMI Enterprises, LLC.

      In February 2002, the Company financed the purchase of equipment in the
amount of $16,129.  The note payable is non-interest bearing, with monthly
payments of $1,344, and is due February 2003.

      In March 2002, the Company financed the purchase of equipment in the
amount of $77,891. The note payable obligation has an interest rate of 7.9%,
with monthly payments of $3,496, and is due February 2004.

      In March 2002, the Company refinanced 10 mixer trucks for $332,700.  The
mixer trucks were previously recorded under an operating lease agreement.  The
capital lease agreement has an interest rate of 6.9%, with monthly payments of
$10,238, and is due April 2005.

      In March 2002, the Company is in negotiations to refinance 8 mixer trucks,
which were previously recorded under operating lease agreements.

      In March 2002, the Company executed a definitive agreement to sell mineral
leases and related equipment and other assets pertaining to the sand and gravel
operation near Prescott, Arizona.

      In March 2002, the Company amended the line of credit agreement.  Under
the terms of the amended agreement, the interest rate increased to Chase
Manhattan Bank's prime, plus 1.5% through January 1, 2003 at which time the
line of credit converts to a term agreement requiring monthly principal and
interest payments through December 31, 2006.

      In March 2002, the Company terminated the non-binding letter of intent to
sell Ready Mix, Inc. to RMI Enterprises, LLC.

21. OTHER INFORMATIVE DISCLOSURES:

      The construction materials operation manufactures and distributes ready
mix concrete and sand and gravel products in the Las Vegas, NV and Phoenix, AZ
markets. Prospective customers include concrete subcontractors, prime
contractors, homebuilders, commercial and industrial property developers, pool
builders and homeowners. Construction materials sales first began from a single
location in March 1997 and, by the end of 2000, expanded to two locations in the
Las Vegas, NV vicinity, one location in the Moapa, NV vicinity and two locations
in the Phoenix, AZ vicinity.

      The construction services operation of the Company generates revenue by
providing construction services, usually under terms of a contract with an owner
or a subcontract with another contractor.

                                      F-23
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

21. OTHER INFORMATIVE DISCLOSURES (CONTINUED):

      The following is a summary of certain financial items of the Company's two
main areas of operations for 2001, 2000 and 1999:
<TABLE>
<CAPTION>
                                                           Construction       Construction
                                                            Services           Materials
                                                           ------------       ------------
<S>                                                        <C>                <C>
      For the twelve months ended December 31, 2001
      Gross revenue                                        $ 143,129,246      $ 32,625,131
      Intercompany revenue                                             -         1,691,229
      Cost of revenue                                        140,058,139        31,037,877
      Interest income                                            299,887            19,910
      Interest expense                                          (302,489)         (183,448)
      Depreciation and amortization                            1,999,626           811,416
      Income (loss) before taxes                              (2,698,403)         (494,159)
      Income tax benefit (expense)                               756,333           (87,702)
      Net income (loss)                                       (1,942,070)         (581,861)
      Total assets                                            47,963,143        14,185,899

      For the twelve months ended December 31, 2000
      Gross revenue                                        $ 144,608,886      $ 20,330,715
      Intercompany revenue                                           -           1,366,343
      Cost of revenue                                        140,684,222        19,617,224
      Interest income                                            614,118            32,362
      Interest expense                                          (177,850)          (73,146)
      Depreciation and amortization                            2,018,501           662,536
      Income (loss) before taxes                                (532,354)       (1,327,093)
      Income tax benefit (expense)                              (210,145)          495,006
      Net income (loss)                                         (742,499)         (832,087)
      Total assets                                            42,043,028        13,343,002

      For the twelve months ended December 31, 1999
      Gross revenue                                        $ 195,589,962      $ 15,664,030
      Intercompany revenue                                           -           1,251,720
      Cost of revenue                                        187,258,844        14,063,702
      Interest income                                            648,922            20,006
      Interest expense                                          (132,637)          (77,235)
      Depreciation and amortization                            1,820,981           279,170
      Income (loss) before taxes                               3,493,888           436,698
      Income tax benefit (expense)                            (1,427,294)         (163,186)
      Net income (loss)                                        2,066,594           273,512
      Total assets                                            48,664,190         9,890,632
</TABLE>

     There are no differences in accounting principles between the operations.
All centrally incurred costs are allocated to the construction services
operation.  Intercompany revenue is eliminated at cost to arrive at consolidated
revenue and cost of revenue.

                                      F-24
<PAGE>

                   MEADOW VALLEY CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


22. QUARTERLY FINANCIAL DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                                 March 31,           June 30,        September 30,       December 31,
                                              -------------       -------------      -------------      -------------
<S>                                           <C>                  <C>                <C>                <C>
2001
Revenue                                       $  35,353,537       $  45,476,667      $  52,619,530      $  40,613,414
Gross Profit                                        190,604           2,150,370          2,205,774            111,613
Income (loss) from operations                    (1,548,077)            417,024            704,325         (2,977,534)
Net income (loss)                                (1,017,359)            537,702            325,453         (2,369,727)
Basic net income (loss) per common share              (0.29)               0.15               0.09              (0.66)
Diluted net income (loss) per common share            (0.29)               0.15               0.09              (0.66)
Basic weighted average common shares
   outstanding                                    3,559,938           3,559,938          3,559,938          3,559,938
Diluted weighted average common shares
   outstanding                                    3,559,938           3,559,938          3,559,938          3,559,938

2002
Revenue                                       $  38,589,472       $  45,378,857      $  44,434,571      $  35,170,358
Gross Profit                                      1,784,830           1,413,572          1,742,034           (302,281)
Income (loss) from operations                       210,286             (61,337)           (50,655)        (2,237,979)
Net income (loss)                                   227,164              15,366             17,515         (1,834,631)
Basic net income (loss) per common share               0.06                0.01                -                (0.51)
Diluted net income (loss) per common share             0.06                0.01                -                (0.51)
Basic weighted average common shares
   outstanding                                    3,518,018           3,559,938          3,559,938          3,559,938
Diluted weighted average common shares
   outstanding                                    3,518,018           3,559,938          3,559,938          3,559,938
</TABLE>

                                      F-25