UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2007

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

For the transition period from                      to                     

READY MIX, INC.

(Exact name of registrant as specified in its charter)

Nevada		86-0830443
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)
3430 East Flamingo Road Suite 100, Las Vegas, NV		89121
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (702) 433-2090
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		American Stock Exchange

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 þ No o

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. o

      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

      Large accelerated filer o               Accelerated filer o                         Non-accelerated filer þ                         Smaller reporting company o

                                        (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates was $22,726,875. The Aggregate market value was computed using the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter

Determination of stock ownership by non-affiliates was made solely for the purpose of this requirement, and the registrant is not bound by these determinations for any other purpose.

On March 10, 2008, there were 3,809,500 shares of common stock outstanding.

 

 

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this Form 10-K, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement to be disseminated in connection with its Annual Meeting of Shareholders for the year ended December 31, 2007, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Form 10-K relates.

READY MIX, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2007

TABLE OF CONTENTS

				Page
PART I
Item 1.		Business			1
Item 1A.		Risk Factors			10
Item 1B.		Unresolved Staff Comments			14
Item 2.		Properties			15
Item 3.		Legal Proceedings			15
Item 4.		Submission of Matters to a Vote of Security Holders			16
PART II
Item 5.		Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities			16
Item 6.		Selected Financial Data			19
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			27
Item 8.		Financial Statements and Supplementary Data			28
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			49
Item 9A(T)		Controls and Procedures			49
Item 9B.		Other Information			49
PART III
Item 10.		Directors, Executive Officers and Corporate Governance			49
Item 11.		Executive Compensation			49
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			50
Item 13.		Certain Relationships and Related Transactions, and Director Independence			50
Item 14.		Principal Accountant Fees and Services			50
PART IV
Item 15.		Exhibits and Financial Statement Schedules			50
EX-10.16
EX-10.17
EX-10.18
EX-23.1
EX-31.1
EX-31.2
EX-32

Special Note Regarding Forward Looking Statements

     This Annual Report on Form 10-K and the documents we incorporate by reference herein include forward-looking statements. All statements other than statements of historical facts contained in this Form 10-K and the documents we incorporate by reference, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

     These forward-looking statements are subject to a number of risks, uncertainties and assumptions described in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. In addition, our past results of operations do not necessarily indicate our future results. Moreover, the ready-mix concrete business is very competitive and rapidly changing. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any risk factor, or combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements.

     Except as otherwise required by applicable laws, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in this Annual Report on Form 10-K or in the documents we incorporate by reference, whether as a result of new information, future events, changed circumstances or any other reason after the date of this Annual Report on Form 10-K. You should not rely upon forward-looking statements as predictions of future events or performance. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

PART I

Item 1. Business

General

     Ready Mix, Inc. (“Company,” “Ready Mix,” “RMI,” “we,” “us” and “our”), based in Las Vegas, Nevada, is engaged in the construction industry as a supplier of construction materials. We provide ready-mix concrete, sand and gravel products to a variety of customers, including but not limited to, contractors, subcontractors, individuals and owners of both private and public construction projects. We have operations in the Las Vegas, Nevada and Phoenix, Arizona metropolitan areas. Our operations consist of seven permanent ready-mix concrete batch plants, three sand and gravel crushing and screening facilities and a fleet of approximately 180 ready-mix concrete trucks and other assorted support vehicles for transporting cement powder, sand and gravel, as well as maintenance and service vehicles. From our three aggregate production facilities located in the vicinity of Las Vegas, Nevada, we expect to supply approximately 95% of the total sand and gravel that are part of the raw materials for the ready-mix concrete that we manufacture and deliver. Our ready-mix batch plants in the Phoenix, Arizona area are located on or near sand and gravel production sites operated by third parties from whom we purchase our sand and gravel. In most instances, these third-party batch plant site leases also include long-term sand and gravel purchase obligations which serve to assure a supply of key raw materials and to provide advantageous geographic locations in proximity to areas of concentrated construction activity. Besides sand and gravel, cement is the other most expensive and important raw material used in the production of ready-mix concrete. We purchase our cement from a variety of suppliers with whom we share excellent relationships, although it is rare that we obtain firm supply agreements from cement suppliers. In recent years, particularly 2005, world-wide high cement demand created shortages of supply. No such shortages have occurred since mid 2006 when residential construction activity in our market began to subside. Since 1997, our operations have consisted principally of formulating, preparing and delivering ready-mix

concrete to the job sites of our customers. We also provide services to reduce our customers’ overall construction costs by lowering the installed, or “in-place”, cost of concrete. These services include the formulation of new mixtures for specific design uses, on-site and lab-based product quality control and delivery programs configured to meet our customers’ needs.

     We produce rock and sand for our Las Vegas area ready-mix plants from two separate production facilities. One quarry, located approximately 50 miles northeast of Las Vegas in Moapa, Nevada, has historically produced all of our sand requirements and approximately 60% of the coarse aggregate requirements of our Nevada concrete batch plants. During 2007, a second aggregate production facility located approximately 15 miles north of Las Vegas began to share in the production and supply of sand and gravel needs for our Las Vegas plants. A third sand and gravel production facility located approximately 40 miles southeast of Las Vegas has not had any appreciable demand due to the difficulty and expense related to transporting any product through the traffic restrictions caused by highway improvements over Hoover Dam. Because these traffic restrictions will likely remain in place for some time, we plan to reduce costs by immediately ceasing operations from this location and terminating our lease as soon as possible. In the Phoenix metropolitan area, all three of our existing ready-mix concrete plants are currently supplied rock and sand from third parties. We hold mining rights on a property in the southeast Phoenix area that we have not yet begun to mine.

     Prior to the completion of our public offering in August of 2005, we had been funded, owned and controlled by Meadow Valley Corporation (“Meadow Valley”). Meadow Valley currently owns approximately 69.4% of our common stock and we share some common management and directors. As a provider of construction services in the heavy construction sector, Meadow Valley, on occasion, purchases our products for its construction projects. Purchases for the years ended December 31, 2007, 2006 and 2005 represented 2.3%, .5% and 1.0% of revenue and amounted to $1.74 million, $.44 million and $.68 million, respectively. Our business has not been dependent upon Meadow Valley, but as we continue to expand our capacity in terms of units of production and delivery capabilities, sales to Meadow Valley may increase.

     For the years ended December 31, 2007, 2006 and 2005, our revenue was $77.4 million, $83.6 million and $67.7 million, respectively. Our revenue mix is comprised of the following:

		December 31*,
		2007				2006				2005
Commercial and industrial construction			31	%			27	%			28	%
Residential construction			53	%			53	%			55	%
Street and highway construction and paving			8	%			7	%			7	%
Other public works and infrastructure construction			8	%			13	%			10	%
			100	%			100	%			100	%

Business Strategy

     Our objective is to expand the geographic scope of our operations, within the metropolitan areas of Las Vegas, Nevada and Phoenix, Arizona, to become a leading value-added provider of ready-mix concrete and related services in each market. We plan to achieve this objective by:

	•		increasing our operating assets and marketing presence within the two metropolitan markets we currently serve;
	•		expanding beyond the metropolitan areas of our two existing markets, but initially within the states of Nevada and Arizona; and
	•		continuing our existing operating strategy aimed at increasing revenue growth and market share, achieving cost efficiencies and enhancing profitability.

     We intend to continue to manage our operations on a relatively decentralized basis to allow the local management within our state markets to focus on their existing customer relationships and local strategy. Our executive management team is responsible for executing our company-wide strategy, including execution and integration and initiating and overseeing operational improvements.

Expanding Beyond the Metropolitan Areas of Our Two Existing Markets

     We will seek to enter new geographic sub-markets initially within the Phoenix and Las Vegas metropolitan areas. These markets will likely be located at the outer edges of the two metropolitan markets, but at a sufficient distance from these metropolitan markets so as to require the development of newer plants to service job sites in these areas.

Continuing Our Existing Operating Strategies

     We intend to continue to implement an operating strategy which we believe will (1) increase revenue and market share through increased marketing and sales initiatives and enhanced operations and (2) achieve further cost efficiencies.

     Increasing Marketing and Sales Initiatives and Enhancing Operations. Our basic operating strategy will continue to emphasize the sale of value-added products to customers who are more focused on reducing their installed, or in-place, concrete costs than on the price per cubic yard of the ready-mix concrete they purchase. Key elements of this service-oriented strategy include:

	•		developing additional local-level marketing and sales expertise;
	•		establishing company-wide quality control improvements;
	•		developing and implementing training programs that emphasize successful marketing, sales and training techniques and the sale of high-margin concrete mix designs; and
	•		investing in computer and communications technology at each of our locations to improve purchasing, accounting, load dispatch, delivery efficiency and reliability and customer relations.

     Achieving Cost Efficiencies and Enhancing Profitability. We will continue to seek to reduce our operating expenses by eliminating duplicative administrative functions and consolidating other functions between our various plants and facilities. In addition, we believe that, as we increase in size, we should experience reduced costs as a percentage of revenue in such areas as:

	•		materials procurement;
	•		purchases of mixer trucks and other equipment, spare parts and tools;
	•		vehicle and equipment maintenance;
	•		equipment financing terms;
	•		employee benefit plans; and
	•		insurance and other risk management programs.

Market Overview

     Ready-mix concrete is a versatile material that the construction industry uses in substantially all of its projects, therefore, demand for ready-mix concrete tends to track the total value of construction put in place. According to data contained in the “2008 U.S. Markets Construction Overview” published by FMI Corporation (“FMI”), total construction put in place in the U.S. in 2007 (in current dollars) was valued at $1.15 trillion, a 4% decline from 2006. This decrease in the dollar value of total construction put in place resulted primarily from declines in the residential construction sector which decreased 16% in 2007. The strength of the non-residential construction sector, which grew 10% in 2007, helped offset the impact of the residential sector on overall construction spending. In the Mountain Region (AZ, NV, UT, NM, CO, WY, MT, ID), construction spending data contained in the same FMI publication was very similar to the national trends as total construction put in place for the Mountain Region declined 5%, the residential sector dropped 15% and the non-residential increased 12%.

FMI’s forecast for 2008 predicts a 6% increase in total construction put in place in the Mountain Region with the residential sector increasing by 3% and all other construction increasing 10%.

     Because our business is currently focused primarily in the Phoenix, Arizona and Las Vegas, Nevada metropolitan areas, housing start data is accessible and reliable in tracking the direction and magnitude of residential construction activity. Housing permits issued in our markets collectively declined 30.3% in 2007. This represents the second consecutive year of double digit declines and seems to add credence to the belief that investor and speculative home buying created a higher than normal spike in demand for homes in our geographic market, thus resulting in a more rapid, steep and prolonged decline in homebuilding activity. With credit concerns exacerbating the problem, predicting the depth and duration of this housing cycle has become tricky for even the most experienced industry forecasters. However, it appears that the consensus of opinion is that the residential sector in our market will likely remain slow for at least the next 12 to 24 months. Non-residential construction activity has remained strong and has helped prevent even more drastic declines in demand for our products. The non-residential construction sector normally lags housing by 18 to 24 months. We believe we are about 18 to 20 removed from the start of the housing decline, and as yet, there are few visible signs of a non-residential slowdown on the horizon. In fact, as with the FMI forecast previously mentioned, most forecasts predict 2008 to be another year of growth for non-residential construction, so it seems unlikely that we will observe the normal historical timing of the lead/lag relationship between residential and non-residential construction activity.

     According to the National Ready Mix Concrete Association (“NRMCA”), the 2007 annual usage of ready-mix concrete in the U.S. will approximate 419 million cubic yards, or a decline of about 9% from 2006. Looking more closely at the combined data compiled by the NRMCA for Arizona and Nevada, 2007 production of ready-mix concrete fell 11%. We experienced a very similar 10% decline in the volume of units produced and sold in 2007 compared to 2006. The NRMCA forecasts ready-mix concrete demand in Arizona and Nevada to decline further in 2008 by 3%. This is a good example of how varied the opinions are regarding the immediate future direction of our market – FMI’s 2008 prediction shows positive growth in every construction sector in the Mountain Region while the NRMCA predicts another year of decline in units of production in Arizona and Nevada.

     There seems to be little disagreement about the long-term prospects of our market. Population and job growth remain two of the key drivers for future construction spending and, in spite of the current cycle, we remain confident of our market’s long-term growth prospects. According to population numbers from the U.S. Census Bureau for all 50 states, Arizona and Nevada ranked #1 and #2, respectively, in percentage increase of population between 2006 and 2007. According to the U.S. Census Bureau’s April 21, 2005 internet release, Nevada and Arizona will be the two fastest growing states between 2000 and 2030. Nevada is projected to grow 114.3%, Arizona 108.8% and Florida is third at 79.5%.

     On the basis of information provided by the NRMCA, in addition to vertically integrated manufacturers of cement and ready-mix concrete, more than 2,500 independent producers, such as us, currently operate a total of approximately 6,000 plants in the United States. Larger markets generally have numerous producers competing for business on the basis of price, timing of delivery and reputation for quality and service.

     Historically, barriers to the start-up of a new ready-mix concrete manufacturing operation were relatively low. Recently, however, public concerns over the dust, noise and heavy mixer and other truck traffic associated with the operation of ready-mix concrete plants and their general appearance have made obtaining the necessary permits and licenses required for new plants more difficult. Delays in the regulatory approval process, when coupled with the substantial capital investment that start-up operations require, have raised the barriers to entry for new companies entering the industry.

Products and Services

Ready-Mix Concrete

     Dry batched concrete is mixed in the mixer truck en route to the job site, whereas wet batched concrete is mixed at the plant and then delivered to the job site. We produce dry batched ready-mix concrete products which require us to proportion the dry components, add water when the components are in the ready-mix truck and then deliver the product in an unhardened state, which we refer to as a plastic state, for placement and shaping into

designed forms at the job site. Selecting the optimum mix for a job entails determining not only the ingredients that will produce the desired permeability, strength, appearance and other properties of the concrete after it has hardened and cured, but also the ingredients necessary to achieve a workable consistency under the weather and other conditions at the job site. We can achieve product differentiation for the mixes we offer because of the variety of mixes we are able to produce, our production capacity and our scheduling, delivery and placement reliability. We also believe we distinguish ourselves with our value-added service approach that emphasizes reducing our customers’ overall construction costs by lowering the installed, or in-place, cost of concrete.

     From a contractor’s perspective, the in-place cost of concrete includes both the amount paid to the ready-mix concrete manufacturer and the costs associated with the labor and equipment the contractor provides. A contractor’s unit cost of concrete is often only a small component of the total in-place cost that takes into account all the labor and equipment costs required to place and finish the ready-mix concrete, including the cost of additional labor and time lost due to substandard products or delivery delays. By carefully designing proper mixes and using recent advances in mixing technology, we assist our customers in reducing the amount of reinforcing steel and labor required in various applications.

     We provide a variety of services in connection with our sale of ready-mix concrete which can help reduce our customers’ in-place cost of concrete. These services include:

	•		production of new formulations and alternative product recommendations that reduce labor and materials costs;
	•		quality control, through automated production and testing, that ensures consistent results and minimizes the need to correct completed work; and
	•		scheduling and tracking systems that ensure timely delivery and reduce the downtime incurred by the customer’s finishing crew.

     We produce ready-mix concrete by combining the desired type of cement, sand, gravel and crushed stone with water and typically one or more admixtures. These admixtures, such as chemicals, minerals and fibers, determine the usefulness of the product for particular applications. We use a variety of chemical admixtures to achieve one or more of five basic purposes:

	•		relieve internal pressure and increase resistance to cracking in cold weather;
	•		retard the hardening process to make concrete more workable in hot weather;
	•		strengthen concrete by reducing its water content;
	•		accelerate the hardening process and reduce the time required for curing; and
	•		facilitate the placement of concrete having low water content.

     We use various mineral admixtures as supplementary cementing materials to alter the permeability, strength and other properties of concrete. These materials include fly ash, ground granulated blast-furnace slag and silica fume. We may also use fibers, such as steel, glass, synthetic and carbon filaments, as an additive in various formulations of concrete. Fibers help to control shrinkage and cracking, thus reducing permeability and improving abrasion resistance. In many applications, fibers replace welded steel wire and reinforcing bars. Relative to the other components of ready-mix concrete, these additives generate comparatively high margins.

Operations

     We have made substantial capital investments in equipment, systems and personnel at our concrete plants to facilitate continuous multi-customer deliveries of a highly perishable product.

     Our ready-mix concrete plants consist of five permanent installations and two portable facilities. Several factors govern the choice of plant type, including:

	•		capital availability;
	•		production consistency requirements; and
	•		daily production capacity requirements.

     The market primarily will drive our future plant construction decisions. The relevant market factors include:

	•		the expected production demand for the plant;
	•		the expected types of projects the plant will service; and
	•		the desired location of the plant.

     Portable plants will also play a part in our growth plans to service large, long-term projects within our market areas, as well as projects in more remote locations.

     We produce ready-mix concrete in batches. The batch operator in a dry batch plant simultaneously loads the dry components of stone, sand and cement with water and admixtures in a mixer truck that begins the mixing process during loading and completes that process while driving to the job site. In a wet batch plant, the batch operator blends the dry components and water in a plant mixer from which he loads the already mixed concrete into the mixer truck, which leaves for the job site promptly after loading.

     Mixer trucks slowly rotate their loads en route to job sites in order to maintain product consistency. A mixer truck typically has a load capacity of ten cubic yards, or approximately 20 tons, and a useful life of 12 years, although for accounting purposes we depreciate them over ten years. In addition to normal maintenance, after five years, some components of the mixer trucks require refurbishment. New mixer trucks currently cost approximately $150,000 to $165,000. We currently operate a fleet of approximately 180 owned and leased mixer trucks.

     In our manufacture and delivery of ready-mix concrete, we emphasize quality control, pre-job planning, customer service and coordination of supplies and delivery. A typical order contains various specifications that the contractor requires the concrete to meet. After receiving the specifications for a particular job, we formulate a variety of mixtures of cement, aggregates, water and admixtures which will meet or exceed the contractor’s specifications. We perform testing to determine which mix design is most appropriate to meet the required specifications. The test results enable us to select the mixture that has the lowest cost and meets or exceeds the job specifications. We also maintain a project file that details the mixture to be used when the concrete for the job is actually prepared. For quality control purposes, we maintain batch samples of concrete from selected job sites.

     We prepare bids for particular jobs based on the size of the job, location, desired profit margin, cost of raw materials and the design mixture identified in our testing process. If the job is large enough, we will obtain quotes from our suppliers as to the cost of raw materials we will use in preparing the bid. Once we obtain a quotation from our suppliers, the price of the raw materials for the specified job is established. Several months may elapse from the time a contractor has accepted our bid until actual delivery of the ready-mix concrete begins. During this time, we maintain regular communication with the contractor concerning the status of the job and any changes in the job’s specifications in order to coordinate the multi-sourced purchases of cement and other materials we will need to fill the job order and meet the contractor’s delivery requirements. We must confirm that our customers are ready to take delivery of manufactured product throughout the placement process.

     On any given day, a particular plant may have production orders for many customers at various locations throughout its area of operation. To fill an order:

	•		the dispatch office coordinates the timing and delivery of the concrete to the job site;
	•		an operator supervises and coordinates the receipt of the necessary raw materials and operates the hopper that dispenses those materials into the appropriate storage bins;
	•		a batch operator prepares the specified mixture from the order and oversees the loading of the mixer truck with dry ingredients and water; and
	•		the driver of the mixer truck delivers the load to the job site, discharges the load and, after washing the truck, departs at the direction of the dispatch office.

     We track the status of each mixer truck as to whether a particular truck is:

	•		loading concrete;
	•		en route to a particular job site;
	•		on the job site;
	•		being washed; or
	•		en route to a particular plant.

     We are continuously updated by the individual mixer truck operators as to their status. In this manner, we are able to determine the optimal routing and timing of subsequent deliveries by each mixer truck and to monitor the performance of each driver.

     A plant manager oversees the operation of each plant. Our employees also include:

	•		maintenance personnel who perform routine maintenance work throughout our plants;
	•		mechanics who perform substantially all the maintenance and repair work on our vehicles;
	•		quality control staff who prepare mixtures for particular job specifications;
	•		various clerical personnel who are responsible for our day-to-day operations; and
	•		sales personnel who are responsible for identifying potential customers and maintaining existing customer relationships.

     We generally operate on a single shift although we have the capability of conducting 24 hour a day operations during times of heavy demand.

Cement and Raw Materials

     We obtain most of the materials necessary to manufacture ready-mix concrete at each of our facilities on a daily basis. These raw materials include cement, which is a manufactured product, stone, gravel and sand. Each plant typically maintains an inventory level of these materials sufficient to satisfy its operating needs for at least one day. Cement represents the single most expensive raw material used in manufacturing a cubic yard of ready-mix concrete. In each of our markets, we purchase cement from any one of several suppliers and do not have any written supply agreements with any cement supplier. However, the symbiotic relationship between ourselves and the cement suppliers provides us with some assurance that we will be able to obtain the cement to produce ready-mix concrete to meet our customers’ demands.

     We lease, on a royalty basis, and operate two sand and gravel production facilities in the Las Vegas, Nevada vicinity, which provide the majority of the rock and sand used in our Las Vegas area concrete plants. These aggregate leases have remaining durations ranging from one to two years. Each lease provides certain rights to extend the lease under certain conditions. We are currently in the process of ceasing operations at a third site approximately 40 miles southeast of Las Vegas, Nevada and plan to terminate that lease as soon as possible to reduce costs. At our Arizona locations, our supply contracts for sand and gravel have remaining terms ranging from approximately two to nine years. Since we do not self-produce rock and sand used in our ready-mix concrete at our Arizona locations, we have entered into lease agreements with third party sand and gravel producers to establish our ready-mix plants on their properties in exchange for our agreeing to purchase their rock and sand as a raw material for our concrete. These leases are long-term in nature, from five to ten years, and generally have renewal options for additional terms. The obligations to purchase the rock and sand from these lessors may contain provisions to pay minimum monthly amounts regardless of our consumption levels, but in some cases, do allow for past payments to apply toward future use. These types of leases reduce the amount of capital equipment we would otherwise need to perform our own crushing and screening and also eliminate the need to own or lease our own mining properties. The leases also specify parameters for the quality of the rock and sand to be supplied by the lessors. These leases are important to us as they are the basis upon which we obtain rock and sand used to produce ready-mix concrete at these plant locations.

Customers

     We target concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers in the Las Vegas, Nevada and Phoenix, Arizona metropolitan areas. Revenue generated from our top ten customers represented approximately 48% of our revenue. The discontinuance of service to any of these customers or a general economic downturn could have a material adverse effect on our business, financial condition and results of operations.

     We rely heavily on repeat customers. We estimate that repeat customer revenue for the years ended December 31, 2007, 2006 and 2005 accounted for approximately 97% to 99% of our revenue. Management and dedicated sales personnel at each of our locations have been responsible for developing and maintaining successful long-term relationships with key customers. We believe that by operating in more markets and locations, we will be in a better position to market to and service larger regional contractors.

Competition

     The ready-mix concrete industry is highly competitive. Our ability to compete in our market depends largely on the proximity of our customers’ job sites to our ready-mix concrete plant locations, our plant operating costs and the prevailing ready-mix concrete prices in each market. Price is the primary competitive factor among suppliers for small or simple jobs, principally in residential construction, while timeliness of delivery and consistency of quality and service as well as price are the principal competitive factors among suppliers for large or complex jobs. Our competitors range from small, owner-operated private companies to subsidiaries or operating units of large, vertically integrated cement manufacturing and concrete products companies.

     Our direct competitors in Nevada include Cemex (including assets acquired from Rinker Materials), Silver State Materials, Sierra Ready Mix and Service Rock Products. In Arizona, we compete against Cemex (including assets acquired from Rinker Materials), Arizona Materials, Maricopa Ready Mix, Vulcan Materials and Hanson Materials. We also face significant competition from several smaller ready-mix concrete providers. We believe we adequately compete with all of our competitors due to our plant locations, quality of our raw materials, our delivery and service, and our competitive prices. Some competitors may have competitive advantages over us if they have lower operating costs or their financial resources enable them to accept lower margins on jobs that are particularly price-sensitive. Competitors having greater financial resources to invest in new mixer trucks or build plants in new areas may also have competitive advantages over us.

Training and Safety

     Our future success will depend, in part, on the extent to which we are able to attract, retain and motivate qualified employees. We believe that our ability to do so will depend on the quality of our recruiting, training, compensation and benefits, the opportunities we afford for advancement and our safety record. Historically, we have supported and funded continuing education programs for our employees. We intend to continue to expand these programs. We require all field employees to attend periodic safety training meetings and all drivers to participate in training seminars followed by certification testing.

Sales and Marketing

     General contractors and subcontractors typically select their suppliers of ready-mix concrete. In large, complex projects, an engineering firm or division within a state transportation or public works department may influence the purchasing decision, particularly where the concrete has complicated design specifications. In those projects and in government-funded projects generally, the general contractor or subcontractor usually awards supply orders on the basis of either direct negotiation or competitive bidding. We believe that the purchasing decision in many cases ultimately is relationship-based. Our marketing efforts target general contractors, concrete subcontractors, design engineers and architects whose focus extends beyond the price of ready-mix concrete to product quality and consistency and reducing their in-place cost of concrete.

     We currently have nine full-time sales persons. We also intend to develop and implement training programs to increase the marketing and sales expertise and technical abilities of our staff. Our goal is to maintain a sales force whose service-oriented approach will appeal to our targeted prospective customers and differentiate us from our competitors.

Seasonality

     The construction industry is seasonal, generally due to inclement weather and length of daylight hours occurring in the winter months. Accordingly, we may experience a seasonal pattern in our operating results with lower revenue in the first and fourth quarters of each calendar year. Results for any one particular quarter, therefore, may not be indicative of results for other quarters or for the year.

Insurance

     Our business is subject to claims and litigation brought by employees, customers and third parties for personal injuries, property damage, product defects and delay damages, that have, or allegedly have, resulted from the conduct of our operations.

     Our operations involve providing blends of ready-mix concrete that are required to meet building code or other regulatory requirements and contractual specifications for durability, compressive strength, weight-bearing capacity and other characteristics. If we fail or are unable to provide product in accordance with these requirements and specifications, claims may arise against us or our reputation could be damaged. Although we have not experienced any material claims of this nature in the past, we may experience such claims in the future. In addition, our employees perform a significant portion of their work moving and storing large quantities of heavy raw materials, driving large mixer trucks in heavy traffic conditions and pouring concrete at construction sites or in other areas that may be hazardous. These operating hazards can cause personal injury and loss of life, damage to or destruction of property and equipment and environmental damage. We maintain insurance coverage in amounts and against the risks we believe are consistent with industry practice, but this insurance may not be adequate to cover all losses or liabilities we may incur in our operations, and we may not be able to maintain insurance of the types or at levels we deem necessary or adequate or at rates we consider reasonable.

Equipment

     Currently, we operate a fleet of approximately 180 owned and leased ready-mix trucks, which are serviced by our mechanics. We believe these vehicles are generally well-maintained and adequate for our operations. The average age of our ready-mix trucks is approximately six years. Since inception, we have elected to finance the purchase of our trucks and other plant equipment with operating leases upon terms generally available in the industry and at rates disclosed in our financial statements. We expect to utilize proceeds from operations to purchase equipment which in the past has been financed. When placing orders for new equipment, it can be expected that lead times may be as much as four to six months; therefore, actual delivery may not necessarily meet the timing of our production needs and can cause disruption of service or diminished productivity.

     We have used a broad range of financing arrangements to acquire the equipment necessary for our business. We commonly lease our trucks and other operating equipment, which we believe has allowed us to minimize the initial cash outlay for such equipment when we commenced our business operations. The terms of these equipment leases are similar to other equipment leases and specify a term, a monthly payment, usually require a down payment, and may or may not specify a buyout option.

Government Regulation

     A wide range of federal, state and local laws apply to our operations, which include the regulation of:

	•		zoning regulations;
	•		street and highway usage;
	•		noise levels; and
	•		health, safety and environmental matters.

     In many instances, we are required to have certificates, permits or licenses in order to conduct our business. Our failure to maintain required certificates, permits or licenses or to comply with applicable laws could result in substantial fines or possible revocation of our authority to conduct certain of our operations.

     Environmental laws that impact our operations include those relating to air quality, solid waste management and water quality. Environmental laws are complex and subject to frequent change. These laws impose strict liability in some cases without regard to negligence or fault. Sanctions for non-compliance may include revocation of permits, corrective action orders, administrative or civil penalties and criminal prosecution. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances. In addition, businesses may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances, as well as damage to natural resources. These laws also expose us to liability for the conduct of or conditions caused by others, or for acts which complied with all applicable laws when performed. We are not aware of any environmental issues which we believe are likely to have a material adverse effect on our business, financial condition or results of operations, but we can provide no assurance that material liabilities will not occur. There also can be no assurance that our compliance with amended, new or more stringent laws, stricter interpretations of existing laws or the future discovery of environmental conditions will not require additional, material expenditures. Additionally, the Occupational Safety and Health Administration (OSHA) and the Mining Safety and Health Agency have established requirements for our training programs and dictate working conditions which we must meet.

     We have all material permits and licenses required to conduct our operations and are in substantial compliance with applicable regulatory requirements relating to our operations. Our capital expenditures relating to environmental matters have not been material. We do not currently anticipate any material adverse effect on our business or financial position as a result of our future compliance with existing environmental laws controlling the discharge of materials into the environment.

     We also require permits to obtain and use water in connection with our production of ready-mix concrete. We believe we have access to, and permitting for, sufficient water supplies to maintain our operations in Arizona and Nevada for the foreseeable future.

Employees

     As of February 2, 2008, we employed approximately 270 employees including executive officers, management personnel, sales personnel, technical personnel, administrative staff, clerical personnel, and drivers, of which approximately 30 were salaried and approximately 240 were hourly personnel generally employed on an as-needed basis, including approximately 165 truck drivers. The number of employees fluctuates depending on the number and size of projects ongoing at any particular time, which may be impacted by variations in weather conditions and length of daylight hours throughout the year. During the year ended December 31, 2007, the number of employees ranged from approximately 280 to approximately 320 and averaged approximately 300. None of our employees belong to a labor union and we believe our relationship with our employees is satisfactory.

Website Access

     Our website address is www.readymixinc.com. On our website we make available, free of charge, our annual report on Form 10-K, our most recent quarterly reports on Form 10-Q, current reports on Form 8-K, Forms 3, 4, and 5 related to beneficial ownership of securities, our code of ethics and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the United States Securities and Exchange Commission. The information on our website is not incorporated into, and is not part of, this report.

Item 1A. Risk Factors

     The risk factors listed in this section and other factors noted herein or incorporated by reference could cause our actual results to differ materially from those contained in any forward-looking statements. The following risk factors, in addition to the information discussed elsewhere herein, should be carefully considered in evaluating us and our business:

We are and will continue to be subject to conflicts of interest resulting from Meadow Valley’s control of us, and we do not have any procedures in place to resolve such conflicts.

     Meadow Valley owns approximately 69% of our outstanding common stock and may be able to control our business. Additionally, Meadow Valley’s chief executive officer also serves us in similar capacities, and all five of Meadow Valley’s directors serve on our seven member board of directors. Only one of our outside directors is independent of Meadow Valley. We also sell a small amount of concrete to Meadow Valley. These relationships could create, or appear to create, potential conflicts of interest when Meadow Valley’s officers and directors are faced with decisions that could have different implications for Meadow Valley and us. These decisions could result in reducing our profitability. Also, the appearance of conflicts, even if such conflicts do not materialize, might adversely affect the investing public’s perception of us. We do not have any formal procedure for resolving such conflicts of interest.

We are at risk of a change in control of ownership.

     Meadow Valley has formed a special committee to, among other things, consider offers that may be made for the acquisition of that company.  If such an offer is received and ultimately consummated, it could result in a change of control of Meadow Valley.  A change of control of Meadow Valley would also result in a change of control of Ready Mix since Meadow Valley currently owns approximately 69% of our common stock and has the ability to elect a majority of the members of our board of directors, who in turn have the ability to appoint our executive officers.  We do not have any precautions in place to avoid such a change of control and in the event a change of control were to occur, there is no assurance that it would be in the best interests of our shareholders.

At any given time, one or a limited number of customers may account for a large percentage of our revenue, which means that we face a greater risk of loss of revenue and a reduction in our profitability if we lose a major customer or if a major customer faces financial difficulties.

     At times, a small number of customers have generated a large percentage of our revenue in any given period. For the year ended December 31, 2007, our largest customer provided approximately 7.7% of our revenue and our ten largest customers collectively provided approximately 47.8% of our revenue. In 2006, one customer provided approximately 9.2% of our revenue and our ten largest customers collectively provided approximately 44.2% of our revenue. In 2005, one customer provided approximately 14.3% of our revenue and our ten largest customers collectively provided approximately 53.4% of our revenue. Companies that constitute our largest customers vary from year to year, and our revenue from individual customers fluctuates each year. If we lose one or more major customers or if any of these customers face financial difficulties, our revenue could be substantially reduced, thereby reducing our profitability.

We may lose business to competitors who underbid us or who have greater resources to supply larger jobs than we have, and we may be otherwise unable to compete favorably in our highly competitive industry.

     Our competitive position in a given market depends largely on the location and operating costs of our ready-mix concrete plants and prevailing prices in that market. Price is a primary competitive factor among suppliers for small or simple jobs, principally in residential construction, while timeliness of delivery and consistency of quality and service, in addition to price, are the principal competitive factors among suppliers for large or complex jobs. Our competitors range from small, owner-operated private companies offering simple mixes to subsidiaries or operating units of large, vertically integrated cement manufacturing and concrete products companies. Our vertically integrated competitors generally have greater manufacturing, financial and marketing resources than we, providing them with a competitive advantage. Competitors having lower operating costs than we do or having the financial resources to enable them to accept lower margins than we do will have a competitive advantage over us for larger jobs which are particularly price-sensitive. Competitors having greater financial resources than we do to invest in new mixer trucks or build plants in new areas also have competitive advantages over us.

We depend on third parties for cement and other supplies essential to operate our business. The loss of any such suppliers could impact our ability to provide concrete to, or otherwise service our customers, as well as our ability to retain and attract customers.

     We rely on third parties to provide us with supplies, including cement and other raw materials, necessary for our operations. We cannot be sure that these relationships will continue in the future or that raw materials will continue to be available to us when required and at a reasonable price. During 2005, a worldwide shortage of cement created difficulties for the entire ready-mix industry in obtaining sufficient cement. The cement industry has responded with planned increased capacity which will likely mitigate any future shortages that may be caused by high demand for ready-mix concrete. If shortages of cement or other raw materials were to resume, we might be unable to meet our supply commitments to our customers which would severely impact our ability to retain and attract customers.

Our operating results may vary significantly from reporting period to reporting period and may be adversely affected by the cyclical nature of the ready-mix concrete markets we serve, causing significant reductions in our revenue.

     Our business and the business environment which supports the ready-mix concrete business can be cyclical in nature. As a result, our revenue may be significantly reduced as a result of declines in construction in Nevada and Arizona caused by:

	•		the level of residential and commercial construction in Nevada and Arizona;
	•		the availability of funds for public or infrastructure construction from local, state and federal sources;
	•		changes in interest rates;
	•		variations in the margins of jobs performed during any particular quarter; and
	•		the budgetary spending patterns of our customers.

     As a result, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for the entire year. Furthermore, negative trends in the ready-mix concrete industry or in our markets could reduce our revenue, thereby decreasing our gross profit and reducing our profitability.

Our business is seasonal, causing quarterly variations in our revenue and earnings, which in turn could negatively affect our stock price.

     The construction industry, even in Arizona and Nevada, is seasonal in nature, often as a result of adverse weather conditions, with significantly stronger construction activity in the second and third calendar quarters, than in the first and fourth quarters. Such seasonality or unanticipated inclement weather could cause our quarterly revenue and earnings to vary significantly. Because of our relatively small size, even a short acceleration or delay in filling customers’ orders can have a material adverse effect on our financial results in a given reporting period. Our varying quarterly results may result in a decline in our common stock price if investors react to our reporting operating results which are less favorable than in a prior period or than those anticipated by investors or the financial community generally.

Governmental regulations covering the ready-mix concrete industry, including environmental regulations, may result in increases in our operating costs and capital expenditures and decreases in our earnings.

     A wide range of federal, state and local laws, ordinances and regulations apply to our production of ready-mix concrete, including:

	•		zoning regulations affecting plant locations;
	•		restrictions on street and highway usage;
	•		limitations on noise levels; and
	•		regulation of health, safety and environmental matters.

     In many instances, we must have various certificates, permits or licenses in order to conduct our business. Our failure to maintain required certificates, permits or licenses or to comply with applicable governmental requirements could result in substantial fines or possible revocation of our authority to conduct some of our operations. Governmental requirements that impact our ready-mix concrete operations also include those relating to air quality, solid waste management and water quality. These requirements are complex and subject to frequent change. They impose strict liability in some cases without regard to negligence or fault and expose us to liability for the conduct of, or conditions caused by others, or for our acts that may otherwise have complied with all applicable requirements when we performed them. Our compliance with amended, new or more stringent requirements, stricter interpretations of existing requirements or the future discovery of environmental conditions may require us to make material expenditures we currently do not anticipate, thereby decreasing our earnings, if any.

There are special risks related to our operating and internal growth strategies that could adversely affect our operating practices and overall profitability.

     One key component of our strategy is to operate our businesses on a decentralized basis, with local Phoenix and Las Vegas metro-wide management retaining responsibility for day-to-day operations, profitability and the internal growth of the local business. If we do not maintain proper overall internal controls, this decentralized operating strategy could result in inconsistent operating and financial practices and our overall profitability could be adversely affected. Our internal growth will also be affected by local management’s ability to:

	•		attract new customers and retain existing customers;
	•		differentiate our company in a competitive market by successfully emphasizing the quality of our products and our service;
	•		hire and retain mixer truck drivers and other specialized employees; and
	•		place orders for new equipment on a timely basis to meet production needs.

The departure of key personnel could disrupt our business and limit our growth, as this growth requires the hiring of new local senior managers and executive officers.

     We depend on the continued efforts of our executive officers, some of whom are executive officers of Meadow Valley, and, in many cases, on our local senior management. In addition, any future growth will impose significant additional responsibilities on members of our senior management and executive officers. The success of our operations, which is based upon a decentralized management, will depend on recruiting new local senior level managers and officers, and we cannot be certain that we can recruit and retain such additional managers and officers. To the extent we are unable to attract and retain qualified management personnel, our growth could be limited and our business could be disrupted, resulting in decreased revenue and increased costs associated with the loss of experienced managers responsible for generating new clients, marketing and cost containment efforts.

If some or all of our employees unionize, it could result in increases in our operating costs, disruptions in our business and decreases in our earnings.

     If our employees were to become represented by a labor union, we could experience disruptions of our operations caused by labor strikes or slow downs as well as higher ongoing labor costs, which could increase our overall costs to do business. In addition, the coexistence of union and non-union employees on particular jobs may lead to conflicts between these employees or impede our ability to integrate our operations efficiently. Labor relations matters affecting our suppliers could increase our costs, disrupt our supply chains and adversely impact our business.

Our operations are subject to special hazards that may cause personal injury or property damage, subjecting us to liabilities and possible losses which may not be covered by insurance.

     Operating mixer trucks, particularly when loaded, exposes our drivers and others to traffic hazards. Our drivers are subject to the usual hazards associated with providing services on construction sites, while our plant personnel are subject to the hazards associated with moving and storing large quantities of heavy raw materials. Operating hazards can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage. We maintain insurance coverage in amounts and against the risks we believe are consistent with industry practice, but this insurance may not be adequate to cover all losses or liabilities we may incur in our operations. Our insurance policies are subject to varying levels of deductibles. Losses up to our deductible amounts will be accrued based upon our estimates of the ultimate liability for claims incurred and an estimate of claims incurred but not reported. However, insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety program. If we were to experience insurance claims or costs above our estimates, we might also be required to use working capital to satisfy these claims rather than using the working capital to maintain or expand our operations.

We may incur material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications.

     One of the services we provide to our customers is the formulation of specific mix designs for ready-mix concrete that meet building code or other regulatory requirements and contractual specifications for durability, compressive strength, weight-bearing capacity and other characteristics. If we fail or are unable to provide products meeting these requirements and specifications, material claims may arise against us and our reputation could be damaged. Additionally, if a significant uninsured or non-indemnified mix design or product-related claim is resolved against us in the future, that resolution may increase our costs and reduce our profitability and cash flows.

Our revenue attributable to public works projects could be negatively impacted by a decrease or delay in governmental spending.

     Our business depends to some extent on the level of federal, state and local spending on public works projects in our markets. Reduced levels of governmental funding for public works projects or delays in that funding could significantly reduce our revenue and thereby reduce our cash flow and profitability.

Item 1B. Unresolved Staff Comments

     None.

Item 2. Properties

     We owned or leased the following properties at December 31, 2007:

Approximate

Approximate

Building Size in

Land

Owned or

Monthly

Lease

Location

Purpose

Square Feet

in Acres

Leased

Rental

Expires

3430 East Flamingo Suite 100,

Las Vegas, Nevada

Area office

5,900

—

Leased

$9,870

3/10/2010

4602 East Thomas Road

Phoenix, Arizona

Area office

18,400

2

Owned

—

—

109 West Delhi,

Ready Mix

North Las Vegas, Nevada

production facility

4,470

5

Owned

—

—

11500 West Beardsley Road,

Ready Mix

Sun City, Arizona (1)

production facility

440

5

Leased

—

5/31/2010

39245 North Schnepf Road,

Ready Mix

Queen Creek, Arizona

production facility

440

5

Owned

—

—

North Schnepf Road,

Sand and Aggegate

Queen Creek, Arizona (1) (2)

production facility

—

15

Leased

—

8/30/2009

Richmar Ave.,

Ready Mix

Las Vegas, Nevada

production facility

440

5

Owned

—

—

6204 West Southern Avenue,

Ready Mix

Tolleson, Arizona (1)

production facility

440

5

Leased

—

10/31/2016

Sand and Aggegate

Moapa, Nevada (1)

production facility

840

40

Leased

—

1/1/2009

Ready Mix

Moapa, Nevada (1)

production facility

440

—

Leased

—

—

Sand and Aggegate

Northwest Arizona (1)

production facility

840

40

Leased

—

8/27/2008

Sand and Aggegate

Northwest Las Vegas, Nevada (1)

production facility

—

40

Leased

—

3/31/2008

Ready Mix

Northwest Las Vegas, Nevada (1)

production facility

440

—

Leased

—

—

     We have determined that the above properties are sufficient to meet our current needs. We will continue to search for possible additional site locations to expand our operations if market conditions warrant.

Item 3. Legal Proceedings

     The Company is, from time to time, involved in legal proceedings arising in the normal course of business. As of the date of this Annual Report on Form 10-K, the Company is involved in one material legal proceeding. On November 8, 2007 Kitchell Contractors, Inc. of Arizona filed a complaint (CV2007-020708), in the Superior Court of the State of Arizona, against us for re-imbursement of costs they incurred to remove and replace concrete totaling approximately $200,000. The claim alleges that the materials supplied to a construction project did not meet the minimum standards as defined in the contract between the parties. We are disputing their claims and are vigorously defending against the complaint.

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, 2007.

PART II

Item 5.		Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

     Our common stock is listed on the American Stock Exchange and trades under the symbol “RMX.” The following table represents the high and low closing prices for our common stock on the American Stock Exchange during 2007. As of February 29, 2008, there were approximately 1,300 record and beneficial owners of our common stock. On February 29, 2008, our common stock closed at $5.90 per share. Our stock began trading on August 24, 2005, at the completion of our initial public offering.

		2007 *								2006 *
		High				Low				High				Low
First quarter		$	13.44			$	11.11			$	16.95			$	13.30
Second quarter		$	13.90			$	11.96			$	15.62			$	12.80
Third quarter		$	13.20			$	11.85			$	14.10			$	9.48
Fourth quarter		$	12.40			$	6.40			$	11.42			$	10.25

     We have never declared or paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements, general business conditions and other such factors as our board of directors deems relevant.

Ready Mix, Inc.

Equity Compensation Plan Information

Number of securities

remaining available

Number of securities

for future issuance

to be issued upon

Weighted-average

under equity

exercise of

exercise price of

compensation plans

outstanding options,

outstanding options,

(excluding securities

Plan category

warrants and rights

warrants and rights

reflected in column (a))

(a)

(b)

(c)

Equity compensation plans approved by security holders (1)(2)

482,375

$

11.54

306,875

Equity compensation plans not approved by security holders

—

—

Total

482,375

306,875

     Our approved equity compensation plan, which we refer to as the 2005 Plan, permits the granting of any or all of the following types of awards: (1) incentive and nonqualified stock options, (2) stock appreciation rights, (3) stock awards, restricted stock and stock units, (4) and other stock or cash-based awards. In connection with any award or any deferred award, payments may also be made representing dividends or their equivalent.

     We have reserved 675,000 shares of our common stock for issuance under the 2005 Plan. As of December 31, 2007, 306,875 shares were available for future grant under the 2005 Plan. The common terms of the stock options are five years and may be exercised after issuance 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 no less than the market price of the Company’s common stock on the date of grant. The board of directors has full discretion to modify these terms.

     Our employees are eligible for participation in Meadow Valley’s (our parent company) equity compensation plan. The table below summarizes Meadow Valley’s equity compensation plan.

Meadow Valley Corporation

Equity Compensation Plan Information

Number of securities

remaining available

Number of securities

for future issuance

to be issued upon

Weighted-average

under equity

exercise of

exercise price of

compensation plans

outstanding options,

outstanding options,

(excluding securities

Plan category

warrants and rights

warrants and rights

reflected in column (a))

(a)

(b)

(c)

Equity compensation plans approved by security holders (1)

320,011

$

5.35

150,149

Equity compensation plans not approved by security holders

—

—

Total

320,011

150,149

     Except for issuances of options under the 2005 Plan, we did not sell any unregistered securities during the year ended December 31, 2007, nor did we repurchase any of our equity securities during the same period.

     The graph below compares the cumulative 28-month total return of holders of Ready Mix, Inc.’s common stock with the cumulative total returns of the AMEX Composite Index, and a customized peer group of six companies that includes: Eagle Materials, Inc., Florida Rock Industries, Inc., Martin Marietta Materials, Texas Industries, Inc., US Concrete, Inc. and Vulcan Materials Corp. The graph tracks the performance of a $100 investment in our common stock, in the peer group, and the index* (with the reinvestment of all dividends) from 8/24/2005 to 12/31/2007.

				8/24/2005					12/31/2005					12/31/2006					12/31/2007
	Ready Mix, Inc.				100.00					113.22					91.74					53.88
	AMEX Composite Index				100.00					105.16					125.13					152.50
	Peer Group				100.00					104.87					129.00					141.93

     The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Item 6. Selected Financial Data

Statement of Operations Information:

     The selected financial data as of and for each of the five years ended December 31, 2007, is derived from the financial statements of the Company and should be read in conjunction with the financial statements included elsewhere in this Annual Report on Form 10-K and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Statement of Operations Information:

     In thousands, except share and per share data.

		Years ended December 31,
		2007				2006				2005				2004				2003
Revenue		$	77,365			$	83,589			$	67,734			$	59,136			$	44,128
Gross profit			6,154				9,206				7,072				6,627				4,107
Income from operations			1,580				4,927				3,943				4,055				1,620
Income before income taxes			2,111				5,212				3,921				3,811				1,674
Net income			1,355				3,339				2,486				2,440				1,040
Basic net income per common share		$	0.36			$	0.88			$	0.94			$	1.20			$	0.51
Diluted net income per common share		$	0.36			$	0.87			$	0.93			$	1.20			$	0.51
Basic weighted average common shares outstanding			3,808,337				3,807,500				2,654,688				2,025,000				2,025,000
Diluted weighted average common shares outstanding			3,817,009				3,833,580				2,681,053				2,025,000				2,025,000
Dividends			—				—				—				—				—

Balance Sheet Information:

		December 31,
		2007				2006				2005				2004				2003
Total assets		$	46,279			$	47,023			$	39,907			$	22,414			$	16,025
Total notes payable and capital lease obligations			9,845				11,040				8,020				8,342				5,239
Due to affiliate			38				73				85				1,380				2,416
Intercompany income tax allocation payable			—				—				—				1,298				658
Total shareholders’ equity			29,219				27,467				23,966				4,344				1,904

Financial Position Information:

		Years ended December 31,
		2007				2006				2005				2004				2003
Working capital		$	11,808			$	10,404			$	14,186			$	(1,057	)		$	(563	)
Current ratio			2.49				2.08				2.70				0.90				0.94
Debt to equity			0.34				0.40				0.33				1.92				2.75

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion of our results of operations and financial condition should be read in conjunction with our financial statements and notes thereto included elsewhere herein. Historical results and percentage relationships among accounts are not necessarily an indication of trends in operating results for any future period. In these discussions, most percentages and dollar amounts have been rounded to aid presentation. As a result, all such figures are approximations.

Executive Overview

     Our revenue is directly related to the level of construction activity in our markets. Ordinarily, the construction segments that affect our business the most are: the single-family residential segment, the commercial construction segment and, to a lesser degree, the public works infrastructure segment, both highway and non-highway. Accordingly, the significant reduction in residential construction during 2007 has caused a corresponding drop in demand for our product. Fortunately, the construction activity in the non-residential sectors remained sufficiently strong to mitigate the effect of the residential slowdown. A prolonged decline in residential activity coinciding with a decline in one or more of the other sectors of the construction market could result in significant additional reductions in demand for our product.

Results of Operations

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

		Years ended December 31,
Dollars in Thousands		2007								2006								2005
Revenue		$	75,620				97.7	%		$	83,152				99.5	%		$	66,898				98.8	%
Related party revenue			1,745				2.3	%			437				0.5	%			836				1.2	%
Total revenue			77,365				100.0	%			83,589				100.0	%			67,734				100.0	%
Gross profit			6,154				8.0	%			9,206				11.0	%			7,072				10.4	%
General and administrative expenses			4,574				5.9	%			4,279				5.1	%			3,128				4.6	%
Income from operations			1,580				2.0	%			4,927				5.9	%			3,943				5.8	%
Interest income			385				0.5	%			395				0.5	%			174				0.3	%
Interest expense			(138	)			-0.2	%			(163	)			-0.2	%			(227	)			-0.3	%
Income tax expense			756				1.0	%			1,872				2.2	%			1,435				2.1	%
Net income		$	1,355				1.8	%		$	3,339				4.0	%		$	2,486				3.7	%
Depreciation and amortization		$	4,377				5.7	%		$	3,439				4.1	%		$	2,411				3.6	%

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

     Revenue. Revenue declined 7.4% to $77.4 million for the year ended December 31, 2007, which we refer to as “2007,” from $83.6 million for the year ended December 31, 2006, which we refer to as “2006.” The decrease in revenue resulted from a 10.1% decrease in sales of cubic yards of concrete, which we refer to as “units,” offset by an increase of 3.2% in the average unit sales price. The increased average unit sales price reflects a shift toward selling more expensive higher strength concrete typically used in commercial and infrastructure projects. But, when comparing the average unit selling price by mix, prices are down across the board. The decreased volume in 2007 was primarily attributable to the residential sector’s continuing decline. We provide ready-mix concrete to a related party. Related party revenue represented 2.3% of our 2007 revenue. The increase in related party revenue when compared to 2006 was the result of the location of the projects, type of products needed and the availability of product and personnel. Location of the project, type of product needed and the availability of product and personnel are factors which we consider when quoting prices to our customers, including our related party. Based on that criteria, future sales to the related party could increase or decrease in any given year, but are not anticipated to be material. We expect raw material prices and transport costs associated with those materials to remain stable during 2008, thus it is unlikely that we will be raising our prices during 2008.

     Gross Profit. Gross profit decreased by 33.2% to $6.2 million for 2007 from $9.2 million for 2006 and gross margin, as a percent of revenue, decreased to 8.0% in 2007 from 11.0% in 2006. Gross profit margin can be affected by a variety of factors including customers’ construction schedules, weather conditions and availability of raw materials. The decrease in gross profit and gross margin during 2007 resulted primarily from increased costs associated with the expansion of our operations, under utilizing new equipment placed in service and a decrease in

the volume of units sold. During 2008, we will likely continue to under-utilize equipment, but we expect long-term margins will benefit from our expansion efforts. Our fixed costs will increase in 2008 as a result of our expansion efforts implemented during 2007 and will impact our gross profit margin in the interim as we are bringing the equipment up to full utilization.

     Depreciation and Amortization.  Depreciation and amortization expense increased $.9 million, or 27.3%, to $4.4 million for 2007 from $3.4 million for 2006. This increase resulted from the additional plant, equipment and vehicles we placed in service in 2007.

     General and Administrative Expenses.  General and administrative expenses increased to $4.6 million for 2007 from $4.3 million for 2006. The increase resulted primarily from a $.3 million increase in public company expense, a $.2 million increase in expenses associated with the ownership of our office facility in Phoenix, Arizona, offset by a $.2 million decrease in administrative salaries, wages, bonuses and related payroll taxes. We record rent income associated with our office building to other income.

     Interest Income and Expense.  Interest income for 2007 remained flat at $.39 million when compared to 2006. Interest expense decreased in 2007 to $.14 million compared to $.16 million for 2006. The decrease in interest expense was related to the repayment of a portion of our outstanding balance on our line of credit, thereby reducing interest expense. Interest expense associated with assets used to generate revenue is included in cost of revenue. The interest included in cost of revenue during 2007 was $.74 million compared to $.60 million for 2006. The increase in interest expense included in cost of revenue represents the increase in debt obligations used to finance our expansion efforts over the past year. We intend to enter into additional financing agreements to acquire equipment and fund working capital when needed, which could increase interest expense in future periods.

     Income Taxes.  The income tax provision for 2007 decreased to $.8 million from $1.9 million for 2006. For 2007, our effective income tax rate differed from the statutory rate due primarily to state income taxes, non-deductible expenses and the Domestic Production Activities deduction.

     Net Income.  Net income was $1.4 million for 2007 as compared to net income of $3.3 million for 2006. The decrease in net income resulted from a decrease in the volume of units sold as discussed above and our under-utilizing equipment, which resulted from the continued slow down of the residential construction sector.

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

     Revenue. Revenue improved 23.4% to $83.6 million for the year ended December 31, 2006, which we refer to as “2006,” from $67.7 million for the year ended December 31, 2005, which we refer to as “2005.” The increase in revenue resulted from a 15.6% increase in the average unit sales price, complemented by an 8.2% increase in sales of cubic yards of concrete, which we refer to as “units.” The increased average sales price reflected our ability to pass our additional costs to our customers, such as the increased costs of raw materials and transportation of those materials, and a change in the types of concrete mixes we sold which required higher strength concrete typically used in commercial and infrastructure projects. The increased volume in 2006 was primarily attributable to our expansion efforts, including the opening of two new concrete batch plants during the year and increased focus to obtain commercial projects. We provide ready-mix concrete to a related party. Related party revenue represented .5% of our total 2006 revenue. The decrease in related party revenue when compared to 2005 was the result of the location of the projects, type of products needed and the availability of product and personnel. Location of the project, type of product needed and the availability of product and personnel are factors which we consider when quoting prices to our customers, including our related party.

     Gross Profit. Gross profit increased by 30.2% to $9.2 million for 2006 from $7.1 million for 2005 and gross margin, as a percent of revenue, increased to 11.0% in 2006 from 10.4% in 2005. Gross profit margin can be affected by a variety of factors including customers’ construction schedules, weather conditions and availability of raw materials. The increase in gross profit and gross margin during 2006 resulted primarily from the expansion of our operations and utilizing new equipment placed in service.

     Depreciation and Amortization.  Depreciation and amortization expense increased $1.0 million, or 42.7%, to $3.4 million for 2006 from $2.4 million for 2005. This increase resulted from the additional plant, equipment and vehicles we placed in service in 2006.

     General and Administrative Expenses.  General and administrative expenses increased to $4.3 million for 2006 from $3.1 million for 2005. The increase resulted primarily from a $.4 million increase in administrative salaries, wages, bonuses and related payroll taxes, a $.1 million increase in public company expense, $.3 million increase in bad debt expense and a $.1 million increase in insurance expense.

     Interest Income and Expense.  Interest income for 2006 increased to $.39 million from $.17 million for 2005 resulting primarily from an increase in invested cash reserves from our initial public offering. Interest expense decreased in 2006 to $.16 compared to $.23 million for 2005. The decrease in interest expense was related to the repayment of related party debt and repayment of our outstanding balance on our line of credit. Interest expense associated with assets used to generate revenue is included in cost of revenue. The interest included in cost of revenue during 2006 was $.60 million compared to $.41 million for 2005.

     Income Taxes.  The income tax provision for 2006 increased to $1.9 million from $1.4 million for 2005. For 2006, our effective income tax rate differed from the statutory rate due primarily to state income taxes, non-deductible expenses and the Domestic Production Activities deduction.

     Net Income.  Net income was $3.3 million for 2006 as compared to net income of $2.5 million for 2005. The increase in net income resulted from an increase in our average unit sales price and our increase in volume of units sold as discussed above.

Liquidity and Capital Resources

     Our primary need for capital has been to increase the number of mixer trucks in our fleet, to increase the number of concrete batch plant locations, to purchase support equipment at each location, to secure and equip aggregate sources to ensure a long-term source and quality of the aggregate products used to produce our concrete and to provide working capital to support the expansion of our operations. As we expand our business, we will continue to utilize the availability of capital offered by financial institutions, in turn increasing our total debt and debt service obligations. Historically, our largest provider of financing has been Wells Fargo Equipment Financing, Inc. formerly known as CIT Construction, who we refer to as “WFE.” We believe our working capital and our historical sources of capital will be satisfactory to meet our needs for at least one year from the date of this Annual Report on Form 10-K.

     We have a credit facility with WFE which provides a $5.0 million revolving credit facility, as well as $15.0 million capital expenditure commitment. As of December 31, 2007 we had approximately $4.3 million available on our revolving credit facility and we also had approximately $7.0 million available on the capital expenditure commitment. The WFE revolving credit facility is collateralized by all of our assets as well all of the assets of Meadow Valley, our parent company. Under the terms of the agreement, we and/or our Parent are required to maintain a certain level of tangible net worth, a ratio of total debt to tangible net worth as well as a minimum cash flow to debt ratio. The Parent is also required to maintain a certain level of earnings before interest, tax, depreciation and amortization (EBITDA). We are also required to maintain a certain level of cash flow to current portion of long-term debt. As of December 31, 2007, both Meadow Valley and Ready Mix were compliant with the facility covenants.

     Over the next 24 months, if market conditions warrant, we intend to expand our operations by adding one additional ready-mix production plant, related production plant equipment and site improvements, for which we anticipate utilizing the capital expenditure commitment of our WFE credit facility.

     In February 2007, we completed the purchase and installation of the equipment we needed to begin producing aggregate products from our pit in the northwest metropolitan Las Vegas area, which we refer to as Lee Canyon. Bringing this facility on line should improve our ability to better service the anticipated growth in the Las Vegas metropolitan area.

     As a result of the expansion efforts we have already executed over the past two years, we have entered into additional debt and operating lease obligations which, in turn, have increased our total fixed minimum monthly payment obligations. To date our liquidity has not been negatively impacted by this increase as our cash flow from operations has provided an amount in excess of the increase in these payments. We expect, but cannot assure, that cash flow from operations will be adequate to provide for the cash outflow needed to service all of our obligations.

     The following table sets forth, for the periods presented, certain items from our Statements of Cash Flows:

		For the years ended December 31,
(Dollars in Thousands)		2007				2006				2005
Cash provided by operating activities		$	7,293			$	5,158			$	2,123
Cash used in investing activities			3,586				8,394				4,582
Cash provided by (used in) financing activities			(2,920	)			(504	)			13,145

     Cash provided by operating activities during 2007 of $7.3 million represents a $2.1 million increase from the amount provided by operating activities during 2006. The change was primarily due to the decrease in our outstanding accounts receivable, which is a result of reduced sales and continued emphasis on collections, a reduction in our refundable deposits and the change in depreciation expense year over year, offset by lower net income, a decrease in accounts payable and accrued liabilities, also a result of reduced sales.

     Cash used in investing activities during 2007 of $3.6 million represents a $4.8 million decrease from the amount used by investing activities during 2006. The decrease in investing activities during 2007 was due primarily to the completion of the expansion of our production facilities and equipment to be used at those locations.

     Cash used in financing activities during 2007 of $2.9 million represents a $2.4 million increase from the amount used in financing activities during 2006. The increase in cash used in financing activities during 2007 was the result of the repayment of debt obligations.

     Cash provided by operating activities during 2006 of $5.2 million represents a $3.0 million increase from the amount provided by operating activities during 2005. The change was primarily due to improved net income, reduction of tax obligations due and payable during the year and the change in depreciation expense year over year offset by deposits made near the end of 2006, which were primarily made to secure the production equipment at our Lee Canyon facility as mentioned above.

     Cash used in investing activities during 2006 of $8.4 million represents a $3.8 million increase from the amount used by investing activities during 2005. The increase in investing activities during 2006 was due primarily to the expansion of our production facilities and equipment to be used at those locations.

     Cash used in financing activities during 2006 of $.5 million represents a $13.6 million decrease from the amount provided by financing activities during 2005. The decrease in financing activities during 2006 was the result of not obtaining additional proceeds from a public offering or obtaining extensive debt to fund our expansion efforts.

Summary of Contractual Obligations and Commercial Commitments

     Contractual obligations at December 31, 2007, 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
(Dollars In thousands)		Total				1 Year				Years				Years				5 Years
Contractual Obligations
Long-term debt obligations		$	9,841			$	2,019			$	4,875			$	1,841			$	1,106
Interest payments on long-term debt (1)			1,907				662				830				271				144
Capital lease obligations			5				5				—				—				—
Operating leases obligations			6,798				2,624				3,583				591				—
Purchase obligations			23,990				3,842				6,323				4,740				9,085
Other long-term liabilities (2)			287				287				—				—				—
Total contractual obligations		$	42,828			$	9,439			$	15,611			$	7,443			$	10,335

Impact of Inflation

     We may experience increases in the cost of our raw materials and the transport of those materials. Given the current downward pressure on pricing due to slackening demand, we are not always able to pass on additional costs, thereby possibly decreasing our margins. Increases in labor costs, worker compensation rates and employee benefits, equipment costs, or material or subcontractor costs could also adversely affect our operations in future periods. Therefore, inflation may have a negative material impact on our operations to the extent that we cannot pass on higher costs to our customers.

Critical Accounting Estimates

General

     Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our financial statements, which have been prepared in accordance with accounting policies generally accepted in the United States of America, or “GAAP.” We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may materially differ from these estimates under different assumptions or conditions.

     An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our financial statements. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements. Our significant accounting policies are described below and in Note 1 – Summary of Significant Accounting Policies and Use of Estimates to our financial statements included in Item 8.

Reportable Segments

     We currently operate our business within one reportable segment of operation. All of the revenue from our customers is substantially from the sale of ready-mix concrete. Ready-mix concrete can have many different variations and characteristics, from the strength of the concrete to its color and consistency. However, we do not maintain the quantity or dollar amount of each variation of our product sold as the variations in the ready-mix concrete sales are simply variations of ready-mix concrete. We also sell sand, aggregate and colored rock from our production facility in Moapa, Nevada, but the primary purpose of this production facility is to provide us with more control over quality and assurance of timely availability of a portion of the raw materials used in the product we sell to customers. The revenue generated from the sale of sand, aggregate and colored rock represented 3.3% of our gross revenue for the years ended December 31, 2007 and 2006. In addition, we view the market similarities between the Phoenix, Arizona and the Las Vegas, Nevada metropolitan areas to be of such a similar nature that we do not distinguish between them for financial statement reporting.

Collectibility of Account Receivables

     We are 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 credit worthiness of each customer and the related aging of the past due balances. Our provision for bad debt as of December 31, 2007 and 2006 amounted to approximately $380,000 and $309,000, respectively. The increase in our provision for bad debt as of December 31, 2007 represented the use of our historic bad debt rate, identifying specific accounts potentially uncollectible and write offs in the amount of approximately $46,000 during 2007. We determine our reserve by using percentages applied to certain types of revenue, as well as a review of individual accounts outstanding and our collection history. Furthermore, if one or more major customers fail to pay us, it would significantly affect our current results as well as future estimates. We pursue our lien rights to minimize our exposure to delinquent accounts.

Valuation of Property and Equipment

     We are required to report property and equipment net of depreciation and amortization expense. We expense depreciation and amortization utilizing the straight-line method, over what we believe to be the estimated useful lives. Leasehold improvements are amortized over their estimated useful lives or the lease term, whichever is shorter. The estimated useful lives of property and equipment are:

Batch plants		4-15 years
Office buildings		39 years
Computer equipment		3-5 years
Equipment		3-10 years
Leasehold improvements		3-10  years
Office furniture and equipment		5-7  years
Vehicles		5-10 years

     The life on any piece of equipment can vary, even within the same category of equipment, due to the quality of the maintenance, care provided by the operator and the general environmental conditions, such as temperature, rain and the terrain conditions to reach the job site where the material is delivered. We maintain, service and repair approximately 95% of our equipment through the use of our mechanics. If we inaccurately estimate the life of any given piece of equipment or category of equipment we may be overstating or understating earnings in any given period.

     We also review our property, plant and 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. The impairments are

recognized in the period during which they are identified. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Income taxes

     We are required to estimate our income taxes in each jurisdiction in which we operate. This process requires us to estimate the actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These temporary differences result in deferred tax assets and liabilities on our balance sheets. We must calculate the blended tax rate, combining all applicable tax jurisdictions, which can vary over time as a result of the allocation of taxable income between the tax jurisdictions and the changes in tax rates. We must also assess the likelihood that the deferred tax assets, if any, will be recovered from future taxable income and, to the extent recovery is not likely, must establish a valuation allowance.

     Furthermore, we are subject to periodic review by domestic tax authorities for audit of our income tax returns. These audits generally include questions regarding our tax filing positions, including the amount and timing of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposures associated with our various tax filing positions, including federal and state taxes, we believe we have complied with the rules of the service codes and therefore have not recorded reserves for any possible exposure. Typically the taxing authorities can audit the previous three years of tax returns and in certain situations audit additional years, therefore a significant amount of time may pass before an audit is conducted and fully resolved. Although no audits are currently being conducted, if a taxing authority would require us to amend a prior year’s tax return we would record the increase or decrease in our tax obligation in the year in which it is more likely than not to be realized.

Classification of Leases

     We follow the standards established by Statements of Financial Accounting Standards (“SFAS”) No. 13, “Accounting for Leases,” (“SFAS 13”). One factor when determining if a lease is an operating lease or a capital lease is the intention from the inception of the lease regarding the final ownership, or transfer of title, of the asset to be leased. We are currently leasing 92 ready-mix trucks under operating lease agreements, since at the inception of those leases we had not intended to take title to those vehicles at the conclusion of the leases. Therefore, we did not request transfer of ownership provisions at the conclusion of the leases such as bargain purchase options or direct transfers of ownership. Since we do not intend to take ownership at the conclusion of the leases and we do not meet the remaining criteria of FAS 13 for capitalization, the leases are classified as operating leases. If we had desired at the inception of the leases to have the ownership transferred to us at the conclusion of the leases, we would have classified those leases as capital leases and would have recorded the ready-mix trucks as assets on our balance sheet as well as recording the liability as capital lease obligations. We believe that the lease expense under the operating lease classification approximates the depreciation expense which would have been incurred if the leases had been classified as capital leases.

Recent Accounting Pronouncements

     In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which is effective for fiscal years beginning after November 15, 2007. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. We do not expect SFAS 159 will have a material impact on our financial statements.

     In June 2007, the FASB ratified EITF 06-11 “Accounting for the Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF 06-11”). EITF 06-11 provides that tax benefits associated with dividends on share-based payment awards be recorded as a component of additional paid-in capital. EITF 06-11 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007. We do not expect EITF 06-11 will have a material impact on our financial statements.

Off-Balance Sheet Arrangements

     The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Known and Anticipated Future Trends and Contingencies

     We have grown steadily since our inception and we plan to continue to exploit opportunities within our markets. In the current housing downturn, there are few alternatives other than to keep our costs to a minimum, do our best to maintain our existing customer base and effectively compete for the projects that are going forward. In the long-term, the key dynamics of employment and population growth within our geographic markets appear to present us with continued growth opportunities. We believe that demand for construction materials will steadily improve once the residential sector recovers from its current downturn. We also believe that the supply of raw materials has increased and shortages of key raw materials will be less likely in the future than we experienced in the recent past.

     In light of the rising need for infrastructure work throughout the nation and the tendency of the current need 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 legislation could dramatically affect the nature of our markets.

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. We do not have foreign currency exchange rate and commodity price market risk.

     Interest Rate Risk—From time to time we temporarily invest our excess cash in interest-bearing securities issued by high-quality issuers. We monitor risk exposure to monies invested in securities in our financial institutions. Due to the short time the investments are outstanding and their general liquidity, these instruments are classified as cash equivalents in the balance sheet and do not represent a material interest rate risk. Our primary market risk exposure for changes in interest rates relates to our long-term debt obligations. We manage our exposure to changing interest rates principally through the use of a combination of fixed and floating rate debt.

     We evaluated the potential effect that near term changes in interest rates would have had on the fair value of our interest rate risk sensitive financial instruments at December 31, 2007. Assuming a 100 basis point increase in the prime interest rate at December 31, 2007 the potential increase in the fair value of our debt obligations would have been approximately $.01 million at December 31, 2007. See Note 7— Line of Credit and Note 8— Notes Payable in the accompanying December 31, 2007 financial statements included in Item 8.

Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders of
Ready Mix, Inc.

We have audited the accompanying balance sheets of Ready Mix, Inc. as of December 31, 2007 and 2006 and the related statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2007, 2006 and 2005. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial statements referred to above present fairly, in all material respects, the financial position of Ready Mix, Inc. at December 31, 2007 and 2006, and the results of its operations and its cash flows for the years ended December 31, 2007, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.

Certified Public Accountants

Phoenix, Arizona
February 21, 2008

INDEPENDENT MEMBER OF THE EDO SEIDMAN ALLIANCE

READY MIX, INC.
BALANCE SHEETS

		December 31,
		2007				2006
Assets:
Current assets:
Cash and cash equivalents		$	9,157,868			$	8,369,875
Accounts receivable, net			7,892,523				8,864,436
Inventory			1,151,926				1,301,842
Prepaid expenses			1,156,086				1,169,041
Due from affiliate			37,859				—
Deferred tax asset			359,396				361,206
Total current assets			19,755,658				20,066,400
Property and equipment, net			26,347,234				25,481,056
Refundable deposits			176,188				1,475,297
Total assets		$	46,279,080			$	47,022,753
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable		$	3,888,856			$	4,269,519
Accrued liabilities			2,023,403				2,443,258
Notes payable			2,019,192				2,515,522
Obligations under capital leases			4,634				250,313
Due to affiliate			—				73,395
Income tax payable			11,738				110,458
Total current liabilities			7,947,823				9,662,465
Notes payable, less current portion			7,821,295				8,269,789
Obligations under capital leases, less current portion			—				4,634
Deferred tax liability			1,290,823				1,619,009
Total liabilities			17,059,941				19,555,897
Commitments and contingencies
Stockholders’ 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 and 3,807,500 issued and outstanding			3,810				3,808
Additional paid-in capital			18,190,971				17,793,892
Retained earnings			11,024,358				9,669,156
Total stockholders’ equity			29,219,139				27,466,856
Total liabilities and stockholders’ equity		$	46,279,080			$	47,022,753

The accompanying notes are an integral part of these financial statements.

READY MIX, INC.
STATEMENTS OF OPERATIONS

		For the years ended December 31,
		2007				2006				2005
Revenue:
Revenue		$	75,620,128			$	83,151,938			$	66,898,161
Revenue — related parties			1,744,544				436,865				836,263
Total revenue			77,364,672				83,588,803				67,734,424
Cost of revenue			71,210,190				74,382,436				60,662,744
Gross profit			6,154,482				9,206,367				7,071,680
General and administrative expenses			4,574,463				4,279,252				3,128,416
Income from operations			1,580,019				4,927,115				3,943,264
Other income (expense):
Interest income			385,353				394,779				173,574
Interest expense			(137,533	)			(163,229	)			(227,341	)
Other income			283,470				52,941				31,135
			531,290				284,491				(22,632	)
Income before income taxes			2,111,309				5,211,606				3,920,632
Income tax expense			756,107				1,872,331				1,435,042
Net income		$	1,355,202			$	3,339,275			$	2,485,590
Basic net income per common share		$	0.36			$	0.88			$	0.94
Diluted net income per common share		$	0.36			$	0.87			$	0.93
Basic weighted average common shares outstanding			3,808,337				3,807,500				2,654,688
Diluted weighted average common shares outstanding			3,817,009				3,833,580				2,681,053

The accompanying notes are an integral part of these financial statements.

READY MIX, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

		Common Stock
		Number of								Additional
		Shares								Paid-in				Retained
		Outstanding				Amount				Capital				Earnings
Balance at January 1, 2005			2,025,000			$	2,025			$	497,975			$	3,844,291
Common stock issued during initial public offering (1)			1,782,500				1,783				17,134,490
Net income for the year ended 2005															2,485,590
Balance at December 31, 2005			3,807,500				3,808				17,632,465				6,329,881
Stock based compensation expense											161,427
Net income for the year ended 2006															3,339,275
Balance at December 31, 2006			3,807,500				3,808				17,793,892				9,669,156
Common stock issued upon exercise of options			2,000				2				21,998
Stock based compensation expense											375,081
Net income for the year ended 2007															1,355,202
Balance at December 31, 2007			3,809,500			$	3,810			$	18,190,971			$	11,024,358

The accompanying notes are an integral part of these financial statements.

READY MIX, INC.
STATEMENTS OF CASH FLOWS

		For the years ended December 31,
		2007				2006				2005
Increase (decrease) in cash and cash equivalents:
Cash flows from operating activities:
Cash received from customers		$	78,500,885			$	83,209,417			$	66,064,739
Cash paid to suppliers and employees			(70,274,014	)			(76,009,924	)			(61,719,515	)
Taxes paid			(1,181,203	)			(2,273,465	)			(2,168,368	)
Interest received			385,353				394,779				173,574
Interest paid			(137,533	)			(163,229	)			(227,341	)
Net cash provided by operating activities			7,293,488				5,157,578				2,123,089
Cash flows from investing activities:
Purchase of property and equipment			(3,792,325	)			(8,439,469	)			(4,582,027	)
Cash received from sale of equipment			206,554				45,500				—
Net cash used in investing activities			(3,585,771	)			(8,393,969	)			(4,582,027	)
Cash flows from financing activities:
Proceeds from the issuance of common stock			22,000				—				17,747,900
Offering costs from the issuance of common stock			—				—				(611,627	)
Repayment of due to affiliate			(111,254	)			(11,415	)			(1,294,516	)
Proceeds from notes payable			2,956,120				3,083,540				543,998
Repayment of notes payable			(5,536,277	)			(3,107,304	)			(2,800,163	)
Repayment of capital lease obligations			(250,313	)			(468,972	)			(440,866	)
Net cash provided by (used in) financing activities			(2,919,724	)			(504,151	)			13,144,726
Net increase (decrease) in cash and cash equivalents			787,993				(3,740,542	)			10,685,788
Cash and cash equivalents at beginning of year			8,369,875				12,110,417				1,424,629
Cash and cash equivalents at end of year		$	9,157,868			$	8,369,875			$	12,110,417
Reconciliation of net income to net cash provided by operating activities:
Net income		$	1,355,202			$	3,339,275			$	2,485,590
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			4,376,723				3,439,208				2,410,900
Deferred income taxes, net			(326,376	)			(287,078	)			340,527
Gain on sale of equipment			(48,214	)			(21,360	)			—
Stock-based compensation expense			375,081				161,427				—
Provision for doubtful accounts			70,956				49,035				(277,180	)
Changes in operating assets and liabilities:
Accounts receivable			900,957				(410,967	)			(1,700,820	)
Prepaid expenses			39,372				2,308				(320,984	)
Inventory			149,916				(696,936	)			(348	)
Refundable deposits			1,299,109				(1,134,132	)			(333,057	)
Accounts payable			(380,663	)			122,883				103,086
Accrued liabilities			(419,855	)			707,971				489,228
Intercompany income tax allocation payable			—				—				(1,298,367	)
Income tax payable			(98,720	)			(114,056	)			224,514
Net cash provided by operating activities		$	7,293,488			$	5,157,578			$	2,123,089

The accompanying notes are an integral part of these financial statements.

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Use of Estimates:

   Nature of the Corporation:

     Ready Mix, Inc. (the “Company”) was organized under the laws of the State of Nevada on June 21, 1996. The principal business purpose of the Company is to manufacture and distribute ready-mix concrete. The Company targets prospective customers such as concrete subcontractors, prime contractors, homebuilders, commercial and industrial property developers and homeowners in the States of Nevada and Arizona. The Company began operations in March 1997 and is a subsidiary of Meadow Valley Corporation (the “Parent”).

   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 materially differ from those estimates.

     Significant estimates are used when accounting for the allowance for doubtful accounts, depreciation and amortization, accruals, taxes, contingencies and the valuation of stock options, which are discussed in the respective notes to the financial statements.

   Cash and Cash Equivalents:

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

   Accounts Receivable, net:

     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. As of December 31, 2007 and 2006, an allowance of $379,635 and $308,679, respectively, was established for potentially uncollectible accounts receivable. During the years ended December 31, 2007, 2006 and 2005, the Company recognized ($117,411), ($97,974) and $244,189, respectively, in bad debt recovery (expense). The Company records delinquent finance charges on outstanding accounts receivables only if they are collected. At December 31, 2007 and 2006 all of the Company’s accounts receivable was pledged as collateral for a line of credit.

   Inventory:

     Inventory, which consists primarily of raw materials, comprised of aggregates, fly ash, cement powder and admixture is stated at the lower of cost, determined by the first-in, first-out method, or market. Inventory quantities are determined by physical measurements. No allowance for slow moving or obsolete inventory has been established as of December 31, 2007 and 2006. At December 31, 2007 and 2006, the Company’s entire inventory was pledged as collateral for a line of credit.

   Property and Equipment:

     Property and equipment are recorded at cost. Depreciation is provided for on the straight-line method, over the estimated useful lives. Depreciation expense for the years ended December 31, 2007, 2006 and 2005 amounted to $4,376,723, $3,439,208 and $2,410,900, respectively. Leasehold improvements are recorded at cost and are amortized over their estimated useful lives or the lease term, whichever is shorter. The estimated useful lives of property and equipment are:

Computer equipment		3 - 5 years
Equipment		3 - 10 years
Batch plants		4 - 15 years
Vehicles		5 - 10 years
Office furniture and equipment		5 - 7 years
Leasehold improvements		3 - 10 years
Building		39 years

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

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

   Property and Equipment (Continued):

     The Company reviews property and 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.

     At December 31, 2007 and 2006, all property and equipment were pledged as collateral for a line of credit, notes payable or capital lease obligations.

   Income Taxes:

     The Company accounts for income taxes in accordance with the Statement of 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 the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Prior to 2005, the Company filed consolidated tax returns with its Parent. The Parent absorbed the net income of the Company pursuant to a tax sharing agreement, which called for any income tax receivable or payable to be remitted to, or paid by, the Parent. As a result of the public offering of its stock the Company can no longer include its income as a part of its Parent’s consolidated tax return and the Company now files its own income tax return in its respective tax jurisdictions.

   Revenue Recognition:

     We recognize revenue on the sale of our concrete and aggregate products at the time of delivery.

   Reportable Segments:

     The Company currently operates its business within one reportable segment of operation. Substantially all of the revenue from its customers is from the sale of ready-mix concrete. Ready-mix concrete can have many different variations and characteristics, including strength, color and consistency. However, the Company does not maintain the quantity or dollar amount of each variation of its product sold because the variations in the ready-mix concrete sales are simply variations of ready-mix concrete. The Company also sells sand, aggregate and colored rock from its production facilities, but the primary purpose of its production facilities is to provide the Company with more control over quality and assurance of timely availability of a portion of the raw materials used in the product that the Company sells to its customers. The revenue generated from the sale of sand, aggregate and colored rock represented 3.3% of the Company’s gross revenue for the years ended December 31, 2007, 2006 and 2005, and are included in the table below. In addition, the Company views the market similarities between the Phoenix, Arizona and the Las Vegas, Nevada metropolitan areas to be of such a similar nature that the Company does not distinguish between them for financial reporting purposes.

     For the years ended December 31, 2007, 2006 and 2005, Company revenue of $77.4 million, $83.6 million and $67.7 million, respectively, was approximately divided by the general type of construction work its customers typically perform as follows:

		December 31,
		2007				2006				2005
Commercial and industrial construction			31	%			27	%			28	%
Residential construction			53	%			53	%			55	%
Street and highway construction and paving			8	%			7	%			7	%
Other public works and infrastructure construction			8	%			13	%			10	%
Total			100	%			100	%			100	%

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

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

   Fair Value of Financial Instruments:

     The carrying amounts of financial instruments including cash, certain current maturities of long-term debt, accrued liabilities and long-term debt approximate fair value because of their short maturities or for long term debt based on borrowing rates currently available to the Company for loans with similar terms and maturities.

     The balance of due from affiliate (due to affiliate) as of December 31, 2007 and 2006 was in the amounts of $37,859 and ($73,395), respectively. During the year ended December 31, 2007 and 2006, no interest was paid as the balance due to or from affiliate was paid monthly. Each current month-end balance is repaid in the following month for expenditures incurred by the affiliate on behalf of the Company or sales made to the affiliate.

     The carrying amount of long-term debt approximates fair value as the interest rates on these instruments approximate the rates at which the Company could borrow at December 31, 2007 and 2006.

   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. Dilutive securities are not included in the weighted average number of shares when inclusion would be anti-dilutive.

   Stock-Based Compensation:

     Effective January 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), using the modified prospective transition method and therefore the Company has not restated its results for prior periods. Under this transition method, stock-based compensation expense for the year ended December 31, 2006 includes compensation expense for all stock-based compensation awards granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provision of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is three years. Stock-based compensation expense for all stock-based compensation awards granted after January 1, 2006 is based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R.

     We estimate fair value using the Black-Scholes valuation model. Assumptions used to estimate the compensation expense are determined as follows:

	•		Expected term is determined using an average of the contractual term and vesting period of the award;
	•		Expected volatility is measured using the average of historical daily changes in the market price of the Company’s common stock over the expected term of the award;
	•		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.

     Prior to the adoption of SFAS 123R, the Company recognized stock-based compensation expense in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”) regarding the SEC’s interpretation of SFAS 123R and the valuation of share-based payments for public companies. The Company has applied the provisions of SAB 107 in its adoption of SFAS 123R. See Note 2-Stock-Based Compensation to the financial statements for a further discussion on stock-based compensation.

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

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

     The table below illustrates the effect on net income and net income per share if the Company had applied the fair value recognition provisions of SFAS 123 to options granted under the stock option plans, non-vested stock awards granted and shares issued under their respective plans in the year ended December 31, 2005. For purposes of pro forma disclosures, the value of the options are estimated using the Black-Scholes option-pricing formula and amortized to expense over the options’ vesting periods; using the straight line method.

		Year ended
		December 31,
		2005
Net income, as reported		$	2,485,590
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			99,943
Pro forma net income		$	2,385,647
Basic net income per common share
As reported		$	0.94
Pro forma			0.90
Diluted net income per common share
As reported		$	0.93
Pro forma			0.89

   Recent Accounting Pronouncements:

     In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which is effective for fiscal years beginning after November 15, 2007. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company does not expect SFAS 159 will have a material impact on its financial statements.

     In June 2007, the FASB ratified EITF 06-11 “Accounting for the Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF 06-11”). EITF 06-11 provides that tax benefits associated with dividends on share-based payment awards be recorded as a component of additional paid-in capital. EITF 06-11 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007. The Company does not expect EITF 06-11 will have a material impact on its financial statements.

2. Stock-Based Compensation:

     On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS 123R. Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB 25, and related Interpretations, as permitted by SFAS 123. In accordance with APB 25, no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant.

     The Company adopted SFAS 123R using the modified prospective transition method. Under this transition method, compensation cost recognized in the year ended December 31, 2006 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. The results for the prior periods have not been restated.

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

2. Stock-Based Compensation (Continued):

          The Company recognizes expected tax benefits related to employee stock based compensation as awards are granted and the incremental tax benefit or liability when related awards are deductible. No stock-based compensation costs were recognized in expense for the year ended December 31, 2005.

          As of December 31, 2007, the Company has the following stock-based compensation plan:

     Equity Incentive Plan

          In 2005, the Company adopted the 2005 Equity Incentive Plan (“the 2005 Plan”). The 2005 Plan permits the granting of any or all of the following types of awards: (1) incentive and nonqualified stock options, (2) stock appreciation rights, (3) stock awards, restricted stock and stock units, (4) and other stock or cash-based awards. In connection with any award or any deferred award, payments may also be made representing dividends or their equivalent.

          The Company has reserved 675,000 shares of its common stock for issuance under the 2005 Plan. Shares of common stock covered by an award granted under the 2005 Plan will not be counted as used unless and until they are actually issued and delivered to a participant. As of December 31, 2007, 306,875 shares were available for future grant under the 2005 Plan. The common terms of the stock options are five years and may be exercised after issuance as follows: 33.3% after one year of continuous service, 66.6% after two years of continuous service and 100% after three years of continuous service. The exercise price of each option is equal to the market price of the Company’s common stock on the date of grant. The board of directors has full discretion to modify these terms.

          The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards with the following assumptions for the indicated periods:

		Awards during
		the year ended				Awards prior to
		December 31, 2007				January 1, 2007
Dividend yield			0	%			0	%
Expected volatility			36.70	%			21.4% - 39.1	%
Weighted-average volatility			36.70	%			26.60	%
Risk-free interest rate			5.00	%			5.00	%
Expected life of options (in years)			5				3
Weighted-average grant-date fair value		$	5.21			$	2.40

          The following table summarizes the stock option activity during the year ended fiscal 2007:

										Weighted Average
						Weighted Average				Remaining				Aggregate				Aggregate
						Exercise Price				Contractural				Fair				Intrinsic
		Shares				per Share				Term (1)				Value				Value (2)
Outstanding January 1, 2007			350,625			$	10.90				3.65			$	839,741
Granted			20,000				12.85								104,200
Exercised (3)			(2,000	)			11.00								(3,900	)
Forfeited or expired			(2,500	)			11.00								(4,875	)
Outstanding December 31, 2007			366,125			$	11.01				2.75			$	935,166			$	—
Exercisable December 31, 2007			218,750			$	11.16				2.63			$	380,865			$	—

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

2. Stock-Based Compensation (Continued):

          A summary of the status of the Company’s nonvested shares as of December 31, 2007 and changes during the year ended December 31, 2007 is presented below:

						Weighted Average
						Grant-Date
		Shares				Fair Value
Nonvested stock options at January 1, 2007			267,084			$	2.51
Granted			20,000				5.21
Vested			(135,209	)			2.82
Forfeited			(2,500	)			1.95
Nonvested stock options at December 31, 2007			149,375			$	2.61

          During the years ended December 31, 2007 and 2006, the Company recognized compensation expense of $375,081 and $161,427 and a tax benefit of $63,694 and $10,198, respectively, related thereto. As of December 31, 2007, there was $236,375 of total unrecognized compensation cost. No attributable expense has been included in the total unrecognized compensation costs related to estimated forfeitures related to nonvested stock options granted under the 2005 Plan as all options outstanding are granted to officers and directors. The total unrecognized compensation costs are expected to be recognized over the weighted average vesting period of 1.92 years. The total fair value of 135,209 options vested during the year ended December 31, 2007, was $380,865. Awards granted during the year ended December 31, 2007, total 20,000 options, which were granted on July 2, 2007, with an exercise price of $12.85. During the year ended December 31, 2007, 2,500 options were forfeited; grant date fair value per share of $1.95, with a total fair value of $4,875.

          3. 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, 2007 and 2006, the Company had uninsured cash and cash equivalents in the amounts of approximately $9,400,000 and $8,700,000, respectively.

          The Company’s business activities and accounts receivable are with customers in the construction industry located primarily in the Las Vegas, Nevada and Phoenix, Arizona metropolitan areas. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

4. Accounts Receivable, net:

          Accounts receivable, net consists of the following:

		December 31,
		2007				2006
Trade receivables		$	8,090,757			$	8,965,685
Other receivables			181,401				207,430
Less: allowance for doubtful accounts			(379,635	)			(308,679	)
		$	7,892,523			$	8,864,436

READY MIX, INC.
NOTES TO FINANCIAL STATEMENTS

5. Property and Equipment, net: