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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, 2002

|     |  |                                                                                              
|---- |  | ---------------------------------------------------------------------------------------------
|[  ] |  | 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
incorporation or organization) |  | (IRS Employer 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               

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. [   ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).  Yes           No  X

On March 14, 2003, the aggregate market value of the registrants voting
stock held by non-affiliates was $3,791,228.

On March 14, 2003, there were 3,601,250 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, 2002.

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TABLE OF CONTENTS



|                  |                                                                                               |  |  |  |  |  |  | 
|----------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I           
|                  | Item 1. Business                                                                             
|                  | Item 2. Properties                                                                           
|                  | Item 3. Legal Proceedings                                                                    
|                  | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II          
|                  | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                  | Item 6. Selected Financial Data                                                              
|                  | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                  | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                          
|                  | Item 8. Financial Statements and Supplementary Data                                          
|                  | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III         
|                  | Item 10. Directors and Executive Officers of the Registrant                                  
|                  | Item 11. Executive Compensation                                                              
|                  | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                  | Item 13. Certain Relationships and Related Transactions                                      
|                  | Item 14. Controls and Procedures                                                             
|PART IV          
|                  | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|Index to Exhibits
|EX-10.208        
|EX-10.209        
|EX-10.210        
|EX-10.211        
|EX-10.212        
|EX-10.213        
|EX-10.214        
|EX-10.215        
|EX-10.216        
|EX-10.217        
|EX-10.218        
|EX-10.219        
|EX-10.220        
|EX-10.221        
|EX-10.222        
|EX-10.223        
|EX-10.224        
|EX-10.225        
|EX-10.226        
|EX-10.227        
|EX-10.228        
|EX-10.229        
|EX-10.230        
|EX-99.12         
|EX-99.13         
|EX-99.14         



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MEADOW VALLEY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2002

TABLE OF CONTENTS

|         |  |                                                                                       |  |     
|-------- |  | ------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                       |  | PAGE
|         |  |                                                                                       |  |     
|         |  | PART I                                                                                |  |     
|Item 1.  |  | Business                                                                              |  | 3   
|Item 2.  |  | Properties                                                                            |  | 10  
|Item 3.  |  | Legal Proceedings                                                                     |  | 11  
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                   |  | 13  
|         |  | PART II                                                                               |  |     
|Item 5.  |  | Market for the Registrants Common Equity and Related Stockholders Matters            |  | 13  
|Item 6.  |  | Selected Financial Data                                                               |  | 15  
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results
of Operations |  | 16  
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 22  
|Item 8.  |  | Financial Statements and Supplementary Data                                           |  | 23  
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure  |  | 23  
|         |  | PART III                                                                              |  |     
|Item 10. |  | Directors and Executive Officers of the Registrant                                    |  | 23  
|Item 11. |  | Executive Compensation                                                                |  | 23  
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 23  
|Item 13. |  | Certain Relationships and Related Transactions                                        |  | 23  
|Item 14. |  | Controls and Procedures                                                               |  | 23  
|         |  | PART IV                                                                               |  |     
|Item 15. |  | Exhibits, Financial Statement Schedule and Reports on Form 8-K                        |  | 25  

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PART I




Item 1.Business

Recent Developments

Meadow Valley Corporation (Company) experienced improvements in several
key areas over the past year. From year end 2001 to year end 2002, working
capital increased from a deficit of $1,194,786 to a surplus of $805,159, the
debt to equity ratio improved from 1.42:1 to 1.35:1, the current ratio improved
from 0.97 to 1.03 and cash flow from operations increased from $.09 million to
$2.9 million, respectively. These improvements have marginally decreased the
challenge of managing the Companys working capital, however, as has been
previously reported, working capital will likely continue to remain at
decreased levels until successful resolution of the construction contract
claims filed against the New Mexico State Highway and Transportation Department
and the Clark County Department of Public Works.

The Companys bonding capacity (that determines the size and number of
projects the Company can bid on and obtain as a provider of construction
services) has been constrained since 2001 when, in general, it was reduced to
an aggregate program of $75 million and a single project limit of $10 million.
The Companys aggregate bonding capacity had peaked in 2000 at approximately
$300 million with a single project limit of approximately $110 million.
Operating losses in 2000 and 2001, mostly stemming from cost overruns on
contracts for which claims are now being pursued, were the primary cause of
decreased bonding capacity.

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 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. In June 2002, the Company announced the
Boards decision to extend the exercise period of the warrants to December 31,
2002. In December 2002, the Company announced its intent to de-list the
warrants following their expiration on December 31, 2002. The warrants expired
and were de-listed at the time of market closing on December 31, 2002.

The Company currently has two wholly owned subsidiaries, Meadow Valley
Contractors, Inc. (MVCI) and Ready Mix, Inc (RMI). MVCI was founded in
1980 as a heavy construction contractor and has been engaged in that activity
since inception. Since the Company purchased all of the outstanding Common
Stock of MVCI on October 1, 1994, references to the Companys history includes
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 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 manufactures
and distributes ready mix concrete, crushed landscaping rock and other
miscellaneous rock and sand products. RMI owns and operates four ready mix
concrete batch plants  two in the Las Vegas, NV area and two in the

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Phoenix, AZ area and 95 ready mix trucks as well as a small fleet of
aggregate hauling tractors and trailers. RMI 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 $69 million at December 31, 2002,
compared to approximately $76 million at December 31, 2001, and consists of
various projects in Nevada, Arizona and Utah. Approximately $60 million of the
Companys backlog is scheduled for completion during 2003. 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.

Business Strategy

Given the Companys current bonding constraints, the Companys strategy is
to maintain recent historical revenue levels 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 Company will strive to improve margins on new contracts by,
among other things, increasing, when possible, margins on new work bidding,
maximizing labor and equipment productivity, negotiating more favorable
material purchase contracts and employing the most competitive subcontractors.

(ii)  Due to the need for additional working capital, the Company may seek
to sell certain mineral lease assets and other assets. The increase in working
capital will improve its liquidity and should provide additional bonding
capacity, thereby allowing the Company to bid larger more profitable projects.

(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 utility right of ways, delays not caused by the
Company and misadministration by third party construction managers employed by
the owners. The total amount of claims that have been submitted and remain
unpaid is approximately $46.7 million. This amount includes costs

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that are attributable to subcontractors and to a prime contractor. The
Companys portion of the claims is approximately $30.1 million. The Company
recorded approximately $8.3 million in claim revenue to offset a portion of
costs incurred on the claims. In addition, the Company has also recorded
approximately $.1 million for unpaid quantities, unpaid change orders and
pending change orders in advance of receipt. On the average, the Company has
recorded approximately 27.7% of the total claim amount into revenue.
Management believes that successful resolution to the 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 strives to adjust its overhead costs based on its 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.

v) Increase revenue and profit from construction materials segment. The
Company will add to its ready mix truck fleet to increase delivery capacity to
better service its customers and increase sales. The Company will also strive
to negotiate strategic arrangements to provide delivery of product to increased
geographic areas within existing markets.

Market Overview

The construction market for 2003 is faced with uncertainty. Budget
deficits at both State and Federal levels will undoubtedly put pressure on
funding for transportation infrastructure construction. The overall sluggish
economy is not expected to provide any fuel for increased construction. At
best, 2003 will see single digit percentage declines in the various segments of
the construction industry. Commercial construction (non-residential buildings)
will probably be the slowest segment while single-family housing, made
attractive by low mortgage rates, will see the smallest declines. From a
national perspective, transportation infrastructure will likely see a decline
in activity, but still less than ten percent. Most funding for State highway
construction budgets originate from user fees, gas taxes or sales taxes and are
generally earmarked for construction spending. In addition, for States to
utilize Federal Highway funds, in most cases, they must match a certain
percentage of the Federal contribution. These factors will likely minimize
declines in State construction budgets.

One of the more significant issues facing the transportation
infrastructure segment of the construction industry is the reauthorization of
Federal highway legislation. TEA-21, passed into law in 1998, provided
approximately $164 billion in transportation funding during its six-year term.
But TEA-21 is set to expire in 2003. Assuming no increase in the Federal gas
tax, the projected revenue from gas tax receipts between fiscal 2004 and fiscal
2009 (the assumed duration of the next highway program legislation) would be
approximately $194 billion. Some industry experts believe this to be the
worst-case scenario for the next highway bill  an 18.5% increase over TEA-21.
However, the last two iterations of highway legislation reauthorizations have
failed to be completed prior to its predecessors expiration. The same thing
is likely to happen this year, with reauthorization probably not being
completed until sometime in 2004. This situation may cause piece-meal bid
lettings and inhibit States from effectively managing capital improvement
programs until they are able to see more clearly what the future holds. For
contractors, this means bidding on what manages to come through the pipeline,
but by not being able to formulate clear plans for future projects, be ready to
size the organization accordingly.

One of the Companys strengths is its geography. With operations in
Nevada, Arizona and Utah, the Company is in the heart of some of the fastest
growing markets in the U.S. Nevada has shown the fastest population growth
since the 2000 Census at 5.4%, followed by Arizona at 3.4%. Nevada has been
the fastest growing state in the United States for the past 15 years. In
addition, Nevada was ranked number one in the Country in job growth from
September 2001 to September 2002. The U.S. population continues to move toward
the sunbelt states. 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  both sectors also driven by population and job growth.
Residential construction activity in 2002 in the greater Phoenix, Arizona area
was second only to 2001. If interest rate levels remain low, residential
construction could continue to contribute to another successful year for RMI
sales in both Phoenix and Las Vegas.

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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, 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 or leases 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. On occasion, equipment owned by the Company may be rented on a
short-term basis to third parties. The net book value of the Companys
equipment at December 31, 2002 was approximately $14.6 million.

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 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, Albuquerque, NM, El Paso, TX and
Yuma, AZ. Of these locations, only the Nephi, UT pit is actively mined. At
the Nephi, UT location, 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. 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.

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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, 2002, revenue generated from 10 projects in Nevada, Arizona and
Utah represented approximately 40% 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, 2002, 2001 and 2000, 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,
|                                     |  |                                 
|                                     |  | 2002                             |      | 2001 |  | 2000
|                                     |  |                                  |      |      |  |     
|Arizona Department of Transportation |  |                                  | 21.4 | %    |  |      | 21.9 | % |  |  | 17.5 | %
|Clark County General Services        |  |                                  | 14.8 | %    |  |      | 12.5 | % |  |  | 16.3 | %
|Utah Department of Transportation    |  |                                  | 11.6 | %    |  |      | 14.7 | % |  |  | 6.1  | %
|Nevada Department of Transportation  |  |                                  | 1.1  | %    |  |      | 9.6  | % |  |  | 23.0 | %

Backlog

The Companys backlog (anticipated revenue from the uncompleted portions
of awarded projects) was approximately $69 million at December 31, 2002,
compared to approximately $76 million at December 31, 2001. At December 31,
2002, the Companys backlog included approximately $60 million of work that is
scheduled for completion during 2003. Accordingly, revenue in the future will
be significantly reduced if the Company is unable to obtain substantial new
projects in 2003. 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.

Currently the Company is limited to a single project bond approval of up
to $15 million and an aggregate program bond capacity of approximately $75
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 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.

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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 19.42% 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 portion of billings,
generally not exceeding 10%, until the project is completed satisfactorily and
all obligations of the contractor are paid.

8



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##### Table of Contents



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 $6 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 nearly all publicly
funded 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 in 2000 and 2001, due primarily to
losses on contracts with New Mexico and Clark County, Nevada, resulted in
decreased liquidity and a change in the Companys surety credit. Currently the
Company has surety credit up to $15 million on a single project and an
aggregate program bond capacity of approximately $75 million. The Company
believes its bonding capacity is sufficient to sustain existing levels of
workload but will limit growth. As the Companys performance continues to
improve, it is reasonable to assume that corresponding improvements in bonding
capacity will follow.

9



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##### Table of Contents



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, 2002, the Company employed approximately 63 salaried
employees (including its management personnel and executive officers) and
approximately 190 hourly employees. The number of hourly employees varies
depending upon the amount of construction in progress. For the year ended
December 31, 2002, the number of hourly employees ranged from approximately 175
to approximately 225 and averaged approximately 200. At December 31, 2002,
the Company was party to three project agreements in Arizona with the Arizona
State District Council of Carpenters, AFL-CIO that covers approximately 4% of
the Companys hourly workforce. At December 31, 2002, the Company believed its
relations with its employees are satisfactory.




Item 2.Properties

The Company leased the following properties at December 31, 2002:



| | (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 2003 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 2003, at a monthly rental
rate of $3,425.                                                                                                                   
|
| | (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



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##### Table of Contents



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 owns approximately 12 acres of land in Las Vegas, Nevada,
which it has available for sale.

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
made 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 $27,605,303 of which approximately $23,889,452 is
on behalf of the Company and the balance of $3,715,851 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,
constructive changes, plan errors and omissions, contract
modifications and associated delay costs.                                                                                                                                                                                                                                                                                                                                                                                       

The above claims combined total approximately $46,740,700. Of that sum,
the Companys portion of the claims total was approximately $30,139,584 and the
balance of approximately $16,601,116 pertains to prime contractor or
subcontractors claims. Total claim amounts reported by the Company are
approximate and are subject to revision as final documentation progresses and
as issues are resolved and/or payments made. Relative to the aforementioned
claims, the Company has recorded approximately $8,348,985 in claim revenue to
offset a portion of costs incurred to date on the claims. The claims
receivable is comprised of a long-term portion of $7,961,107 and a current
portion of $387,878. The current portion of claims receivable results from an
NMSHTD-authorized December 2002 pay estimate containing, among other past due
payments, settlements on only a portion of the claims on one project. In
addition, the Company has also recorded approximately $126,860 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 $8,475,845, net of professional fees, will reduce income.
Conversely, a payment for those same items in excess of $8,475,845, net of
professional fees, will increase income.

The portion of accounts receivable pertaining to retention withheld on the
contracts for which claims have been filed amounts to $2,013,897. The degree
to which the Company is successful in recovering its costs from the claims may
also impact the amount of retention paid by the owner. The Company believes
that all retention amounts currently being held by the owners on the contracts
with outstanding claims will be paid in full in accordance with the contract
terms. Therefore, no allowance has been made to reduce the receivables due
from the retention on the disputed contracts.

11



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##### Table of Contents



Lawsuits Filed Against Meadow Valley Contractors, Inc.



| | (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s 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s 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 MVCI has filed counter-claims for
approximately $3,000,000 seeking to recover the damages ICS has
caused MVCI through its failure to perform.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Independent from, but related to the ICS issue, the Nevada
State Labor Commissioner (Commission) filed a lawsuit against MVCI
seeking payment of $452,921 from MVCI, as the prime contractor, for
wages and fringes owed but not paid by ICS, MVCIs subcontractor. In
December 2002, the parties agreed to a settlement and the lawsuit was
dismissed. MVCI has paid $209,888.88 and will add this amount to its
counterclaims against ICS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (3) |  | 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
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 $3,000,000. AnA
also filed a complaint on two other projects completed in 1997 where,
as a subcontractor to MVCI, they claim damages of approximately
$715,000 for changed conditions. In June 2002, AnAs lawsuit was
dismissed and in November 2002 a judgment was awarded to MVCI against
AnA and one of two of AnAs managing partners. It is highly unlikely
that MVCI will ever see any portion of the awarded damages due to AnA
having ceased operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (4) |  | 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 MVCI has
submitted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (5) |  | MVCI is defending a claimed preference, in the Third Judicial
Court of Salt Lake County, in connection with a payment made to it by
an insurance company, Southern America Insurance Company, in the
approximate amount of $100,000. MVCI believes that the payment is
not a preference, and is vigorously defending the action.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (6) |  | Johnson & Danley Construction Co., Inc. (JDCC), J.D.
Materials, Inc. (JDM) and Joel T. Danley (Danley) (collectively
J&D), Twelfth Judicial District, District of New Mexico  JDCC was
the prime contractor and MVCI was a subcontractor to JDCC on two of
the five contracts involved in MVCIs disputes with the state of New
Mexico. JDCC was also a subcontractor to MVCI on other contracts in
New Mexico. JDM is the owner of an aggregate pit in Alamogordo, NM
and leases the pit to MVCI under a mineral lease agreement. Danley
is believed to be an officer and owner of JDCC and JDM. JDCC filed
for Chapter 11 bankruptcy protection, which in accordance with the
contract, resulted in the termination of its contracts with the New
Mexico State Highway and Transportation Department (NMSHTD). The
payment and performance
bonds supplied by JDCC in connection with the two contracts for which
JDCC was the prime contractor had been furnished by MVCIs surety
companies. MVCI indemnified the surety companies against losses and
claims on the two contracts. Upon JDCCs termination, the NMSHTD
entered into a takeover agreement with the surety companies who
subsequently entered into an agreement with MVCI to complete the work.
MVCI has successfully completed the projects. In its complaint, J&D
alleged, among other things, that MVCI was partially responsible for
the cause of its bankruptcy and sought damages in an undetermined
amount. On February 10, 2003 for mutual consideration, J&D and MVCI
entered into a settlement agreement whereby the two parties dismiss
their claims and counterclaims in their entirety. The parties have
agreed to jointly prosecute their respective claims against the NMSHTD.

12



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##### Table of Contents





| | (7) |  | The Company and all of its Directors were served with a civil
Complaint by Silver State Materials Corp. and Cyrus Spurlino
(collectively Plaintiffs) in case no. CV-S-01-1436-KJD-LRL
(USDC-NV). 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
terms, were not so amended until April 1997, and that such amendment
was not filed with the Securities and Exchange Commission. The
Complaint seeks (i) injunctive relief compelling a Special Meeting of
Shareholders to remove all of the Companys Directors for cause, (ii)
the election of a new Board of Directors, (iii) to compel the Company
to enact amended and restated Bylaws, (iv) monetary damages in an
undisclosed amount, (v) recovery of interest, fees and costs, and
(vi) such other relief as the District Court may deem appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The Company and its Directors believe that the Complaint is without
merit and intend to continue their vigorous defense. On December 19,
2001, based upon the Stipulation of the Company, its Directors and the
Plaintiffs, the District Court ordered an open extension of time for
the Defendants to respond to the Complaint, subject to a ten (10) day
written notice from Plaintiffs. At that time, the Company and the
Plaintiffs were engaged in settlement discussions that included the
possible sale of the Companys subsidiary, Ready Mix, Inc. (RMI).
NRS 78.416(2), and related statutes, apparently prohibits the Company
from selling 5 percent or more of the aggregate market value of its
assets to an interested stockholder. Due to this probable restriction,
the Companys Board of Directors concluded and advised the Plaintiffs
that the proposed transaction involving the sale of RMI would not be in
the best interests of the Company or its Shareholders. The Plaintiffs
have since threatened resumption of the litigation and their intent to
file an Amended Complaint (as interested Shareholders) against the
Companys Board. As of this date, the extension of time to respond to
the Complaint remains open and the Plaintiffs have not served written
notice requiring the Defendants response. Plaintiffs have not filed
an Amended Complaint. The Companys subsidiary, RMI, has not been
sold, nor are there any ongoing discussions with the Plaintiffs
regarding the sale of RMI. Unless the Company elects to sell RMI or
its assets and redeem Plaintiffs Shares, further legal proceedings
against the Company may occur.




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, 2002.




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.

|               |  |      |      |      |  |      |      |     |  |   |      |  |  |   |      | 
|-------------- |  | ---- | ---- | ---- |  | ---- | ---- | --- |  | - | ---- |  |  | - | ---- | 
|               |  | 2002 |      | 2001
|               |  |      |      |     
|               |  | High |      | Low  |  | High |      | Low
|               |  |      |      |      |  |      |      |    
|First Quarter  |  | $    | 1.95 |      |  | $    | 1.66 |     |  | $ | 3.36 |  |  | $ | 2.31 | 
|Second Quarter |  |      | 1.70 |      |  |      | 0.95 |     |  |   | 2.81 |  |  |   | 1.81 | 
|Third Quarter  |  |      | 1.25 |      |  |      | 0.75 |     |  |   | 2.54 |  |  |   | 1.95 | 
|Fourth Quarter |  |      | 0.92 |      |  |      | 0.72 |     |  |   | 2.17 |  |  |   | 1.93 | 

Holder of Record

As of
March 14, 2003, there were 446 record and beneficial owners of the
Companys Common Stock.

13



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##### Table of Contents



Securities Authorized for Issuance Under Equity Compensation Plan

The following table provides information as of December 31, 2002 regarding
compensation plans (including individual compensation arrangements) under which
equity securities of Meadow Valley Corporation are authorized for issuance.

Equity Compensation Plan Information

|                                                           |  |                      |         |                     |  |                                 |      |                       |  |                         |         | 
|---------------------------------------------------------- |  | -------------------- | ------- | ------------------- |  | ------------------------------- | ---- | --------------------- |  | ----------------------- | ------- | 
|                                                           |  |                      |         |                     |  |                                 |      |                       |  | Number of Securities   
|                                                           |  |                      |         |                     |  |                                 |      |                       |  | Remaining Available for
|                                                           |  | Number of Securities |         |                     |  |                                 |      | Future Issuance Under
|                                                           |  | to be Issued upon    |         | Weighted-Average    |  | Equity Compensation Plans      
|                                                           |  | Exercise of          |         | Exercise Price of   |  | (Excluding Securities Reflected
|                                                           |  | Outstanding Options  |         | Outstanding Options |  | in Column (a))                 
|                                                           |  |                      |         |                     |  |                                
|Plan Category                                              |  | (a)                  |         | (b)                 |  | (c)                            
|                                                           |  |                      |         |                     |  |                                
|Equity Compensation
Plans Approved by
Security Holders     |  |                      | 744,025 |                     |  |                                 | 4.46 |                       |  |                         | 455,975 | 
|Equity Compensation
Plans Not Approved by
Security Holders |  |                      |        |                     |  |                                 |     |                       |  |                         |        | 
|                                                           |  |                      |         |                     |  |                                 |      |                       |  |                         |         | 
|Total                                                      |  |                      | 744,025 |                     |  |                                 | 4.46 |                       |  |                         | 455,975 | 
|                                                           |  |                      |         |                     |  |                                 |      |                       |  |                         |         | 

See Note 18 to the Consolidated Financial Statements for information
regarding the material features of the above plan. The plan provides that the
number of shares with respect to which options may be granted, and the number
of shares of Common Stock subject to an outstanding option, shall be
proportionately adjusted in the event of a subdivision or consolidation of
shares or the payment of a dividend on Common Stock, and the purchase price per
share of outstanding options shall be proportionately revised.

14



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##### Table of Contents






Item 6.Selected Financial Data

|                                                             |                                                                         |   |                          |      |      |   |             |       |      |   |             |       |   |   |             |      |  |   |             |            |  
|------------------------------------------------------------ | ----------------------------------------------------------------------- | - | ------------------------ | ---- | ---- | - | ----------- | ----- | ---- | - | ----------- | ----- | - | - | ----------- | ---- |  | - | ----------- | ---------- | -
|                                                             |                                                                         |   | Years Ended December 31,
|                                                             |                                                                         |   |                         
|                                                             |                                                                         |   | 2002                     |      | 2001 |   | 2000        |       | 1999 |   | 1998       
|                                                             |                                                                         |   |                          |      |      |   |             |       |      |   |            
|Statement of Operations Data:                                |                                                                         |   |                          |      |      |   |             |       |      |   |             |       |   |   |             |      |  |   |             |           
|Revenue                                                      |                                                                         | $ | 151,047,268              |      |      | $ | 174,063,148 |       |      | $ | 163,573,258 |       |   | $ | 210,002,272 |      |  | $ | 187,036,077 |           
|Gross profit                                                 |                                                                         |   | 7,531,597                |      |      |   | 4,658,361   |       |      |   | 4,638,155   |       |   |   | 9,931,446   |      |  |   | 9,444,231   |           
|Income (loss) from operations                                |                                                                         |   | 932,657                  |      |      |   | (3,404,262  | )     |      |   | (2,139,685  | )     |   |   | 3,260,411   |      |  |   | 3,084,983   |           
|Interest Expense                                             |                                                                         |   | 441,585                  |      |      |   | 485,937     |       |      |   | 250,996     |       |   |   | 209,872     |      |  |   | 435,358     |           
|Income (loss) from continuing operations
before income taxes |                                                                         |   | 936,770                  |      |      |   | (3,192,562  | )     |      |   | (1,859,447  | )     |   |   | 3,930,586   |      |  |   | 3,592,019   |           
|Net income (loss) from continuing operations                 |                                                                         |   | 738,141                  |      |      |   | (2,523,931  | )     |      |   | (1,574,586  | )     |   |   | 2,340,106   |      |  |   | 2,169,579   |           
|Discontinued Operations:                                     |                                                                         |   |                          |      |      |   |             |       |      |   |             |       |   |   |             |      |  |   |             |           
|                                                             | Loss from discontinued operations (1)                                   |   |                          |     |      |   |             |      |      |   |             |      |   |   |             |     |  |   |             | (635,246   | )
|                                                             | Estimated loss on disposal of net assets
of discontinued operations (2) |   |                          |     |      |   |             |      |      |   |             |      |   |   |             |     |  |   |             | (1,950,000 | )
|Net income (loss)                                            |                                                                         |   | 738,141                  |      |      |   | (2,523,931  | )     |      |   | (1,574,586  | )     |   |   | 2,340,106   |      |  |   | (415,667    | )         
|Basic net income (loss) per common share:                    |                                                                         |   |                          |      |      |   |             |       |      |   |             |       |   |   |             |      |  |   |             |           
|                                                             | Income (loss) from continuing operations                                |   | $                        | 0.21 |      |   | $           | (0.71 | )    |   | $           | (0.44 | ) |   | $           | 0.67 |  |   | $           | 0.60       |  
|                                                             | Loss from discontinued operations                                       |   |                          |     |      |   |             |      |      |   |             |      |   |   |             |     |  |   |             | (0.18      | )
|                                                             | Estimated loss on disposal of net assets
of discontinued operations     |   |                          |     |      |   |             |      |      |   |             |      |   |   |             |     |  |   |             | (0.54      | )
|Basic net income (loss) per common share                     |                                                                         | $ | 0.21                     |      |      | $ | (0.71       | )     |      | $ | (0.44       | )     |   | $ | 0.67        |      |  | $ | (0.12       | )         
|Diluted net income (loss) per common share:                  |                                                                         |   |                          |      |      |   |             |       |      |   |             |       |   |   |             |      |  |   |             |           
|                                                             | Income (loss) from continuing operations                                |   | $                        | 0.21 |      |   | $           | (0.71 | )    |   | $           | (0.44 | ) |   | $           | 0.66 |  |   | $           | 0.60       |  
|                                                             | Loss from discontinued operations                                       |   |                          |     |      |   |             |      |      |   |             |      |   |   |             |     |  |   |             | (0.17      | )
|                                                             | Estimated loss on disposal of net assets
of discontinued operations     |   |                          |     |      |   |             |      |      |   |             |      |   |   |             |     |  |   |             | (0.54      | )
|Diluted net income (loss) per common share                   |                                                                         | $ | 0.21                     |      |      | $ | (0.71       | )     |      | $ | (0.44       | )     |   | $ | 0.66        |      |  | $ | (0.11       | )         
|Basic weighted average common shares
outstanding             |                                                                         |   | 3,559,938                |      |      |   | 3,559,938   |       |      |   | 3,549,458   |       |   |   | 3,518,510   |      |  |   | 3,601,250   |           
|Diluted weighted average common shares
outstanding           |                                                                         |   | 3,559,938                |      |      |   | 3,559,938   |       |      |   | 3,549,458   |       |   |   | 3,529,705   |      |  |   | 3,644,651   |           
|Financial Position Data:                                     |                                                                         |   |                          |      |      |   |             |       |      |   |             |       |   |   |             |      |  |   |             |           
|Working capital                                              |                                                                         | $ | 805,159                  |      |      | $ | (1,194,786  | )     |      | $ | 4,946,174   |       |   | $ | 5,780,599   |      |  | $ | 5,760,414   |           
|Total assets                                                 |                                                                         |   | 55,538,096               |      |      |   | 60,191,119  |       |      |   | 55,386,030  |       |   |   | 58,554,822  |      |  |   | 49,297,063  |           
|Long-term debt                                               |                                                                         |   | 11,132,310               |      |      |   | 12,448,674  |       |      |   | 11,278,148  |       |   |   | 7,121,634   |      |  |   | 5,977,643   |           
|Stockholders equity                                         |                                                                         |   | 11,452,447               |      |      |   | 10,714,306  |       |      |   | 13,238,237  |       |   |   | 14,812,823  |      |  |   | 12,472,717  |           



---

|(1) |  | Includes the net income tax benefit of $423,497 for the year ended
December 31, 1998 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.

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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.

The financial performance of fiscal year 2002 was a considerable
improvement over the prior two years. The improvement is attributable to two
primary factors. First, Ready Mix Inc. had their best year ever and the
expansion plans that contributed to losses in 2000 and 2001 produced increased
revenue and increased profit on much-improved margins. RMI revenue has grown
148% since year-end 1999. Second, highway contracts on which claims have been
filed were completed prior to 2002 and did not have any additional material
losses in 2002.

During the year, considerable progress was achieved in progressing the
claims through the mandatory claim review process. For the five projects in
dispute with the New Mexico State Highway and Transportation Department
(NMSHTD), all but one have now been heard by the State Claims Review Board
(Review Board), the third and final step in the administrative review process
required before a contractor would resort to litigation. The fifth New Mexico
project will go before the Review Board in April 2003. At any point in the
review process, or even after litigation may be initiated, it is possible that
the Company and the NMSHTD may seek to open settlement discussions. The Clark
County, Nevada claim is scheduled to be heard by a three-member arbitration
panel in the fall of 2003 and it is conceivable that the binding arbitration
will be completed before year-end.

Non-payment of claim costs has been the primary cause for the Companys
decreased working capital and weakened financial condition, which in turn, has
decreased the Companys bonding capacity. Due to the Companys bonding
capacity constraint the Companys backlog at December 31, 2002 of $68.7 million
declined from the preceding years $76.0 million. The decreased bonding
capacity continues to limit 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. Company management
continually looks at 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,
|                                    |  |                         
|                                    |  | 2002                     |        | 2001 |  | 2000
|                                    |  |                          |        |      |  |     
|Revenue                             |  |                          | 100.00 | %    |  |      | 100.00 | % |  |  | 100.00 | %
|Cost of revenue                     |  |                          | 95.01  |      |  |      | 97.32  |   |  |  | 97.16  |  
|Gross profit                        |  |                          | 4.99   |      |  |      | 2.68   |   |  |  | 2.84   |  
|General and administrative expenses |  |                          | 4.37   |      |  |      | 4.63   |   |  |  | 4.14   |  
|Income (loss) from operations       |  |                          | 0.62   |      |  |      | (1.96  | ) |  |  | (1.30  | )
|Interest income                     |  |                          | 0.10   |      |  |      | 0.18   |   |  |  | 0.40   |  
|Interest expense                    |  |                          | (.29   | )    |  |      | (.28   | ) |  |  | (.15   | )
|Other income (expense)              |  |                          | 0.19   |      |  |      | 0.22   |   |  |  | (.07   | )
|Net income (loss)                   |  |                          | 0.49   |      |  |      | (1.45  | ) |  |  | (.96   | )

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Year Ended December 31, 2002 compared to Year Ended December 31, 2001

Revenue and Backlog.Revenue decreased 13.2% to $151.0 million for the
year ended December 31, 2002 (2002) from $174.1 million for the year ended
December 31, 2001 (2001). The decrease was the result of a $28.9 million
decrease in construction service revenue offset by a $5.8 million increase in
revenue generated from construction materials production and manufacturing sold
to non-affiliates. Backlog decreased to $68.7 million at December 31, 2002
compared to $76.0 million at December 31, 2001. Revenue is impacted in any one
period by the backlog at the beginning of the period. Because so much of the
Companys business stems from competitively bid public works, backlog will
fluctuate depending upon the amount and type of contracts that the Company bids
on and wins. Bid bonds provided by the Companys surety company are required
on most of the contracts that the Company bids, therefore, any restrictions or
limitations in the extension of surety credit can impact the amount and type of
contracts available to be bid by the Company. Recent limitations to the
Companys surety credit have contributed to the Companys declining backlog.
Surety credit limits may be improved as the Companys financial performance
improves, but there can be no assurance that surety credit will improve as
there also exist insurance industry and individual insurance company dynamics
that are unrelated to the Companys performance.

Gross Profit.Consolidated gross profit increased to $7.5 million for
2002 from $4.7 million for 2001 and consolidated gross margin, as a percent of
revenue, increased to 4.99% in 2002 from 2.68% in 2001. Gross profit from
construction services increased to $3.6 million in 2002 from $3.1 million in
2001 and the gross profit margin increased to 3.19% from 2.15% in the
respective periods. The increase in the construction services gross profit
margin was the result of reductions in costs related to claims and costs
overruns on certain projects and by increased profit recognition related to
several projects nearing completion at December 31, 2002. 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. Gross profit from construction materials
increased to $3.9 million in 2002 from $1.6 million in 2001 and the gross
profit margin increased to 10.6% from 5.13% in the respective periods. The
improved performance for the construction materials segment during 2002 is the
result of a 19.0% increase in revenue from 2001 that resulted from the
expansion of the construction materials operations.

General and Administrative Expenses.General and administrative expenses
decreased to $6.60 million for 2002 from $8.06 million for 2001. The decrease
resulted primarily from the Company recording an impairment loss of goodwill in
the amount of $1.4 million during 2001 and no impairment loss of goodwill
during 2002, a $.6 million decrease in administrative salaries, wages and
related payroll taxes, and a $.1 million decrease in administrative vehicle
expense, offset by a $.3 million increase in various employee incentive plans,
a $.5 million increase in legal fees.

Interest Income and Expense.Interest income for 2002 decreased to $.2
million from $.3 million for 2001 resulting primarily from a decrease in
invested cash reserves. Interest expense decreased for 2002 to $.4 million
from $.5 million for 2001, due primarily to the lower variable interest rate on
the LOC in 2002 compared to the variable interest rate in 2001.

Net Income (loss).Net income was $.7 million for 2002 as compared to a
net loss of $2.5 million for 2001. The increase from a net loss to a net
income was the result primarily of the Companys ability to increase gross
profits and to decrease in general and administrative expenses, offset by a net
reduction in other income (expense).

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
construction services 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

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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).

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.

|                                                |  |                                  |            |      |  |      |           |   |  |   |            |  
|----------------------------------------------- |  | -------------------------------- | ---------- | ---- |  | ---- | --------- | - |  | - | ---------- | -
|                                                |  | For the Years Ended December 31,
|                                                |  |                                 
|                                                |  | 2002                             |            | 2001 |  | 2000
|                                                |  |                                  |            |      |  |     
|Cash Provided By (Used in) Operating Activities |  | $                                | 2,953,781  |      |  | $    | 94,449    |   |  | $ | (3,031,916 | )
|Cash Provided By (Used in) Investing Activities |  |                                  | 1,619,844  |      |  |      | 1,124,921 |   |  |   | (1,662,667 | )
|Cash Provided By (Used in) Financing activities |  |                                  | (3,512,596 | )    |  |      | (813,462  | ) |  |   | 339,692    |  

Cash provided by operating activities during 2002 amounted to $2.95
million, primarily the result of a decrease in accounts receivable of $.4
million, decrease in costs in excess of billings of $3.8 million, a decrease in
inventory, net of $1.4 million, decrease in net deferred taxes of $.5 million,
an increase in accrued liabilities of $1.9 million, depreciation and
amortization of $2.8 million, and a net income of $.7 million, offset by, an
increase in claims receivable of $2.4 million, a decrease in billings in excess
of costs of $.9 million, decrease in accounts payable of $7.1 million and a
decrease in allowance for doubtful accounts of $.3 million.

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 provided by investing activities during 2002 amounted to $1.6 million
related primarily to the proceeds from the sale of property and equipment in
the amount of $1.6 million, a decrease in restricted cash of $.7 million and
the proceeds from the sale of mineral rights and pit development of $.5
million, offset by the purchase of property and equipment of $.5 million and
the purchase of land held for sale of $.7 million.

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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.

Cash used in financing activities during 2002 amounted to $3.5 million
related primarily to repayment of notes payable and capital lease obligations
in the amount of $4.1 million, offset by the proceeds received from a note
payable in the amount of $.6 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.

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.

Critical 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 policies are the revenue recognition and
cost estimation on certain contracts for which we use a percentage of
completion accounting method, our allowance for doubtful accounts and the
allowance for obsolete inventory. The revenue recognition and cost estimation
accounting method is applied by our Construction Services Operations to heavy
construction projects executed under multi-year contracts with various
customers. Approximately 76%, 82% and 88% of total net revenue was recognized
under the percentage of completion method of accounting during 2002, 2001 and
2000, 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.

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.

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We are also required to estimate the collectibility of our account
receivables. A considerable amount of judgment is required in assessing the
realization of these receivables, including the current creditworthiness of
each customer and the related aging of the past due balances. Our provision
for bad debts during the years ended December 31, 2002 and 2001 amounted to
$287,333 and $562,412, respectively. We determine our reserve by using
percentages applied to certain aged receivable categories and percentages of
certain types of revenue generated.

In addition, we are required to state our inventories at the lower of cost
or market. In assessing the ultimate realization of inventories, we are
required to make judgments as to the future demand requirements and compare
these with the current inventory levels. Our reserve requirements generally
increase as our projected demand requirements decrease due to market conditions
and longer than expected usage periods. At December 31, 2002 and 2001,
inventories of $2,103,100 and $3,365,750 respectively, are net of reserves of
$1,000,000 and $0 respectively. It is possible that significant changes in
required inventory reserves may continue to occur in the future if there is a
further decline in market conditions.

Summary of Contractual Obligations and Commercial Commitments

Contractual obligations at December 31, 2002, and the effects such
obligations are expected to have on liquidity and cash flow in future periods,
are summarized as follows:

|                              |  |                        |            |        |  |           |           |       |  |         |            |       |  |   |           |  |  |   |           | 
|----------------------------- |  | ---------------------- | ---------- | ------ |  | --------- | --------- | ----- |  | ------- | ---------- | ----- |  | - | --------- |  |  | - | --------- | 
|                              |  | Payments Due by Period
|                              |  |                       
|                              |  |                        |            |        |  | Less than |           | 1 - 3 |  | 4 - 5   |            | After
|                              |  | Total                  |            | 1 Year |  | Years     |           | Years |  | 5 Years
|                              |  |                        |            |        |  |           |           |       |  |        
|Contractual Obligations       |  |                        |            |        |  |           |           |       |  |         |            |       |  |   |           |  |  |   |           | 
|Long-term debt                |  | $                      | 5,680,807  |        |  | $         | 3,424,209 |       |  | $       | 2,151,748  |       |  | $ | 104,850   |  |  | $ |          | 
|Capital Lease Obligations     |  |                        | 3,174,732  |        |  |           | 1,110,505 |       |  |         | 1,649,510  |       |  |   | 414,717   |  |  |   |          | 
|Operating Leases              |  |                        | 17,379,720 |        |  |           | 4,937,836 |       |  |         | 7,290,344  |       |  |   | 2,638,517 |  |  |   | 2,513,023 | 
|                              |  |                        |            |        |  |           |           |       |  |         |            |       |  |   |           |  |  |   |           | 
|Total Contractual Obligations |  | $                      | 26,235,259 |        |  | $         | 9,472,550 |       |  | $       | 11,091,602 |       |  | $ | 3,158,084 |  |  | $ | 2,513,023 | 
|                              |  |                        |            |        |  |           |           |       |  |         |            |       |  |   |           |  |  |   |           | 

|                             |  |                                            |           |           |  |       |   |       |  |         |           |  |  |   |           |  |  |   |   | 
|---------------------------- |  | ------------------------------------------ | --------- | --------- |  | ----- | - | ----- |  | ------- | --------- |  |  | - | --------- |  |  | - | - | 
|                             |  | Amount of Commitment Expiration Per Period
|                             |  |                                           
|                             |  | Total Amounts                              |           | Less than |  | 1 - 3 |   | 4 - 5 |  | Over   
|                             |  | Committed                                  |           | 1 Year    |  | Years |   | Years |  | 5 Years
|                             |  |                                            |           |           |  |       |   |       |  |        
|Other
Commercial Commitments |  |                                            |           |           |  |       |   |       |  |         |           |  |  |   |           |  |  |   |   | 
|Line of Credit               |  | $                                          | 7,000,000 |           |  | $     |  |       |  | $       | 3,334,202 |  |  | $ | 3,665,798 |  |  | $ |  | 
|                             |  |                                            |           |           |  |       |   |       |  |         |           |  |  |   |           |  |  |   |   | 

Recent Accounting Pronouncements

In June 2001, Financial Accounting Standards Board (FASB) issued Statement
No. 143 (SFAS No. 143), Accounting for Asset Retirement Obligations,
effective for fiscal years beginning after June 15, 2002. The Statement
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. When the
liability is initially recorded, the entity capitalizes a cost by increasing
the carrying amount of the related long-lived asset. Over time, the liability
is accreted to its present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. The adoption of SFAS No. 143 is not
expected to have a material effect on the Companys financial position or
results of operations.

In June 2002, FASB issued Statement No. 146 (SFAS No. 146), Accounting
for Costs Associated with Exit or Disposal Activities, effective for
activities that are initiated after December 31, 2002, with early application
encouraged. This Statement addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies

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Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The adoption of SFAS
No. 146 is not expected to have a material effect on the Companys financial
position or results of operations.

In October 2002, FASB issued Statement No. 147 (SFAS No. 147),
Acquisitions of Certain Financial Institutions, An Amendment of FASB
Statements No. 72 and 144 and FASB Interpretation No. 9, effective for
acquisitions on or after October 1, 2002. SFAS No. 72, and FASB Interpretation
No. 9, provided interpretive guidance on the application of the purchase method
to acquisitions of financial institutions. Except for transactions between two
or more mutual enterprises, this Statement removes acquisitions of financial
institutions from the scope of both SFAS No. 72 and FASB Interpretation 9 and
requires that those transactions be accounted for in accordance with SFAS No.
141, Business Combinations, and No. 142, Goodwill and Other Intangible
Assets. Thus, the requirement in paragraph 5 of SFAS No. 72 to recognize (and
subsequently amortize) any excess of the fair value of liabilities assumed over
the fair value of tangible and identifiable intangible assets acquired as an
unidentifiable intangible asset no longer applies to acquisitions within the
scope of SFAS No. 147. In addition, SFAS No. 147 amends SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, to include in
its scope long-term customer-relationship intangible assets of financial
institutions such as depositor-and borrower-relationship intangible assets and
credit cardholder intangible assets. Consequently, those intangible assets are
subject to the same undiscounted cash flow recoverability test and impairment
loss recognition and measurement provisions that Statement 144 requires for
other long-lived assets that are held and used. The adoption of SFAS No. 147 is
not expected to have a material effect on the Companys financial position or
results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 expands on the
accounting guidance of SFAS No. 5, 57 and 107 and incorporates without change
the provisions of FASB Interpretation No. 34, which is being superceded. FIN
45 elaborates on existing disclosure requirements for most guarantees,
including standby letters of credit. It also clarifies that guarantees must be
recognized as an initial liability for fair value, or market value, of the
obligations assumed under the guarantee and that this information must be
disclosed in interim and annual financial statements. FIN 45 applies on a
prospective basis to guarantees issued or modified after December 31, 2002.
The Company does not anticipate the adoption of FIN 45 to have a material
effect on its consolidated financial position or results of operations.

In December 2002, FASB issued Statement No. 148 (SFAS No. 148),
Accounting for Stock-Based Compensation  Transition and Disclosure  An
Amendment of FASB Statement No. 123. SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company is required to follow the prescribed format and provide
the additional disclosures required by SFAS No. 148 in its annual financial
statements for the year ended December 31, 2002 and must also provide the
disclosures in its quarterly reports containing condensed financial statements
for interim periods beginning with the quarterly period ended March 31, 2003.
The adoption of SFAS No. 148 is not expected to have a material effect on the
Companys financial position or results of operations

In January 2003, FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46) which requires the consolidation of
variable interest entities, as defined. FIN 46 is applicable to financial
statements to be issued by the Company after 2002; however, disclosures are
required currently if the Company expects to consolidate any variable interest
entities. The Company does not currently believe that any material entities
will be consolidated with the Company as a result of FIN 46.

Known and Anticipated Future Trends and Contingencies

With continued improvement in profitability and working capital, it is
anticipated that the Companys bonding limits will increase proportionately,
thereby allowing the Company to bid on and perform more and larger projects.
Conversely, if the Company fails to maintain or further enhance the improving
trends started in 2002, bonding capacity could decline. Any decline in bonding
below existing levels would require significant reorganization of personnel and
resources.

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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, established a total budget authority of
$215 billion over the six-year period 1998-2003. TEA-21 ensured that tax
revenue deposited into the Highway Trust Fund would be spent on transportation
improvements by guaranteeing $164 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. Just months ago, declines in tax revenues, due to the recent
recession, created a downward adjustment in funding from the RABA component of
TEA-21 and it looked as though the Bush administration was going to cut highway
funding by approximately $5 billion from 2002 to 2003. Debate over highway
funding for TEA-21s final year of 2003 appears to be reaching a close and it
appears that the 2003 funding level will rest somewhere between the $31.8
billion approved by the U.S. Senate or the $27.7 billion supported by the
House. Interim resolutions (until final spending authorization is passed) have
allowed funding to continue at the 2002 annual rate of $31.8 billion. Over the
next few months until funding authority is finalized, State Departments of
Transportation may not let as many contracts until they are fully aware of the
funding available to them.

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 in its financial institutions. 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.

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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, 2002. Assuming a 100 basis
point increase in the prime interest rate at December 31, 2002 the potential
increase in the fair value of the Companys debt obligations would have been
approximately $76,000 at December 31, 2002. See notes 9 and 10 in the
accompanying consolidated financial statement.




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, 2002, which is hereby incorporated by reference.

Section 16(a) Beneficial Ownership Reporting Compliance

Earle May, one of the Companys directors, failed to timely file Forms 4
with the U.S. Securities and Exchange Commission covering four transactions
made by him in the Companys common stock purchase warrants occurring over a
five-day period in December 2002. All of these transactions were reported by
Mr. May in December 2002.




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, 2002, 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, 2002,
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, 2002, which is hereby incorporated by reference.




Item 14.Controls and Procedures

The Companys Chief Executive Officer and its Principal Accounting
Officer, after evaluating the effectiveness of the Companys disclosure
controls and procedures (as defined in the Securities Exchange Act of 1934
Rules 13a-14(c) and 15d-14(c) as of a date within 90 days of the filing date of
this annual report on Form 10-K (the Evaluation Date)), have

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concluded that as of the Evaluation Date, the Companys disclosure
controls and procedures were adequate and effective to ensure that material
information relating to the Company and its consolidated subsidiaries would be
made known to them by others within those entities, particularly during the
period in which this annual report on Form 10-K was being prepared.

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect the Companys disclosure controls
and procedures subsequent to the Evaluation Date, nor any significant
deficiencies or material weaknesses in such disclosure controls and procedures
requiring corrective actions. As a result, no corrective actions were taken.

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PART IV




Item 15.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, 2002,
2001 and 2000.
|      
|(b)    |  | Reports on Form 8-K                                                                                                                                                                          
|       |  | The Company filed a Form 8-K during the fourth quarter ended December 31, 2002.                                                                                                              
|      
|(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 (13)                                        
|        | 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) 

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|        |  |                                                                                               |  | 
|------- |  | --------------------------------------------------------------------------------------------- |  | 
|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 Transportation (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)                                                  

26



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|        |       |                                                         |                                                                                                |  | 
|------- | ----- | ------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  | 
|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 Nevada 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)

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|        |  |                                                                                         |  | 
|------- |  | --------------------------------------------------------------------------------------- |  | 
|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)                

28



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##### Table of Contents



|        |        |                                          |                                                                                      |  | 
|------- | ------ | ---------------------------------------- | ------------------------------------------------------------------------------------ |  | 
|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. (13)                   
|        | 10.161 |                                          | Lease Agreement with Associates Leasing, Inc. (13)                                  
|        | 10.162 |                                          | Office Lease Agreement (13)                                                         
|        | 10.163 |                                          | Lease Agreement with Caterpillar Financial Services Corporation (13)                
|        | 10.164 |                                          | Security Agreement with John Deere Construction Equipment & Forestry Company (13)   
|        | 10.165 |                                          | Lease Extension with U.S. Bancorp Leasing & Financial (13)                          
|        | 10.166 |                                          | Security Agreement with The CIT Group/Equipment Financing, Inc. (13)                
|        | 10.167 |                                          | Security Agreement with The CIT Group/Equipment Financing, Inc. (13)                
|        | 10.168 |                                          | Amendment No. 1 to Restated and Amended Revolving Loan Agreement with The           
|        |        | CIT Group/Equipment Financing, Inc. (13)
|        | 10.169 |                                          | Security Agreement with The CIT Group/Equipment Financing, Inc. (13)                
|        | 10.170 |                                          | Indemnification Agreement with Robert R. Morris (13)                                
|        | 10.171 |                                          | Indemnification Agreement with Nicole R. Smith (13)                                 
|        | 10.172 |                                          | Indemnification Agreement with Alan A. Terril (13)                                  
|        | 10.173 |                                          | Indemnification Agreement with Bradley E. Larson (13)                               
|        | 10.174 |                                          | Indemnification Agreement with Kenneth D. Nelson (13)                               
|        | 10.175 |                                          | Installment Sale Contract with Caterpillar Financial Services Corporation (13)      
|        | 10.176 |                                          | Contract between Registrant and Clark County, Nevada (13)                           
|        | 10.177 |                                          | Contract between Registrant and U.S. Army Corp of Engineers (13)                    
|        | 10.178 |                                          | Contract between Registrant and Utah Department of Transportation (13)              
|        | 10.179 |                                          | Contract between Registrant and Clark County, Nevada (13)                           
|        | 10.180 |                                          | Contract between Registrant and Utah Department of Transportation (13)              
|        | 10.181 |                                          | Contract between Registrant and Clark County, Nevada (13)                           
|        | 10.182 |                                          | Lease Extension with The CIT Group/Equipment Financing, Inc. (13)                   
|        | 10.183 |                                          | Asset Purchase Agreement between United Metro Materials Inc. and the Registrant (13)
|        | 10.184 |                                          | Engagement Letter with AMG Financing Capital, Inc. (13)                             
|        | 10.185 |                                          | Amendment No. 2 to Restated and Amended Revolving Loan Agreement with The           
|        |        | CIT Group/Equipment Financing, Inc. (13)
|        | 10.186 |                                          | Notice of Termination of Non-Binding Letter of Intent with RMI Enterprises, LLC (13)
|        | 10.187 |                                          | Security Agreement with Key Equipment Finance, a Division of Key Corporate Capital  
|        |        | Inc. (14)                               
|        | 10.188 |                                          | Amendment No. 1 to Security Agreement with Key Equipment Finance, a Division of Key 
|        |        | Corporate Capital Inc. (15)             

29



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##### Table of Contents



|        |  |                                                                                                                     |  | 
|------- |  | ------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit |  |                                                                                                                     |  | 
|No.     |  | Title                                                                                                              
|        |  |                                                                                                                    
|10.189  |  | Employment Agreement with Robert DeRuiter (15)                                                                     
|10.190  |  | Addendum to Employment Contracts for Brad Larson, Ken Nelson, Ron Lewis and Alan                                   
|        |  | Terril (15)                                                                                                        
|10.191  |  | General Agreement of Indemnity between the Registrant and Liberty Mutual Insurance                                 
|        |  | Company (15)                                                                                                       
|10.192  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (15)                                               
|10.193  |  | Office Lease Agreement (16)                                                                                        
|10.194  |  | Lease Agreement with The CIT Group/Equipment Financing, Inc. (16)                                                  
|10.195  |  | Security Agreement with Astec Financial Services, Inc. (16)                                                        
|10.196  |  | Security Agreement with Cananwill, Inc. (16)                                                                       
|10.197  |  | Security Agreement with Astec Financial Services, Inc. (16)                                                        
|10.198  |  | Security Agreement with Caterpillar Financial Services Corporation (16)                                            
|10.199  |  | Security Agreement with Deere Credit, Inc. (16)                                                                    
|10.200  |  | Promissory Note executed by Nevada State Bank (16)                                                                 
|10.201  |  | Employment Agreement with Nicole R. Smith (16)                                                                     
|10.202  |  | Employment Agreement with Robert Morris (16)                                                                       
|10.203  |  | Employment Agreement with Robert Bottcher (16)                                                                     
|10.204  |  | Employment Agreement with Robert Terril (16)                                                                       
|10.205  |  | Employment Agreement with Sam Grasmick (16)                                                                        
|10.206  |  | Purchase Agreement with Nevada Title Company (16)                                                                  
|10.207  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (16)                                               
|10.208  |  | Contract between Registrant and Arizona Department of Transportation                                               
|10.209  |  | Contract between Registrant and City of Phoenix                                                                    
|10.210  |  | Contract between Registrant and Arizona Department of Transportation                                               
|10.211  |  | Contract between Registrant and Federal Highway Administration                                                     
|10.212  |  | Contract between Registrant and Arizona Department of Transportation                                               
|10.213  |  | Contract between Registrant and Utah Department of Transportation                                                  
|10.214  |  | Contract between Registrant and Arizona Department of Transportation                                               
|10.215  |  | Agreement with Fisher Sand and Gravel Co. to act as the Company's                                                  
|        |  | co-indemnitor                                                                                                      
|10.216  |  | Contract between Registrant and City of North Las Vegas                                                            
|10.217  |  | Renewal and Amendment of Amended and Restated Revolving Loan                                                       
|        |  | Agreement with The CIT Group/Equipment Financing, Inc.                                                             
|10.218  |  | Renewal and Amendment of Revolving Loan Agreement                                                                  
|        |  | with The CIT Group/Equipment Financing, Inc.                                                                       
|10.219  |  | Lease Agreement with Oshkosh/McNeilus                                                                              
|10.220  |  | Security Agreement with Wagner Equipment Co.                                                                       
|10.221  |  | Security Agreement with Wagner Equipment Co.                                                                       
|10.222  |  | Sales Agreement with Conde Del Mar Properties, L.L.C.                                                              
|10.223  |  | Notice of Assignment
of Security Agreement from Astec Financial Services to the CIT
Group/Equipment Financing, Inc.
|10.224  |  | Notice of Assignment
of Security Agreement from Astec Financial Services to the CIT
Group/Equipment Financing, Inc.
|10.225  |  | Notice of Assignment of Lease Agreement from The CIT Group/                                                        
|        |  | Equipment Financing, Inc. to General Electric Capital Corporation                                                  

30



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##### Table of Contents



|        |  |                                                                                               |  |                |  | 
|------- |  | --------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Exhibit |  |                                                                                               |  |               
|No.     |  | Title                                                                                        
|        |  |                                                                                              
|10.226  |  | Notice of Assignment of Lease Agreement from The CIT Group/                                  
|        |  | Equipment Financing, Inc. to General Electric Capital Corporation                            
|10.227  |  | Employment Agreement with Bradley E. Larson                                                  
|10.228  |  | Employment Agreement with Kenneth D. Nelson                                                  
|10.229  |  | Employment Agreement with Alan A. Terril                                                     
|10.230  |  | Indemnification Agreement with Clint Tryon                                                   
|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)             
|99.4    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley          
|        |  |                                                                                               |  | E. Larson (15)
|99.5    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Nicole R.        
|        |  |                                                                                               |  | Smith (15)    
|99.6    |  | Nasdaq Listing Qualifications warning (15)                                                   
|99.7    |  | Nasdaq Listing Qualifications compliance (16)                                                
|99.8    |  | Nasdaq Listing Qualifications warning (16)                                                   
|99.9    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley          
|        |  | E. Larson (16)                                                                               
|99.10   |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Clint Tryon (16) 
|99.11   |  | Nasdaq Listing Qualifications warning (16)                                                   
|99.12   |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley E. Larson
|99.13   |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Clint Tryon      
|99.14   |  | Nasdaq Listing Qualifications compliance                                                     

31



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##### Table of Contents



| |  |  |         |   |  |                                                                                                                                             |  | 
| |  |  | ------- | - |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |  |  | Exhibit |   |  |                                                                                                                                             |  | 
| |  |  | No.     |   |  | Title                                                                                                                                      
| |  |  |         |   |  |                                                                                                                                            
| |  |  | (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                                                                      
| |  |  | (13     | ) |  | Incorporated
by reference to the Company's December 31, 2001 Annual Report on Form 10-K                                                    
| |  |  | (14     | ) |  | Incorporated
by reference to the Company's March 31, 2002 Form 10-Q                                                                        
| |  |  | (15     | ) |  | Incorporated
by reference to the Company's June 30, 2002 Form 10-Q                                                                         
| |  |  | (16     | ) |  | Incorporated
by reference to the Company's September 30, 2002 Form 10-Q                                                                    

32



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##### Table of Contents



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: March 28, 2003

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
Bradley E. Larson
Director, President and Chief Executive Officer
Date: March 28, 2003           |  | /s/ Earle C. May
Earle C. May
Director
Date: March 28, 2003                                                
|                                                                                                                      
|/s/ Kenneth D. Nelson
Kenneth D. Nelson
Director, Chief Administrative Officer and
Vice President
Date: March 28, 2003 |  | /s/ Alan A.
Terril
Alan A. Terril
Director, Vice President and Chief Operating Officer
Date: March 28, 2003
|                                                                                                                      
|/s/ Charles E. Cowan
Charles E. Cowan
Director
Date: March 28, 2003                                                    |  | /s/ Gary A. Agron
Gary A. Agron
Director
Date: March 28, 2003                                              
|                                                                                                                      
|/s/Charles R. Norton
Charles R. Norton
Director
Date: March 28, 2003                                                   |  | /s/ Clint Tryon
Clint Tryon
Treasurer, Secretary and Principal Accounting Officer
Date: March 28, 2003     

33



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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS

|                                                                                                                |  |    
|--------------------------------------------------------------------------------------------------------------- |  | ---
|Meadow Valley Corporation and Subsidiaries                                                                      |  |    
|                                                                                                               
|Report of Independent Certified Public Accountants                                                              |  | F-2
|Consolidated Balance Sheets at December 31, 2002 and 2001                                                       |  | F-3
|Consolidated Statements of Operations for the years ended December 31, 2002,
2001 and 2000                      |  | F-4
|Consolidated Statements of Changes in Stockholders Equity for the years ended
December 31, 2002, 2001 and 2000 |  | F-5
|Consolidated Statements of Cash Flows for the years ended December 31, 2002,
2001 and 2000                      |  | F-6
|Notes to Consolidated Financial Statements                                                                      |  | F-8

F-1



---



##### Table of Contents



|    |  |                                              |  |                                                                                                                
|--- |  | -------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------
|BDO |  | BDO Seidman, LLP
Accountants and Consultants |  | 1900 Avenue of the Stars, 11thFloor
Los Angeles, California 90067
Telephone: (310) 557-0300
Fax: (310) 557-1777

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, 2002 and 2001 and the related
consolidated statements of operations, stockholders equity, and cash flows for
each of the three years in the period ended December 31, 2002. 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, 2002 and 2001, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America.

|                                     
|-------------------------------------
|\s\ BDO Seidman, LLP                 
|                                     
|Los Angeles, California
March 7, 2003

F-2



---



##### Table of Contents



MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |              |            |            |            | 
|---------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------- | ------------------------------------------ | ---------- | ------------ | ---------- | ------------ | ---------- | ---------- | ---------- | 
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            | December 31, |            | December 31,
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            | 2002         |            | 2001        
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|Assets (Note 10):                                                |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|Current Assets:                                                  |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  | Cash and cash equivalents (Notes 1 and 2)                                                   |                           | $                                          | 3,289,535  |              |            | $            | 2,228,506  |           
|                                                                 |                                                                                                                  | Restricted cash (Notes 1, 2 and 17)                                                         |                           |                                            | 1,681,361  |              |            |              | 2,401,548  |           
|                                                                 |                                                                                                                  | Accounts receivable, net (Notes 1, 3, 11, 15 and 17)                                        |                           |                                            | 21,203,373 |              |            |              | 21,377,904 |           
|                                                                 |                                                                                                                  | Claims Receivable (Notes 1 and 15)                                                          |                           |                                            | 387,878    |              |            |              |           |           
|                                                                 |                                                                                                                  | Prepaid expenses and other                                                                  |                           |                                            | 1,573,614  |              |            |              | 404,780    |           
|                                                                 |                                                                                                                  | Inventory, net (Note 1)                                                                     |                           |                                            | 2,103,100  |              |            |              | 3,365,750  |           
|                                                                 |                                                                                                                  | Land held for sale (Note 5)                                                                 |                           |                                            | 711,531    |              |            |              |           |           
|                                                                 |                                                                                                                  | Costs and estimated earnings in excess of billings on
uncompleted
contracts (Notes 1 and 4) |                           |                                            | 1,543,061  |              |            |              | 5,294,054  |           
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  |                                                                                             | Total Current Assets      |                                            |            | 32,493,453   |            |              |            | 35,072,542 |           
|Property and equipment, net (Notes 1, 6, 9, and 13)              |                                                                                                                  |                                                                                             | 14,555,646                |                                            |            |              | 15,267,791 |             
|Assets held for sale (Note 1)                                    |                                                                                                                  |                                                                                             |                          |                                            |            |              | 3,213,484  |             
|Refundable deposits                                              |                                                                                                                  |                                                                                             | 50,604                    |                                            |            |              | 55,110     |             
|Goodwill, net (Note 1)                                           |                                                                                                                  |                                                                                             |                          |                                            |            |              |           |             
|Mineral rights and pit development, net                          |                                                                                                                  |                                                                                             | 445,063                   |                                            |            |              | 533,608    |             
|Claims receivable (Notes 1, 4 and 15)                            |                                                                                                                  |                                                                                             | 7,961,107                 |                                            |            |              | 5,968,026  |             
|Other assets                                                     |                                                                                                                  |                                                                                             | 32,223                    |                                            |            |              | 80,558     |             
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  |                                                                                             | Total Assets              |                                            | $          | 55,538,096   |            |              | $          | 60,191,119 |           
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|Liabilities and Stockholders Equity:                            |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|Current Liabilities:                                             |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  | Accounts payable (Notes 7 and 11)                                                           |                           | $                                          | 19,912,516 |              |            | $            | 27,025,984 |           
|                                                                 |                                                                                                                  | Accrued liabilities (Notes 8 and 11)                                                        |                           |                                            | 3,697,111  |              |            |              | 1,811,998  |           
|                                                                 |                                                                                                                  | Notes payable (Note 9)                                                                      |                           |                                            | 3,424,209  |              |            |              | 1,685,634  |           
|                                                                 |                                                                                                                  | Obligations under capital leases (Note 13)                                                  |                           |                                            | 921,306    |              |            |              | 1,118,055  |           
|                                                                 |                                                                                                                  | Billings in excess of costs and estimated earnings on
uncompleted
contracts (Notes 1 and 4) |                           |                                            | 3,733,152  |              |            |              | 4,625,657  |           
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  |                                                                                             | Total Current Liabilities |                                            |            | 31,688,294   |            |              |            | 36,267,328 |           
|Deferred tax liability (Notes 1 and 12)                          |                                                                                                                  |                                                                                             | 1,265,045                 |                                            |            |              | 760,811    |             
|Notes payable, less current portion (Notes 9 and 10)             |                                                                                                                  |                                                                                             | 9,256,598                 |                                            |            |              | 9,484,479  |             
|Obligations under capital leases, less current portion (Note 13) |                                                                                                                  |                                                                                             | 1,875,712                 |                                            |            |              | 2,964,195  |             
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  |                                                                                             | Total Liabilities         |                                            |            | 44,085,649   |            |              |            | 49,476,813 |           
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|Commitments and contingencies (Notes 10, 11, 13 and 15)          |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|Stockholders Equity:                                            |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 | Preferred stock  $.001 par value; 1,000,000 shares authorized, none
issued and outstanding (Note 14)            |                                                                                             |                           |                                           |            |              |            |             |           
|                                                                 | Common stock  $.001 par value; 15,000,000 shares authorized, 3,559,938
issued and outstanding (Notes 14 and 18) |                                                                                             |                           | 3,601                                      |            |              |            | 3,601        |           
|                                                                 | Additional paid-in capital                                                                                       |                                                                                             |                           | 10,943,569                                 |            |              |            | 10,943,569   |           
|                                                                 | Capital adjustments                                                                                              |                                                                                             |                           | (799,147                                   | )          |              |            | (799,147     | )         
|                                                                 | Retained earnings                                                                                                |                                                                                             |                           | 1,304,424                                  |            |              |            | 566,283      |           
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  |                                                                                             |                           | Total Stockholders Equity                 |            |              | 11,452,447 |              |            |            | 10,714,306 | 
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             
|                                                                 |                                                                                                                  |                                                                                             |                           | Total Liabilities and Stockholders Equity |            | $            | 55,538,096 |              |            | $          | 60,191,119 | 
|                                                                 |                                                                                                                  |                                                                                             |                           |                                            |            |              |            |             

The Accompanying Notes are an Integral Part of the Financial Statements

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##### Table of Contents



MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |          |  
|------------------------------------------------------------ | ---------------------- | - | -------------------------------- | -------- | ---- | - | ----------- | -------- | - | - | ----------- | -------- | -
|                                                             |                        |   | For the Years Ended December 31,
|                                                             |                        |   |                                 
|                                                             |                        |   | 2002                             |          | 2001 |   | 2000       
|                                                             |                        |   |                                  |          |      |   |            
|Revenue (Notes 11 and 17)                                    |                        | $ | 151,047,268                      |          |      | $ | 174,063,148 |          |   | $ | 163,573,258 |         
|Cost of revenue (Note 11)                                    |                        |   | 143,515,671                      |          |      |   | 169,404,787 |          |   |   | 158,935,103 |         
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Gross profit                                                 |                        |   | 7,531,597                        |          |      |   | 4,658,361   |          |   |   | 4,638,155   |         
|General and administrative expenses (Notes 1 and
11)         |                        |   | 6,598,940                        |          |      |   | 8,062,623   |          |   |   | 6,777,840   |         
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Income (loss) from operations                                |                        |   | 932,657                          |          |      |   | (3,404,262  | )        |   |   | (2,139,685  | )       
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Other income (expense):                                      |                        |   |                                  |          |      |   |             |          |   |   |             |         
|                                                             | Interest income        |   |                                  | 156,836  |      |   |             | 319,797  |   |   |             | 646,480  |  
|                                                             | Interest expense       |   |                                  | (441,585 | )    |   |             | (485,937 | ) |   |             | (250,996 | )
|                                                             | Other income (expense) |   |                                  | 288,862  |      |   |             | 377,840  |   |   |             | (115,246 | )
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|                                                             |                        |   | 4,113                            |          |      |   | 211,700     |          |   |   | 280,238     |         
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Income (loss) before income taxes                            |                        |   | 936,770                          |          |      |   | (3,192,562  | )        |   |   | (1,859,447  | )       
|Income tax benefit (expense) (Note 12)                       |                        |   | (198,629                         | )        |      |   | 668,631     |          |   |   | 284,861     |         
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Net income (loss) (Note 18)                                  |                        | $ | 738,141                          |          |      | $ | (2,523,931  | )        |   | $ | (1,574,586  | )       
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Basic net income (loss) per common share                     |                        | $ | 0.21                             |          |      | $ | (0.71       | )        |   | $ | (0.44       | )       
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Diluted net income (loss) per common share                   |                        | $ | 0.21                             |          |      | $ | (0.71       | )        |   | $ | (0.44       | )       
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Basic weighted average common shares
outstanding (Note 19)   |                        |   | 3,559,938                        |          |      |   | 3,559,938   |          |   |   | 3,549,458   |         
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         
|Diluted weighted average common shares
outstanding (Note 19) |                        |   | 3,559,938                        |          |      |   | 3,559,938   |          |   |   | 3,549,458   |         
|                                                             |                        |   |                                  |          |      |   |             |          |   |   |             |         

The Accompanying Notes are an Integral Part of the Financial Statements

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##### Table of Contents



MEADOW VALLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

For the Years Ended December 31, 2002, 2001 and 2000

|                                                                      |  |              |           |        |  |         |       |            |  |          |            |          |  |   |          |   |  |   |            |  
|--------------------------------------------------------------------- |  | ------------ | --------- | ------ |  | ------- | ----- | ---------- |  | -------- | ---------- | -------- |  | - | -------- | - |  | - | ---------- | -
|                                                                      |  | Common Stock |           |        |  |         |       |            |  |          |            |          |  |  
|                                                                      |  |              |           |        |  |         |       |            |  |          |            |          |  |  
|                                                                      |  | Number of    |           |        |  |         |       |            |  |          |            |          |  |   |          |   |  |  
|                                                                      |  | Shares       |           |        |  |         |       | Paid-in    |  | Capital  |            | Retained
|                                                                      |  | Outstanding  |           | Amount |  | Capital |       | Adjustment |  | Earnings
|                                                                      |  |              |           |        |  |         |       |            |  |         
|Balance at January 1, 2000                                            |  |              | 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    |  
|                                                                      |  |              |           |        |  |         |       |            |  |          |            |          |  |   |          |   |  |   |            |  
|Net income                                                            |  |              |           |        |  |         |       |            |  |          |            |          |  |   |          |   |  |   | 738,141    |  
|                                                                      |  |              |           |        |  |         |       |            |  |          |            |          |  |   |          |   |  |   |            |  
|Balance at December 31,
2002                                          |  |              | 3,559,938 |        |  | $       | 3,601 |            |  | $        | 10,943,569 |          |  | $ | (799,147 | ) |  | $ | 1,304,424  |  
|                                                                      |  |              |           |        |  |         |       |            |  |          |            |          |  |   |          |   |  |   |            |  

The Accompanying Notes are an Integral Part of the Financial Statements

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##### Table of Contents



MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |              |            |  
|---------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | --------- | -------------------------------- | ---------- | ---- | --------- | ------------ | --------- | - | ---------- | ------------ | ---------- | -
|                                                     |                                                          |                                                     |           | For the Years Ended December 31,
|                                                     |                                                          |                                                     |           |                                 
|                                                     |                                                          |                                                     |           | 2002                             |            | 2001 |           | 2000        
|                                                     |                                                          |                                                     |           |                                  |            |      |           |             
|Increase (Decrease) in Cash and Cash Equivalents:    |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|Cash flows from operating activities:                |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|                                                     | Cash received from customers                             |                                                     | $         | 152,229,244                      |            |      | $         | 164,497,420  |           |   | $          | 164,943,635  |           
|                                                     | Cash paid to suppliers and employees                     |                                                     |           | (149,296,319                     | )          |      |           | (165,041,014 | )         |   |            | (167,857,330 | )         
|                                                     | Interest received                                        |                                                     |           | 156,836                          |            |      |           | 319,797      |           |   |            | 646,480      |           
|                                                     | Interest paid                                            |                                                     |           | (441,585                         | )          |      |           | (485,937     | )         |   |            | (250,996     | )         
|                                                     | Income taxes refunded (paid)                             |                                                     |           | 305,605                          |            |      |           | 804,183      |           |   |            | (513,705     | )         
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|                                                     |                                                          | Net cash provided by
(used in) operating
activities |           |                                  | 2,953,781  |      |           |              | 94,449    |   |            |              | (3,031,916 | )
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|Cash flows from investing activities:                |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|                                                     | Decrease (increase) in restricted cash                   |                                                     |           | 720,187                          |            |      |           | (618,543     | )         |   |            | 360,502      |           
|                                                     | Proceeds from sale of property and equipment             |                                                     |           | 1,573,495                        |            |      |           | 2,366,242    |           |   |            | 320,039      |           
|                                                     | Purchase of property and equipment                       |                                                     |           | (519,894                         | )          |      |           | (510,516     | )         |   |            | (1,625,734   | )         
|                                                     | Increase in land held for sale                           |                                                     |           | (711,531                         | )          |      |           |             |           |   |            |             |           
|                                                     | Purchase of mineral rights and pit development           |                                                     |           |                                 |            |      |           | (112,262     | )         |   |            | (717,474     | )         
|                                                     | Proceeds from sale of mineral rights and
pit development |                                                     |           | 557,587                          |            |      |           |             |           |   |            |             |           
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|                                                     |                                                          | Net cash provided by
(used in) investing
activities |           |                                  | 1,619,844  |      |           |              | 1,124,921 |   |            |              | (1,662,667 | )
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|Cash flows from financing activities:                |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|                                                     | Repayment of capital lease obligations                   |                                                     |           | (1,285,232                       | )          |      |           | (1,105,301   | )         |   |            | (1,183,847   | )         
|                                                     | Proceeds received from notes payable                     |                                                     |           | 600,000                          |            |      |           | 4,182,533    |           |   |            | 6,055,556    |           
|                                                     | Repayment of notes payable                               |                                                     |           | (2,827,364                       | )          |      |           | (3,890,694   | )         |   |            | (4,532,017   | )         
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|                                                     |                                                          | Net cash provided by
(used in) financing
activities |           |                                  | (3,512,596 | )    |           |              | (813,462  | ) |            |              | 339,692    |  
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|Net increase (decrease) in cash and cash equivalents |                                                          |                                                     | 1,061,029 |                                  |            |      | 405,908   |              |           |   | (4,354,891 | )           
|Cash and cash equivalents at beginning of year       |                                                          |                                                     | 2,228,506 |                                  |            |      | 1,822,598 |              |           |   | 6,177,489  |             
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             
|Cash and cash equivalents at end of year             |                                                          | $                                                   | 3,289,535 |                                  |            | $    | 2,228,506 |              |           | $ | 1,822,598  |             
|                                                     |                                                          |                                                     |           |                                  |            |      |           |              |           |   |            |             

The Accompanying Notes are an Integral Part of the Financial Statements

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##### Table of Contents



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

|                                                                                            |                                                                                                    |                                               |           |                                  |           |      |        |            |           |   |            |            |           |  
|------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------- | --------- | -------------------------------- | --------- | ---- | ------ | ---------- | --------- | - | ---------- | ---------- | --------- | -
|                                                                                            |                                                                                                    |                                               |           | For the Years Ended December 31,
|                                                                                            |                                                                                                    |                                               |           |                                 
|                                                                                            |                                                                                                    |                                               |           | 2002                             |           | 2001 |        | 2000      
|                                                                                            |                                                                                                    |                                               |           |                                  |           |      |        |           
|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)                                                                                  |                                               | $         | 738,141                          |           |      | $      | (2,523,931 | )         |   | $          | (1,574,586 | )        
|                                                                                            | Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities: |                                               |           |                                  |           |      |        |            |           |   |            |            |          
|                                                                                            |                                                                                                    | Depreciation and amortization                 |           |                                  | 2,816,406 |      |        |            | 2,811,042 |   |            |            | 2,681,037 |  
|                                                                                            |                                                                                                    | (Gain) loss on sale of
property and equipment |           |                                  | (34,025   | )    |        |            | 64,872    |   |            |            | (106,280  | )
|                                                                                            |                                                                                                    | Deferred taxes, net                           |           |                                  | 504,234   |      |        |            | (638,448  | ) |            |            | (24,566   | )
|                                                                                            |                                                                                                    | Allowance for doubtful accounts               |           |                                  | (275,079  | )    |        |            | 163,193   |   |            |            | 301,895   |  
|                                                                                            |                                                                                                    | Inventory allowance                           |           |                                  | 1,000,000 |      |        |            |          |   |            |            |          |  
|                                                                                            |                                                                                                    | Impairment of goodwill                        |           |                                  |          |      |        |            | 1,420,704 |   |            |            |          |  
|Changes in Operating Assets and Liabilities:                                                |                                                                                                    |                                               |           |                                  |           |      |        |            |           |   |            |           
|                                                                                            | Accounts receivable                                                                                |                                               |           | 449,610                          |           |      |        | (7,243,533 | )         |   |            | 4,657,423  |          
|                                                                                            | Claims receivable, current                                                                         |                                               |           | (387,878                         | )         |      |        |           |           |   |            |           |          
|                                                                                            | Prepaid expenses and other                                                                         |                                               |           | 69,126                           |           |      |        | 344,928    |           |   |            | 638,042    |          
|                                                                                            | Inventory                                                                                          |                                               |           | 2,383,353                        |           |      |        | (1,198,218 | )         |   |            | (1,071,280 | )        
|                                                                                            | Income tax receivable                                                                              |                                               |           |                                 |           |      |        | 774,000    |           |   |            | (774,000   | )        
|                                                                                            | Costs and estimated earnings in excess of billings on
uncompleted contracts                        |                                               |           | 3,750,993                        |           |      |        | 4,533,955  |           |   |            | (969,076   | )        
|                                                                                            | Refundable deposits                                                                                |                                               |           | 4,506                            |           |      |        | 121,455    |           |   |            | (92,885    | )        
|                                                                                            | Claims receivable, less current portion                                                            |                                               |           | (1,993,081                       | )         |      |        | (5,968,026 | )         |   |            |           |          
|                                                                                            | Other assets                                                                                       |                                               |           | 48,335                           |           |      |        | (80,558    | )         |   |            |           |          
|                                                                                            | Accounts payable                                                                                   |                                               |           | (7,113,468                       | )         |      |        | 9,419,871  |           |   |            | (3,201,679 | )        
|                                                                                            | Accrued liabilities                                                                                |                                               |           | 1,885,113                        |           |      |        | (477,700   | )         |   |            | (1,097,622 | )        
|                                                                                            | Billings in excess of costs and estimated earnings on
uncompleted contracts                        |                                               |           | (892,505                         | )         |      |        | (1,429,157 | )         |   |            | (2,398,339 | )        
|                                                                                            |                                                                                                    |                                               |           |                                  |           |      |        |            |           |   |            |           
|Net cash provided by (used in) operating activities                                         |                                                                                                    | $                                             | 2,953,781 |                                  |           | $    | 94,449 |            |           | $ | (3,031,916 | )         
|                                                                                            |                                                                                                    |                                               |           |                                  |           |      |        |            |           |   |            |           

The Accompanying Notes are an Integral Part of the Financial Statements

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##### Table of Contents



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, 2002, 2001 and 2000 of $932,657, $(3,404,262) and $(2,139,685)
and has provided (used) cash in operating activities of $2,953,781, $94,449 and
$(3,031,916) for the years ended December 31, 2002, 2001 and 2000. In order to
improve working capital, the Company executed a definitive agreement on March
22, 2002 to sell certain pit assets classified as assets held for sale at
December 31, 2001 to United Metro Materials Inc. (United Metro). The
transaction closed on May 9, 2002. The net book value of assets sold and
liabilities assumed was $51,668. Proceeds from the sale totaled $3,833,760,
which included payments from United Metro and refunds of certain pit and
equipment costs. In connection with the transaction, United Metro also assumed
$1,693,267 in future operating lease obligations resulting in a decrease of
$38,216 in monthly lease payments. If sales during the twenty-four months
beginning May 2002, as measured in tons of materials sold, meet or exceed a
stipulated minimum amount, United Metro will pay an additional $250,000 as
specified in the purchase agreement. Cash proceeds from the sale of the
Prescott pit assets were primarily used to reduce subcontract, trade payables
and eliminate $211,525 in debt. During 2003, the Company may also consider the
disposal of other assets as a means to increase working capital. Should the
Company not be able to sell other assets, or raise additional capital 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, 2001 and for the year ended December
31, 2000 have been reclassified in the accompanying consolidated financial
statements to conform with the current year presentation. These
reclassifications had no effect on previously reported net loss or
stockholders equity.

Accounting Estimates:

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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, inventory allowance, 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.

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##### Table of Contents



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

1. Summary of Significant Accounting Policies and Use of Estimates
(Continued):

Revenue and Cost Recognition (Continued):

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, 2002 and 2001, the
total amount of claims that have been submitted or soon-to-be submitted was
approximately $46,740,700 and $54,407,238, respectively. Of those sums, the
Companys portion of the claims total was $30,139,584 and $29,396,539 and the
balance of $16,601,116 and $25,010,699 pertains to prime contractor or
subcontractors claims. Relative to the aforementioned claims, the Company has
recorded approximately $8,348,985 and $7,754,448 in cumulative claim revenue as
of December 31, 2002 and 2001, to offset costs incurred to-date on the claims.
In the accompanying December 31, 2002 balance sheet, claims receivable in the
amount of $8,348,985 has been recorded in connection with claims filed. The
claim receivable is comprised of a long-term portion of $7,961,107 and a
current portion of $387,878. In addition, the Company also recorded
approximately $126,860 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 $8,475,845, net of
professional fees, will reduce income. Conversely, a payment for those same
items in excess of $8,475,845, net of professional fees, will increase 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.

Cash and Cash Equivalents:

The Company considers all highly liquid instruments purchased with an
initial maturity of three (3) months or less to be cash equivalents.

Restricted Cash:

At December 31, 2002 and 2001, funds in the amount of $1,681,361 and
$2,401,548, 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.

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, 2002
and 2001, the Company had established an allowance for potentially
uncollectible accounts receivable in the amounts of $287,333 and $562,412,
respectively. During the years ended December 31, 2002, 2001 and 2000 the
Company incurred bad debt expense in the amounts of $201,089, $171,037 and
$489,379, respectively.

Inventory, net:

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. At December 31,
2002, the Company had established an allowance for potentially obsolete
inventory in the amount of $1,000,000.

Property and Equipment:

Property and equipment are recorded at cost. Depreciation charged to
operations during the years ended December 31, 2002, 2001 and 2000 was
$2,727,860, $2,529,281 and $2,422,470, respectively. Depreciation is provided
for on the straight-line method, over the estimated useful lives. Leasehold
improvements are recorded at cost and are depreciated over their estimated
useful lives or the lease term, whichever is shorter.

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

1. Summary of Significant Accounting Policies and Use of Estimates (Continued):

Property and Equipment (Continued):

The estimated useful lives of property and equipment are:

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

At December 31, 2002 and 2001, property and equipment with a net book
value of $14,555,646 and $15,802,984, 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, 2002, 2001 and
2000 was $0, $80,029 and $80,029, respectively. Based on an analysis of the
carrying value of goodwill, 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.

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.

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:

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

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##### Table of Contents



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

1. Summary of Significant Accounting Policies and Use of Estimates (Continued):

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

Based on an analysis of the carrying value of goodwill, 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 transaction closed on May 9, 2002. The net book value of assets sold and
liabilities assumed was $51,668. Proceeds from the sale totaled $3,833,760,
which included payments from United Metro and refunds of certain pit and
equipment costs. In connection with the transaction, United Metro also assumed
$1,693,267 in future operating lease obligations resulting in a decrease of
$38,216 in monthly lease payments. If sales during the twenty-four months
beginning May 2002, as measured in tons of materials sold, meet or exceed a
stipulated minimum amount, United Metro will pay an additional $250,000 as
specified in the purchase agreement. Cash proceeds from the sale of the
Prescott pit assets were primarily used to reduce subcontract, trade payables
and eliminate $211,525 in debt. Accordingly, $3,213,484 of assets consisting
primarily of inventory and equipment has 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.

Business Combinations and Goodwill and Other Intangible Assets:

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. Based on an analysis of the carrying value of goodwill, 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 operations.

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##### Table of Contents



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

1.     Summary of Significant Accounting Policies and Use of Estimates (Continued):

Adoption of SFAS No. 145:

In April 2002, FASB issued Statement No. 145 (SFAS No. 145), Rescission
of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections effective on or after May 15, 2002. This Statement
rescinds SFAS No. 4 and an amendment of that Statement, and SFAS No. 64. This
Statement also rescinds SFAS No. 44. This Statement amends SFAS No. 13, to
eliminate an inconsistency between the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. This Statement also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The adoption of SFAS
No. 145 did not have a material effect on the Companys financial position or
results of operations.

New Accounting Announcements not yet adopted:

In June 2001, Financial Accounting Standards Board (FASB) issued Statement
No. 143 (SFAS No. 143), Accounting for Asset Retirement Obligations,
effective for fiscal years beginning after June 15, 2002. The Statement
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. When the
liability is initially recorded, the entity capitalizes a cost by increasing
the carrying amount of the related long-lived asset. Over time, the liability
is accreted to its present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon settlement.
The adoption of SFAS No. 143 is not expected to have a material effect on the
Companys financial position or results of operations.

In June 2002, FASB issued Statement No. 146 (SFAS No. 146), Accounting
for Costs Associated with Exit or Disposal Activities, effective for
activities that are initiated after December 31, 2002, with early application
encouraged. This Statement addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies Emerging Issues
Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). The adoption of SFAS No. 146 is not
expected to have a material effect on the Companys financial position or
results of operations.

In October 2002, FASB issued Statement No. 147 (SFAS No. 147),
Acquisitions of Certain Financial Institutions, An Amendment of FASB
Statements No. 72 and 144 and FASB Interpretation No. 9, effective for
acquisitions on or after October 1, 2002. SFAS No. 72, and FASB Interpretation
No. 9, provided interpretive guidance on the application of the purchase method
to acquisitions of financial institutions. Except for transactions between two
or more mutual enterprises, this Statement removes acquisitions of financial
institutions from the scope of both SFAS No. 72 and FASB Interpretation 9 and
requires that those transactions be accounted for in accordance with SFAS No.
141, Business Combinations, and No. 142, Goodwill and Other Intangible
Assets. Thus, the requirement in paragraph 5 of SFAS No. 72 to recognize (and
subsequently amortize) any excess of the fair value of liabilities assumed over
the fair value of tangible and identifiable intangible assets acquired as an
unidentifiable intangible asset no longer applies to acquisitions within the
scope of SFAS No. 147. In addition, SFAS No. 147 amends SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, to include in
its scope long-term customer-relationship intangible assets of financial
institutions such as depositor-and borrower-relationship intangible assets and
credit cardholder intangible assets. Consequently, those intangible assets are
subject to the same undiscounted cash flow recoverability test and impairment
loss recognition and measurement provisions that Statement 144 requires for
other long-lived assets that are held and used. The adoption of SFAS No. 147 is
not expected to have a material effect on the Companys financial position or
results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 expands on the
accounting guidance of SFAS No. 5, 57 and 107 and incorporates without change
the provisions of FASB Interpretation No. 34, which is being superceded. FIN
45 elaborates on existing disclosure requirements for most guarantees,
including standby letters of credit. It also clarifies that guarantees must be
recognized as an initial liability for fair value, or market value, of the
obligations assumed under the guarantee and that this information must be
disclosed in interim and annual financial statements. FIN 45 applies on a
prospective basis to guarantees issued or modified after December 31, 2002.
The Company does not anticipate the adoption of FIN 45 to have a material
effect on its consolidated financial position or results of operations.

F-12



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##### Table of Contents



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

1.     Summary of Significant Accounting Policies and Use of Estimates (Continued):

New Accounting Announcements not yet adopted (Continued):

In December 2002, FASB issued Statement No. 148 (SFAS No. 148),
Accounting for Stock-Based Compensation  Transition and Disclosure  An
Amendment of FASB Statement No. 123. SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company is required to follow the prescribed format and provide
the additional disclosures required by SFAS No. 148 in its annual financial statements for the year ended December 31,
2002 and must also provide the disclosures in its quarterly reports containing
condensed financial statements for interim periods beginning with the quarterly
period ended March 31, 2003. The adoptionof SFAS No. 148 is not expected to
have a material effect on the Companys financial position or results of
operations

In January 2003, FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46) which requires the consolidation of
variable interest entities, as defined. FIN 46 is applicable to financial
statements to be issued by the Company after 2002; however, disclosures are
required currently if the Company expects to consolidate any variable interest
entities. The Company does not currently believe that any material entities
will be consolidated with the Company as a result of FIN 46.

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, 2002 and 2001, the Company has
uninsured cash, cash equivalents, and restricted cash in the amounts of
$4,825,721 and $6,603,140, respectively.

3. Accounts Receivable, net:

Accounts receivable, net consists of the following:

|                                      |  |              |            |              |  |   |            |  
|------------------------------------- |  | ------------ | ---------- | ------------ |  | - | ---------- | -
|                                      |  | December 31, |            | December 31,
|                                      |  | 2002         |            | 2001        
|                                      |  |              |            |             
|Contracts in progress                 |  | $            | 8,854,440  |              |  | $ | 9,114,437  |  
|Contracts in progress  retention     |  |              | 5,619,937  |              |  |   | 6,740,547  |  
|Completed contracts                   |  |              | 5,420      |              |  |   | 8,775      |  
|Completed contracts  retention       |  |              | 119,444    |              |  |   | 83,500     |  
|Other trade receivables               |  |              | 6,241,710  |              |  |   | 5,894,753  |  
|Other receivables                     |  |              | 649,755    |              |  |   | 98,304     |  
|                                      |  |              |            |              |  |   |            |  
|                                      |  |              | 21,490,706 |              |  |   | 21,940,316 |  
|Less: Allowance for doubtful accounts |  |              | (287,333   | )            |  |   | (562,412   | )
|                                      |  |              |            |              |  |   |            |  
|                                      |  | $            | 21,203,373 |              |  | $ | 21,377,904 |  
|                                      |  |              |            |              |  |   |            |  

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##### Table of Contents



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

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,
|                                        |  | 2002         |              | 2001        
|                                        |  |              |              |             
|Costs incurred on uncompleted contracts |  | $            | 450,305,829  |              |  | $ | 443,326,113  |  
|Estimated earnings to date              |  |              | 18,366,100   |              |  |   | 14,792,091   |  
|                                        |  |              |              |              |  |   |              |  
|                                        |  |              | 468,671,929  |              |  |   | 458,118,204  |  
|Less: billings to date                  |  |              | (462,900,913 | )            |  |   | (451,481,781 | )
|                                        |  |              |              |              |  |   |              |  
|                                        |  |              | 5,771,016    |              |  |   | 6,636,423    |  
|Less: claims receivable, long term      |  |              | (7,961,107   | )            |  |   | (5,968,026   | )
|                                        |  |              |              |              |  |   |              |  
|                                        |  | $            | (2,190,091   | )            |  | $ | 668,397      |  
|                                        |  |              |              |              |  |   |              |  

Included in the accompanying balance sheets under the following captions:

|                                                                            |  |              |            |              |  |   |            |  
|--------------------------------------------------------------------------- |  | ------------ | ---------- | ------------ |  | - | ---------- | -
|                                                                            |  | December 31, |            | December 31,
|                                                                            |  | 2002         |            | 2001        
|                                                                            |  |              |            |             
|Costs and estimated earnings in excess of billings on
uncompleted contracts |  | $            | 1,543,061  |              |  | $ | 5,294,054  |  
|Billings in excess of costs and estimated earnings on
uncompleted contracts |  |              | (3,733,152 | )            |  |   | (4,625,657 | )
|                                                                            |  |              |            |              |  |   |            |  
|                                                                            |  | $            | (2,190,091 | )            |  | $ | 668,397    |  
|                                                                            |  |              |            |              |  |   |            |  

5. Land held for sale:

In September 2002, the Company paid $711,531 to acquire a parcel of land.
The land is held for sale by the construction materials segment. The Company
intends to sell the land for cash within the next year.

6. Property and Equipment:

Property and equipment consists of the following:

|                              |  |              |            |              |  |   |            |  
|----------------------------- |  | ------------ | ---------- | ------------ |  | - | ---------- | -
|                              |  | December 31, |            | December 31,
|                              |  | 2002         |            | 2001        
|                              |  |              |            |             
|Land                          |  | $            | 827,639    |              |  | $ | 827,639    |  
|Plants                        |  |              | 7,283,099  |              |  |   | 7,283,099  |  
|Computer equipment            |  |              | 475,902    |              |  |   | 382,962    |  
|Equipment                     |  |              | 11,438,669 |              |  |   | 12,262,847 |  
|Vehicles                      |  |              | 3,542,820  |              |  |   | 2,431,937  |  
|Office furniture and fixtures |  |              | 61,995     |              |  |   | 61,995     |  
|Improvements                  |  |              | 446,541    |              |  |   | 442,814    |  
|                              |  |              |            |              |  |   |            |  
|                              |  |              | 24,076,665 |              |  |   | 23,693,293 |  
|Accumulated depreciation      |  |              | (9,521,019 | )            |  |   | (8,425,502 | )
|                              |  |              |            |              |  |   |            |  
|                              |  | $            | 14,555,646 |              |  | $ | 15,267,791 |  
|                              |  |              |            |              |  |   |            |  

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##### Table of Contents



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

7. Accounts Payable:

Accounts payable consists of the following:

|           |  |              |            |              |  |   |            | 
|---------- |  | ------------ | ---------- | ------------ |  | - | ---------- | 
|           |  | December 31, |            | December 31,
|           |  | 2002         |            | 2001        
|           |  |              |            |             
|Trade      |  | $            | 16,108,962 |              |  | $ | 22,897,786 | 
|Retentions |  |              | 3,803,554  |              |  |   | 4,128,198  | 
|           |  |              |            |              |  |   |            | 
|           |  | $            | 19,912,516 |              |  | $ | 27,025,984 | 
|           |  |              |            |              |  |   |            | 

8. Accrued Liabilities:

Accrued liabilities consists of the following:

|             |  |              |           |              |  |   |           | 
|------------ |  | ------------ | --------- | ------------ |  | - | --------- | 
|             |  | December 31, |           | December 31,
|             |  | 2002         |           | 2001        
|             |  |              |           |             
|Compensation |  | $            | 2,031,966 |              |  | $ | 715,552   | 
|Taxes        |  |              | 241,772   |              |  |   | 517,853   | 
|Insurance    |  |              | 212,701   |              |  |   | 144,616   | 
|Other        |  |              | 1,210,672 |              |  |   | 433,977   | 
|             |  |              |           |              |  |   |           | 
|             |  | $            | 3,697,111 |              |  | $ | 1,811,998 | 
|             |  |              |           |              |  |   |           | 

9. Notes Payable:

Notes payable consists of the following:

|                                                                                                                                                                                                   |  |              |           |              |  |   |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | ------------ |  | - | --------- | 
|                                                                                                                                                                                                   |  | December 31, |           | December 31,
|                                                                                                                                                                                                   |  | 2002         |           | 2001        
|                                                                                                                                                                                                   |  |              |           |             
|Notes payable, interest rates ranging from 6.28% to 7.81%
with monthly payments of $42,483, due dates ranging from July 1, 2003 to June 4, 2004, collateralized by equipment                       |  | $            | 447,154   |              |  | $ | 1,377,503 | 
|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                      |  |              | 115,335   |              |  |   | 218,862   | 
|Notes payable, interest rates ranging from 6.9% to 8.11% with
monthly payments of $7,524, due dates ranging from May 11,
2004 to November 1, 2004, collateralized by equipment                     |  |              | 136,981   |              |  |   | 285,890   | 
|Notes payable, variable interest rate was 4.25% at December
31,2002, with monthly principal payments of $15,536, due
dates ranging from July 14, 2005 to May 13, 2006,
collateralized by equipment |  |              | 610,672   |              |  |   | 797,102   | 
|Non-interest bearing note payable, with monthly payments of
$5,012, due September 28, 2004, collateralized by equipment                                                                            |  |              | 105,251   |              |  |   | 165,394   | 
|                                                                                                                                                                                                   |  |              |           |              |  |   |           | 
|                                                                                                                                                                                                   |  | $            | 1,415,393 |              |  | $ | 2,844,751 | 
|                                                                                                                                                                                                   |  |              |           |              |  |   |           | 

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##### Table of Contents



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

9. Notes Payable (Continued):

Notes payable consists of the following (Continued):

|                                                                                                                                                                                             |  |              |            |              |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ------------ |  | - | ---------- | -
|                                                                                                                                                                                             |  | December 31, |            | December 31,
|                                                                                                                                                                                             |  | 2002         |            | 2001        
|                                                                                                                                                                                             |  |              |            |             
|Total from previous page                                                                                                                                                                     |  | $            | 1,415,393  |              |  | $ | 2,844,751  |  
|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       |  |              | 1,020,152  |              |  |   | 1,325,362  |  
|Note payable, 4.75% interest rate, with monthly payments of
$126,507, due July 6, 2003, collateralized by workers
compensation and general liability insurance policies                     |  |              | 871,693    |              |  |   |           |  
|Note payable, variable interest rate was 7.25% at December 31,
2002, with monthly interest only payments and a principal
payment of $600,000, due September 29, 2003, collateralized
by land |  |              | 600,000    |              |  |   |           |  
|Non-interest bearing note payable, with monthly payments of
$1,344, due Februay 7, 2003, collateralized by equipment                                                                         |  |              | 1,344      |              |  |   |           |  
|Notes payable, interest rates ranging from 4.0% to 9.0%, with
monthly payments of $75,720, due dates ranging from February
10, 2004 to October 20, 2005, collateralized by equipment         |  |              | 1,772,225  |              |  |   |           |  
|Note payable, variable interest rate was 4.75% at December 31,
2002, with interest only payments until January 1, 2004,
principal and interest there after due December 31, 2007,            |  |              |            |              |  |   |            |  
|collateralized by all assets of the Company (See Note 10)                                                                                                                                    |  |              | 7,000,000  |              |  |   | 7,000,000  |  
|                                                                                                                                                                                             |  |              |            |              |  |   |            |  
|                                                                                                                                                                                             |  |              | 12,680,807 |              |  |   | 11,170,113 |  
|Less: current portion                                                                                                                                                                        |  |              | (3,424,209 | )            |  |   | (1,685,634 | )
|                                                                                                                                                                                             |  |              |            |              |  |   |            |  
|                                                                                                                                                                                             |  | $            | 9,256,598  |              |  | $ | 9,484,479  |  
|                                                                                                                                                                                             |  |              |            |              |  |   |            |  

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

|     |  |   |            | 
|---- |  | - | ---------- | 
|2003 |  | $ | 3,424,209  | 
|2004 |  |   | 3,079,727  | 
|2005 |  |   | 2,406,223  | 
|2006 |  |   | 1,894,311  | 
|2007 |  |   | 1,876,337  | 
|     |  |   |            | 
|     |  | $ | 12,680,807 | 
|     |  |   |            | 

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##### Table of Contents



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

10. Line of Credit:

Effective December 31, 2002, the Company amended and renewed the line of
credit agreement. Under the amended agreement, the interest rate remained
Chase Manhattan Banks prime rate, plus 1.5% through January 1, 2004 at which
time the line of credit converts to a term agreement requiring monthly
principal and interest payments through December 31, 2007. 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 as well as maintain a ratio of total debt to tangible net worth. As of
December 31, 2002, the Company was in compliance with the covenants. As of
December 31, 2002 and 2001, Meadow Valley Corporation had drawn down the entire
$7,000,000, from the line of credit.

11. 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, 2002 and 2001, the Company provided
construction materials to various related parties in the amounts of $12,282 and
$108,112, respectively. Included in accounts receivable at December 31, 2002
and 2001 are amounts due from related parties, in the amounts of $14,666 and
$27,337, respectively.

Professional Services:

During the years ended December 31, 2002, 2001 and 2000, a related party
rendered professional services to the Company in the amounts of $23,491,
$14,573 and $23,342, respectively. Included in accounts payable at December
31, 2002 and 2001 are amounts due to a related party, in the amounts of $3,990
and $7,380, respectively. During each of the years ended December 31, 2002,
2001 and 2000, the Company paid $30,000 to outside members of the board of
directors.

Subcontractor/Supplier:

Various related parties provided materials and equipment used in the
Companys construction service and material businesses during the years ended
December 31, 2002, 2001 and 2000, in the amounts of $2,099,905, $4,114,319 and
$535,694, respectively. Included in accounts payable at December 31, 2002 and
2001 are amounts due to related parties, in the amounts of $81,471 and
$1,039,528, respectively, related to subcontracts and supplies.

Royalties:

During the years ended December 31, 2002, 2001 and 2000, the Company paid
a related party mining royalties in the amounts of $514,296, $390,144 and
$328,310, respectively. Included in accrued liabilities at December 31, 2002
and 2001 are amounts due to a related party for royalties, in the amounts of
$31,276 and $30,464, respectively.

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, 2002, 2001 and 2000 amount to $0,
$9,240 and $10,080, respectively.

F-17



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##### Table of Contents



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

12. Income Taxes:

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

|         |         |   |                                  |   |      |   |         |        |  |   |         |         | 
|-------- | ------- | - | -------------------------------- | - | ---- | - | ------- | ------ |  | - | ------- | ------- | 
|         |         |   | For the Years Ended December 31,
|         |         |   |                                 
|         |         |   | 2002                             |   | 2001 |   | 2000   
|         |         |   |                                  |   |      |   |        
|Current: |         |   |                                  |   |      |   |         |        |  |   |         |        
|         | Federal |   | $                                |  |      |   | $       | 30,183 |  |   | $       | 231,663 | 
|         | State   |   |                                  |  |      |   |         |       |  |   |         | 28,632  | 
|         |         |   |                                  |   |      |   |         |        |  |   |         |        
|         |         |   |                                 |   |      |   | 30,183  |        |  |   | 260,295 |        
|Deferred |         |   | (198,629                         | ) |      |   | 638,448 |        |  |   | 24,566  |        
|         |         |   |                                  |   |      |   |         |        |  |   |         |        
|         |         | $ | (198,629                         | ) |      | $ | 668,631 |        |  | $ | 284,861 |        
|         |         |   |                                  |   |      |   |         |        |  |   |         |        

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

|                           |                  |   |              |            |              |   |           |            |  
|-------------------------- | ---------------- | - | ------------ | ---------- | ------------ | - | --------- | ---------- | -
|                           |                  |   | December 31, |            | December 31,
|                           |                  |   | 2002         |            | 2001        
|                           |                  |   |              |            |             
|Deferred tax asset:        |                  |   |              |            |              |   |           |           
|                           | Other            |   | $            | 549,288    |              |   | $         | 613,705    |  
|                           | NOL carryforward |   |              | 952,558    |              |   |           | 1,600,198  |  
|                           |                  |   |              |            |              |   |           |           
|                           |                  |   | 1,501,846    |            |              |   | 2,213,903 |           
|Deferred tax liability:    |                  |   |              |            |              |   |           |           
|                           | Depreciation     |   |              | (2,766,891 | )            |   |           | (2,718,734 | )
|                           |                  |   |              |            |              |   |           |           
|                           |                  |   | (1,265,045   | )          |              |   | (504,831  | )         
|Valuation Allowance        |                  |   |             |            |              |   | (255,980  | )         
|                           |                  |   |              |            |              |   |           |           
|Net deferred tax liability |                  | $ | (1,265,045   | )          |              | $ | (760,811  | )         
|                           |                  |   |              |            |              |   |           |           

For the years ended December 31, 2002, 2001 and 2000, 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,
|                                                            |                      |   |                                 
|                                                            |                      |   | 2002                             |          | 2001 |   | 2000      
|                                                            |                      |   |                                  |          |      |   |           
|Statutory rate applied to income
(loss) before income taxes |                      | $ | 318,502                          |          |      | $ | (1,085,471 | )       |   | $ | (632,212 | )      
|State taxes, net of federal benefit                         |                      |   | 30,913                           |          |      |   | (35,902    | )       |   |   | (61,362  | )      
|Increase (decrease) in income taxes
resulting from:         |                      |   |                                  |          |      |   |            |         |   |   |          |        
|                                                            | Valuation Allowance  |   |                                  | (255,980 | )    |   |            |        |   |   |          |        | 
|                                                            | Non-Deductible items |   |                                  | 14,599   |      |   |            | 525,015 |   |   |          | 50,557  | 
|                                                            | Other                |   |                                  | 90,595   |      |   |            | (72,273 | ) |   |          | 358,156 | 
|                                                            |                      |   |                                  |          |      |   |            |         |   |   |          |        
|                                                            |                      | $ | 198,629                          |          |      | $ | (668,631   | )       |   | $ | (284,861 | )      
|                                                            |                      |   |                                  |          |      |   |            |         |   |   |          |        

At December 31, 2002, the Company has available federal and state
operating loss carry-forwards of approximately $3,013,000, which will expire
through the year 2022.

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##### Table of Contents



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

13. Commitments:

The Company is currently leasing office space in Phoenix, Arizona under a
non-cancelable operating lease agreement expiring in December 2003. The lease
agreement provides for monthly payments of $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 $113,456, $115,059 and $96,765 for the years ended
December 31, 2002, 2001 and 2000, 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 $6,641,195,
$8,307,423 and $4,369,138 for the years ended December 31, 2002, 2001 and 2000,
respectively. Minimum future rental payments under non-cancelable operating
leases having remaining terms in excess of one year as of December 31, 2002 for
each of the next five years and in aggregate are:

|                   |  |   |            | 
|------------------ |  | - | ---------- | 
|2003               |  | $ | 4,937,836  | 
|2004               |  |   | 4,515,003  | 
|2005               |  |   | 2,775,341  | 
|2006               |  |   | 1,583,473  | 
|2007               |  |   | 1,055,044  | 
|Subsequent to 2007 |  |   | 2,513,023  | 
|                   |  |   |            | 
|                   |  | $ | 17,379,720 | 
|                   |  |   |            | 

The Company has entered into employment contracts with some of its
executive officers and key managers 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, 2002, 2001 and 2000, the total commitments, excluding
benefits and incentives, amount to $829,875, $498,875 and $870,188,
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 lesser of the expected useful life or the
lease term. Depreciation on the assets under capital leases charged to expense
in 2002, 2001 and 2000 was $482,748, $621,147 and $762,548, respectively. At
December 31, 2002 and 2001, property and equipment included $3,952,220 and
$5,017,796, respectively, of vehicles and equipment under capital leases.

Minimum future lease payments under capital leases as of December 31, 2002
for each of the next four years and in aggregate are:

|                                           |  |   |           |  
|------------------------------------------ |  | - | --------- | -
|2003                                       |  | $ | 1,110,505 |  
|2004                                       |  |   | 995,788   |  
|2005                                       |  |   | 653,722   |  
|2006                                       |  |   | 414,717   |  
|                                           |  |   |           |  
|Total minimum payments                     |  |   | 3,174,732 |  
|Less: amount representing interest         |  |   | (377,714  | )
|                                           |  |   |           |  
|Present value of net minimum lease payment |  |   | 2,797,018 |  
|Less: current portion                      |  |   | (921,306  | )
|                                           |  |   |           |  
|                                           |  | $ | 1,875,712 |  
|                                           |  |   |           |  

F-19



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##### Table of Contents



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

14. 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. In June 2002,
the exercise period was extended until December 31, 2002. The warrants expired
and were de-listed at the time of market closing on December 31, 2002.

15. 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
made 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 $27,605,303 of which approximately $23,889,452 is
on behalf of the Company and the balance of $3,715,851 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,
constructive changes, plan errors and omissions, contract
modifications and associated delay costs.                                                                                                                                                                                                                                                                                                                                                                                       

The above claims combined total approximately $46,740,700. Of that sum,
the Companys portion of the claims total was approximately $30,139,584 and the
balance of approximately $16,601,116 pertains to prime contractor or
subcontractors claims. Total claim amounts reported by the Company are
approximate and are subject to revision as final documentation progresses and
as issues are resolved and/or payments made. Relative to the aforementioned
claims, the Company has recorded approximately $8,348,985 in claim revenue to
offset a portion of costs incurred to date on the claims. The claims
receivable is comprised of a long-term portion of $7,961,107 and a current
portion of $387,878. The current portion of claims receivable results from an
NMSHTD-authorized December 2002 pay estimate containing, among other past due
payments, settlements on only a portion of the claims on one project. In
addition, the Company has also recorded approximately $126,860 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

F-20



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##### Table of Contents



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

15. Litigation and Claim Matters (Continued):

less than $8,475,845, net of professional fees, will reduce income.
Conversely, a payment for those same items in excess of $8,475,845, net of
professional fees, will increase income.

The portion of accounts receivable pertaining to retention withheld on the
contracts for which claims have been filed amounts to $2,013,897. The degree
to which the Company is successful in recovering its costs from the claims may
also impact the amount of retention paid by the owner. The Company believes
that all retention amounts currently being held by the owners on the contracts
with outstanding claims will be paid in full in accordance with the contract
terms. Therefore, no allowance has been made to reduce the receivables due
from the retention on the disputed contracts.

Lawsuits Filed Against Meadow Valley Contractors, Inc.



| | (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s 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s 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 MVCI has filed counter-claims for
approximately $3,000,000 seeking to recover the damages ICS has
caused MVCI through its failure to perform.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Independent from, but related to the ICS issue, the Nevada
State Labor Commissioner (Commission) filed a lawsuit against MVCI
seeking payment of $452,921 from MVCI, as the prime contractor, for
wages and fringes owed but not paid by ICS, MVCIs subcontractor. In
December 2002, the parties agreed to a settlement and the lawsuit was
dismissed. MVCI has paid $209,888.88 and will add this amount to its
counterclaims against ICS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (3) |  | 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
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 $3,000,000. AnA
also filed a complaint on two other projects completed in 1997 where,
as a subcontractor to MVCI, they claim damages of approximately
$715,000 for changed conditions. In June 2002, AnAs lawsuit was
dismissed and in November 2002 a judgment was awarded to MVCI against
AnA and one of two of AnAs managing partners. It is highly unlikely
that MVCI will ever see any portion of the awarded damages due to AnA
having ceased operations.                                                                      
|
| | (4) |  | 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 MVCI has
submitted.                                                                                                                                                                                                                                                                                                                                                          
|
| | (5) |  | MVCI is defending a claimed preference, in the Third Judicial
Court of Salt Lake County, in connection with a payment made to it by
an insurance company, Southern America Insurance Company, in the
approximate amount of $100,000. MVCI believes that the payment is
not a preference, and is vigorously defending the action.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (6) |  | Johnson & Danley Construction Co., Inc. (JDCC), J.D.
Materials, Inc. (JDM) and Joel T. Danley (Danley) (collectively
J&D), Twelfth Judicial District, District of New Mexico  JDCC was
the prime contractor and MVCI was a subcontractor to JDCC on two of
the five contracts involved in MVCIs disputes with the state of New
Mexico. JDCC was also a subcontractor to MVCI on other contracts in
New Mexico. JDM is the owner of an aggregate pit in Alamogordo, NM
and leases the pit to MVCI under a mineral lease                                                                                                                                                                                                                                                                                                                                                                                        

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##### Table of Contents



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

15. Litigation and Claim Matters (Continued):



| |     |  | agreement. Danley is believed to be an officer and owner of JDCC and
JDM. JDCC filed for Chapter 11 bankruptcy protection, which in
accordance with the contract, resulted in the termination of its
contracts with the New Mexico State Highway and Transportation
Department (NMSHTD). The payment and performance
bonds supplied by JDCC in connection with the two contracts for which
JDCC was the prime contractor had been furnished by MVCIs surety
companies. MVCI indemnified the surety companies against losses and
claims on the two contracts. Upon JDCCs termination, the NMSHTD
entered into a takeover agreement with the surety companies who
subsequently entered into an agreement with MVCI to complete the work.
MVCI has successfully completed the projects. In its complaint, J&D
alleged, among other things, that MVCI was partially responsible for
the cause of its bankruptcy and sought damages in an undetermined
amount. On February 10, 2003 for mutual consideration, J&D and MVCI
entered into a settlement agreement whereby the two parties dismiss
their claims and counterclaims in their entirety. The parties have
agreed to jointly prosecute their respective claims against the NMSHTD.                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (7) |  | The Company and all of its Directors were served with a civil
Complaint by Silver State Materials Corp. and Cyrus Spurlino
(collectively Plaintiffs) in case no. CV-S-01-1436-KJD-LRL
(USDC-NV). 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
terms, were not so amended until April 1997, and that such amendment
was not filed with the Securities and Exchange Commission. The
Complaint seeks (i) injunctive relief compelling a Special Meeting of
Shareholders to remove all of the Companys Directors for cause, (ii)
the election of a new Board of Directors, (iii) to compel the Company
to enact amended and restated Bylaws, (iv) monetary damages in an
undisclosed amount, (v) recovery of interest, fees and costs, and
(vi) such other relief as the District Court may deem appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |     |  | The Company and its Directors believe that the Complaint is without
merit and intend to continue their vigorous defense. On December 19,
2001, based upon the Stipulation of the Company, its Directors and the
Plaintiffs, the District Court ordered an open extension of time for
the Defendants to respond to the Complaint, subject to a ten (10) day
written notice from Plaintiffs. At that time, the Company and the
Plaintiffs were engaged in settlement discussions that included the
possible sale of the Companys subsidiary, Ready Mix, Inc. (RMI).
NRS 78.416(2), and related statutes, apparently prohibits the Company
from selling 5 percent or more of the aggregate market value of its
assets to an interested stockholder. Due to this probable restriction,
the Companys Board of Directors concluded and advised the Plaintiffs
that the proposed transaction involving the sale of RMI would not be in
the best interests of the Company or its Shareholders. The Plaintiffs
have since threatened resumption of the litigation and their intent to
file an Amended Complaint (as interested Shareholders) against the
Companys Board. As of this date, the extension of time to respond to
the Complaint remains open and the Plaintiffs have not served written
notice requiring the Defendants response. Plaintiffs have not filed
an Amended Complaint. The Companys subsidiary, RMI, has not been
sold, nor are there any ongoing discussions with the Plaintiffs
regarding the sale of RMI. Unless the Company elects to sell RMI or
its assets and redeem Plaintiffs Shares, further legal proceedings
against the Company may occur.

16. Statement of Cash Flows:

Non-Cash Operating Activities:

The Company recognized operating activities that affected assets and
liabilities, but did not result in cash receipts or payments. This non-cash
activity is as follows:

During the year ended December 31, 2002, the Company had a net decrease in
the allowance for doubtful accounts of $275,079, due primarily to the write off
of a receivable, which was secured by a second deed of trust on a parcel of
land. The Company acquired the property from the first deed of trust holder
prompting the write-off of the receivable.

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##### Table of Contents



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

16. Statement of Cash Flows (Continued):

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 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.

During the years ended December 31, 2002, 2001 and 2000, the Company
financed the purchase of property, plant and equipment in the amounts of
$2,500,099, $2,141,357 and $4,044,329, respectively.

During the year ended December 31, 2002, the Company financed the purchase
of the annual workers compensation and general liability insurance policies in
the amount of $1,237,960.

17. Significant Customers:

For the years ended December 31, 2002, 2001 and 2000, 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,
|  |  |                                 
|  |  | 2002                             |      | 2001 |  | 2000
|  |  |                                  |      |      |  |     
|A |  |                                  | 21.4 | %    |  |      | 21.9 | % |  |  | 17.5 | %
|B |  |                                  | 14.8 | %    |  |      | 12.5 | % |  |  | 16.3 | %
|C |  |                                  | 11.6 | %    |  |      | 14.7 | % |  |  | 6.1  | %
|D |  |                                  | 1.1  | %    |  |      | 9.6  | % |  |  | 23.0 | %

At December 31, 2002 and 2001, amounts due from the aforementioned
Customers included in restricted cash and accounts receivables, are as follows:

|  |  |                                  |           |      |  |   |           | 
|- |  | -------------------------------- | --------- | ---- |  | - | --------- | 
|  |  | For the Years Ended December 31,
|  |  |                                 
|  |  | 2002                             |           | 2001
|  |  |                                  |           |     
|A |  | $                                | 3,721,503 |      |  | $ | 3,809,567 | 
|B |  |                                  | 1,006,668 |      |  |   | 6,255,403 | 
|C |  |                                  | 2,913,529 |      |  |   | 2,218,976 | 
|D |  |                                  | 200,405   |      |  |   | 350,962   | 

18. 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.

F-23



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##### Table of Contents



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

18. Stock Option Plan (Continued):

The following summarized the stock option transactions:

|                              |           |  |         |          |                 |   |                  |      | 
|----------------------------- | --------- |  | ------- | -------- | --------------- | - | ---------------- | ---- | 
|                              |           |  |         |          |                 |   | Weighted Average
|                              |           |  | Shares  |          | Price per Share
|                              |           |  |         |          |                
|Outstanding January 1, 2000   |           |  | 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             |     
|                              | Forfeited |  |         | (27,625  | )               |   |                  | 4.29 | 
|                              |           |  |         |          |                 |   |                  |     
|Outstanding December 31, 2002 |           |  | 744,025 |          |                 |   | 4.46             |     
|                              |           |  |         |          |                 |   |                  |     

Information relating to stock options at December 31, 2002 summarized by
exercise price is as follows:

|                         |  |             |         |                  |  |                  |   |        |  |                |       |                  |  |  |         |  |  |   |       | 
|------------------------ |  | ----------- | ------- | ---------------- |  | ---------------- | - | ------ |  | -------------- | ----- | ---------------- |  |  | ------- |  |  | - | ----- | 
|                         |  | Outstanding |         | Exercisable     
|                         |  |             |         |                 
|                         |  |             |         |                  |  | Weighted Average |   |        |  |                |       | Weighted Average
|                         |  |             |         |                  |  |                  |   |        |  |                |       |                 
|                         |  |             |         |                  |  | Remaining        |   |        |  |                |       |                  |  |  |         |  |  |  
|Exercise Price Per Share |  | Shares      |         | Life ( In Years) |  | Exercise Price   |   | Shares |  | Exercise Price
|                         |  |             |         |                  |  |                  |   |        |  |               
|$6.25                    |  |             | 134,475 |                  |  |                  | 3 |        |  |                | 6.25  |                  |  |  | 134,475 |  |  |   | 6.25  | 
|$5.41                    |  |             | 2,500   |                  |  |                  | 4 |        |  |                | 5.41  |                  |  |  | 2,500   |  |  |   | 5.41  | 
|$4.375                   |  |             | 140,800 |                  |  |                  | 4 |        |  |                | 4.375 |                  |  |  | 140,800 |  |  |   | 4.375 | 
|$5.31                    |  |             | 80,000  |                  |  |                  | 5 |        |  |                | 5.31  |                  |  |  | 80,000  |  |  |   | 5.31  | 
|$5.875                   |  |             | 85,900  |                  |  |                  | 6 |        |  |                | 5.875 |                  |  |  | 85,900  |  |  |   | 5.875 | 
|$4.563                   |  |             | 20,000  |                  |  |                  | 7 |        |  |                | 4.563 |                  |  |  | 20,000  |  |  |   | 4.563 | 
|$4.00                    |  |             | 20,000  |                  |  |                  | 7 |        |  |                | 4.00  |                  |  |  | 20,000  |  |  |   | 4.00  | 
|$3.875                   |  |             | 78,500  |                  |  |                  | 7 |        |  |                | 3.875 |                  |  |  | 78,500  |  |  |   | 3.875 | 
|$2.438                   |  |             | 181,850 |                  |  |                  | 9 |        |  |                | 2.438 |                  |  |  | 60,617  |  |  |   | 2.438 | 
|                         |  |             |         |                  |  |                  |   |        |  |                |       |                  |  |  |         |  |  |   |       | 
|$2.438 to $6.25          |  |             | 744,025 |                  |  |                  |   |        |  | $              | 4.46  |                  |  |  | 622,792 |  |  | $ | 4.85  | 
|                         |  |             |         |                  |  |                  |   |        |  |                |       |                  |  |  |         |  |  |   |       | 

F-24



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##### Table of Contents



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

18. Stock Option Plan (Continued):

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, 2002, 2001 and 2000. 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, 2002, 2001 and 2000 would have been reduced to the proforma
amounts presented below:

|                                                                                                                                             |             |   |          |      |      |   |            |       |   |   |            |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | - | -------- | ---- | ---- | - | ---------- | ----- | - | - | ---------- | ----- | -
|                                                                                                                                             |             |   | 2002     |      | 2001 |   | 2000      
|                                                                                                                                             |             |   |          |      |      |   |           
|Net income (loss), as reported                                                                                                               |             | $ | 738,141  |      |      | $ | (2,523,931 | )     |   | $ | (1,574,586 | )    
|Add: Stock-based Employee compensation
expense included in reported income,
net of related tax effects                                       |             |   |         |      |      |   |           |       |   |   |           |      
|Deduct: Total stock-based Employee
compensation expense determined under
fair value based methods for all awards,
net of related tax effects |             |   | (105,827 | )    |      |   | (101,797   | )     |   |   | (147,402   | )    
|                                                                                                                                             |             |   |          |      |      |   |            |       |   |   |            |      
|Pro forma net income (loss)                                                                                                                  |             | $ | 632,314  |      |      | $ | (2,625,728 | )     |   | $ | (1,721,988 | )    
|                                                                                                                                             |             |   |          |      |      |   |            |       |   |   |            |      
|Basic net income (loss) per common share                                                                                                     |             |   |          |      |      |   |            |       |   |   |            |      
|                                                                                                                                             | As Reported |   | $        | 0.21 |      |   | $          | (0.71 | ) |   | $          | (0.44 | )
|                                                                                                                                             | Pro forma   |   |          | 0.18 |      |   |            | (0.74 | ) |   |            | (0.49 | )
|Diluted net income (loss) per common share                                                                                                   |             |   |          |      |      |   |            |       |   |   |            |      
|                                                                                                                                             | As Reported |   | $        | 0.21 |      |   | $          | (0.71 | ) |   | $          | (0.44 | )
|                                                                                                                                             | Pro forma   |   |          | 0.18 |      |   |            | (0.74 | ) |   |            | (0.49 | )

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. The weighted average fair value at date of grant for options
granted during 2001 was approximated $.97.

19. Basic Earnings (Loss) Per Share:

The Companys basic net income (loss) per share at December 31, 2002, 2001
and 2000 were computed by dividing net income (loss) for the period by
3,559,938, 3,559,938 and 3,549,458, respectively, the basic weighted average
number of common shares outstanding during the period.

The Companys diluted net income per common share at December 31, 2002 is
computed based on the weighted average number of shares of common stock
outstanding during the period. Options to purchase 744,025 at a range of
$2.438 to $6.25 per share were outstanding during 2002, but were not included
in the computation of diluted net income per common shares because the options
exercise price was greater than the average market price of the common share.

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 loss 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 loss per common share because the options
exercise price was greater than the average market price of the common share.

F-25



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##### Table of Contents



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

20. NASDAQ Stock Market Notifications:

The NASDAQ Stock Market notified the Company in writing on November 8,
2002 that the price of the Companys stock had closed below the minimum $1.00
per share required for continued inclusion under Marketplace Rule 4310(c)(4)
(the Rule). The Company will be provided 180 calendar days, or until May 7,
2003, to regain compliance. If, at any time before May 7, 2003, the bid price
of the Companys common stock closes at $1.00 per share or more for a minimum
of 10 consecutive trading days, the NASDAQ staff will provide written
notification that the Company complies with the Rule.

The NASDAQ Stock Market notified the Company in writing on March 11, 2003
that the price of the Companys stock closing bid price has been at $1.00 per
share or greater for at least 10 consecutive trading days, therefore regaining
compliance with the Marketplace Rule 4310(c)(4).

21. Subsequent Events:

In January 2003, the Company financed the purchase of two pieces of
equipment in the amount of $103,750. The note payable obligations have an
interest rate of 6.75%, with combined monthly payments of $3,192, and are due
January 2005.

In January 2003, the Company leased 10 mixer trucks, with a combined
monthly payment of $22,706. The operating lease expires in January 2008

In January 2003, the Company entered an agreement to sell the land held
for sale for $1,000,000. The agreement calls for a 60-day feasibility period
during which the purchaser has the ability to cancel the agreement with no
penalties or loss of deposit. The completion of the transaction will occur
within 15 days after the end of the feasibility period.

In February 2003, the Company entered into a settlement agreement with
mutual consideration, between the Company and Johnson & Danley Construction
Co., Inc. whereby the two parties dismiss their claims and counterclaims in
their entirety.

In February 2003, the Company amended and renewed the line of credit
agreement, which had an effective date of December 31, 2002. Under the terms
of the amended agreement, the interest rate remained Chase Manhattan Banks
prime rate, plus 1.5% through January 1, 2004 at which time the line of credit
converts to a term agreement requiring monthly principal and interest payments
through December 31, 2007.

In February 2003, the Company leased 5 mixer trucks, with a combined
monthly payment of $11,270. The operating lease expires in January 2008.

In March 2003, the Company is in negotiations to execute employment
agreements with some of its key officers that provide for an annual salary and
various other benefits and incentives. The total commitments, excluding
benefits and incentives, will likely amount to $1,169,250.

22. 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-26



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##### Table of Contents



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

22. Other Informative Disclosures (Continued):

The following is a summary of certain financial information of the
Companys two main areas of operations for 2002, 2001 and 2000:

|                                              |  |              |             |              |  |   |            |  
|--------------------------------------------- |  | ------------ | ----------- | ------------ |  | - | ---------- | -
|                                              |  | Construction |             | Construction
|                                              |  | Services     |             | Materials   
|                                              |  |              |             |             
|For the twelve months ended December 31, 2002 |  |              |             |              |  |   |            |  
|Gross revenue                                 |  | $            | 114,245,704 |              |  | $ | 38,849,418 |  
|Intercompany revenue                          |  |              |            |              |  |   | 2,047,854  |  
|Cost of revenue                               |  |              | 110,603,682 |              |  |   | 34,959,843 |  
|Interest income                               |  |              | 146,354     |              |  |   | 10,482     |  
|Interest expense                              |  |              | (279,636    | )            |  |   | (161,949   | )
|Depreciation and amortization                 |  |              | 1,698,828   |              |  |   | 1,117,578  |  
|Income (loss) before taxes                    |  |              | (813,327    | )            |  |   | 1,750,097  |  
|Income tax benefit (expense)                  |  |              | 299,166     |              |  |   | (497,795   | )
|Net income (loss)                             |  |              | (514,161    | )            |  |   | 1,252,302  |  
|Total assets                                  |  |              | 39,535,610  |              |  |   | 16,002,486 |  
|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 |  

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-27



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##### Table of Contents



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

23. Quarterly Financial Data (Unaudited):

|                                                   |  |           |            |          |  |               |            |              |  |   |            |   |  |   |            |  
|-------------------------------------------------- |  | --------- | ---------- | -------- |  | ------------- | ---------- | ------------ |  | - | ---------- | - |  | - | ---------- | -
|                                                   |  | March 31, |            | June 30, |  | September 30, |            | December 31,
|                                                   |  |           |            |          |  |               |            |             
|2002                                               |  |           |            |          |  |               |            |              |  |   |            |   |  |   |            |  
|Revenue                                            |  | $         | 35,005,133 |          |  | $             | 41,976,217 |              |  | $ | 37,523,094 |   |  | $ | 36,542,824 |  
|Gross profit                                       |  |           | 1,642,374  |          |  |               | 2,119,617  |              |  |   | 1,477,462  |   |  |   | 2,292,144  |  
|Income from operations                             |  |           | 114,097    |          |  |               | 723,829    |              |  |   | 41,977     |   |  |   | 52,754     |  
|Net income                                         |  |           | 20,307     |          |  |               | 392,754    |              |  |   | 40,807     |   |  |   | 284,273    |  
|Basic net income per common share                  |  |           | 0.01       |          |  |               | 0.11       |              |  |   | 0.01       |   |  |   | 0.08       |  
|Diluted net income per common share                |  |           | 0.01       |          |  |               | 0.11       |              |  |   | 0.01       |   |  |   | 0.08       |  
|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  |  
|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  |  
|2000                                               |  |           |            |          |  |               |            |              |  |   |            |   |  |   |            |  
|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  |  

F-28



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##### Table of Contents



Certification

I, Bradley E. Larson, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Meadow
Valley Corporation;                                                                                                                                                                                                                                           
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated
in this annual report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: March 28, 2003 | /s/  Bradley E. Larson
    Bradley E. Larson
President and Chief Executive Officer
|-------------------- | ----------------------------------------------------------------------------------

F-29



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##### Table of Contents



Certification

I, Clint Tryon, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Meadow
Valley Corporation;                                                                                                                                                                                                                                           
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated
in this annual report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: March 28, 2003 | /s/  Clint Tryon
Clint Tryon
Secretary, Treasurer and
Principal Accounting Officer
|-------------------- | ----------------------------------------------------------------------------------

F-30



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##### Table of Contents






Index to 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 (13)                                                                                             
|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)                                                              





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##### Table of Contents



|        |  |                                                                                              
|------- |  | ---------------------------------------------------------------------------------------------
|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 Transportation (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)                                                  





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##### Table of Contents



|        |  |                                                                                                                                   
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|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 Nevada 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)                                                                           





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##### Table of Contents



|        |  |                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------
|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)                           





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##### Table of Contents



|        |  |                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------
|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. (13)                                                 
|10.161  |  | Lease Agreement with Associates Leasing, Inc. (13)                                                                
|10.162  |  | Office Lease Agreement (13)                                                                                       
|10.163  |  | Lease Agreement with Caterpillar Financial Services Corporation (13)                                              
|10.164  |  | Security Agreement with John Deere Construction Equipment & Forestry Company (13)                                 
|10.165  |  | Lease Extension with U.S. Bancorp Leasing & Financial (13)                                                        
|10.166  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (13)                                              
|10.167  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (13)                                              
|10.168  |  | Amendment No. 1 to Restated and Amended Revolving Loan Agreement with The
CIT Group/Equipment Financing, Inc. (13)
|10.169  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (13)                                              
|10.170  |  | Indemnification Agreement with Robert R. Morris (13)                                                              
|10.171  |  | Indemnification Agreement with Nicole R. Smith (13)                                                               
|10.172  |  | Indemnification Agreement with Alan A. Terril (13)                                                                
|10.173  |  | Indemnification Agreement with Bradley E. Larson (13)                                                             
|10.174  |  | Indemnification Agreement with Kenneth D. Nelson (13)                                                             
|10.175  |  | Installment Sale Contract with Caterpillar Financial Services Corporation (13)                                    
|10.176  |  | Contract between Registrant and Clark County, Nevada (13)                                                         
|10.177  |  | Contract between Registrant and U.S. Army Corp of Engineers (13)                                                  
|10.178  |  | Contract between Registrant and Utah Department of Transportation (13)                                            
|10.179  |  | Contract between Registrant and Clark County, Nevada (13)                                                         
|10.180  |  | Contract between Registrant and Utah Department of Transportation (13)                                            
|10.181  |  | Contract between Registrant and Clark County, Nevada (13)                                                         
|10.182  |  | Lease Extension with The CIT Group/Equipment Financing, Inc. (13)                                                 
|10.183  |  | Asset Purchase Agreement between United Metro Materials Inc. and the Registrant (13)                              
|10.184  |  | Engagement Letter with AMG Financing Capital, Inc. (13)                                                           
|10.185  |  | Amendment No. 2 to Restated and Amended Revolving Loan Agreement with The
CIT Group/Equipment Financing, Inc. (13)
|10.186  |  | Notice of Termination of Non-Binding Letter of Intent with RMI Enterprises, LLC (13)                              
|10.187  |  | Security Agreement with Key Equipment Finance, a Division of Key Corporate Capital Inc. (14)                      
|10.188  |  | Amendment No. 1 to Security Agreement with Key Equipment Finance, a Division of Key
Corporate Capital Inc. (15)   





---



##### Table of Contents



|        |  |                                                                                                                             
|------- |  | ----------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                             
|No.     |  | Title                                                                                                                       
|        |  |                                                                                                                             
|10.189  |  | Employment Agreement with Robert DeRuiter (15)                                                                              
|10.190  |  | Addendum to Employment Contracts for Brad Larson, Ken Nelson, Ron Lewis and Alan
Terril (15)                                
|10.191  |  | General Agreement of Indemnity between the Registrant and Liberty Mutual Insurance
Company (15)                             
|10.192  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (15)                                                        
|10.193  |  | Office Lease Agreement (16)                                                                                                 
|10.194  |  | Lease Agreement with The CIT Group/Equipment Financing, Inc. (16)                                                           
|10.195  |  | Security Agreement with Astec Financial Services, Inc. (16)                                                                 
|10.196  |  | Security Agreement with Cananwill, Inc. (16)                                                                                
|10.197  |  | Security Agreement with Astec Financial Services, Inc. (16)                                                                 
|10.198  |  | Security Agreement with Caterpillar Financial Services Corporation (16)                                                     
|10.199  |  | Security Agreement with Deere Credit, Inc. (16)                                                                             
|10.200  |  | Promissory Note executed by Nevada State Bank (16)                                                                          
|10.201  |  | Employment Agreement with Nicole R. Smith (16)                                                                              
|10.202  |  | Employment Agreement with Robert Morris (16)                                                                                
|10.203  |  | Employment Agreement with Robert Bottcher (16)                                                                              
|10.204  |  | Employment Agreement with Robert Terril (16)                                                                                
|10.205  |  | Employment Agreement with Sam Grasmick (16)                                                                                 
|10.206  |  | Purchase Agreement with Nevada Title Company (16)                                                                           
|10.207  |  | Security Agreement with The CIT Group/Equipment Financing, Inc. (16)                                                        
|10.208  |  | Contract between Registrant and Arizona Department of Transportation                                                        
|10.209  |  | Contract between Registrant and City of Phoenix                                                                             
|10.210  |  | Contract between Registrant and Arizona Department of Transportation                                                        
|10.211  |  | Contract between Registrant and Federal Highway Administration                                                              
|10.212  |  | Contract between Registrant and Arizona Department of Transportation                                                        
|10.213  |  | Contract between Registrant and Utah Department of Transportation                                                           
|10.214  |  | Contract between Registrant and Arizona Department of Transportation                                                        
|10.215  |  | Agreement with Fisher Sand and Gravel Co. to act as the Companys
co-indemnitor                                             
|10.216  |  | Contract between Registrant and City of North Las Vegas                                                                     
|10.217  |  | Renewal and Amendment of Amended and Restated Revolving Loan
Agreement with The CIT Group/Equipment Financing, Inc.         
|10.218  |  | Renewal and Amendment of Revolving Loan Agreement
with The CIT Group/Equipment Financing, Inc.                              
|10.219  |  | Lease Agreement with Oshkosh/McNeilus                                                                                       
|10.220  |  | Security Agreement with Wagner Equipment Co.                                                                                
|10.221  |  | Security Agreement with Wagner Equipment Co.                                                                                
|10.222  |  | Sales Agreement with Conde Del Mar Properties, L.L.C.                                                                       
|10.223  |  | Notice of Assignment of Security Agreement from Astec Financial
Services to The CIT Group/Equipment Financing, Inc.         
|10.224  |  | Notice of Assignment of Security Agreement from Astec Financial
Services to The CIT Group/Equipment Financing, Inc.         
|10.225  |  | Notice of Assignment of Lease Agreement from The CIT Group/Equipment
Financing, Inc. to General Electric Capital Corporation





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##### Table of Contents



|        |  |                                                                                                                             
|------- |  | ----------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                             
|No.     |  | Title                                                                                                                       
|        |  |                                                                                                                             
|10.226  |  | Notice of Assignment of Lease Agreement from The CIT Group/Equipment
Financing, Inc. to General Electric Capital Corporation
|10.227  |  | Employment Agreement with Bradley E. Larson                                                                                 
|10.228  |  | Employment Agreement with Kenneth D. Nelson                                                                                 
|10.229  |  | Employment Agreement with Alan A. Terril                                                                                    
|10.230  |  | Indemnification Agreement with Clint Tryon                                                                                  
|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)                                            
|99.4    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley E. Larson (15)                          
|99.5    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Nicole R. Smith (15)                            
|99.6    |  | Nasdaq Listing Qualifications warning (15)                                                                                  
|99.7    |  | Nasdaq Listing Qualifications compliance (16)                                                                               
|99.8    |  | Nasdaq Listing Qualifications warning (16)                                                                                  
|99.9    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley E. Larson (16)                          
|99.10   |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Clint Tryon (16)                                
|99.11   |  | Nasdaq Listing Qualifications warning (16)                                                                                  
|99.12   |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Bradley E. Larson                               
|99.13   |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Clint Tryon                                     
|99.14   |  | Nasdaq Listing Qualifications compliance                                                                                    





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##### Table of Contents



|        |  |                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                            
|No.     |  | Title                                                                                                                                      
|        |  |                                                                                                                                            
|(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                                                                      
|(13)    |  | Incorporated by reference to the Companys December 31, 2001 Annual Report on Form 10-K                                                    
|(14)    |  | Incorporated by reference to the Companys March 31, 2002 Form 10-Q                                                                        
|(15)    |  | Incorporated by reference to the Companys June 30, 2002 Form 10-Q                                                                         
|(16)    |  | Incorporated by reference to the Companys September 30, 2002 Form 10-Q