MEADOW VALLEY CORPORATION
2,261,250 SHARES
OF
COMMON STOCK
This prospectus relates to the public offering from time to time of up to
an aggregate of 1,926,250 shares of our common stock upon exercise of 1,926,250
common stock purchase warrants issued in connection with our October 1995
initial public offering and 335,000 shares of common stock underlying 167,500
unit warrants issued to the underwriters of our initial public offering. See
"Selling Stockholders" on page 7.
Each common stock purchase warrant is exercisable to purchase one share of
common stock for $5.00 per share until June 30, 2002, when the common stock
purchase warrants will expire. Each unit warrant is exercisable to purchase one
share of common stock and one common stock purchase warrant for $7.20 per unit
until June 30, 2002, when the unit warrants will expire.
Investing in these securities involves risks. See "Risk Factors" on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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September 8, 2000
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We have not authorized any dealer, salesman or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and any accompanying prospectus
supplement. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or any prospectus
supplement. This prospectus and any supplement to this prospectus do not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they relate, nor do
this prospectus and any accompanying prospectus supplement constitute an offer
to sell or the solicitation of an offer to buy securities in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. The information contained in this prospectus and any supplement to
this prospectus is accurate as of the dates on their covers.
Table of Contents
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Page
Where You Can Find More Information......................................... 2
Forward-Looking Statements.................................................. 3
Risk Factors................................................................ 4
Our Company................................................................. 5
Use of Proceeds............................................................. 6
Our Common Stock and Warrants............................................... 6
Selling Stockholders........................................................ 7
Plan of Distribution........................................................ 8
Legal Matters............................................................... 8
Experts..................................................................... 9
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can inspect and copy these reports, proxy
statements and other information at the public reference facilities of the SEC,
in Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549; 7 World Trade
Center, Suite 1300, New York, New York 10048; and Suite 1400, Citicorp Center,
500 W. Madison Street, Chicago, Illinois 60661-2511. You can also obtain copies
of these materials from the public reference section of the SEC at 450 Fifth
Street N.W., Washington, D.C. 20549, at prescribed rates. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. The SEC
also maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC at http://www.sec.gov. You can also inspect reports and other
information we file at the office of the National Market System at 9801
Washingtonian Blvd., Gaithersburg, MD 20878.
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We have filed a registration statement and related exhibits with the SEC
under the Securities Act of 1933, as amended. The registration statement
contains additional information about us and the securities that may be sold by
the selling stockholders. You may inspect the registration statement and related
exhibits without charge at the public reference facilities of the SEC described
above, and may obtain copies from the SEC at prescribed rates. This information
is also available at the SEC's Web site.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to those documents. We hereby "incorporate by reference" the documents
listed below, which means that we are disclosing important information to you by
referring you to those documents. The information that we file later with the
SEC will automatically update and in some cases supersede this information.
Specifically, we incorporate by reference:
o Our Annual Report on Form 10-K for the year ended December 31, 1999;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
o Our Proxy Statement dated May 1, 2000; and
o Any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of
this prospectus and before we stop offering securities (other than
those portions of such documents described in paragraphs (i), (k), and
(1) of Item 402 of Regulation S-K promulgated by the SEC).
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Meadow Valley Corporation
4411 S. 40th Street, Suite D-11
Phoenix, Arizona 85040
(602) 437-5400
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with other information.
FORWARD-LOOKING STATEMENTS
We make forward-looking statements in this prospectus that are based on the
beliefs and assumptions of our management and on information currently available
to our management. Forward- looking statements include the information about our
possible or assumed future results of operations and statements preceded by,
followed by or that include the words "believe", "expect", "anticipate",
"intend", "plan", "estimate" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. We caution you not to rely unduly on any
forward-looking statements.
You should understand that there are important factors such as those
included in the "Risk Factors" section of this prospectus and in the documents
incorporated in this prospectus by reference which could cause our results to
differ materially from those expressed in such forward-looking statements.
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RISK FACTORS
Before you invest in our common stock, you should be aware of various
risks, including those described below. You should carefully consider these risk
factors together with all other information included in this prospectus before
you decide to invest in our common stock.
We depend upon public sector customers for most of our revenue.
Substantially all of our revenue is generated from projects sponsored by
federal, state and local governmental authorities. Consequently, any reduction
in demand for our services by these governmental authorities for whatever
reason, including a general economic slowdown or a continuation of the current
trend toward reducing governmental spending, would have a material adverse
effect on our results of operations. Furthermore, government contracts are
generally terminable at will subject to a relatively small cancellation payment.
Although we have not experienced any cancellations in the past, there can be no
assurance that cancellations will not occur in the future.
We may be held financially liable for subcontractor performance. We act as
prime contractor on most of our construction projects and are therefore
responsible for performance of the entire contract, including work assigned to
subcontractors. Accordingly, we may be subject to substantial liability if a
subcontractor fails to perform as required under the prime contract.
We are subject to fixed unit price risks which could significantly reduce
or eliminate our profits on projects. A substantial portion of our revenue is
derived from "fixed unit price" contracts under which we are 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. While fixed unit price
contracts generally shift the risk of estimating the quantity of units required
for a particular project to our customers, any increase in our unit cost over
our unit bid price, whether due to inefficiency, faulty estimates, weather,
inflation or other factors, must be borne by us and may adversely affect our
results of operations.
We have experienced variations in quarterly operating results. The
construction industry is seasonal, generally due to inclement weather occurring
in the winter months. Accordingly, we have experienced a seasonal pattern in our
operating results with lower revenue in the first quarter of each calendar year
than other quarters. Our quarterly results may also be affected by the timing of
bid solicitations by governmental authorities and the stage of completion of
major projects. Results for any one quarter may not be indicative of results for
other quarters or for the year.
We are subject to potential liability for environmental damages and
personal injury. We are subject to significant risks of statutory, contractual
and common law liability for environmental damages and personal injury. We may
be liable for claims arising from on-site or off-site services, including
mishandling of hazardous or non-hazardous waste materials, or environmental
contamination caused by us or our subcontractors, the costs for which could be
substantial, even if we exercised due care and complied with all relevant laws
and regulations. We are also subject to worker and third-party claims for
personal injury, resulting in substantial liability for which we may be
uninsured. We carry insurance which we consider sufficient to meet regulatory
and customer requirements and to protect our assets and operations.
Nevertheless, an uninsured claim against us could have a material adverse effect
on our financial condition and results of operations. Moreover, any inability to
obtain insurance of the type and in the amounts required in connection with
specific projects could impair our ability to bid on or complete such projects.
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Our backlog has been substantially reduced, which will reduce future
revenue. Our backlog of construction projects was $98 million as of March 31,
2000 compared to $172 million at March 31, 1999. The reduced backlog is expected
to result in lower revenue throughout the balance of 2000 and perhaps into 2001.
This lower revenue could result in lower earnings in future periods.
We cannot assure that we will be able to meet future bonding requirements.
We are required to provide bid and/or performance bonds in connection with
governmental construction projects. To date, we have been able to obtain bonds
of up to approximately $100 million per project, but there can be no assurance
that we will be able to continue to obtain such bonds in the future. In
addition, new or proposed legislation in various jurisdictions may require the
posting of substantial additional bonds or require other financial assurances
for particular projects.
We are subject to governmental regulation which increases the costs of our
projects. Our operations are subject to compliance with costly regulatory
requirements of federal, state and municipal authorities, including regulations
covering labor relations, safety standards, affirmative action and protection of
the environment, including requirements in connection with water discharge, air
emissions and hazardous and toxic substance discharge. We believe that we are in
substantial compliance with all applicable laws and regulations. However,
amendments to current laws and regulations imposing more stringent requirements
could have a material adverse effect on us.
Intense competition reduces our profit margins. The heavy construction
industry is intensely competitive. We compete with a large number of small
owner/operator contractors that tend to dominate smaller highway projects,
together with larger, well-capitalized regional and national contractors, when
bidding on larger infrastructure projects. This competition reduces our profit
margins on certain projects by forcing us to reduce our bid prices in order to
secure the work.
Rejection of our claims for additional compensation may reduce our revenue
and earnings. We currently have claims pending for an aggregate of $20.6 million
of additional compensation for projects we have completed, of which
approximately $5 million of such claims were recognized by us as revenue in
prior periods. In the event these claims are rejected by the project owner and
we elect not to arbitrate or litigate the issues, our future revenue and
earnings will be reduced.
OUR COMPANY
We are primarily a heavy construction contractor specializing in
infrastructure projects including the construction of bridges and overpasses,
channels, roadways, highways and airport runways. We generally serve as the
prime contractor for public sector customers, such as federal, state and local
governmental authorities, in the states of Nevada, Arizona, Utah and New Mexico.
We primarily seek 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.
We also own or lease portable hot mix asphalt plants and related paving
equipment and a rubberized asphalt plant. The asphalt paving capabilities
provide us the opportunity to expand our existing geographic market, enhance our
construction operations in existing markets, improve our competitiveness and may
generate increased revenue on projects that call for large quantities of
asphalt, concrete, recycled asphalt or rubberized asphalt.
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We had a project backlog of approximately $104.0 million at December 31,
1999, which included the remainder of a $94.6 million portion of the
reconstruction of the core of the interchange of I-15 and US 95 in Las Vegas,
Nevada, the remainder of $87.8 million of projects which are portions of the
Beltway Continuation projects in Las Vegas, Nevada, the remainder of a $29.3
million portion of the State Route 87 Continuation, in Sunflower, Arizona, the
remainder of a $17.5 million portion of the Reconstruction of US 89, in Cherry
Hills, Utah and the $13.0 million Storm Drain Channel Construction in Chandler,
Arizona. At January 1, 2000 our backlog included approximately $100 million of
work that was scheduled for completion during 2000. We have 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 we expanded our Nevada construction industry activities with the
formation of Ready Mix, Inc., as a wholly-owned subsidiary. RMI manufactures and
distributes ready mix concrete and owns and operates a construction materials
processing plant in the Las Vegas, Nevada area. RMI primarily targets
prospective customers such as concrete subcontractors, prime contractors, home
builders, commercial and industrial property developers, pool builders and
homeowners. RMI began its ready mix concrete operation from its first location
in March 1997 and began processing construction materials in November 1999.
Financed with internal funds, a $7 million line of credit, notes payable and
operating leases, RMI intends to operate in 2000 from at least four sites using
at least 92 mixer trucks. During January 2000, we ordered 52 mixer trucks for
RMI at an estimated cost of $6,650,000.
USE OF PROCEEDS
We will receive up to $11,674,750 upon exercise of the common stock
purchase warrants and the unit warrants. We will not receive any proceeds from
the sale by the selling stockholders of the common stock underlying the common
stock purchase warrants registered by this prospectus. Any funds received upon
exercise of the common stock purchase warrants will be added to our working
capital. We will pay all expenses of the registration and sale of the common
stock, except selling commissions, fees and stock transfer fees.
OUR COMMON STOCK AND WARRANTS
Our common stock is traded on the Nasdaq National Market under the symbol
"MVCO." Each holder of our common stock is entitled to one vote for each share
registered in his or her name on our books on all matters submitted to a vote of
stockholders. Our common stock does not have cumulative voting rights. As a
result, in an election of directors, the holders of a majority of shares of our
common stock will be able to elect all of the directors to be elected.
Each common stock purchase warrant is exercisable to purchase one share of
common stock for $5.00 per share until June 30, 2002, when the common stock
purchase warrants will expire. We can redeem the warrants for $.01 per warrant
upon 30 days' notice to the warrant holders if the closing price of our common
stock on the Nasdaq National Market or other automated exchange is at least
$7.50 per share for 20 consecutive trading days ending not earlier than five
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days before the warrants are called for redemption. Each unit warrant is
exercisable to purchase one share of common stock and one common stock purchase
warrant for $7.20 per unit until June 30, 2002, when the unit warrants will
expire.
For more information on our common stock and warrants, see our Registration
Statement on Form S-1 dated October 16, 1995, which we have filed with the SEC.
See also "Where You Can Find More Information" on page 2.
SELLING STOCKHOLDERS
In October 1995, we issued 1,926,250 registered common stock purchase
warrants to approximately 400 investors as a part of our initial public
offering. At the same time we issued 167,500 registered unit warrants to our
underwriters, each unit warrant entitling the holder to purchase one share of
common stock and one common stock purchase warrant for $7.20 per unit. This
prospectus continues the registration for resale of the 1,926,250 shares of
common stock underlying the common stock purchase warrants held by our current
warrant holders and the 335,000 shares of common stock underlying the unit
warrants. The holders of these securities are the selling stockholders referred
to in this prospectus. The selling stockholders, including their transferees,
pledgees, donees or successors, may from time to time offer and sell all or any
of their shares of common stock which they acquired upon exercise of the common
stock purchase warrants.
The selling stockholders may exercise their common stock purchase warrants
and offer all, some or none of the shares of common stock. Thus, we cannot
estimate the amount of the common stock that will be held by the selling
stockholders upon termination of any sales.
None of the selling stockholders are affiliates of our company except for
May Management, Inc., a company controlled by Earle C. May, one of our
directors, and Messrs. Larson, Lewis and Nelson, three of our executive
officers. May Management owns 51,350 common stock purchase warrants, and Messrs.
Larson, Lewis and Nelson own 3,000, 17,800 and 900 warrants, respectively. The
unit warrants issued to our underwriters, Neidiger Tucker Bruner, Inc. and HD
Brous & Co., Inc., were subsequently assigned, so that ownership of the unit
warrants is currently as follows:
Name Number of Shares Underlying the Unit Warrants
---- ---------------------------------------------
Ellen Brous 41,875
Charles Bruner 17,750
Debra Fiakas 3,000
Scott Miller 38,875
J. Henry Morgan 11,000
Eugene Neidiger 19,000
Gina Neidiger 4,000
Robert Parrish 10,000
Anthony Petrelli 9,000
Mary Petrelli 9,000
John Turk 4,000
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PLAN OF DISTRIBUTION
We are registering an aggregate of 2,261,250 shares of common stock
underlying the common stock purchase warrants and the unit warrants, to permit
public secondary sales of the shares by the selling stockholders from time to
time after the date of this prospectus. The exercise price of the stock purchase
warrants is $5.00 per share, and the warrants expire June 30, 2002. Following
exercise of the common stock purchase warrants, we anticipate that the selling
stockholders may sell all or a portion of the common stock from time to time in
one or more of the following transactions:
o on the Nasdaq National Market;
o in the over-the-counter market;
o in transactions other than on the Nasdaq National Market or in the
over-the-counter market;
o through brokers or dealers, or in direct transactions with purchasers;
o in connection with short sales;
o by pledge to secure debts and other obligations;
o in connection with the writing of options, in hedge transactions, and
in settlement of other transactions in standardized or
over-the-counter options; or
o in a combination of any of the above transactions.
The selling stockholders may sell their shares at prevailing market prices,
at prices related to prevailing market prices, at negotiated prices, or at fixed
prices. There is no assurance that the selling stockholders will sell any or all
of their common stock. The selling stockholders may also elect to sell their
shares pursuant to Rule 144 under the Securities Act of 1933.
The selling stockholders and any broker-dealers who act in connection with
sales of common stock may be deemed to be "underwriters" as that term is defined
in the Securities Act, and any commissions received by them and profit on any
resale of the common stock might be deemed to be underwriting discounts and
commissions under the Securities Act. In effecting sales, broker-dealers engaged
by the selling stockholders may arrange for other broker-dealers to participate.
The selling stockholders will pay all discounts and selling commissions in
connection with the sale of common stock, fees and expenses of counsel. We will
pay the registration fee payable to the SEC to register the common stock, fees
and expenses relating to the registration or qualification of the shares of
common stock under any applicable state securities or "blue sky" laws and the
fees and expenses of our counsel and independent accountants.
LEGAL MATTERS
The Law Office of Gary A. Agron will pass upon the validity of the common
stock offered under this prospectus. Mr. Agron is one of our directors and holds
options to purchase up to 23,500 shares of our common stock.
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EXPERTS
The financial statements incorporated by reference in this prospectus have
been audited by BDO Seidman, LLP, independent certified public accountants, to
the extent and for the periods set forth in their report incorporated herein by
reference, and are incorporated herein in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
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