##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No 001-32440
 READY MIX, INC.
  Nevada
    
    86-0830443(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 4602 East Thomas Road
Phoenix, Arizona 85018
 (602) 957-2722
 þ o
 þ o
  Large accelerated filer o
    
    Accelerated filer
o
    
    Non-accelerated filer o(Do not check if a smaller reporting
company)
    
    Smaller reporting company
þ
 o þ
  3,809,500 shares of Common Stock, $.001 par value per share




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##### 



READY MIX, INC.
INDEX
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2009
  
 PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Balance Sheets  As of September 30, 2009 (Unaudited) and
December 31, 2008
    
    
    3Condensed Statements of Operations (Unaudited)  Nine months and three
months ended September 30, 2009 and 2008 and Changes in Stockholders
Equity (Unaudited)
    
    
    4Condensed Statements of Cash Flows (Unaudited)  Nine months ended
September 30, 2009 and 2008
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3. Defaults Upon Senior Securities
    
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29Item 5. Other Information
    
    
    29Item 6. Exhibits
    
    
    29EX-10.26EX-10.27EX-10.28EX-10.29EX-31.1EX-31.2EX-32
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 READY MIX, INC.
CONDENSED BALANCE SHEETS
 September 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)Assets:Current assets:Cash and cash equivalents
    
    $
    2,532,980
    
    
    $
    4,204,280Accounts receivable, net
    
    
    3,281,175
    
    
    
    6,751,769Inventory
    
    
    1,568,236
    
    
    
    1,411,761Prepaid expenses
    
    
    1,301,056
    
    
    
    1,189,598Due from affiliate
    
    
    38,643
    
    
    
    Income tax receivable
    
    
    971,361
    
    
    
    1,026,133Deferred tax asset
    
    
    725,553
    
    
    
    696,892Total current assets
    
    
    10,419,004
    
    
    
    15,280,433Property and equipment, net
    
    
    20,547,367
    
    
    
    23,988,688Refundable deposits
    
    
    108,079
    
    
    
    108,079Deferred tax asset
    
    
    244,515
    
    
    
    Total assets
    
    $
    31,318,965
    
    
    $
    39,377,200Liabilities and stockholders equity:Current liabilities:Accounts payable
    
    $
    1,901,248
    
    
    $
    2,329,620Accrued liabilities
    
    
    668,895
    
    
    
    966,058Notes payable
    
    
    2,155,723
    
    
    
    2,204,706Due to affiliate
    
    
    
    
    
    
    177,825Total current liabilities
    
    
    4,725,866
    
    
    
    5,678,209Notes payable, less current portion
    
    
    4,698,746
    
    
    
    6,041,731Deferred tax liability
    
    
    
    
    
    
    1,216,100Total liabilities
    
    
    9,424,612
    
    
    
    12,936,040Commitments and contingenciesStockholders equity:Preferred stock  $.001 par value; 5,000,000 shares authorized,
none issued and outstanding
    
    
    
    
    
    
    Common stock  $.001 par value; 15,000,000 shares authorized,
3,809,500 issued and outstanding
    
    
    3,810
    
    
    
    3,810Additional paid-in capital
    
    
    18,522,816
    
    
    
    18,362,557Retained earnings
    
    
    3,367,727
    
    
    
    8,074,793Total stockholders equity
    
    
    21,894,353
    
    
    
    26,441,160Total liabilities and stockholders equity
    
    $
    31,318,965
    
    
    $
    39,377,200
  3




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##### Table of Contents



READY MIX, INC.


CONDENSED STATEMENTS OF OPERATIONS AND
CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)
 Nine months ended
    
    
    Three months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue:Revenue
    
    $
    21,612,547
    
    
    $
    48,683,689
    
    
    $
    6,155,232
    
    
    $
    16,088,023Revenue  related parties
    
    
    9,198
    
    
    
    529,674
    
    
    
    2,815
    
    
    
    264,632Total revenue
    
    
    21,621,745
    
    
    
    49,213,363
    
    
    
    6,158,047
    
    
    
    16,352,655Cost of revenue
    
    
    26,783,619
    
    
    
    48,909,838
    
    
    
    7,899,579
    
    
    
    16,329,953Gross profit (loss)
    
    
    (5,161,874
    )
    
    
    303,525
    
    
    
    (1,741,532
    )
    
    
    22,702General and administrative expenses
    
    
    2,479,637
    
    
    
    3,128,390
    
    
    
    710,430
    
    
    
    1,037,471Loss from operations
    
    
    (7,641,511
    )
    
    
    (2,824,865
    )
    
    
    (2,451,962
    )
    
    
    (1,014,769
    )Other income (expense):Interest income
    
    
    11,492
    
    
    
    135,834
    
    
    
    2,244
    
    
    
    31,136Interest expense
    
    
    (77,528
    )
    
    
    (81,983
    )
    
    
    (25,682
    )
    
    
    (27,094
    )Other income
    
    
    539,839
    
    
    
    74,873
    
    
    
    345,144
    
    
    
    61,431473,803
    
    
    
    128,724
    
    
    
    321,706
    
    
    
    65,473Loss before income taxes
    
    
    (7,167,708
    )
    
    
    (2,696,141
    )
    
    
    (2,130,256
    )
    
    
    (949,296
    )Income tax benefit
    
    
    2,460,642
    
    
    
    970,611
    
    
    
    747,908
    
    
    
    341,747Net loss
    
    $
    (4,707,066
    )
    
    $
    (1,725,530
    )
    
    $
    (1,382,348
    )
    
    $
    (607,549
    )Basic net loss per common share
    
    $
    (1.24
    )
    
    $
    (0.45
    )
    
    $
    (0.36
    )
    
    $
    (0.16
    )Diluted net loss per common share
    
    $
    (1.24
    )
    
    $
    (0.45
    )
    
    $
    (0.36
    )
    
    $
    (0.16
    )Basic weighted average common
shares outstanding
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500Diluted weighted average common
shares outstanding
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500
 Common StockNumber of
    
    
    
    
    
    
    AdditionalShares
    
    
    
    
    
    
    Paid-in
    
    
    RetainedOutstanding
    
    
    Amount
    
    
    Capital
    
    
    EarningsBalance at January 1, 2009
    
    
    3,809,500
    
    
    $
    3,810
    
    
    $
    18,362,557
    
    
    $
    8,074,793Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    160,259Net loss for the nine months
ended September 30, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,707,066
    )Balance at September 30, 2009
    
    
    3,809,500
    
    
    $
    3,810
    
    
    $
    18,522,816
    
    
    $
    3,367,727
  4




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##### Table of Contents



READY MIX, INC.


CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine months endedSeptember 30,2009
    
    
    2008Increase (decrease) in cash and cash equivalents:Cash flows from operating activities:Cash received from customers
    
    $
    25,790,005
    
    
    $
    47,959,943Cash paid to suppliers and employees
    
    
    (26,965,140
    )
    
    
    (49,478,620
    )Taxes paid
    
    
    
    
    
    
    (11,091
    )Taxes refunded
    
    
    1,026,138
    
    
    
    Interest received
    
    
    11,492
    
    
    
    135,834Interest paid
    
    
    (77,528
    )
    
    
    (81,983
    )Net cash used in operating activities
    
    
    (215,033
    )
    
    
    (1,475,917
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (44,114
    )
    
    
    (748,442
    )Cash received from sale of equipment
    
    
    362,883
    
    
    
    111,726Net cash provided by (used in) investing activities
    
    
    318,769
    
    
    
    (636,716
    )Cash flows from financing activities:Received from (repayment of) due to affiliate
    
    
    (216,468
    )
    
    
    64,563Proceeds from notes payable
    
    
    
    
    
    
    990,676Repayment of notes payable
    
    
    (1,558,568
    )
    
    
    (2,463,052
    )Repayment of capital lease obligations
    
    
    
    
    
    
    (4,634
    )Net cash used in financing activities
    
    
    (1,775,036
    )
    
    
    (1,412,447
    )Net decrease in cash and cash equivalents
    
    
    (1,671,300
    )
    
    
    (3,525,080
    )Cash and cash equivalents at beginning of period
    
    
    4,204,280
    
    
    
    9,157,868Cash and cash equivalents at end of period
    
    $
    2,532,980
    
    
    $
    5,632,788Reconciliation of net loss to net cash used in
operating activities:Net loss
    
    $
    (4,707,066
    )
    
    $
    (1,725,530
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    3,395,106
    
    
    
    3,529,821(Gain) loss on sale of equipment
    
    
    (272,554
    )
    
    
    126,099Deferred taxes, net
    
    
    (1,489,276
    )
    
    
    (30,345
    )Stock-based compensation expense
    
    
    160,259
    
    
    
    143,836Provision for doubtful accounts
    
    
    (430,381
    )
    
    
    130,332Changes in operating assets and liabilities:Accounts receivable
    
    
    3,900,975
    
    
    
    (1,454,391
    )Prepaid expenses
    
    
    55,142
    
    
    
    250,524Inventory
    
    
    (156,475
    )
    
    
    (535,373
    )Income tax receivable/payable
    
    
    54,772
    
    
    
    (951,357
    )Refundable deposits
    
    
    
    
    
    
    31,772Accounts payable
    
    
    (428,372
    )
    
    
    (550,218
    )Accrued liabilities
    
    
    (297,163
    )
    
    
    (441,087
    )Net cash used in operating activities
    
    $
    (215,033
    )
    
    $
    (1,475,917
    )
  5




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##### Table of Contents



READY MIX, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies and Use of Estimates:
 Presentation of Interim Information:
  Seasonal Variations:
  Nature of Corporation:
  Accounting Estimates:
   Revenue Recognition:
  
    
    The contract has been evidenced by the customers signature on the
delivery ticket;
    
    A price per unit has been determined; and
    
    Collectibility has been reasonably assured either by credit
authorization of the customer or by COD terms.
  Loss per Share:
  6




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READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies and Use of Estimates (Continued):
 Stock-Based Compensation:
   
    
    Expected term is generally determined using an average of the contractual term and
vesting period of the award and in some cases the contractual term is used;
    
    Expected volatility is measured using the average of historical daily changes in the
market price of the Companys common stock since the Companys initial public offering;
    
    Risk-free interest rate is equivalent to the implied yield on zero-coupon U.S. Treasury
bonds with a remaining maturity equal to the expected term of the awards; and
    
    Forfeitures are based on the history of cancellations of similar awards granted by the
Company and managements analysis of potential forfeitures.
 Fair Value of Financial Instruments:
    Recent Accounting Pronouncements
  
    
    Guidance in determining fair value when volume and level of activity for assets
or liabilities have decreased significantly and identifying transactions that are not
orderly provides additional guidance for estimating fair value when volume and level of
activity for assets or liabilities have decreased significantly. This guidance also
provides for identifying circumstances that indicate a transaction is not orderly. These
provisions became effective for the Companys interim period ended June 30, 2009 and did
not affect the Companys financial position and results of operations.
    
    Guidance surrounding interim disclosures about fair value of financial
instruments requires disclosures about fair value of financial instruments in interim
reporting periods of publicly traded companies that were previously only required to be
disclosed in annual financial statements. The provisions of this disclosure-only guidance
became effective for the Companys interim period ended June 30, 2009 and did not affect
the Companys financial position and results of operations.
 7




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##### Table of Contents



READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies and Use of Estimates (Continued):
 Recent Accounting Pronouncements (Continued):
 
    
    Guidance in determining recognition and presentation of other-than-temporary
impairments amends current other-than-temporary impairment guidance in GAAP for debt
securities to make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in financial
statements. This guidance does not amend existing recognition and measurement guidance
related to other-than-temporary impairments of equity securities. This guidance became
effective for the Companys interim period ended June 30, 2009 and did not affect the
Companys financial position and results of operations.
    TM
 8




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READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 2. Stock-Based Compensation:
   Equity Incentive Plan:
    Awards granted during the nine
    
    Awards granted prior tomonths ended September 30, 2009
    
    January 1, 2009Dividend yield
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    63.4% - 66.4
    %
    
    
    21.4% - 39.1
    %Weighted-average volatility
    
    
    64.96
    %
    
    
    27.47
    %Risk-free interest rate
    
    
    1.99
    %
    
    
    3.00% - 5.00
    %Expected life of options (in years)
    
    
    3-5
    
    
    
    3-5Weighted-average grant-date fair value
    
    $
    1.15
    
    
    $
    2.53
  Weighted AverageWeighted Average
    
    
    Remaining
    
    
    Aggregate
    
    
    AggregateExercise Price
    
    
    Contractual
    
    
    Fair
    
    
    IntrinsicShares
    
    
    per Share
    
    
    Term (1)
    
    
    Value
    
    
    Value (2)Outstanding January 1, 2009
    
    
    379,125
    
    
    $
    10.76
    
    
    
    1.88
    
    
    $
    967,716Granted
    
    
    215,000
    
    
    
    2.13
    
    
    
    
    
    
    
    246,200Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    (31,750
    )
    
    
    7.98
    
    
    
    
    
    
    
    (67,513
    )Outstanding September 30, 2009
    
    
    562,375
    
    
    $
    7.62
    
    
    
    2.34
    
    
    $
    1,146,403
    
    
    $
    323,900Exercisable September 30, 2009
    
    
    360,703
    
    
    $
    10.07
    
    
    
    1.33
    
    
    $
    844,886
    
    
    $
    77,800
 
 (1)
    
    Remaining contractual term is presented in years.(2)
    
    The aggregate intrinsic value is calculated as the difference between the
exercise price of the underlying awards and the closing price of our common stock as of
September 30, 2009, for those awards that have an exercise price currently below the
closing price as of September 30, 2009. Awards with an exercise price above the closing
price as of September 30, 2009 are considered to have no intrinsic value. 9




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READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 2. Stock-Based Compensation (Continued):
  Weighted AverageGrant-DateShares
    
    Fair ValueNonvested stock options at January 1, 2009
    
    
    33,333
    
    
    $
    3.33Granted
    
    
    215,000
    
    
    
    1.15Vested
    
    
    (33,334
    )
    
    
    1.34Forfeited
    
    
    (13,327
    )
    
    
    1.68Nonvested stock options at September 30, 2009
    
    
    201,672
    
    
    $
    1.44
  2009
    
    2008Number of options to purchase shares granted
    
    
    215,000
    
    
    
    20,000Weighted-average grant-date fair value
    
    $
    1.15
    
    
    $
    2.31Number of options to purchase shares exercised
    
    
    
    
    
    
    Aggregate intrinsic value of options exercised
    
    $
    
    
    
    $
    Number of options to purchase shares vested
    
    
    33,334
    
    
    
    91,458Aggregate fair value of options vested
    
    $
    44,602
    
    
    $
    185,543
  3. Statement of Cash Flows:
 Non-Cash Investing and Financing Activities:
    10




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READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 4. Notes Payable:
  September 30,
    
    
    December 31,2009
    
    
    20087.99% note payable, with monthly principal payments of
$14,362 plus interest, due March 25, 2011, collateralized
by equipment
    
    $
    287,238
    
    
    $
    387,7718.14% note payable, with monthly principal payments of
$30,470 plus interest, due March 28, 2011, collateralized
by equipment
    
    
    609,408
    
    
    
    822,7018.45% notes payable, with combined monthly principal
payments of $26,182 plus interest, due June 28, 2011,
collateralized by equipment
    
    
    602,198
    
    
    
    785,4757.46% note payable, with a monthly payment of $13,867, due
May 26, 2021, collateralized by a building and land
    
    
    1,292,209
    
    
    
    1,343,1887.90% note payable, with monthly principal payments of
$10,774 plus interest, due November 30, 2011,
collateralized by equipment
    
    
    312,454
    
    
    
    377,1007.04% note payable, with monthly principal payments of
$4,496 plus interest, due September 30, 2009,
collateralized by equipment
    
    
    13,489
    
    
    
    40,4677.13% note payable, with monthly principal payments of
$34,966 plus interest, due February 28, 2013,
collateralized by equipment
    
    
    1,538,523
    
    
    
    1,748,3227.13% note payable, with monthly principal payments of
$5,375 plus interest, due February 28, 2012,
collateralized by equipment
    
    
    172,011
    
    
    
    204,2637.35% note payable, with monthly principal payments of
$2,793 plus interest, due September 28, 2012,
collateralized by equipment
    
    
    106,122
    
    
    
    125,6716.25% notes payable, with combined monthly principal
payments of $5,705 plus interest, due January 28, 2012,
collateralized by equipment
    
    
    171,160
    
    
    
    211,0975.39% note payable, with monthly principal payments of
$2,695 plus interest, due March 21, 2012,
collateralized by equipment
    
    
    86,244
    
    
    
    105,110$
    5,191,056
    
    
    $
    6,151,165
 11




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READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 4. Notes Payable (Continued):
  September 30,
    
    
    December 31,2009
    
    
    2008Total from previous page
    
    $
    5,191,056
    
    
    $
    6,151,1655.65% note payable, with monthly principal payments of
$11,440 plus interest, due April 18, 2013,
collateralized by equipment
    
    
    514,820
    
    
    
    594,9036.25% note payable, with monthly principal payments of
$5,448 plus interest, due June 26, 2011,
collateralized by equipment
    
    
    130,744
    
    
    
    163,4306.80% notes payable, with combined monthly principal
payments of $9,782 plus interest, due June 26, 2013 and
June 26, 2014, collateralized by equipment
    
    
    567,978
    
    
    
    626,6696.99% note payable, with monthly principal payments of
$2,420 plus interest, due November 30, 2013,
collateralized by equipment
    
    
    128,270
    
    
    
    142,7916.99% notes payable, with combined monthly principal
payments of $4,778 plus interest, due December 29, 2013,
collateralized by equipment
    
    
    258,038
    
    
    
    317,4794.60% note payable, with a monthly payment of
$21,348, due December 28, 2009, collateralized by
the Companys umbrella insurance policy
    
    
    63,563
    
    
    
    Line of credit, variable interest rate was 3.50% at December 31,
2008, interest only payments until December 31, 2008, 36 equal
monthly principal payments plus interest therafter, collateralized
by all of the Companys assets
    
    
    
    
    
    
    250,0006,854,469
    
    
    
    8,246,437Less: current portion
    
    
    (2,155,723
    )
    
    
    (2,204,706
    )$
    4,698,746
    
    
    $
    6,041,731
  2010
    
    $
    2,155,7232011
    
    
    1,878,7432012
    
    
    1,036,3682013
    
    
    676,8942014
    
    
    236,627Subsequent to 2014
    
    
    870,114$
    6,854,469
  12




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##### Table of Contents



READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 4. Notes Payable (Continued):
  September 30, 2009Minimum /(amounts in thousands)
    
    Maximum
    
    ActualLeverage (1)
    
    
    1.50 to 1.0
    
    
    
    .49 to 1.0Fixed charge coverage ratio (2)
    
    
    .65 to 1.0
    
    
    -.64 to 1.0Available cash minimum (3)
    
    
    750,000
    
    
    
    2,532,980Dividends paid (4)
    
    
    
    
    
    
    Management fee agreement (5)
    
    
    22,000
    
    
    
    22,000Change of control (6)Sale or assignment of real estate (7)
 
 (1)
    
    Leverage is defined as total liabilities to net worth. Measured quarterly.(2)
    
    Fixed charge coverage ratio is defined as the sum of net profit, interest
expense, taxes, depreciation and amortization less dividends, plus or minus
extraordinary expenses or gains, divided by all interest bearing notes, loans and
capital leases to be determined at WFEs sole discretion, for the previous four fiscal
quarterly periods. Measured quarterly. The required fixed charge coverage ratio
increases to .75 to 1.0 for the quarters ending December 31, 2009 and March 31, 2010,
to .85 to 1.0 for the quarter ending June 30, 2010, and to 1.0 to 1.0 for the quarter
ending September 30, 2010 and each quarter thereafter.(3)
    
    Available cash minimum is defined as cash and cash equivalents as reported on
the Companys balance sheet. Measured quarterly.(4)
    
    Dividends shall not be paid to shareholders without the prior written consent
of lender.(5)
    
    Management fee between Meadow Valley Contractors, Inc. and the Company will not
exceed $22,000 per month. Reviewed quarterly.(6)
    
    Change of control provision states that the Company will be in default in the
event that the Board of Directors ceases to consist of a majority of the directors in
place as of February 2, 2009 without the written consent of lender.(7)
    
    The Company is prohibited from (a) entering into or assuming any agreement to
sell, transfer or assign any of the Companys owned real property and (b) creating or
assuming any lien on any of the Companys owned real property, in each case without
written consent of lender.  On or before
    
    After
    
    After
    
    AfterDecember 31,2009
    
    2009
    
    2010
    
    2011Prepayment penalty
    
    
    6.00
    %
    
    
    5.00
    %
    
    
    3.00
    %
    
    
    2.00
    %
  13




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##### Table of Contents



READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 4. Notes Payable (Continued):
    5. Line of Credit:
  6. Commitments:
  14




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##### Table of Contents



READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 6. Commitments (Continued):
    7. Loss per Share:
   Nine months ended
    
    
    Three months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Weighted average common shares
outstanding
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500Dilutive effect of:Stock options and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares
outstanding assuming dilution
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500
    
    
    
    3,809,500
  15




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##### Table of Contents



READY MIX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
 7. Loss per Share (Continued):
  8. Income Taxes:
   9. Subsequent Events:
  16




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statement Disclosure
   
    
    the current economic environment and our continuing operating losses;
    
    further declines in industry volume, due to the continued housing crisis, the
deepening recession and other factors;
    
    continued or increased price competition resulting from industry overcapacity;
    
    inability to implement our plans to further reduce structural costs and increase
liquidity;
    
    ability to achieve the level of cost reductions required to sustain cost
competiveness in our market;
    
    we will be in default of a financial covenant in our loan agreement with WFE for
the quarter ending December 31, 2009;
    
    whether we will be able to obtain a waiver of such covenant and amend our loan
agreement with WFE, and the possible acceleration of the loan and seizure of our
equipment if we able not able to do so;
    
    our alleged default of a financial covenant in our agreement with National Bank
of Arizona;
    
    whether we will be able to obtain a waiver of such covenant and amend our loan
agreement with National Bank of Arizona, and the possible acceleration of the loan
and seizure of our headquarters building if we are not able to do so;
    
    our possible inability to continue as a going concern if we are not able to
obtain a waiver of the financial covenant from WFE or refinance the obligations
owed to WFE;
    
    whether our Boards evaluation of strategic alternatives will result in the
Company pursuing any particular transaction, or, if it pursues any such
transaction, whether it will be completed; and,
    
    other unanticipated events and conditions that may hinder our ability to
compete.
  17




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##### Table of Contents



General
   Overview
      18




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##### Table of Contents



Critical Accounting Policies, Estimates and Judgments
       19




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##### Table of Contents



New Accounting Pronouncements
  
    
    Guidance in determining fair value when volume and level of activity for
assets or liabilities have decreased significantly and identifying transactions that are
not orderly provides additional guidance for estimating fair value when volume and level of
activity for assets or liabilities have decreased significantly. This guidance also
provides for identifying circumstances that indicate a transaction is not orderly. These
provisions became effective for our quarter ended on June 30, 2009 and did not affect our
financial position and results of operations.
    
    Guidance surrounding interim disclosures about fair value of financial
instruments requires disclosures about fair value of financial instruments in interim
reporting periods of publicly traded companies that were previously only required to be
disclosed in annual financial statements. The provisions of this disclosure-only guidance
became effective for our quarter ended June 30, 2009 and did not affect our financial
position and results of operations.
    
    Guidance in determining recognition and presentation of other-than-temporary
impairments amends current other-than-temporary impairment guidance in GAAP for debt
securities to make the guidance more
 20




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##### Table of Contents



TM
 21




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##### Table of Contents



Results of Operations
  (dollars in thousands)
    
    Nine months ended
    
    
    Three months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)
    
    
    (Unaudited)Revenue
    
    $
    21,613
    
    
    
    99.9
    %
    
    $
    48,684
    
    
    
    98.9
    %
    
    $
    6,155
    
    
    
    99.9
    %
    
    $
    16,088
    
    
    
    98.4
    %Related party revenue
    
    
    9
    
    
    
    0.1
    %
    
    
    529
    
    
    
    1.1
    %
    
    
    3
    
    
    
    0.1
    %
    
    
    265
    
    
    
    1.6
    %Total revenue
    
    
    21,622
    
    
    
    100.0
    %
    
    
    49,213
    
    
    
    100.0
    %
    
    
    6,158
    
    
    
    100.0
    %
    
    
    16,353
    
    
    
    100.0
    %Gross profit (loss)
    
    
    (5,162
    )
    
    
    -23.9
    %
    
    
    304
    
    
    
    0.6
    %
    
    
    (1,742
    )
    
    
    -28.3
    %
    
    
    23
    
    
    
    0.1
    %General and
administrative expenses
    
    
    2,480
    
    
    
    11.5
    %
    
    
    3,128
    
    
    
    6.4
    %
    
    
    710
    
    
    
    11.5
    %
    
    
    1,037
    
    
    
    6.3
    %Loss from operations
    
    
    (7,642
    )
    
    
    -35.3
    %
    
    
    (2,825
    )
    
    
    -5.7
    %
    
    
    (2,452
    )
    
    
    -39.8
    %
    
    
    (1,015
    )
    
    
    -6.2
    %Interest income
    
    
    11
    
    
    
    0.1
    %
    
    
    136
    
    
    
    0.3
    %
    
    
    2
    
    
    
    0.1
    %
    
    
    31
    
    
    
    0.2
    %Interest expense
    
    
    (77
    )
    
    
    -0.4
    %
    
    
    (82
    )
    
    
    -0.2
    %
    
    
    (25
    )
    
    
    -0.4
    %
    
    
    (27
    )
    
    
    -0.2
    %Other income
    
    
    540
    
    
    
    2.5
    %
    
    
    75
    
    
    
    0.2
    %
    
    
    345
    
    
    
    5.6
    %
    
    
    61
    
    
    
    0.4
    %Income tax benefit
    
    
    2,461
    
    
    
    11.4
    %
    
    
    971
    
    
    
    2.0
    %
    
    
    748
    
    
    
    12.1
    %
    
    
    342
    
    
    
    2.1
    %Net loss
    
    $
    (4,707
    )
    
    
    -21.8
    %
    
    $
    (1,725
    )
    
    
    -3.5
    %
    
    $
    (1,382
    )
    
    
    -22.4
    %
    
    $
    (608
    )
    
    
    -3.7
    %Depreciation and
amortization
    
    $
    3,395
    
    
    
    15.7
    %
    
    $
    3,530
    
    
    
    7.2
    %
    
    $
    1,062
    
    
    
    17.3
    %
    
    $
    1,191
    
    
    
    7.3
    %
 Nine months ended September 30, 2009 compared to nine months ended September 30, 2008
 Revenue
  Gross Profit (Loss).
 Depreciation and Amortization.
 General and Administrative Expenses.
 22




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##### Table of Contents



Interest Income and Expense.
 Income Taxes.
 Net Loss.
 Three Months Ended September 30, 2009 compared to Three Months Ended September 30, 2008
 Revenue
  Gross Profit (Loss).
 Depreciation and Amortization.
 General and Administrative Expenses.
 23




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##### Table of Contents



Interest Income and Expense.
 Income Taxes.
 Net Loss.
 Liquidity and Capital Resources
     September 30, 2009Minimum /(amounts in thousands)
    
    Maximum
    
    ActualLeverage (1)
    
    
    1.50 to 1.0
    
    
    
    .49 to 1.0Fixed charge coverage ratio (2)
    
    
    .65 to 1.0
    
    
    -.64 to 1.0Available cash minimum (3)
    
    
    750,000
    
    
    
    2,532,980Dividends paid (4)
    
    
    
    
    
    
    Management fee agreement (5)
    
    
    22,000
    
    
    
    22,000Change of control (6)Sale or assignment of real estate (7)
 
 (1)
    
    Leverage is defined as total liabilities to net worth. Measured quarterly.(2)
    
    Fixed charge coverage ratio is defined as the sum of net profit, interest
expense, taxes, depreciation and amortization less dividends, plus or minus
extraordinary expenses or gains, divided by all interest bearing notes, loans and
capital leases to be 24




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##### Table of Contents



determined at WFEs sole discretion, for the previous four fiscal
quarterly periods. Measured quarterly. The required fixed charge coverage ratio
increases to .75 to 1.0 for the quarters ending December 31, 2009 and March 31, 2010,
to .85 to 1.0 for the quarter ending June 30, 2010, and to 1.0 to 1.0 for the quarter
ending September 30, 2010 and each quarter thereafter.(3)
    
    Available cash minimum is defined as cash and cash equivalents as reported on
the Companys balance sheet. Measured quarterly.(4)
    
    Dividends shall not be paid to shareholders without the prior written consent
of WFE.(5)
    
    Management fee between Meadow Valley Contractors, Inc. and the Company will not
exceed $22,000 per month. Reviewed quarterly.(6)
    
    Change of control provision states that the Company will be in default in the
event that the Board of Directors ceases to consist of a majority of the directors in
place as of February 2, 2009 without the written consent of WFE.(7)
    
    The Company is prohibited from (a) entering into or assuming any agreement to
sell, transfer or assign any of the Companys owned real property and (b) creating or
assuming any lien on any of the Companys owned real property, in each case without
written consent of WFE.  On or before
    
    After
    
    After
    
    AfterDecember 31,2009
    
    2009
    
    2010
    
    2011Prepayment penalty
    
    
    6.00
    %
    
    
    5.00
    %
    
    
    3.00
    %
    
    
    2.00
    %
     25




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##### Table of Contents



Nine months endedSeptember 30,2009
    
    2008(Unaudited)Cash flows used in operating activities
    
    $
    (215
    )
    
    $
    (1,476
    )Cash flows provided by (used in) investing activities
    
    
    319
    
    
    
    (637
    )Cash flows used in financing activities
    
    
    (1,775
    )
    
    
    (1,412
    )
    Website Access
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
   26




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  ur success in meeting our obligations and obtaining additional future waivers of covenant
violations from our lenders in the next twelve months relies in large part, upon whether our
business continues to experience significant declines in revenue. If we continue to experience
similar significant declines in revenue, our ability to obtain future waivers of covenant
violations may be unsuccessful and we may be unable to meet our payment obligations, especially if
payment requirements are accelerated by our lenders.
  
    
    Our customers confidence in our ability to serve their needs and
our ability to continue to attract customers, particularly for new
upcoming projects;
    
    The financial viability of our suppliers and our ability to
purchase concrete materials from our key suppliers at competitive prices;
    
    Our ability to manage our batch plants and aggregate pit
production facilities as needed to manage production volume with the
least amount of cost and to complete other planned asset sales;
    
    Our ability to obtain adequate backlog to offset continued
revenue declines and our ability execute on backlog at improved margins;
    
    The overall strength and stability of general economic conditions
and of the ready-mix concrete industry, in the Phoenix, Arizona and Las
Vegas, Nevada metropolitan areas.
  27




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##### Table of Contents



Inadequate liquidity could materially adversely affect our business operations in the future and
threaten our ability to continue as a going concern.
    We are currently losing money, may need additional financing, and may not be able to obtain it on
favorable terms or at all.
  28




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##### Table of Contents



We cannot assure you that our Boards consideration of strategic alternatives will result in any
transaction being completed.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
   
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  10.26
    
    Amendment No.1 to Master Loan and Security Agreement with Wells Fargo
Equipment Finance, Inc.10.27
    
    Master Loan and Security Agreement with Wells Fargo Equipment Finance, Inc.10.28
    
    Amendment No. 1 to Master Lease Agreement with Wells Fargo Equipment Finance,
Inc. (Formerly The CIT Group/Equipment Financing, Inc.)10.29
    
    Master Lease Agreement with Wells Fargo Equipment Finance, Inc. (Formerly The
CIT Group/Equipment Financing, Inc.)31.1
    
    Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 of
the Securities Exchange Act of 193431.2
    
    Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14 of
the Securities Exchange Act of 193432
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
 29




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##### Table of Contents



SIGNATURE
  READY MIX, INC.
(Registrant)By
    /s/ Bradley E. LarsonBradley E. LarsonChief Executive Officer
(Principal Executive Officer)November 13, 2009By
    /s/ David D. DotyDavid D. DotyChief  Financial Officer, Secretary and Treasurer
(Principal Accounting Officer)November 13, 2009 30