Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | ||
Aug. 31, 2013 | Oct. 15, 2013 | Oct. 15, 2013 | |
Common Stock, Class A | Common Stock, Class B | ||
Entity Registrant Name | New Enterprise Stone & Lime Co., Inc. | ||
Entity Central Index Key | 1527032 | ||
Document Type | 10-Q | ||
Document Period End Date | 31-Aug-13 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -26 | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 500 | 273,285 | |
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | Q2 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Aug. 31, 2013 | Feb. 28, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $4,400 | $9,534 |
Restricted cash | 15,188 | 10,123 |
Accounts receivable, less reserves of $4,338 and $3,515 respectively | 153,240 | 52,271 |
Inventories | 128,660 | 125,144 |
Deferred income taxes | 13,880 | 12,386 |
Other current assets | 8,817 | 8,337 |
Total current assets | 324,185 | 217,795 |
Property, plant and equipment, net | 361,990 | 371,868 |
Goodwill | 89,073 | 89,073 |
Other intangible assets | 20,542 | 21,000 |
Other assets | 29,962 | 34,452 |
Total assets | 825,752 | 734,188 |
Current liabilities | ||
Current maturities of long-term debt | 9,794 | 11,342 |
Accounts payable - trade | 62,442 | 20,608 |
Accrued liabilities | 67,090 | 54,007 |
Total current liabilities | 139,326 | 85,957 |
Long-term debt, less current maturities | 627,125 | 566,645 |
Deferred income taxes | 50,510 | 52,443 |
Other liabilities | 37,443 | 36,733 |
Total liabilities | 854,404 | 741,778 |
Commitments and contingencies (Note 7) | ||
Deficit | ||
Accumulated deficit | -155,916 | -134,297 |
Additional paid-in capital | 126,962 | 126,962 |
Accumulated other comprehensive loss | -2,323 | -2,422 |
Total New Enterprise Stone & Lime Co., Inc. deficit | -31,003 | -9,483 |
Noncontrolling interest in consolidated subsidiaries | 2,351 | 1,893 |
Total deficit | -28,652 | -7,590 |
Total liabilities and deficit | 825,752 | 734,188 |
Common Stock, Class A | ||
Deficit | ||
Common stock | 1 | 1 |
Common Stock, Class B | ||
Deficit | ||
Common stock | $273 | $273 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Accounts receivable, reserves (in dollars) | $4,338 | $3,515 |
Common Stock, Class A | ||
Common stock, par value (in dollars per share) | $1 | $1 |
Common Stock, Class B | ||
Common stock, par value (in dollars per share) | $1 | $1 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
Revenue | ||||
Construction materials | $122,167 | $130,431 | $202,120 | $216,777 |
Heavy/highway construction | 96,467 | 106,095 | 144,360 | 157,126 |
Traffic safety services and equipment | 23,731 | 21,425 | 43,629 | 40,488 |
Other revenues | 2,591 | 4,132 | ||
Total revenue | 242,365 | 260,542 | 390,109 | 418,523 |
Cost of revenue (exclusive of items shown separately below) | ||||
Construction materials | 75,979 | 77,022 | 140,055 | 142,719 |
Heavy/highway construction | 87,492 | 97,359 | 134,896 | 149,285 |
Traffic safety services and equipment | 17,567 | 18,382 | 33,805 | 33,280 |
Other expenses | 2,551 | 3,461 | ||
Total cost of revenue | 181,038 | 195,314 | 308,756 | 328,745 |
Depreciation, depletion and amortization | 13,131 | 13,280 | 25,249 | 25,123 |
Equipment and intangible asset impairment | 452 | 300 | 452 | 300 |
Pension and profit sharing | 2,574 | 2,593 | 4,452 | 4,434 |
Selling, administrative and general expenses | 17,974 | 17,420 | 37,387 | 35,102 |
(Gain) loss on disposals of property, equipment and software | -301 | 7 | -149 | -28 |
Operating income | 27,497 | 31,628 | 13,962 | 24,847 |
Interest expense, net | -18,919 | -17,535 | -38,096 | -40,355 |
Income (loss) before income taxes | 8,578 | 14,093 | -24,134 | -15,508 |
Income tax expense (benefit) | 51 | 5,571 | -3,424 | -5,916 |
Net income (loss) | 8,527 | 8,522 | -20,710 | -9,592 |
Unrealized actuarial gains and amortization of prior service costs, net of income taxes | 30 | 14 | 99 | 91 |
Comprehensive income (loss) | 8,557 | 8,536 | -20,611 | -9,501 |
Less: Comprehensive income attributable to noncontrolling interest | -170 | -334 | -909 | -639 |
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $8,387 | $8,202 | ($21,520) | ($10,140) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 |
Reconciliation of net loss to net cash from operating activities | ||
Net income (loss) | ($20,710) | ($9,592) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation, depletion and amortization | 25,249 | 25,123 |
Equipment and intangible asset impairment | 452 | 300 |
Gain on disposals of property, equipment and software | -149 | -28 |
Non-cash payment-in-kind interest accretion | 11,649 | 10,931 |
Amortization and write-off of debt issuance costs | 2,450 | 8,231 |
Deferred income taxes | -3,492 | -5,900 |
Bad debt expense | 1,485 | 1,023 |
Changes in assets and liabilities: | ||
Accounts receivable | -102,454 | -94,617 |
Inventories | -3,516 | -6,261 |
Other assets | -1,015 | -1,394 |
Accounts payable | 41,834 | 22,065 |
Other liabilities | 14,020 | 6,815 |
Net cash used in operating activities | -34,197 | -43,304 |
Cash flows from investing activities | ||
Capital expenditures | -14,267 | -25,409 |
Proceeds from sale of property and equipment | 364 | 153 |
Change in cash value of life insurance | 2,951 | -3,006 |
Change in restricted cash | -4,916 | -178 |
Net cash used in investing activities | -15,868 | -28,440 |
Cash flows from financing activities | ||
Proceeds from revolving credit | 116,351 | 187,725 |
Repayment of revolving credit | -68,012 | -221,361 |
Proceeds from issuance of long-term debt | 563 | 268,688 |
Repayment of long-term debt | -1,445 | -153,291 |
Payments on capital leases | -2,075 | -2,564 |
Debt issuance costs | -14,062 | |
Distribution to noncontrolling interest | -451 | -438 |
Net cash provided by financing activities | 44,931 | 64,697 |
Net decrease in cash and cash equivalents | -5,134 | -7,047 |
Cash and cash equivalents | ||
Beginning of period | 9,534 | 15,032 |
End of period | $4,400 | $7,985 |
Nature_of_Operations_and_Summa
Nature of Operations and Summary of Significant Accounting Policies | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Nature of Operations and Summary of Significant Accounting Policies | ||||||||
Nature of Operations and Summary of Significant Accounting Policies | 1. Nature of Operations and Summary of Significant Accounting Policies | |||||||
Company Activities | ||||||||
New Enterprise Stone & Lime Co., Inc., a Delaware corporation, is a privately held, vertically integrated construction materials supplier and heavy/highway construction contractor in Pennsylvania and western New York and a national traffic safety services and equipment provider. Founded in 1924, the Company operates in three segments based upon the nature of its products and services: construction materials, heavy/highway construction and traffic safety services and equipment. As used herein, the terms (“we,” “us,” “our,” “NESL,” or the “Company”) refer to New Enterprise Stone & Lime Co., Inc., and/or one or more of its subsidiaries. Almost all of our products are produced and consumed outdoors. Normally, our highest sales and earnings are in the second and third fiscal quarters and our lowest are in the first and fourth fiscal quarters. As a result of this seasonality, our significant net working capital items, which are accounts receivable, inventories, accounts payable - trade and accrued liabilities, are typically higher as of interim period ends compared to fiscal year end. | ||||||||
Basis of Presentation | ||||||||
The accompanying unaudited condensed consolidated financial statements and notes included in this report have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include all of the information or disclosures required for a complete presentation in accordance with GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2013 filed with the Securities and Exchange Commission (“SEC”). The results for interim periods are not necessarily indicative of the results for a full fiscal year. | ||||||||
Principles of Consolidation | ||||||||
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and entities where the Company has a controlling equity interest. Intercompany balances and transactions have been eliminated in consolidation. | ||||||||
Noncontrolling interest | ||||||||
The Company allocates net income (loss) and comprehensive income (loss) to both New Enterprise Stone and Lime Co., Inc. and its noncontrolling interest holders. For the periods presented, the net income (loss) and comprehensive income (loss) attributable to noncontrolling interest are the same amounts. | ||||||||
Reclassifications | ||||||||
Certain items previously reported in prior period financial statement captions have been conformed to agree with current presentation. | ||||||||
Out of Period Adjustments | ||||||||
For the three months ended August 31, 2013, the Company recorded out of period pre-tax income of approximately $1.2 million primarily related to two adjustments. The first out of period adjustment recorded was a $1.0 million loss for Construction in Progress that should have been written off in prior periods. The second out of period adjustment was a $2.3 million gain for inventory that was inadvertently not recorded in prior periods. As a result of these out of period adjustments, the Company’s operating income increased by $1.2 million and net income increased by $1.1 million for the three months ended August 31, 2013. | ||||||||
For the six months ended August 31, 2013, the Company recorded an out of period pre-tax loss of approximately $0.1 million which includes the year-to-date impact of the two adjustments noted above in the amount of $0.7 million pre-tax income offset by other errors corrected in the quarter ended May 31, 2013 that relate to prior periods. | ||||||||
Management does not believe these out of period errors are material to the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended August 31, 2013 or to any prior periods. | ||||||||
Use of Estimates | ||||||||
The preparation of the condensed consolidated financial statements requires management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of property, plant and equipment; valuation of receivables, inventories, goodwill and other intangible assets; recognition of revenue and loss contract reserves under the percentage-of-completion method; assets and obligations related to employee benefit plans; asset retirement obligations; income tax valuation; and self-insurance reserves. Actual results could differ from those estimates. | ||||||||
Cash and Cash Equivalents and Restricted Cash | ||||||||
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash balances were restricted in certain consolidated subsidiaries for bond sinking fund and insurance requirements as well as collateral on outstanding letters of credit or rentals. | ||||||||
We use a cash pooling arrangement with a single financial institution with specific provisions for the right to offset positive and negative cash balances. Accordingly, we classify net aggregate bank overdraft positions as other obligations within the current maturities of long-term debt, based on the short-term nature of these positions. As of August 31, 2013, the balance was $1.2 million. | ||||||||
Trade Accounts Receivable | ||||||||
Trade accounts receivable, less allowance for doubtful accounts, are recorded at the invoiced amount plus service charges related to past due accounts. The Company’s total accounts receivable consisted of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Costs and estimated earnings in excess of billings | $ | 24,281 | $ | 4,265 | ||||
Trade | 129,406 | 48,392 | ||||||
Retainages | 3,891 | 3,129 | ||||||
157,578 | 55,786 | |||||||
Allowance for doubtful accounts | (4,338 | ) | (3,515 | ) | ||||
Accounts receivable, net | $ | 153,240 | $ | 52,271 | ||||
Costs and estimated earnings in excess of billings relate to revenue recognized and not yet billed due to contract terms. State and local agencies often require several approvals to process billings or payments and this may cause a lag in payment times. | ||||||||
Inventories | ||||||||
Inventories are stated at the lower of cost or market. Cost is determined using either first-in, first-out (“FIFO”) or weighted average method based on the applicable category of inventories. | ||||||||
The Company’s total inventory consists of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Crushed stone, agricultural lime, and sand | $ | 81,110 | $ | 76,927 | ||||
Safety equipment | 14,917 | 16,057 | ||||||
Parts, tires, and supplies | 11,920 | 11,331 | ||||||
Raw materials | 10,370 | 9,247 | ||||||
Concrete blocks | 3,507 | 4,210 | ||||||
Building materials | 3,971 | 3,921 | ||||||
Other | 2,865 | 3,451 | ||||||
$ | 128,660 | $ | 125,144 | |||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment are carried at cost. Assets under capital leases are stated at the lesser of the present value of minimum lease payments or the fair value of the leased item. Provision for depreciation is generally computed over estimated service lives by the straight-line method. | ||||||||
The Company’s property, plant and equipment consist of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Limestone and sand acreage | $ | 144,721 | $ | 144,076 | ||||
Land, buildings and building improvements | 100,512 | 100,074 | ||||||
Crushing, prestressing, and manufacturing plants | 330,899 | 326,066 | ||||||
Contracting equipment, vehicles and other | 306,664 | 300,450 | ||||||
Construction in progress | 3,375 | 5,680 | ||||||
Property, plant and equipment | 886,171 | 876,346 | ||||||
Less: Accumulated depreciation and depletion | (524,181 | ) | (504,478 | ) | ||||
Property, plant and equipment, net | $ | 361,990 | $ | 371,868 | ||||
Depreciation expense was $11.9 million and $12.1 million for three months ended August 31, 2013 and August 31, 2012, respectively. Depreciation expense was $23.0 million and $22.9 million for the six months ended August 31, 2013 and 2012, respectively. | ||||||||
The Company recorded asset impairment of $0.5 million related to equipment in the traffic safety services and equipment segment for the three months ended August 31, 2013. | ||||||||
Goodwill and Other Intangible Assets | ||||||||
Goodwill | ||||||||
The Company tests goodwill for impairment on an annual basis or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. There were no changes to the carrying value of goodwill during the six months ended August 31, 2013. Management continues to monitor the impact of market and economic events to determine if it is more likely than not that the carrying value of these reporting units has been impaired. The timing of a sustained recovery in the construction industry will have a significant effect on the fair value of the Company's reporting units. A decrease in the estimated fair value of one or more of the Company’s reporting units as a result of changes in future earnings, interest rates, market trends and/or cash flows could result in the recognition of goodwill impairment. | ||||||||
In the fourth quarter of fiscal year 2013, we completed our annual goodwill impairment testing. The estimated fair value of each of the reporting units was in excess of its carrying value, even after conducting various sensitivity analyses on key assumptions, such that no adjustment to the carrying values of goodwill was required. | ||||||||
Other Intangible Assets | ||||||||
Other intangible assets consist of technology, customer relationships and trademarks acquired in previous acquisitions. The technology is being amortized over a straight-line basis of 15 years. The customer relationships are being amortized on a straight-line basis over 20 years. Beginning in fiscal year 2014, our trademarks, which were previously considered indefinite lived, are being amortized over 30 and 50 years. | ||||||||
Amortization of intangible assets for the three months ended August 31, 2013 and August 31, 2012 was $0.3 million and $0.1 million, respectively. Amortization of intangible assets for the six months ended August 31, 2013 and August 31, 2012 was $0.5 million and $0.3 million, respectively. | ||||||||
Other Assets | ||||||||
The Company’s long term other assets consist of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Deferred financing fees (less current portion of $3,522 and $3,658, respectively) | $ | 12,073 | $ | 14,523 | ||||
Capitalized software (net of accumulated amortization of $1,684 and $1,080, respectively) | 8,607 | 9,211 | ||||||
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively) | 1,387 | 4,338 | ||||||
Deferred stripping costs | 3,876 | 3,868 | ||||||
Other | 4,019 | 2,512 | ||||||
Total other assets | $ | 29,962 | $ | 34,452 | ||||
New Accounting Standards | ||||||||
Recently Adopted Accounting Standards | ||||||||
In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Topic 220). This ASU requires companies to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, companies are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. This ASU does not change the current requirements for reporting net income or other comprehensive income in the financial statements. This ASU was effective commencing with the three months ending May 31, 2013. The Company recognizes actuarial gains and losses in Accumulated Other Comprehensive Income as they occur. Accordingly, our adoption of this standard did not have an impact on the Company's consolidated financial statements. | ||||||||
In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU gives companies the option to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is determined that it is more likely than not the indefinite-lived intangible asset is impaired, a quantitative impairment test is required. However, if it is concluded otherwise, the quantitative test is not necessary. This ASU was effective commencing with the three months ending May 31, 2013. We adopted this standard on March 1, 2013, which did not have a material impact on the Company's consolidated financial statements. | ||||||||
Recently Issued Accounting Standards | ||||||||
In July 2013, the FASB issued guidance on the presentation of unrecognized tax benefits when net operating losses or tax credit carryforwards exist. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted, and is applicable to the Company’s fiscal year beginning March 1, 2014. The Company is currently evaluating this guidance, but does not anticipate its adoption will have a material impact on the Company's consolidated financial statements. |
Risks_and_Uncertainties
Risks and Uncertainties | 6 Months Ended |
Aug. 31, 2013 | |
Risks and Uncertainties | |
Risks and Uncertainties | 2. Risks and Uncertainties |
Our business is heavily impacted by several factors which are outside the control of management, including the overall health of the economy, the level of commercial and residential construction, the level of federal, state and local publicly funded construction projects and seasonal variations generally attributable to weather conditions. These factors impact the amount and timing of our revenues and our overall performance. | |
The Company believes it has sufficient financial resources, including cash and cash equivalents, cash from operations and amounts available for borrowing under its ABL Facility, to fund the business and operations for at least the next twelve months, including capital expenditures and debt service obligations. However, in the past the Company has failed to meet certain operating performance measures as well as the financial covenant requirements set forth under previous credit facilities and ABL Facility, which resulted in the need to obtain several amendments, and should the Company fail in the future to meet certain covenants as applicable, it cannot guarantee that it will be able to obtain such amendments. A failure to obtain such amendments could result in an acceleration of the indebtedness under the ABL Facility and a cross default under its other indebtedness, including the Company’s $250.0 million 11% senior notes due 2018 (the “Notes”) and the Company’s $265.0 million ($289.4 million outstanding as of August 31, 2013) 13% senior secured notes due 2018 (the “Secured Notes”). If the lenders were to accelerate the due dates of the indebtedness or if current sources of liquidity prove to be insufficient, there can be no assurance that the Company would be able to repay or refinance such indebtedness or to obtain sufficient funding. This could require the Company to restructure or alter its operations and capital structure. Refer to Note 4, “Long-Term Debt” for disclosure of recent changes to the ABL Facility. | |
The Company was required to register and exchange the Secured Notes by March 10, 2013 or be subject to penalty interest. Since the exchange has not yet been completed, penalty interest is 25 basis points for the first 90 days and each 90 days thereafter until the aggregate penalty interest rate reaches 1%, and will remain at 1% until we complete the exchange of the Secured Notes. See Note 10, “Subsequent Events” for more information. |
Accrued_Liabilities
Accrued Liabilities | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Accrued Liabilities | ||||||||
Accrued Liabilities | 3. Accrued Liabilities | |||||||
Accrued liabilities consisted of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Insurance | $ | 24,723 | $ | 19,715 | ||||
Interest | 21,384 | 18,962 | ||||||
Payroll and vacation | 10,340 | 8,281 | ||||||
Other | 2,028 | 3,671 | ||||||
Withholding taxes | 2,357 | 1,640 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 5,582 | 1,529 | ||||||
Contract expenses | 676 | 209 | ||||||
Total accrued liabilities | $ | 67,090 | $ | 54,007 |
LongTerm_Debt
Long-Term Debt | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Long-Term Debt | ||||||||
Long-Term Debt | 4. Long-Term Debt | |||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
ABL Facility ($56.1 million available as of August 31, 2013) | $ | 73,613 | $ | 24,314 | ||||
Secured Notes due 2018 | 289,387 | 276,925 | ||||||
Notes due 2018 | 250,000 | 250,000 | ||||||
Land, equipment and other obligations | 17,163 | 19,005 | ||||||
Obligations under capital leases | 6,756 | 7,743 | ||||||
Total debt | 636,919 | 577,987 | ||||||
Less: Current portion | (9,794 | ) | (11,342 | ) | ||||
Total long-term debt | $ | 627,125 | $ | 566,645 | ||||
Asset-Based Loan Facility | ||||||||
Original Terms | ||||||||
On March 15, 2012, the Company entered into the ABL Facility with M&T, as the issuing bank, a lender, the swing lender, the agent and the arranger. The ABL Facility originally provided for maximum borrowings on a revolving basis of up to $170.0 million from time to time for general corporate purposes, including working capital. As discussed below, as a result of the third amendment to the ABL Facility, a maximum of $145.0 million may be borrowed under the ABL Facility. The ABL Facility includes a $15.0 million letter of credit sub-facility and a $20.0 million swing line sub-facility for short-term borrowings. The ABL Facility will mature on March 15, 2017. We classify borrowings under the ABL Facility as long-term due to our ability to maintain such borrowings on a long-term basis. | ||||||||
Borrowings under the ABL Facility (except swing line loans) bear interest at a rate per annum equal to, at the Company’s option, either (a) a base rate or (b) a LIBOR rate, in each case plus an applicable margin. Swing line loans bear interest at the base rate plus the applicable margin. The LIBOR margin for the ABL Facility is fixed at 5.00% (as of the date of the third amendment, discussed below) and the base rate margin is fixed at 3.00% (as of the date of the third amendment, discussed below). The ABL Facility also contains a commitment fee that is tied to the quarterly average Excess Availability, as defined in the ABL Facility Agreement as the borrowing base less the sum of letter of credit obligations and outstanding loans thereunder. The commitment fee ranges from 0.25% to 0.625%. From the commencement of the ABL Facility Agreement until September 7, 2012 (date of the first amendment, discussed below), the LIBOR margin was 2.75%, the base rate margin was 0.75% and the commitment fee was 0.50%. | ||||||||
Borrowings under the ABL Facility are guaranteed on a full and unconditional and joint and several basis by certain of the Company’s existing and future domestic subsidiaries and are secured, subject to certain permitted liens, by first-priority liens on the ABL Priority Collateral and by second-priority liens on the collateral securing the Secured Notes on a first-priority basis, except for certain real property. | ||||||||
Availability of ABL Facility and Covenants | ||||||||
The ABL Facility includes affirmative and negative covenants that, subject to significant exceptions, limit our ability and the ability of our guarantors to undertake certain actions, including, among other things, limitations on (i) the incurrence of indebtedness and liens, (ii) asset sales, (iii) dividends and other payments with respect to capital stock, (iv) acquisitions, investments and loans, (v) affiliate transactions, (vi) altering the business, (vii) issuances of equity that have mandatory redemption or put rights prior to the maturity of the ABL Facility and (viii) providing negative pledges to third parties. As of August 31, 2013, the Company was in compliance with these affirmative and negative covenants. | ||||||||
Prior to the third amendment to the ABL Facility, if the Company had less than $25.0 million of availability under the ABL Facility at any point in time, it would be obligated to comply with a fixed charge coverage ratio. The third amendment to the ABL Facility, among other things, reduced the minimum excess availability threshold for the fixed charge coverage ratio until November 30, 2014, effectively increasing the Company’s short-term borrowing availability by allowing it to borrow up to the entire amount of the ABL Facility without needing to comply with a fixed charge coverage ratio. | ||||||||
If at any time after November 30, 2014 excess availability is less than the greater of (i) $25.0 million or (ii) 15% of the lesser of the commitments and the borrowing base, the Company must comply with a minimum fixed charge coverage ratio test of at least 1.0 to 1.0 for the immediately preceding four fiscal quarters or twelve consecutive months, as applicable. As of August 31, 2013, the Company’s Fixed Charge Coverage Ratio was below 1.0 to 1.0. The practical result will be that after November 30, 2014, so long as our fixed charge coverage ratio as calculated pursuant to the covenant remains less than 1.0 to 1.0, the Company’s available borrowings under the ABL Facility will be reduced by $25.0 million. | ||||||||
A fixed charge covenant ratio is also used to determine what advance rates apply in calculating the borrowing base under the ABL Facility, as well as whether the Company can make certain investments, acquisitions, restricted payments, repurchases or increases in the amount of cash interest payments on other indebtedness. As part of the first amendment to the ABL Facility entered into on September 7, 2012, the borrowing base formula under the ABL Facility became subject to adjustment based on the most recent fixed charge coverage ratio. If the calculation of the fixed charge coverage ratio is less than 1.0 to 1.0, the borrowing base will be equal to the sum of (a) the lesser of (i) $56.0 million (from $65 million) and (ii) 65% (from 75%) of the appraised value of the eligible real property, plus (b) 70% (from 85%) of the outstanding balance of eligible accounts receivable plus, (c) 40% (from 60%) of eligible inventory, minus (d) reserves imposed by the agent of the ABL Facility in the exercise of reasonable business judgment from the perspective of a secured asset-based lender, minus (e) reserves imposed by the agent to the ABL Facility with respect to branded inventory in its sole discretion. | ||||||||
The applicability of the Company’s fixed charge coverage ratio is conditional upon reaching the minimum excess availability. As a result of the third amendment, the Company has a minimum excess availability of zero (reduced from $25.0 million) until November 30, 2014, effectively eliminating the need to comply with a fixed charge coverage ratio. After this date, the Company may be subject to a fixed charge coverage ratio of 1.0 to 1.0, if its minimum excess availability reaches $25.0 million (see Amendment below). | ||||||||
Amendment of ABL Facility | ||||||||
The ABL Facility contained a covenant that required us to deliver our fiscal year 2012 annual financial statements to the lender by May 29, 2012. On September 7, 2012, we entered into the first amendment to the ABL Facility to change the required delivery date of our audited February 29, 2012 financial statements and the required delivery date of our first and second quarter results and financial statements. Subsequent to the date of the first amendment, we required multiple extensions of time and ultimately filed our audited February 29, 2012 financial statements, our fiscal year 2013 first and second quarter results and financial statements on December 15, 2012, January 1, 2013 and February 28, 2013, respectively. | ||||||||
As part of the first amendment to the ABL Facility entered into on September 7, 2012, the borrowing base formula under the ABL Facility became subject to adjustment based on the most recent Fixed Charge Coverage Ratio as described above. We were subject to the adjusted borrowing base calculation as of February 28, 2013 and August 31, 2013. The first amendment added a 1.25% floor to LIBOR for purposes of determining the interest rate applicable to LIBOR based borrowings, which was later removed in the third amendment discussed below. | ||||||||
In connection with the first amendment to the ABL Facility, we also agreed with M&T that, in the event M&T is unable to reduce its final participation in the ABL Facility to no more than $75.0 million during the primary syndication of the ABL Facility by December 15, 2012, M&T would be entitled to add or modify terms of the ABL Facility that were previously prohibited from being added or modified, including but not limited to the advance rates, certain covenants and the interest and fees payable. As of August 31, 2013, M&T has not syndicated the ABL Facility and has not modified the terms of the ABL Facility. See the discussion below concerning the potential modifications by M&T. | ||||||||
On December 7, 2012, we entered into the second amendment to the ABL Facility to change the required delivery date of our third quarter results and financial statements. Subsequent to the date of the second amendment, we required an extension of time and ultimately filed our third quarter results and financial statements on April 1, 2013. There can be no guarantee that the Company will not need to obtain similar amendments in the future. A failure to obtain such amendment could result in an acceleration of the Company’s indebtedness under the ABL Facility and a cross-default under the Company’s other indebtedness, including the Notes and Secured Notes. | ||||||||
On May 29, 2013, we entered into the third amendment to the ABL Facility. As discussed above, prior to the third amendment, if the Company had less than $25.0 million of availability under the ABL Facility at any point in time, it would be obligated to comply with a fixed charge coverage ratio. The third amendment, among other things, reduced the minimum excess availability to zero until November 30, 2014, effectively increasing the Company’s short-term borrowing availability by allowing it to borrow up to the entire amount of the ABL Facility without needing to comply with a fixed charge coverage ratio. The Company also agreed to the following additional amendments to the ABL Facility in the third amendment: (i) the aggregate overall amount available for borrowing under the ABL Facility was reduced from $170.0 million to $145.0 million; (ii) the interest rate margin added to applicable LIBOR based borrowings was increased to a fixed 5%; (iii) the interest rate margin added to applicable Base Rate borrowings was increased to a fixed 3%; (iv) the 1.25% floor applicable to LIBOR based borrowings was removed; and (v) to the extent that the Company disposes of assets that are ABL priority collateral and certain unencumbered assets, the net cash proceeds will be used to prepay outstanding borrowings under the ABL Facility and the overall ABL Facility will be reduced by $1 for each $1 of assets sold up to $15 million. The third amendment did not change other significant terms of the ABL Facility such as the maturity, borrowing base formula, and covenants, as applicable. Although the overall commitment was reduced from $170.0 million to $145.0 million, because the Company’s borrowing base was below $145.0 million at the time of the third amendment, such reduction had no impact on the Company’s short-term ability to borrow under the ABL Facility. | ||||||||
In connection with the third amendment, we also agreed with M&T that our board of directors would create a special committee consisting of our four non-employee directors, which we refer to as the special committee, that has engaged an advisor to develop a business plan that focuses on cost reductions and operational efficiencies, which we refer to as the Plan. Under the terms of the third amendment, the Plan must be reasonably acceptable in scope, timing and process to M&T. On July 18, 2013, the Plan was unanimously approved by the members of the special committee and by our entire board of directors, which authorized the special committee to oversee the implementation of the Plan by management. On July 19, 2013 the Plan was submitted to M&T for its review and on August 15, 2013, M&T informed the Company that the Plan is not acceptable in scope, timing and process. The Company believes that the concerns with the Plan expressed by M&T go beyond scope, timing and process. The Company is currently engaged in discussions with M&T to resolve differences over the Plan and is confident that those differences will be resolved. If we fail to meet our covenants in the ABL Facility and our lenders do not agree to a waiver or amendment, then there would be an event of default under our ABL Facility. In such event, if our lenders accelerated the payment of indebtedness under the ABL Facility, such event would result in a cross-default under the Notes and Secured Notes. | ||||||||
Potential Modification by M&T | ||||||||
In connection with the first amendment to the ABL Facility described above, in order to facilitate the syndication of the ABL Facility amongst additional lenders, the Company and M&T agreed that if M&T were unable to reduce its final loan commitments under the ABL Facility to no more than $75.0 million prior to December 15, 2012, M&T would be entitled to add to or modify the terms of the ABL Facility on a unilateral basis, including but not limited to adjusting the advance rates, adding or modifying certain covenants and increasing the interest and fees payable in order to facilitate its syndication efforts. In connection with such modifications, there is no limit or ceiling to the interest rate M&T could charge. Notwithstanding these rights, M&T would not be able to do the following without the Company’s consent: | ||||||||
· reduce the ABL Facility’s total amount to less than $170.0 million (as discussed above, this has been reduced to $145.0 million due to the third amendment); | ||||||||
· impose a permanent fixed charge coverage ratio; | ||||||||
· cause the springing fixed charge coverage ratio covenant in the ABL Facility to be greater than 1.00 to 1.00; | ||||||||
· add a senior or total debt to EBITDA covenant with a less than 20% cushion from management projections; | ||||||||
· add a net worth covenant with a less than 20% cushion from management projections; | ||||||||
· restrict the Company’s ability to incur additional permitted indebtedness and related permitted liens for capital leases, purchase debt and sale-leaseback transactions to less than $35.0 million in the aggregate at any time; | ||||||||
· if the Company’s fixed charge coverage ratio is 1.00 to 1.00 or greater, cause the advance rate for (a) eligible inventory to be less than 60%; (b) eligible accounts to be less than 85%; or (c) eligible real property to be less than the lower of (1) 75% of the appraised value thereof and (2) $65.0 million; | ||||||||
· if the Company’s fixed charge coverage ratio is less than 1.00 to 1.00, cause the advance rate for (a) eligible inventory to be less than 40%; (b) eligible accounts to be less than 70%; or (c) eligible real property to be less than the lower of (1) 75% of the appraised value thereof and (2) $56.0 million; or | ||||||||
· require that any of (a) Rock Solid Insurance Company, (b) South Woodbury L.P., (c) NESL II, LLC, (d) Kettle Creek Partners L.P. or (e) Kettle Creek Partners G.P., LLC guaranty the ABL Facility. | ||||||||
As of August 31, 2013, despite M&T’s inability to successfully syndicate the ABL Facility, the terms of the ABL Facility have not been modified by M&T. However, should M&T choose to exercise its right to add or modify terms of the ABL Facility, borrowings under the ABL Facility may be subject to terms less favorable than the current terms of the ABL Facility which could negatively impact our financial position, cash flows and results of operations. Furthermore, such modifications may require us to renegotiate the terms of the ABL Facility or obtain additional financing. We may not be able to obtain such modifications or additional financing on commercially reasonable terms or at all. If we are unable to obtain such modifications or additional financing, we would have to consider other options, such as the sale of certain assets, sales of equity, and negotiations with our lenders to restructure our debt. The terms of our indebtedness may restrict, or market or business conditions may limit, our ability to do any or all of these things. | ||||||||
The third amendment did not change other significant terms of the ABL Facility such as the maturity, borrowing base formula, and covenants, as applicable. The Company paid $0.3 million in fees to effect the third amendment to the ABL Facility and as a result of the reduction in the maximum borrowings of the ABL Facility the Company also recognized $0.7 million of unamortized deferred financing fees as interest expense during the six months ended August 31, 2013. | ||||||||
Interest Rate and Availability | ||||||||
As of August 31, 2013, the weighted average interest rate on the ABL Facility was 6.25%. The effective interest rate, including all fees, for the ABL Facility was approximately 6.0% for the six months ending August 31, 2013. As discussed above, we recently amended our ABL Facility to fix the interest rate margin added to LIBOR based borrowings at 5.0%, fix the interest rate margin added to base rate borrowings at 3.0% and remove the 1.25% floor applicable to LIBOR based borrowings. | ||||||||
Secured Notes due 2018 | ||||||||
Interest on the Secured Notes is initially payable at 13.0% per annum, semi-annually in arrears on March 15 and September 15. The Company will make each interest payment to the holders of record of the Secured Notes as of the immediately preceding March 1 and September 1. The Company used the proceeds from this offering to repay certain existing indebtedness and to pay related fees and expenses. The Secured Notes will mature on March 15, 2018. | ||||||||
With respect to any interest payment date on or prior to March 15, 2017, the Company may, at its option, elect (an “Interest Form Election”) to pay interest on the Secured Notes (i) entirely in cash (“Cash Interest”) or (ii) subject to any Interest Rate Increase (as defined below), initially at the rate of 4% per annum in cash (“Cash Interest Portion”) and 9% per annum by increasing the outstanding principal amount of the Secured Notes or by issuing additional paid in kind notes under the indenture on the same terms as the Secured Notes (“PIK Interest Portion” or “PIK Interest”); provided that in the absence of an Interest Form Election, interest on the Secured Notes will be payable as PIK Interest. At August 31, 2013, PIK interest was $35.0 million ($24.4 million was recorded as an increase to the Secured Notes and $10.6 million was recorded as a long-term obligation in other liabilities). | ||||||||
With respect to any interest payment payable after March 15, 2017, interest will be payable solely in cash. In addition, at the beginning of and with respect to each 12-month period that begins on March 15, 2013, March 15, 2014 and March 15, 2015, the interest rate on the Secured Notes as of such date shall permanently increase by an additional 1.0% per annum (an “Interest Rate Increase”) unless the Company delivers a written notice to the Trustee of the Company’s election for such 12-month period to either (x) alter the manner of interest payment on the Secured Notes going forward by increasing the Cash Interest Portion and decreasing the PIK Interest Portion in each case in effect with respect to the immediately preceding interest period for which any PIK Interest was paid prior to each such election by, in each case, 1.0% per annum or (y) pay interest on the Secured Notes for such 12-month period entirely in cash (a “12-Month Cash Election”). In the event of a 12-Month Cash Election for any 12-month period prior to March 15, 2017, the interest rate on the Secured Notes applicable for such 12-month period shall be 1.0% less than the total interest rate applicable to the Secured Notes in effect with respect to the immediately preceding interest period for which any PIK Interest was paid. Any Interest Rate Increase shall be affected by increasing the PIK Interest Portion in effect with respect to the immediately preceding interest period for which any PIK Interest was paid prior to each such Interest Rate Increase. If the Company makes a 12-Month Cash Election for and in respect of the 12-month period beginning on March 15, 2016, the same interest rate will apply for and in respect of the 12-month period beginning on March 15, 2017. The additional 1.0% per annum Interest Rate Increase will only apply to the three consecutive annual periods beginning March 15, 2013. | ||||||||
On March 4, 2013, the Company notified the trustee of its Secured Notes that it had selected to pay interest on the Secured Notes for the 12-month period commencing March 15, 2013 in the form of 5% cash payment and 8% payment in kind, which represents $14.9 million and $23.6 million, respectively. | ||||||||
At any time prior to March 15, 2015, the Company may redeem, at its option, up to 35% of the Secured Notes with the net cash proceeds from certain public equity offerings at a redemption price equal to 113.0% of the principal amount outstanding, plus accrued and unpaid interest. The Company may also redeem some or all of the Secured Notes at any time prior to March 15, 2015 at a redemption price equal to 100.0% of the principal amount of the outstanding Secured Notes, plus accrued and unpaid interest, plus a “make-whole” premium. On and after March 15, 2015, the Secured Notes will be redeemable, in whole or in part, at the redemption prices specified as follows: | ||||||||
Year | Percentage | |||||||
2015 | 106.5 | % | ||||||
2016 | 103.25 | % | ||||||
2017 and thereafter | 100 | % | ||||||
In addition, the Company may be required to make an offer to purchase the Secured Notes upon the sale of certain assets or upon a change of control. The Company will be required to redeem certain portions of the Secured Notes for tax purposes at the end of the first accrual period ending after the fifth anniversary of the Secured Notes issuance and each accrual period thereafter. | ||||||||
We were required to file a registration statement with the Securities and Exchange Commission (“SEC”) and complete an exchange offer for the exchange of the Secured Notes for new Secured Notes having terms substantially identical in all material respects to the Secured Notes (the “Secured Registration Statement”) by March 10, 2013 or be subject to penalty interest. The penalty interest will increase 25 basis points each quarter for four consecutive quarters until it reaches 1% and will remain at 1% until we complete the exchange offer for the Secured Notes. On June 13, 2013, we filed the Secured Notes Registration Statement. For the six months ended August 31, 2013 the Company incurred $0.5 million of penalty interest. The penalty interest will cease to accrue upon the completion of the exchange offer. See Note 10, “Subsequent Events” for more information. | ||||||||
Notes Due 2018 | ||||||||
In August 2010, the Company sold $250.0 million aggregate principal amount of the Notes. Interest on the Notes is payable semi-annually in arrears on March 1 and September 1 of each year. The proceeds from the issuance of Notes were used to pay down debt. | ||||||||
At any time prior to September 1, 2014, the Company may redeem all or part of the Notes at a redemption price equal to 100.0% of the principal amount plus accrued and unpaid interest and an applicable “make-whole” premium which is set forth in the indenture governing the Notes. On or after September 1, 2014, the Company may redeem all or a part of the Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest if redeemed during the twelve-month period beginning on September 1 of the years indicated below: | ||||||||
Year | Percentage | |||||||
2014 | 105.5 | % | ||||||
2015 | 102.75 | % | ||||||
2016 and thereafter | 100 | % | ||||||
In addition, prior to September 1, 2013, the Company was permitted to redeem up to 35.0% of the aggregate principal Notes outstanding with the net cash proceeds from certain equity offerings at a redemption price equal to 111.0% of the principal amount thereof, together with accrued and unpaid interest. If the Company experiences a change of control, as outlined in the indenture, the Company may be required to offer to purchase the Notes at a purchase price equal to 101.0% of the principal amount, plus accrued interest. | ||||||||
Land, equipment and other obligations | ||||||||
The Company has various notes, mortgages and other financing arrangements resulting from the purchase of principally land and equipment. All loans provide for at least annual payments, which include interest ranging up to 10.0% per annum, and are principally secured by the land and equipment acquired. | ||||||||
We issued four revenue bonds to different industrial development authorities for counties in Pennsylvania in order to fund the acquisition and installation of plant and equipment. The Company maintains irrevocable, transferable letters of credit equal to the approximate carrying value of each bond, in total for $5.0 million and $5.4 million as of August 31, 2013 and February 28, 2013, respectively. The effective interest rate on these bonds ranged from 0.20% to 0.43% for six months ended August 31, 2013 and 0.23% to 0.46% for the six months ended August 31, 2012. The Company is subject to annual principal maturities each year which, is funded on either a quarterly or monthly basis, depending upon the terms of the original agreement. The Company’s plant and equipment provide collateral under these borrowings and for the letters of credit. | ||||||||
Obligations include a cash overdraft liability of $1.2 million and $2.2 million, which is included within the current portion of long-term debt as of August 31, 2013 and February 28, 2013, respectively. | ||||||||
Obligations under capital lease | ||||||||
The Company has various arrangements for the lease of machinery and equipment which qualify as capital leases. These arrangements typically provide for monthly payments, some of which include residual value guarantees if the Company were to terminate the arrangement during certain specified periods of time for each underlying asset under lease. |
Income_Taxes
Income Taxes | 6 Months Ended |
Aug. 31, 2013 | |
Income Taxes | |
Income Taxes | 5. Income Taxes |
The income tax provisions for all periods consist of federal and state taxes that are based on the estimated effective tax rates applicable for the full years ending February 28, 2014 and February 28, 2013, respectively, after giving effect to items specifically related to the interim periods. | |
The effective income tax rates for the second quarters of fiscal years 2014 and 2013 were 0.6% and 39.5%, respectively, resulting in tax expense of $0.1 million and $5.6 million, respectively. The effective income tax rates for the first six months of fiscal years 2014 and 2013 were 14.2% and 38.1%, respectively, resulting in tax benefit of $3.4 million and $5.9 million, respectively. The principal factor affecting the comparability of the effective income tax rates for the respective periods is the Company’s assessment of the realizability of the current year projected income tax loss. The Company recorded a valuation allowance on the portion of the current year federal and state income tax losses that it believes are not more likely than not to be realized. The Company reversed valuation allowance related to a portion of its state net operating loss carryforward that it has determined is more likely than not to be realized as a result of a state income tax law change that occurred during the second quarter of fiscal year 2014. | |
The cash taxes paid were not material for the three and six months ended August 31, 2013 and August 31, 2012, respectively, primarily as a result of net operating losses. |
Retirement_and_Benefit_Program
Retirement and Benefit Programs | 6 Months Ended | |||||||||||||
Aug. 31, 2013 | ||||||||||||||
Retirement and Benefit Programs | ||||||||||||||
Retirement and Benefit Programs | 6. Retirement and Benefit Programs | |||||||||||||
Substantially all employees are covered by a defined contribution plan, a defined benefit plan, a collectively bargained multiemployer plan, or a noncontributory profit sharing plan. The expense associated with these programs is shown as pension and profit sharing in our condensed consolidated statements of comprehensive income (loss). | ||||||||||||||
The Company has two defined benefit pension plans covering certain union employees covered by labor union contracts. The benefits are based on years of service. Actuarial gains and losses are generally amortized over the average remaining service life of the Company’s active employees. Net periodic pension expense recognized for the three and six months ended August 31, 2013 and 2012, was as follows: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
August 31, | August 31, | |||||||||||||
(In thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||
Net periodic benefit cost | ||||||||||||||
Service cost | $ | 85 | $ | 68 | $ | 171 | $ | 135 | ||||||
Interest cost | 100 | 99 | 200 | 198 | ||||||||||
Expected return on plan assets | (145 | ) | (146 | ) | (288 | ) | (293 | ) | ||||||
Amortization of prior service cost | 17 | 15 | 33 | 30 | ||||||||||
Recognized net actuarial loss | 66 | 62 | 132 | 124 | ||||||||||
Total pension expense | $ | 123 | $ | 98 | $ | 248 | $ | 194 | ||||||
The Company made contributions to the defined benefit pension plans of $0.1 million during the six months ended August 31, 2013, and expects to make additional contributions of $0.2 million in the remainder of fiscal year 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 31, 2013 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies |
In the normal course of business, the Company has commitments, lawsuits, claims and contingent liabilities. The ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s consolidated financial position, statement of comprehensive income (loss) or liquidity. | |
The Company maintains a captive insurance company, Rock Solid Insurance Company (“Rock Solid”), for workers’ compensation (non-Pennsylvania employees), general liability, auto, health, and property coverage. On April 8, 2011, Rock Solid entered into a Collateral Trust Agreement with an insurer to eliminate a letter of credit that was required to maintain coverage of the deductible portion of its liability coverage. The total amount of collateral provided in the arrangement is $13.6 million and is recorded as part of restricted cash as of August 31, 2013. Reserves for retained losses within this captive, which are recorded in accrued liabilities in our condensed consolidated balance sheets, were approximately $13.9 million and $10.8 million as of August 31, 2013 and February 28, 2013, respectively. Exposures for periods prior to the inception of the captive are covered by pre-existing insurance policies. |
Segment_Reporting
Segment Reporting | 6 Months Ended | |||||||||||||
Aug. 31, 2013 | ||||||||||||||
Segment Reporting | ||||||||||||||
Segment Reporting | 8. Segment Reporting | |||||||||||||
The Company reports information about its operating segments using the “management approach,” which is based on the way management organizes and reports the segments within the organization for making operating decisions and assessing performance to the chief operating decision maker. The Company’s three reportable segments are: (i) construction materials; (ii) heavy/highway construction; and (iii) traffic safety services and equipment. Almost all activity of the Company is domestic. Segment information includes both inter-segment and certain intra-segment activities. | ||||||||||||||
The Company reviews earnings of the segments principally at the operating income level less indirect costs and accounts for inter-segment and certain intra-segment sales at prices that range from negotiated rates to those that approximate fair market value. Segment operating income consists of revenue less direct costs and expenses. Corporate and unallocated costs include those administrative and financial costs which are not allocated to segment operations and are excluded from segment operating income. These costs include corporate administrative functions such as trade receivable billings and collections, payment processing, accounting, legal and other administrative costs, unallocated corporate functions and divisional administrative functions. | ||||||||||||||
In prior fiscal periods the Company reported other revenues separately, which management now includes within the construction materials segment consistent with managements business assessment. Additionally in the first quarter of fiscal 2014, management began assessing performance of its operations without the allocation of indirect costs of its selling, administrative and general expense. Indirect costs include trade receivable billings and collections, payment processing, accounting, legal and other administrative costs. Operating profit for the three months ended August 31, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $8.9 million, $0.6 million, and $1.1 million for construction materials, heavy/highway construction and traffic safety services and equipment segments, respectively. Operating profit for the six months ended August 31, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $12.4 million, $1.8 million, and $1.4 million for construction materials, heavy/highway construction and traffic safety services and equipment segments, respectively | ||||||||||||||
The following is a summary of certain financial data for the Company’s operating segments: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
August 31, | August 31, | |||||||||||||
(In thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||
Revenue | ||||||||||||||
Construction materials | $ | 181,803 | $ | 194,144 | $ | 293,022 | $ | 316,426 | ||||||
Heavy/highway construction | 95,944 | 108,963 | 144,360 | 162,946 | ||||||||||
Traffic safety services and equipment | 27,735 | 22,816 | 51,824 | 44,925 | ||||||||||
Other revenues | — | 3,428 | — | 7,150 | ||||||||||
Segment totals | 305,482 | 329,351 | 489,206 | 531,447 | ||||||||||
Eliminations | (63,117 | ) | (68,809 | ) | (99,097 | ) | (112,924 | ) | ||||||
Total net revenue | $ | 242,365 | $ | 260,542 | $ | 390,109 | $ | 418,523 | ||||||
Operating income (loss) | ||||||||||||||
Construction materials | $ | 34,987 | $ | 29,458 | $ | 42,342 | $ | 35,288 | ||||||
Heavy/highway construction | 6,065 | 5,422 | 3,542 | 1,939 | ||||||||||
Traffic safety services and equipment | 2,029 | (812 | ) | 1,354 | (1,275 | ) | ||||||||
Corporate and unallocated | (15,584 | ) | (2,440 | ) | (33,276 | ) | (11,105 | ) | ||||||
Total operating income | $ | 27,497 | $ | 31,628 | $ | 13,962 | $ | 24,847 | ||||||
Three Months Ended | Six Months Ended | |||||||||||||
August 31, | August 31, | |||||||||||||
(In thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||
Depreciation, depletion and amortization | ||||||||||||||
Construction materials | $ | 8,966 | $ | 7,585 | $ | 17,055 | $ | 15,301 | ||||||
Heavy/highway construction | 1,697 | 2,920 | 3,773 | 4,817 | ||||||||||
Traffic safety services and equipment | 1,846 | 1,722 | 3,360 | 3,414 | ||||||||||
Corporate and unallocated | 622 | 1,053 | 1,061 | 1,591 | ||||||||||
Total depreciation, depletion and amortization | $ | 13,131 | $ | 13,280 | $ | 25,249 | $ | 25,123 | ||||||
Condensed_Issuer_Guarantor_and
Condensed Issuer, Guarantor and Non Guarantor Financial Information | 6 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | |||||||||||||||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | 9. Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||||||||||||||||
The Company’s Secured Notes and Notes are guaranteed by certain subsidiaries. Except for Rock Solid, NESL, II LLC, and Kettle Creek Partners GP, LLC, all existing consolidated subsidiaries of the Company are 100% owned and provide a joint and several, full and unconditional guarantee of the securities. These entities include Gateway Trade Center Inc., EII Transport Inc., Protections Services Inc., Work Area Protection Corp., SCI Products Inc., ASTI Transportation Systems, Inc., and Precision Solar Controls Inc. (“Guarantor Subsidiaries”). There are no significant restrictions on the parent Company’s ability to obtain funds from any of the Guarantor Subsidiaries in the form of a dividend or loan. Additionally, there are no significant restrictions on a Guarantor Subsidiary’s ability to obtain funds from the parent Company or its direct or indirect subsidiaries. Certain other wholly owned subsidiaries and consolidated partially owned partnerships do not guarantee the Secured Notes or the Notes. These entities include Rock Solid, South Woodbury, L.P., NESL, II LLC, Kettle Creek Partners L.P., and Kettle Creek Partners GP, LLC (“Non Guarantors”). | |||||||||||||||||
The following condensed consolidating balance sheets, statements of comprehensive income (loss) and statements of cash flows are provided for the Company, all Guarantor Subsidiaries and Non Guarantors. The information has been presented as if the parent Company accounted for its ownership of the Guarantor Subsidiaries and Non Guarantors using the equity method of accounting. | |||||||||||||||||
Condensed Consolidating Balance Sheet at August 31, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Assets | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 29 | $ | 19 | $ | 4,352 | $ | — | $ | 4,400 | |||||||
Restricted cash | 1,488 | 105 | 13,595 | — | 15,188 | ||||||||||||
Accounts receivable | 135,846 | 17,934 | 14 | (554 | ) | 153,240 | |||||||||||
Inventories | 113,486 | 15,174 | — | — | 128,660 | ||||||||||||
Net investment in lease | — | — | 647 | (647 | ) | — | |||||||||||
Deferred income taxes | 12,916 | 964 | — | — | 13,880 | ||||||||||||
Other current assets | 7,555 | 1,221 | 41 | — | 8,817 | ||||||||||||
Total current assets | 271,320 | 35,417 | 18,649 | (1,201 | ) | 324,185 | |||||||||||
Property, plant and equipment, net | 340,800 | 21,190 | 7,272 | (7,272 | ) | 361,990 | |||||||||||
Goodwill | 83,228 | 5,845 | — | — | 89,073 | ||||||||||||
Other intangible assets | 8,119 | 12,423 | — | — | 20,542 | ||||||||||||
Investment in subsidiaries | 79,821 | — | — | (79,821 | ) | — | |||||||||||
Intercompany receivables | 965 | 20,672 | 51 | (21,688 | ) | — | |||||||||||
Other assets | 28,778 | 1,184 | — | — | 29,962 | ||||||||||||
$ | 813,031 | $ | 96,731 | $ | 25,972 | $ | (109,982 | ) | $ | 825,752 | |||||||
Liabilities and (Deficit) Equity | |||||||||||||||||
Current liabilities | |||||||||||||||||
Current maturities of long-term debt | $ | 9,544 | $ | — | $ | 897 | $ | (647 | ) | $ | 9,794 | ||||||
Accounts payable - trade | 56,442 | 6,403 | 151 | (554 | ) | 62,442 | |||||||||||
Accrued liabilities | 49,631 | 3,131 | 14,328 | — | 67,090 | ||||||||||||
Total current liabilities | 115,617 | 9,534 | 15,376 | (1,201 | ) | 139,326 | |||||||||||
Intercompany payables | 21,314 | 95 | 279 | (21,688 | ) | — | |||||||||||
Long-term debt, less current maturities | 620,961 | — | 6,164 | — | 627,125 | ||||||||||||
Intercompany capital leases, less current installments | 7,272 | — | — | (7,272 | ) | — | |||||||||||
Deferred income taxes | 42,097 | 8,413 | — | — | 50,510 | ||||||||||||
Other liabilities | 36,773 | 670 | — | — | 37,443 | ||||||||||||
Total liabilities | 844,034 | 18,712 | 21,819 | (30,161 | ) | 854,404 | |||||||||||
(Deficit) equity | |||||||||||||||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | (31,003 | ) | 78,019 | 1,802 | (79,821 | ) | (31,003 | ) | |||||||||
Noncontrolling interest | — | — | 2,351 | — | 2,351 | ||||||||||||
Total (deficit) equity | (31,003 | ) | 78,019 | 4,153 | (79,821 | ) | (28,652 | ) | |||||||||
$ | 813,031 | $ | 96,731 | $ | 25,972 | $ | (109,982 | ) | $ | 825,752 | |||||||
Condensed Consolidating Balance Sheet at February 28, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Assets | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 31 | $ | 19 | $ | 9,484 | $ | — | $ | 9,534 | |||||||
Restricted cash | 1,174 | 105 | 8,844 | — | 10,123 | ||||||||||||
Accounts receivable | 39,128 | 13,129 | 14 | — | 52,271 | ||||||||||||
Inventories | 109,032 | 16,112 | — | — | 125,144 | ||||||||||||
Net investment in lease | — | — | 634 | (634 | ) | — | |||||||||||
Deferred income taxes | 11,425 | 961 | — | — | 12,386 | ||||||||||||
Other current assets | 6,992 | 1,317 | 28 | — | 8,337 | ||||||||||||
Total current assets | 167,782 | 31,643 | 19,004 | (634 | ) | 217,795 | |||||||||||
Property, plant and equipment, net | 350,656 | 21,212 | 7,589 | (7,589 | ) | 371,868 | |||||||||||
Goodwill | 83,228 | 5,845 | — | — | 89,073 | ||||||||||||
Other intangible assets | 8,093 | 12,907 | — | — | 21,000 | ||||||||||||
Investment in subsidiaries | 81,430 | — | — | (81,430 | ) | — | |||||||||||
Intercompany receivables | 279 | 19,984 | — | (20,263 | ) | — | |||||||||||
Other assets | 33,252 | 1,200 | — | — | 34,452 | ||||||||||||
$ | 724,720 | $ | 92,791 | $ | 26,593 | $ | (109,916 | ) | $ | 734,188 | |||||||
Liabilities and (Deficit) Equity | |||||||||||||||||
Current liabilities | |||||||||||||||||
Current maturities of long-term debt | $ | 11,175 | $ | — | $ | 801 | $ | (634 | ) | $ | 11,342 | ||||||
Accounts payable - trade | 18,343 | 2,044 | 221 | — | 20,608 | ||||||||||||
Accrued liabilities | 37,640 | 5,135 | 11,232 | — | 54,007 | ||||||||||||
Total current liabilities | 67,158 | 7,179 | 12,254 | (634 | ) | 85,957 | |||||||||||
Intercompany payables | 19,984 | — | 279 | (20,263 | ) | — | |||||||||||
Long-term debt, less current maturities | 559,915 | — | 6,730 | — | 566,645 | ||||||||||||
Intercompany capital leases, less current installments | 7,589 | — | — | (7,589 | ) | — | |||||||||||
Deferred income taxes | 43,834 | 8,609 | — | — | 52,443 | ||||||||||||
Other liabilities | 35,723 | 1,010 | — | — | 36,733 | ||||||||||||
Total liabilities | 734,203 | 16,798 | 19,263 | (28,486 | ) | 741,778 | |||||||||||
(Deficit) equity | |||||||||||||||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | (9,483 | ) | 75,993 | 5,437 | (81,430 | ) | (9,483 | ) | |||||||||
Noncontrolling interest | — | — | 1,893 | — | 1,893 | ||||||||||||
Total (deficit) equity | (9,483 | ) | 75,993 | 7,330 | (81,430 | ) | (7,590 | ) | |||||||||
$ | 724,720 | $ | 92,791 | $ | 26,593 | $ | (109,916 | ) | $ | 734,188 | |||||||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 215,098 | $ | 29,050 | $ | 2,890 | $ | (4,673 | ) | $ | 242,365 | ||||||
Cost of revenue (exclusive of items shown separately below) | 160,283 | 22,522 | 3,194 | (4,961 | ) | 181,038 | |||||||||||
Depreciation, depletion and amortization | 11,241 | 1,890 | — | — | 13,131 | ||||||||||||
Equipment and intangible asset impairment | — | 452 | — | — | 452 | ||||||||||||
Pension and profit sharing | 2,471 | 103 | — | — | 2,574 | ||||||||||||
Selling, administrative and general expenses | 15,657 | 1,833 | 140 | 344 | 17,974 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | (132 | ) | (169 | ) | — | — | (301 | ) | |||||||||
Operating income (loss) | 25,578 | 2,419 | (444 | ) | (56 | ) | 27,497 | ||||||||||
Interest expense, net | (18,923 | ) | (38 | ) | (14 | ) | 56 | (18,919 | ) | ||||||||
Income (loss) before income taxes | 6,655 | 2,381 | (458 | ) | — | 8,578 | |||||||||||
Income tax expense (benefit) | 9 | 42 | — | — | 51 | ||||||||||||
Equity in earnings of subsidiaries | 1,711 | — | — | (1,711 | ) | — | |||||||||||
Net income (loss) | 8,357 | 2,339 | (458 | ) | (1,711 | ) | 8,527 | ||||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 30 | — | — | — | 30 | ||||||||||||
Comprehensive income (loss) | 8,387 | 2,339 | (458 | ) | (1,711 | ) | 8,557 | ||||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (170 | ) | — | (170 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | 8,387 | $ | 2,339 | $ | (628 | ) | $ | (1,711 | ) | $ | 8,387 | |||||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2012 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 223,736 | $ | 27,079 | $ | 1,975 | $ | 7,752 | $ | 260,542 | |||||||
Cost of revenue (exclusive of items shown separately below) | 164,700 | 22,385 | 714 | 7,515 | 195,314 | ||||||||||||
Depreciation, depletion and amortization | 11,460 | 1,820 | — | — | 13,280 | ||||||||||||
Equipment and intangible asset impairment | — | 300 | — | — | 300 | ||||||||||||
Pension and profit sharing | 2,488 | 105 | — | — | 2,593 | ||||||||||||
Selling, administrative and general expenses | 14,554 | 2,419 | 103 | 344 | 17,420 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | (87 | ) | 94 | — | — | 7 | |||||||||||
Operating income (loss) | 30,621 | (44 | ) | 1,158 | (107 | ) | 31,628 | ||||||||||
Interest expense, net | (17,444 | ) | (71 | ) | (127 | ) | 107 | (17,535 | ) | ||||||||
Income (loss) before income taxes | 13,177 | (115 | ) | 1,031 | — | 14,093 | |||||||||||
Income tax expense (benefit) | 6,357 | (786 | ) | — | — | 5,571 | |||||||||||
Equity in earnings of subsidiaries | 1,368 | — | — | (1,368 | ) | — | |||||||||||
Net income (loss) | 8,188 | 671 | 1,031 | (1,368 | ) | 8,522 | |||||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 14 | — | — | — | 14 | ||||||||||||
Comprehensive income (loss) | 8,202 | 671 | 1,031 | (1,368 | ) | 8,536 | |||||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (334 | ) | — | (334 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | 8,202 | $ | 671 | $ | 697 | $ | (1,368 | ) | $ | 8,202 | ||||||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 340,836 | $ | 52,262 | $ | 5,306 | $ | (8,295 | ) | $ | 390,109 | ||||||
Cost of revenue (exclusive of items shown separately below) | 270,705 | 41,484 | 4,699 | (8,132 | ) | 308,756 | |||||||||||
Depreciation, depletion and amortization | 21,805 | 3,444 | — | — | 25,249 | ||||||||||||
Equipment and intangible asset impairment | — | 452 | — | — | 452 | ||||||||||||
Pension and profit sharing | 4,266 | 186 | — | — | 4,452 | ||||||||||||
Selling, administrative and general expenses | 32,336 | 4,837 | 214 | — | 37,387 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | 6 | (155 | ) | — | — | (149 | ) | ||||||||||
Operating income (loss) | 11,718 | 2,014 | 393 | (163 | ) | 13,962 | |||||||||||
Interest expense, net | (38,041 | ) | (99 | ) | (119 | ) | 163 | (38,096 | ) | ||||||||
Income (loss) before income taxes | (26,323 | ) | 1,915 | 274 | — | (24,134 | ) | ||||||||||
Income tax expense (benefit) | (3,313 | ) | (111 | ) | — | — | (3,424 | ) | |||||||||
Equity in earnings of subsidiaries | 1,391 | — | — | (1,391 | ) | — | |||||||||||
Net income (loss) | (21,619 | ) | 2,026 | 274 | (1,391 | ) | (20,710 | ) | |||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 99 | — | — | — | 99 | ||||||||||||
Comprehensive income (loss) | (21,520 | ) | 2,026 | 274 | (1,391 | ) | (20,611 | ) | |||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (909 | ) | — | (909 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | (21,520 | ) | $ | 2,026 | $ | (635 | ) | $ | (1,391 | ) | $ | (21,520 | ) | |||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2012 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 371,992 | $ | 48,699 | $ | 3,953 | $ | (6,121 | ) | $ | 418,523 | ||||||
Cost of revenue (exclusive of items shown separately below) | 293,823 | 39,498 | 1,328 | (5,904 | ) | 328,745 | |||||||||||
Depreciation, depletion and amortization | 21,421 | 3,702 | — | — | 25,123 | ||||||||||||
Equipment and intangible asset impairment | — | 300 | — | — | 300 | ||||||||||||
Pension and profit sharing | 4,250 | 184 | — | — | 4,434 | ||||||||||||
Selling, administrative and general expenses | 30,231 | 4,668 | 203 | — | 35,102 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | (122 | ) | 94 | — | — | (28 | ) | ||||||||||
Operating income (loss) | 22,389 | 253 | 2,422 | (217 | ) | 24,847 | |||||||||||
Interest expense, net | (40,154 | ) | (143 | ) | (275 | ) | 217 | (40,355 | ) | ||||||||
Income (loss) before income taxes | (17,765 | ) | 110 | 2,147 | — | (15,508 | ) | ||||||||||
Income tax expense (benefit) | (4,455 | ) | (1,461 | ) | — | — | (5,916 | ) | |||||||||
Equity in earnings of subsidiaries | 3,079 | — | — | (3,079 | ) | — | |||||||||||
Net income (loss) | (10,231 | ) | 1,571 | 2,147 | (3,079 | ) | (9,592 | ) | |||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 91 | — | — | — | 91 | ||||||||||||
Comprehensive income (loss) | (10,140 | ) | 1,571 | 2,147 | (3,079 | ) | (9,501 | ) | |||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (639 | ) | — | (639 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | (10,140 | ) | $ | 1,571 | $ | 1,508 | $ | (3,079 | ) | $ | (10,140 | ) | ||||
Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Cash flows from operating activities | $ | (36,950 | ) | $ | 2,213 | $ | 3,540 | $ | (3,000 | ) | $ | (34,197 | ) | ||||
Cash flows from investing activities | |||||||||||||||||
Capital expenditures | (12,039 | ) | (2,228 | ) | — | — | (14,267 | ) | |||||||||
Proceeds from sale of property and equipment | 349 | 15 | — | — | 364 | ||||||||||||
Change in cash value of life insurance | 2,951 | — | — | — | 2,951 | ||||||||||||
Change in restricted cash | (165 | ) | — | (4,751 | ) | — | (4,916 | ) | |||||||||
Net cash used in investing activities | (8,904 | ) | (2,213 | ) | (4,751 | ) | — | (15,868 | ) | ||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from revolving credit | 116,351 | — | — | — | 116,351 | ||||||||||||
Repayment of revolving credit | (68,012 | ) | — | — | — | (68,012 | ) | ||||||||||
Proceeds from issuance of long-term debt | 563 | — | — | — | 563 | ||||||||||||
Repayment of long-term debt | (975 | ) | — | (470 | ) | — | (1,445 | ) | |||||||||
Payments on capital leases | (2,075 | ) | — | — | — | (2,075 | ) | ||||||||||
Debt issuance costs | — | — | — | — | — | ||||||||||||
Dividends paid | — | — | (3,000 | ) | 3,000 | — | |||||||||||
Distribution to noncontrolling interest | — | — | (451 | ) | — | (451 | ) | ||||||||||
Net cash provided by (used in) financing activities | 45,852 | — | (3,921 | ) | 3,000 | 44,931 | |||||||||||
Net decrease in cash and cash equivalents | (2 | ) | — | (5,132 | ) | — | (5,134 | ) | |||||||||
Cash and cash equivalents | |||||||||||||||||
Beginning of period | 31 | 19 | 9,484 | — | 9,534 | ||||||||||||
End of period | $ | 29 | $ | 19 | $ | 4,352 | $ | — | $ | 4,400 | |||||||
Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2012 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Cash flows from operating activities | $ | (46,689 | ) | $ | 2,287 | $ | 1,098 | $ | — | $ | (43,304 | ) | |||||
Cash flows from investing activities | |||||||||||||||||
Capital expenditures | (22,670 | ) | (2,739 | ) | — | — | (25,409 | ) | |||||||||
Proceeds from sale of property and equipment | 153 | — | — | — | 153 | ||||||||||||
Change in cash value of life insurance | (3,006 | ) | — | — | — | (3,006 | ) | ||||||||||
Change in restricted cash | (173 | ) | (4 | ) | (1 | ) | — | (178 | ) | ||||||||
Net cash used in investing activities | (25,696 | ) | (2,743 | ) | (1 | ) | — | (28,440 | ) | ||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from revolving credit | 187,725 | — | — | — | 187,725 | ||||||||||||
Repayment of revolving credit | (221,361 | ) | — | — | — | (221,361 | ) | ||||||||||
Proceeds from issuance of long-term debt | 268,688 | — | — | — | 268,688 | ||||||||||||
Repayment of long-term debt | (153,119 | ) | — | (172 | ) | — | (153,291 | ) | |||||||||
Payments on capital leases | (2,564 | ) | — | — | — | (2,564 | ) | ||||||||||
Debt issuance costs | (14,062 | ) | — | — | — | (14,062 | ) | ||||||||||
Distribution to noncontrolling interest | — | — | (438 | ) | — | (438 | ) | ||||||||||
Net cash provided by (used in) financing activities | 65,307 | — | (610 | ) | — | 64,697 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (7,078 | ) | (456 | ) | 487 | — | (7,047 | ) | |||||||||
Cash and cash equivalents | |||||||||||||||||
Beginning of period | 7,106 | 476 | 7,450 | — | 15,032 | ||||||||||||
End of period | $ | 28 | $ | 20 | $ | 7,937 | $ | — | $ | 7,985 |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Aug. 31, 2013 | |
Subsequent Events | |
Subsequent Events | 10. Subsequent Events |
The Company was required to register and exchange the Secured Notes, by March 10, 2013 or be subject to a penalty interest of 25 basis points each quarter until the aggregate penalty interest reaches 1%. On June 13, 2013, the Company filed the Secured Notes Registration Statement. On September 30, 2013, the Secured Notes Registration Statement was declared effective by the SEC. The penalty interest will cease upon the completion of the exchange offer which is expected by October 30, 2013. | |
Effective October 1, 2013, the Company froze contributions to its nonqualified benefit plan, reduced the matching contribution rate for its qualified plan and froze certain other hourly and profit share contributions. |
Nature_of_Operations_and_Summa1
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Nature of Operations and Summary of Significant Accounting Policies | ||||||||
Basis of Presentation | Basis of Presentation | |||||||
The accompanying unaudited condensed consolidated financial statements and notes included in this report have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include all of the information or disclosures required for a complete presentation in accordance with GAAP. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2013 filed with the Securities and Exchange Commission (“SEC”). The results for interim periods are not necessarily indicative of the results for a full fiscal year. | ||||||||
Principles of Consolidation | Principles of Consolidation | |||||||
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and entities where the Company has a controlling equity interest. Intercompany balances and transactions have been eliminated in consolidation. | ||||||||
Noncontrolling interest | Noncontrolling interest | |||||||
The Company allocates net income (loss) and comprehensive income (loss) to both New Enterprise Stone and Lime Co., Inc. and its noncontrolling interest holders. For the periods presented, the net income (loss) and comprehensive income (loss) attributable to noncontrolling interest are the same amounts. | ||||||||
Out of Period Adjustment | Out of Period Adjustments | |||||||
For the three months ended August 31, 2013, the Company recorded out of period pre-tax income of approximately $1.2 million primarily related to two adjustments. The first out of period adjustment recorded was a $1.0 million loss for Construction in Progress that should have been written off in prior periods. The second out of period adjustment was a $2.3 million gain for inventory that was inadvertently not recorded in prior periods. As a result of these out of period adjustments, the Company’s operating income increased by $1.2 million and net income increased by $1.1 million for the three months ended August 31, 2013. | ||||||||
For the six months ended August 31, 2013, the Company recorded an out of period pre-tax loss of approximately $0.1 million which includes the year-to-date impact of the two adjustments noted above in the amount of $0.7 million pre-tax income offset by other errors corrected in the quarter ended May 31, 2013 that relate to prior periods. | ||||||||
Management does not believe these out of period errors are material to the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended August 31, 2013 or to any prior periods. | ||||||||
Reclassifications | Reclassifications | |||||||
Certain items previously reported in prior period financial statement captions have been conformed to agree with current presentation. | ||||||||
Use of Estimates | Use of Estimates | |||||||
The preparation of the condensed consolidated financial statements requires management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of property, plant and equipment; valuation of receivables, inventories, goodwill and other intangible assets; recognition of revenue and loss contract reserves under the percentage-of-completion method; assets and obligations related to employee benefit plans; asset retirement obligations; income tax valuation; and self-insurance reserves. Actual results could differ from those estimates. | ||||||||
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash | |||||||
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash balances were restricted in certain consolidated subsidiaries for bond sinking fund and insurance requirements as well as collateral on outstanding letters of credit or rentals. | ||||||||
We use a cash pooling arrangement with a single financial institution with specific provisions for the right to offset positive and negative cash balances. Accordingly, we classify net aggregate bank overdraft positions as other obligations within the current maturities of long-term debt, based on the short-term nature of these positions. As of August 31, 2013, the balance was $1.2 million. | ||||||||
Trade Accounts Receivable | Trade Accounts Receivable | |||||||
Trade accounts receivable, less allowance for doubtful accounts, are recorded at the invoiced amount plus service charges related to past due accounts. The Company’s total accounts receivable consisted of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Costs and estimated earnings in excess of billings | $ | 24,281 | $ | 4,265 | ||||
Trade | 129,406 | 48,392 | ||||||
Retainages | 3,891 | 3,129 | ||||||
157,578 | 55,786 | |||||||
Allowance for doubtful accounts | (4,338 | ) | (3,515 | ) | ||||
Accounts receivable, net | $ | 153,240 | $ | 52,271 | ||||
Costs and estimated earnings in excess of billings relate to revenue recognized and not yet billed due to contract terms. State and local agencies often require several approvals to process billings or payments and this may cause a lag in payment times. | ||||||||
Inventories | Inventories | |||||||
Inventories are stated at the lower of cost or market. Cost is determined using either first-in, first-out (“FIFO”) or weighted average method based on the applicable category of inventories. | ||||||||
The Company’s total inventory consists of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Crushed stone, agricultural lime, and sand | $ | 81,110 | $ | 76,927 | ||||
Safety equipment | 14,917 | 16,057 | ||||||
Parts, tires, and supplies | 11,920 | 11,331 | ||||||
Raw materials | 10,370 | 9,247 | ||||||
Concrete blocks | 3,507 | 4,210 | ||||||
Building materials | 3,971 | 3,921 | ||||||
Other | 2,865 | 3,451 | ||||||
$ | 128,660 | $ | 125,144 | |||||
Property, Plant and Equipment | Property, Plant and Equipment | |||||||
Property, plant and equipment are carried at cost. Assets under capital leases are stated at the lesser of the present value of minimum lease payments or the fair value of the leased item. Provision for depreciation is generally computed over estimated service lives by the straight-line method. | ||||||||
The Company’s property, plant and equipment consist of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Limestone and sand acreage | $ | 144,721 | $ | 144,076 | ||||
Land, buildings and building improvements | 100,512 | 100,074 | ||||||
Crushing, prestressing, and manufacturing plants | 330,899 | 326,066 | ||||||
Contracting equipment, vehicles and other | 306,664 | 300,450 | ||||||
Construction in progress | 3,375 | 5,680 | ||||||
Property, plant and equipment | 886,171 | 876,346 | ||||||
Less: Accumulated depreciation and depletion | (524,181 | ) | (504,478 | ) | ||||
Property, plant and equipment, net | $ | 361,990 | $ | 371,868 | ||||
Depreciation expense was $11.9 million and $12.1 million for three months ended August 31, 2013 and August 31, 2012, respectively. Depreciation expense was $23.0 million and $22.9 million for the six months ended August 31, 2013 and 2012, respectively. | ||||||||
The Company recorded asset impairment of $0.5 million related to equipment in the traffic safety services and equipment segment for the three months ended August 31, 2013. | ||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |||||||
Goodwill | ||||||||
The Company tests goodwill for impairment on an annual basis or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. There were no changes to the carrying value of goodwill during the six months ended August 31, 2013. Management continues to monitor the impact of market and economic events to determine if it is more likely than not that the carrying value of these reporting units has been impaired. The timing of a sustained recovery in the construction industry will have a significant effect on the fair value of the Company's reporting units. A decrease in the estimated fair value of one or more of the Company’s reporting units as a result of changes in future earnings, interest rates, market trends and/or cash flows could result in the recognition of goodwill impairment. | ||||||||
In the fourth quarter of fiscal year 2013, we completed our annual goodwill impairment testing. The estimated fair value of each of the reporting units was in excess of its carrying value, even after conducting various sensitivity analyses on key assumptions, such that no adjustment to the carrying values of goodwill was required. | ||||||||
Other Intangible Assets | ||||||||
Other intangible assets consist of technology, customer relationships and trademarks acquired in previous acquisitions. The technology is being amortized over a straight-line basis of 15 years. The customer relationships are being amortized on a straight-line basis over 20 years. Beginning in fiscal year 2014, our trademarks, which were previously considered indefinite lived, are being amortized over 30 and 50 years. | ||||||||
Amortization of intangible assets for the three months ended August 31, 2013 and August 31, 2012 was $0.3 million and $0.1 million, respectively. Amortization of intangible assets for the six months ended August 31, 2013 and August 31, 2012 was $0.5 million and $0.3 million, respectively. | ||||||||
Other Assets | Other Assets | |||||||
The Company’s long term other assets consist of the following: | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Deferred financing fees (less current portion of $3,522 and $3,658, respectively) | $ | 12,073 | $ | 14,523 | ||||
Capitalized software (net of accumulated amortization of $1,684 and $1,080, respectively) | 8,607 | 9,211 | ||||||
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively) | 1,387 | 4,338 | ||||||
Deferred stripping costs | 3,876 | 3,868 | ||||||
Other | 4,019 | 2,512 | ||||||
Total other assets | $ | 29,962 | $ | 34,452 | ||||
New Accounting Standards | New Accounting Standards | |||||||
Recently Adopted Accounting Standards | ||||||||
In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Topic 220). This ASU requires companies to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, companies are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. This ASU does not change the current requirements for reporting net income or other comprehensive income in the financial statements. This ASU was effective commencing with the three months ending May 31, 2013. The Company recognizes actuarial gains and losses in Accumulated Other Comprehensive Income as they occur. Accordingly, our adoption of this standard did not have an impact on the Company's consolidated financial statements. | ||||||||
In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU gives companies the option to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is determined that it is more likely than not the indefinite-lived intangible asset is impaired, a quantitative impairment test is required. However, if it is concluded otherwise, the quantitative test is not necessary. This ASU was effective commencing with the three months ending May 31, 2013. We adopted this standard on March 1, 2013, which did not have a material impact on the Company's consolidated financial statements. | ||||||||
Recently Issued Accounting Standards | ||||||||
In July 2013, the FASB issued guidance on the presentation of unrecognized tax benefits when net operating losses or tax credit carryforwards exist. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted, and is applicable to the Company’s fiscal year beginning March 1, 2014. The Company is currently evaluating this guidance, but does not anticipate its adoption will have a material impact on the Company's consolidated financial statements. |
Nature_of_Operations_and_Summa2
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Nature of Operations and Summary of Significant Accounting Policies | ||||||||
Schedule of total accounts receivable | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Costs and estimated earnings in excess of billings | $ | 24,281 | $ | 4,265 | ||||
Trade | 129,406 | 48,392 | ||||||
Retainages | 3,891 | 3,129 | ||||||
157,578 | 55,786 | |||||||
Allowance for doubtful accounts | (4,338 | ) | (3,515 | ) | ||||
Accounts receivable, net | $ | 153,240 | $ | 52,271 | ||||
Schedule of total inventory | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Crushed stone, agricultural lime, and sand | $ | 81,110 | $ | 76,927 | ||||
Safety equipment | 14,917 | 16,057 | ||||||
Parts, tires, and supplies | 11,920 | 11,331 | ||||||
Raw materials | 10,370 | 9,247 | ||||||
Concrete blocks | 3,507 | 4,210 | ||||||
Building materials | 3,971 | 3,921 | ||||||
Other | 2,865 | 3,451 | ||||||
$ | 128,660 | $ | 125,144 | |||||
Schedule of property, plant and equipment | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Limestone and sand acreage | $ | 144,721 | $ | 144,076 | ||||
Land, buildings and building improvements | 100,512 | 100,074 | ||||||
Crushing, prestressing, and manufacturing plants | 330,899 | 326,066 | ||||||
Contracting equipment, vehicles and other | 306,664 | 300,450 | ||||||
Construction in progress | 3,375 | 5,680 | ||||||
Property, plant and equipment | 886,171 | 876,346 | ||||||
Less: Accumulated depreciation and depletion | (524,181 | ) | (504,478 | ) | ||||
Property, plant and equipment, net | $ | 361,990 | $ | 371,868 | ||||
Schedule of long term other assets | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Deferred financing fees (less current portion of $3,522 and $3,658, respectively) | $ | 12,073 | $ | 14,523 | ||||
Capitalized software (net of accumulated amortization of $1,684 and $1,080, respectively) | 8,607 | 9,211 | ||||||
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively) | 1,387 | 4,338 | ||||||
Deferred stripping costs | 3,876 | 3,868 | ||||||
Other | 4,019 | 2,512 | ||||||
Total other assets | $ | 29,962 | $ | 34,452 |
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Accrued Liabilities | ||||||||
Schedule of accrued liabilities | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
Insurance | $ | 24,723 | $ | 19,715 | ||||
Interest | 21,384 | 18,962 | ||||||
Payroll and vacation | 10,340 | 8,281 | ||||||
Other | 2,028 | 3,671 | ||||||
Withholding taxes | 2,357 | 1,640 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 5,582 | 1,529 | ||||||
Contract expenses | 676 | 209 | ||||||
Total accrued liabilities | $ | 67,090 | $ | 54,007 |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 6 Months Ended | |||||||
Aug. 31, 2013 | ||||||||
Long-Term Debt | ||||||||
Schedule of long-term debt | ||||||||
August 31, | February 28, | |||||||
(In thousands) | 2013 | 2013 | ||||||
ABL Facility ($56.1 million available as of August 31, 2013) | $ | 73,613 | $ | 24,314 | ||||
Secured Notes due 2018 | 289,387 | 276,925 | ||||||
Notes due 2018 | 250,000 | 250,000 | ||||||
Land, equipment and other obligations | 17,163 | 19,005 | ||||||
Obligations under capital leases | 6,756 | 7,743 | ||||||
Total debt | 636,919 | 577,987 | ||||||
Less: Current portion | (9,794 | ) | (11,342 | ) | ||||
Total long-term debt | $ | 627,125 | $ | 566,645 | ||||
Secured Notes due 2018 | ||||||||
Long-Term Debt | ||||||||
Schedule of percentages of principal amount at which Notes may be redeemed | ||||||||
Year | Percentage | |||||||
2015 | 106.5 | % | ||||||
2016 | 103.25 | % | ||||||
2017 and thereafter | 100 | % | ||||||
Notes due 2018 | ||||||||
Long-Term Debt | ||||||||
Schedule of percentages of principal amount at which Notes may be redeemed | ||||||||
Year | Percentage | |||||||
2014 | 105.5 | % | ||||||
2015 | 102.75 | % | ||||||
2016 and thereafter | 100 | % |
Retirement_and_Benefit_Program1
Retirement and Benefit Programs (Tables) | 6 Months Ended | |||||||||||||
Aug. 31, 2013 | ||||||||||||||
Retirement and Benefit Programs | ||||||||||||||
Schedule of net periodic pension expense recognized | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
August 31, | August 31, | |||||||||||||
(In thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||
Net periodic benefit cost | ||||||||||||||
Service cost | $ | 85 | $ | 68 | $ | 171 | $ | 135 | ||||||
Interest cost | 100 | 99 | 200 | 198 | ||||||||||
Expected return on plan assets | (145 | ) | (146 | ) | (288 | ) | (293 | ) | ||||||
Amortization of prior service cost | 17 | 15 | 33 | 30 | ||||||||||
Recognized net actuarial loss | 66 | 62 | 132 | 124 | ||||||||||
Total pension expense | $ | 123 | $ | 98 | $ | 248 | $ | 194 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 6 Months Ended | |||||||||||||
Aug. 31, 2013 | ||||||||||||||
Segment Reporting | ||||||||||||||
Summary of certain financial data for the company's operating segments | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
August 31, | August 31, | |||||||||||||
(In thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||
Revenue | ||||||||||||||
Construction materials | $ | 181,803 | $ | 194,144 | $ | 293,022 | $ | 316,426 | ||||||
Heavy/highway construction | 95,944 | 108,963 | 144,360 | 162,946 | ||||||||||
Traffic safety services and equipment | 27,735 | 22,816 | 51,824 | 44,925 | ||||||||||
Other revenues | — | 3,428 | — | 7,150 | ||||||||||
Segment totals | 305,482 | 329,351 | 489,206 | 531,447 | ||||||||||
Eliminations | (63,117 | ) | (68,809 | ) | (99,097 | ) | (112,924 | ) | ||||||
Total net revenue | $ | 242,365 | $ | 260,542 | $ | 390,109 | $ | 418,523 | ||||||
Operating income (loss) | ||||||||||||||
Construction materials | $ | 34,987 | $ | 29,458 | $ | 42,342 | $ | 35,288 | ||||||
Heavy/highway construction | 6,065 | 5,422 | 3,542 | 1,939 | ||||||||||
Traffic safety services and equipment | 2,029 | (812 | ) | 1,354 | (1,275 | ) | ||||||||
Corporate and unallocated | (15,584 | ) | (2,440 | ) | (33,276 | ) | (11,105 | ) | ||||||
Total operating income | $ | 27,497 | $ | 31,628 | $ | 13,962 | $ | 24,847 | ||||||
Three Months Ended | Six Months Ended | |||||||||||||
August 31, | August 31, | |||||||||||||
(In thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||
Depreciation, depletion and amortization | ||||||||||||||
Construction materials | $ | 8,966 | $ | 7,585 | $ | 17,055 | $ | 15,301 | ||||||
Heavy/highway construction | 1,697 | 2,920 | 3,773 | 4,817 | ||||||||||
Traffic safety services and equipment | 1,846 | 1,722 | 3,360 | 3,414 | ||||||||||
Corporate and unallocated | 622 | 1,053 | 1,061 | 1,591 | ||||||||||
Total depreciation, depletion and amortization | $ | 13,131 | $ | 13,280 | $ | 25,249 | $ | 25,123 |
Condensed_Issuer_Guarantor_and1
Condensed Issuer, Guarantor and Non Guarantor Financial Information (Tables) | 6 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | |||||||||||||||||
Schedule of condensed consolidating balance sheet | Condensed Consolidating Balance Sheet at August 31, 2013 | ||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Assets | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 29 | $ | 19 | $ | 4,352 | $ | — | $ | 4,400 | |||||||
Restricted cash | 1,488 | 105 | 13,595 | — | 15,188 | ||||||||||||
Accounts receivable | 135,846 | 17,934 | 14 | (554 | ) | 153,240 | |||||||||||
Inventories | 113,486 | 15,174 | — | — | 128,660 | ||||||||||||
Net investment in lease | — | — | 647 | (647 | ) | — | |||||||||||
Deferred income taxes | 12,916 | 964 | — | — | 13,880 | ||||||||||||
Other current assets | 7,555 | 1,221 | 41 | — | 8,817 | ||||||||||||
Total current assets | 271,320 | 35,417 | 18,649 | (1,201 | ) | 324,185 | |||||||||||
Property, plant and equipment, net | 340,800 | 21,190 | 7,272 | (7,272 | ) | 361,990 | |||||||||||
Goodwill | 83,228 | 5,845 | — | — | 89,073 | ||||||||||||
Other intangible assets | 8,119 | 12,423 | — | — | 20,542 | ||||||||||||
Investment in subsidiaries | 79,821 | — | — | (79,821 | ) | — | |||||||||||
Intercompany receivables | 965 | 20,672 | 51 | (21,688 | ) | — | |||||||||||
Other assets | 28,778 | 1,184 | — | — | 29,962 | ||||||||||||
$ | 813,031 | $ | 96,731 | $ | 25,972 | $ | (109,982 | ) | $ | 825,752 | |||||||
Liabilities and (Deficit) Equity | |||||||||||||||||
Current liabilities | |||||||||||||||||
Current maturities of long-term debt | $ | 9,544 | $ | — | $ | 897 | $ | (647 | ) | $ | 9,794 | ||||||
Accounts payable - trade | 56,442 | 6,403 | 151 | (554 | ) | 62,442 | |||||||||||
Accrued liabilities | 49,631 | 3,131 | 14,328 | — | 67,090 | ||||||||||||
Total current liabilities | 115,617 | 9,534 | 15,376 | (1,201 | ) | 139,326 | |||||||||||
Intercompany payables | 21,314 | 95 | 279 | (21,688 | ) | — | |||||||||||
Long-term debt, less current maturities | 620,961 | — | 6,164 | — | 627,125 | ||||||||||||
Intercompany capital leases, less current installments | 7,272 | — | — | (7,272 | ) | — | |||||||||||
Deferred income taxes | 42,097 | 8,413 | — | — | 50,510 | ||||||||||||
Other liabilities | 36,773 | 670 | — | — | 37,443 | ||||||||||||
Total liabilities | 844,034 | 18,712 | 21,819 | (30,161 | ) | 854,404 | |||||||||||
(Deficit) equity | |||||||||||||||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | (31,003 | ) | 78,019 | 1,802 | (79,821 | ) | (31,003 | ) | |||||||||
Noncontrolling interest | — | — | 2,351 | — | 2,351 | ||||||||||||
Total (deficit) equity | (31,003 | ) | 78,019 | 4,153 | (79,821 | ) | (28,652 | ) | |||||||||
$ | 813,031 | $ | 96,731 | $ | 25,972 | $ | (109,982 | ) | $ | 825,752 | |||||||
Condensed Consolidating Balance Sheet at February 28, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Assets | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 31 | $ | 19 | $ | 9,484 | $ | — | $ | 9,534 | |||||||
Restricted cash | 1,174 | 105 | 8,844 | — | 10,123 | ||||||||||||
Accounts receivable | 39,128 | 13,129 | 14 | — | 52,271 | ||||||||||||
Inventories | 109,032 | 16,112 | — | — | 125,144 | ||||||||||||
Net investment in lease | — | — | 634 | (634 | ) | — | |||||||||||
Deferred income taxes | 11,425 | 961 | — | — | 12,386 | ||||||||||||
Other current assets | 6,992 | 1,317 | 28 | — | 8,337 | ||||||||||||
Total current assets | 167,782 | 31,643 | 19,004 | (634 | ) | 217,795 | |||||||||||
Property, plant and equipment, net | 350,656 | 21,212 | 7,589 | (7,589 | ) | 371,868 | |||||||||||
Goodwill | 83,228 | 5,845 | — | — | 89,073 | ||||||||||||
Other intangible assets | 8,093 | 12,907 | — | — | 21,000 | ||||||||||||
Investment in subsidiaries | 81,430 | — | — | (81,430 | ) | — | |||||||||||
Intercompany receivables | 279 | 19,984 | — | (20,263 | ) | — | |||||||||||
Other assets | 33,252 | 1,200 | — | — | 34,452 | ||||||||||||
$ | 724,720 | $ | 92,791 | $ | 26,593 | $ | (109,916 | ) | $ | 734,188 | |||||||
Liabilities and (Deficit) Equity | |||||||||||||||||
Current liabilities | |||||||||||||||||
Current maturities of long-term debt | $ | 11,175 | $ | — | $ | 801 | $ | (634 | ) | $ | 11,342 | ||||||
Accounts payable - trade | 18,343 | 2,044 | 221 | — | 20,608 | ||||||||||||
Accrued liabilities | 37,640 | 5,135 | 11,232 | — | 54,007 | ||||||||||||
Total current liabilities | 67,158 | 7,179 | 12,254 | (634 | ) | 85,957 | |||||||||||
Intercompany payables | 19,984 | — | 279 | (20,263 | ) | — | |||||||||||
Long-term debt, less current maturities | 559,915 | — | 6,730 | — | 566,645 | ||||||||||||
Intercompany capital leases, less current installments | 7,589 | — | — | (7,589 | ) | — | |||||||||||
Deferred income taxes | 43,834 | 8,609 | — | — | 52,443 | ||||||||||||
Other liabilities | 35,723 | 1,010 | — | — | 36,733 | ||||||||||||
Total liabilities | 734,203 | 16,798 | 19,263 | (28,486 | ) | 741,778 | |||||||||||
(Deficit) equity | |||||||||||||||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | (9,483 | ) | 75,993 | 5,437 | (81,430 | ) | (9,483 | ) | |||||||||
Noncontrolling interest | — | — | 1,893 | — | 1,893 | ||||||||||||
Total (deficit) equity | (9,483 | ) | 75,993 | 7,330 | (81,430 | ) | (7,590 | ) | |||||||||
$ | 724,720 | $ | 92,791 | $ | 26,593 | $ | (109,916 | ) | $ | 734,188 | |||||||
Schedule of condensed consolidating statements of comprehensive income (loss) | Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2013 | ||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 215,098 | $ | 29,050 | $ | 2,890 | $ | (4,673 | ) | $ | 242,365 | ||||||
Cost of revenue (exclusive of items shown separately below) | 160,283 | 22,522 | 3,194 | (4,961 | ) | 181,038 | |||||||||||
Depreciation, depletion and amortization | 11,241 | 1,890 | — | — | 13,131 | ||||||||||||
Equipment and intangible asset impairment | — | 452 | — | — | 452 | ||||||||||||
Pension and profit sharing | 2,471 | 103 | — | — | 2,574 | ||||||||||||
Selling, administrative and general expenses | 15,657 | 1,833 | 140 | 344 | 17,974 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | (132 | ) | (169 | ) | — | — | (301 | ) | |||||||||
Operating income (loss) | 25,578 | 2,419 | (444 | ) | (56 | ) | 27,497 | ||||||||||
Interest expense, net | (18,923 | ) | (38 | ) | (14 | ) | 56 | (18,919 | ) | ||||||||
Income (loss) before income taxes | 6,655 | 2,381 | (458 | ) | — | 8,578 | |||||||||||
Income tax expense (benefit) | 9 | 42 | — | — | 51 | ||||||||||||
Equity in earnings of subsidiaries | 1,711 | — | — | (1,711 | ) | — | |||||||||||
Net income (loss) | 8,357 | 2,339 | (458 | ) | (1,711 | ) | 8,527 | ||||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 30 | — | — | — | 30 | ||||||||||||
Comprehensive income (loss) | 8,387 | 2,339 | (458 | ) | (1,711 | ) | 8,557 | ||||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (170 | ) | — | (170 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | 8,387 | $ | 2,339 | $ | (628 | ) | $ | (1,711 | ) | $ | 8,387 | |||||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2012 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 223,736 | $ | 27,079 | $ | 1,975 | $ | 7,752 | $ | 260,542 | |||||||
Cost of revenue (exclusive of items shown separately below) | 164,700 | 22,385 | 714 | 7,515 | 195,314 | ||||||||||||
Depreciation, depletion and amortization | 11,460 | 1,820 | — | — | 13,280 | ||||||||||||
Equipment and intangible asset impairment | — | 300 | — | — | 300 | ||||||||||||
Pension and profit sharing | 2,488 | 105 | — | — | 2,593 | ||||||||||||
Selling, administrative and general expenses | 14,554 | 2,419 | 103 | 344 | 17,420 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | (87 | ) | 94 | — | — | 7 | |||||||||||
Operating income (loss) | 30,621 | (44 | ) | 1,158 | (107 | ) | 31,628 | ||||||||||
Interest expense, net | (17,444 | ) | (71 | ) | (127 | ) | 107 | (17,535 | ) | ||||||||
Income (loss) before income taxes | 13,177 | (115 | ) | 1,031 | — | 14,093 | |||||||||||
Income tax expense (benefit) | 6,357 | (786 | ) | — | — | 5,571 | |||||||||||
Equity in earnings of subsidiaries | 1,368 | — | — | (1,368 | ) | — | |||||||||||
Net income (loss) | 8,188 | 671 | 1,031 | (1,368 | ) | 8,522 | |||||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 14 | — | — | — | 14 | ||||||||||||
Comprehensive income (loss) | 8,202 | 671 | 1,031 | (1,368 | ) | 8,536 | |||||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (334 | ) | — | (334 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | 8,202 | $ | 671 | $ | 697 | $ | (1,368 | ) | $ | 8,202 | ||||||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2013 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 340,836 | $ | 52,262 | $ | 5,306 | $ | (8,295 | ) | $ | 390,109 | ||||||
Cost of revenue (exclusive of items shown separately below) | 270,705 | 41,484 | 4,699 | (8,132 | ) | 308,756 | |||||||||||
Depreciation, depletion and amortization | 21,805 | 3,444 | — | — | 25,249 | ||||||||||||
Equipment and intangible asset impairment | — | 452 | — | — | 452 | ||||||||||||
Pension and profit sharing | 4,266 | 186 | — | — | 4,452 | ||||||||||||
Selling, administrative and general expenses | 32,336 | 4,837 | 214 | — | 37,387 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | 6 | (155 | ) | — | — | (149 | ) | ||||||||||
Operating income (loss) | 11,718 | 2,014 | 393 | (163 | ) | 13,962 | |||||||||||
Interest expense, net | (38,041 | ) | (99 | ) | (119 | ) | 163 | (38,096 | ) | ||||||||
Income (loss) before income taxes | (26,323 | ) | 1,915 | 274 | — | (24,134 | ) | ||||||||||
Income tax expense (benefit) | (3,313 | ) | (111 | ) | — | — | (3,424 | ) | |||||||||
Equity in earnings of subsidiaries | 1,391 | — | — | (1,391 | ) | — | |||||||||||
Net income (loss) | (21,619 | ) | 2,026 | 274 | (1,391 | ) | (20,710 | ) | |||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 99 | — | — | — | 99 | ||||||||||||
Comprehensive income (loss) | (21,520 | ) | 2,026 | 274 | (1,391 | ) | (20,611 | ) | |||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (909 | ) | — | (909 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | (21,520 | ) | $ | 2,026 | $ | (635 | ) | $ | (1,391 | ) | $ | (21,520 | ) | |||
Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2012 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Revenue | $ | 371,992 | $ | 48,699 | $ | 3,953 | $ | (6,121 | ) | $ | 418,523 | ||||||
Cost of revenue (exclusive of items shown separately below) | 293,823 | 39,498 | 1,328 | (5,904 | ) | 328,745 | |||||||||||
Depreciation, depletion and amortization | 21,421 | 3,702 | — | — | 25,123 | ||||||||||||
Equipment and intangible asset impairment | — | 300 | — | — | 300 | ||||||||||||
Pension and profit sharing | 4,250 | 184 | — | — | 4,434 | ||||||||||||
Selling, administrative and general expenses | 30,231 | 4,668 | 203 | — | 35,102 | ||||||||||||
(Gain) loss on disposals of property, equipment and software | (122 | ) | 94 | — | — | (28 | ) | ||||||||||
Operating income (loss) | 22,389 | 253 | 2,422 | (217 | ) | 24,847 | |||||||||||
Interest expense, net | (40,154 | ) | (143 | ) | (275 | ) | 217 | (40,355 | ) | ||||||||
Income (loss) before income taxes | (17,765 | ) | 110 | 2,147 | — | (15,508 | ) | ||||||||||
Income tax expense (benefit) | (4,455 | ) | (1,461 | ) | — | — | (5,916 | ) | |||||||||
Equity in earnings of subsidiaries | 3,079 | — | — | (3,079 | ) | — | |||||||||||
Net income (loss) | (10,231 | ) | 1,571 | 2,147 | (3,079 | ) | (9,592 | ) | |||||||||
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 91 | — | — | — | 91 | ||||||||||||
Comprehensive income (loss) | (10,140 | ) | 1,571 | 2,147 | (3,079 | ) | (9,501 | ) | |||||||||
Less: comprehensive income attributable to noncontrolling interest | — | — | (639 | ) | — | (639 | ) | ||||||||||
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | $ | (10,140 | ) | $ | 1,571 | $ | 1,508 | $ | (3,079 | ) | $ | (10,140 | ) | ||||
Schedule of condensed consolidating statements of cash flows | Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2013 | ||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Cash flows from operating activities | $ | (36,950 | ) | $ | 2,213 | $ | 3,540 | $ | (3,000 | ) | $ | (34,197 | ) | ||||
Cash flows from investing activities | |||||||||||||||||
Capital expenditures | (12,039 | ) | (2,228 | ) | — | — | (14,267 | ) | |||||||||
Proceeds from sale of property and equipment | 349 | 15 | — | — | 364 | ||||||||||||
Change in cash value of life insurance | 2,951 | — | — | — | 2,951 | ||||||||||||
Change in restricted cash | (165 | ) | — | (4,751 | ) | — | (4,916 | ) | |||||||||
Net cash used in investing activities | (8,904 | ) | (2,213 | ) | (4,751 | ) | — | (15,868 | ) | ||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from revolving credit | 116,351 | — | — | — | 116,351 | ||||||||||||
Repayment of revolving credit | (68,012 | ) | — | — | — | (68,012 | ) | ||||||||||
Proceeds from issuance of long-term debt | 563 | — | — | — | 563 | ||||||||||||
Repayment of long-term debt | (975 | ) | — | (470 | ) | — | (1,445 | ) | |||||||||
Payments on capital leases | (2,075 | ) | — | — | — | (2,075 | ) | ||||||||||
Debt issuance costs | — | — | — | — | — | ||||||||||||
Dividends paid | — | — | (3,000 | ) | 3,000 | — | |||||||||||
Distribution to noncontrolling interest | — | — | (451 | ) | — | (451 | ) | ||||||||||
Net cash provided by (used in) financing activities | 45,852 | — | (3,921 | ) | 3,000 | 44,931 | |||||||||||
Net decrease in cash and cash equivalents | (2 | ) | — | (5,132 | ) | — | (5,134 | ) | |||||||||
Cash and cash equivalents | |||||||||||||||||
Beginning of period | 31 | 19 | 9,484 | — | 9,534 | ||||||||||||
End of period | $ | 29 | $ | 19 | $ | 4,352 | $ | — | $ | 4,400 | |||||||
Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2012 | |||||||||||||||||
(In thousands) | New Enterprise | Guarantor | Non | Eliminations | Total | ||||||||||||
Stone & Lime | Subsidiaries | Guarantors | |||||||||||||||
Co., Inc. | |||||||||||||||||
Cash flows from operating activities | $ | (46,689 | ) | $ | 2,287 | $ | 1,098 | $ | — | $ | (43,304 | ) | |||||
Cash flows from investing activities | |||||||||||||||||
Capital expenditures | (22,670 | ) | (2,739 | ) | — | — | (25,409 | ) | |||||||||
Proceeds from sale of property and equipment | 153 | — | — | — | 153 | ||||||||||||
Change in cash value of life insurance | (3,006 | ) | — | — | — | (3,006 | ) | ||||||||||
Change in restricted cash | (173 | ) | (4 | ) | (1 | ) | — | (178 | ) | ||||||||
Net cash used in investing activities | (25,696 | ) | (2,743 | ) | (1 | ) | — | (28,440 | ) | ||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from revolving credit | 187,725 | — | — | — | 187,725 | ||||||||||||
Repayment of revolving credit | (221,361 | ) | — | — | — | (221,361 | ) | ||||||||||
Proceeds from issuance of long-term debt | 268,688 | — | — | — | 268,688 | ||||||||||||
Repayment of long-term debt | (153,119 | ) | — | (172 | ) | — | (153,291 | ) | |||||||||
Payments on capital leases | (2,564 | ) | — | — | — | (2,564 | ) | ||||||||||
Debt issuance costs | (14,062 | ) | — | — | — | (14,062 | ) | ||||||||||
Distribution to noncontrolling interest | — | — | (438 | ) | — | (438 | ) | ||||||||||
Net cash provided by (used in) financing activities | 65,307 | — | (610 | ) | — | 64,697 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (7,078 | ) | (456 | ) | 487 | — | (7,047 | ) | |||||||||
Cash and cash equivalents | |||||||||||||||||
Beginning of period | 7,106 | 476 | 7,450 | — | 15,032 | ||||||||||||
End of period | $ | 28 | $ | 20 | $ | 7,937 | $ | — | $ | 7,985 |
Nature_of_Operations_and_Summa3
Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
Operating income | $27,497 | $31,628 | $13,962 | $24,847 |
Net income (loss) | 8,527 | 8,522 | -20,710 | -9,592 |
Net out of period adjustment related to loss for construction in progress written off, inventory and other | Restatement adjustment | ||||
Operating income | 1,200 | -100 | ||
Number of out of period adjustments | 2 | |||
Net income (loss) | 1,100 | |||
Net out of period adjustment related to loss for construction in progress written off and inventory | Restatement adjustment | ||||
Operating income | 700 | |||
Out of period adjustment related to loss for construction in progress written off | Restatement adjustment | ||||
Operating income | 1,000 | |||
Out of period adjustment related to inventory | Restatement adjustment | ||||
Operating income | $2,300 |
Nature_of_Operations_and_Summa4
Nature of Operations and Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | |
item | |||||
Nature of Operations and Summary of Significant Accounting Policies | |||||
Number of Operating segments | 3 | ||||
Cash and Cash Equivalents and Restricted Cash | |||||
Bank overdraft balance | $1,200,000 | $1,200,000 | |||
Trade Accounts Receivable | |||||
Costs and estimated earnings in excess of billings | 24,281,000 | 24,281,000 | 4,265,000 | ||
Trade | 129,406,000 | 129,406,000 | 48,392,000 | ||
Retainages | 3,891,000 | 3,891,000 | 3,129,000 | ||
Accounts receivable, gross | 157,578,000 | 157,578,000 | 55,786,000 | ||
Allowance for doubtful accounts | -4,338,000 | -4,338,000 | -3,515,000 | ||
Accounts receivable, net | 153,240,000 | 153,240,000 | 52,271,000 | ||
Inventories | |||||
Crushed stone, agricultural lime and sand | 81,110,000 | 81,110,000 | 76,927,000 | ||
Safety equipment | 14,917,000 | 14,917,000 | 16,057,000 | ||
Parts, tires and supplies | 11,920,000 | 11,920,000 | 11,331,000 | ||
Raw materials | 10,370,000 | 10,370,000 | 9,247,000 | ||
Concrete blocks | 3,507,000 | 3,507,000 | 4,210,000 | ||
Building materials | 3,971,000 | 3,971,000 | 3,921,000 | ||
Other | 2,865,000 | 2,865,000 | 3,451,000 | ||
Total Inventory | 128,660,000 | 128,660,000 | 125,144,000 | ||
Property, Plant and Equipment | |||||
Property, plant and equipment | 886,171,000 | 886,171,000 | 876,346,000 | ||
Less: Accumulated depreciation and depletion | -524,181,000 | -524,181,000 | -504,478,000 | ||
Property, plant and equipment, net | 361,990,000 | 361,990,000 | 371,868,000 | ||
Depreciation expense | 11,900,000 | 12,100,000 | 23,000,000 | 22,900,000 | |
Asset impairment charges | 452,000 | 300,000 | 452,000 | 300,000 | |
Traffic safety services and equipment | |||||
Property, Plant and Equipment | |||||
Asset impairment charges | 500,000 | ||||
Limestone and sand acreage | |||||
Property, Plant and Equipment | |||||
Property, plant and equipment | 144,721,000 | 144,721,000 | 144,076,000 | ||
Land, buildings and building improvements | |||||
Property, Plant and Equipment | |||||
Property, plant and equipment | 100,512,000 | 100,512,000 | 100,074,000 | ||
Crushing, prestressing and manufacturing plants | |||||
Property, Plant and Equipment | |||||
Property, plant and equipment | 330,899,000 | 330,899,000 | 326,066,000 | ||
Contracting equipment, vehicles and other | |||||
Property, Plant and Equipment | |||||
Property, plant and equipment | 306,664,000 | 306,664,000 | 300,450,000 | ||
Construction in progress | |||||
Property, Plant and Equipment | |||||
Property, plant and equipment | $3,375,000 | $3,375,000 | $5,680,000 |
Nature_of_Operations_and_Summa5
Nature of Operations and Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | |
Nature of Operations and Summary of Significant Accounting Policies | |||||
Changes in carrying value of goodwill | $0 | ||||
Adjustment to the carrying values of goodwill | 0 | ||||
Other Intangible Assets | |||||
Amortization of intangible assets | 300,000 | 100,000 | 500,000 | 300,000 | |
Other Assets | |||||
Deferred financing fees | 12,073,000 | 14,523,000 | 12,073,000 | ||
Current portion of deferred financing fees | 3,522,000 | 3,658,000 | 3,522,000 | ||
Capitalized software | 8,607,000 | 9,211,000 | 8,607,000 | ||
Accumulated amortization of capitalized software | 1,684,000 | 1,080,000 | 1,684,000 | ||
Cash surrender value of life insurance | 1,387,000 | 4,338,000 | 1,387,000 | ||
Loans on life insurance policy | 3,204,000 | 0 | 3,204,000 | ||
Deferred stripping costs | 3,876,000 | 3,868,000 | 3,876,000 | ||
Other | 4,019,000 | 2,512,000 | 4,019,000 | ||
Total other assets | $29,962,000 | $34,452,000 | $29,962,000 | ||
Technology | |||||
Other Intangible Assets | |||||
Amortization period | 15 years | ||||
Customer relationships | |||||
Other Intangible Assets | |||||
Amortization period | 20 years | ||||
Trademarks | Beginning in fiscal year 2014 | Minimum | |||||
Other Intangible Assets | |||||
Amortization period | 30 years | ||||
Trademarks | Beginning in fiscal year 2014 | Maximum | |||||
Other Intangible Assets | |||||
Amortization period | 50 years |
Risks_and_Uncertainties_Detail
Risks and Uncertainties (Details) (USD $) | 6 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2010 | Aug. 31, 2013 |
Minimum | Notes | Notes | Secured Notes | |
Risks and Uncertainties | ||||
Period for which sufficient financial resources are available to fund business and operations | 12 months | |||
Face amount of debt | $250 | $250 | $265 | |
Amount outstanding | $289.40 | |||
Interest rate (as a percent) | 11.00% | 13.00% | ||
Penalty interest (as a percent) | 0.25% | |||
Initial period of default resulting in increase in interest rate | 90 days | |||
Subsequent period of default resulting in additional increase in interest rate | 90 days | |||
Maximum additional interest rate in case of failure to consummate exchange offer (as a percent) | 1.00% |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities | ||
Insurance | $24,723 | $19,715 |
Interest | 21,384 | 18,962 |
Payroll and vacation | 10,340 | 8,281 |
Other | 2,028 | 3,671 |
Withholding taxes | 2,357 | 1,640 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 5,582 | 1,529 |
Contract expenses | 676 | 209 |
Total accrued liabilities | $67,090 | $54,007 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 |
Long-Term Debt | ||
Debt | $636,919,000 | $577,987,000 |
Less: Current portion | -9,794,000 | -11,342,000 |
Long-term debt | 627,125,000 | 566,645,000 |
ABL Facility | ||
Long-Term Debt | ||
Debt | 73,613,000 | 24,314,000 |
Available borrowing capacity | 56,100,000 | |
Secured Notes due 2018 | ||
Long-Term Debt | ||
Debt | 289,387,000 | 276,925,000 |
Notes due 2018 | ||
Long-Term Debt | ||
Debt | 250,000,000 | 250,000,000 |
Land, equipment and other obligations | ||
Long-Term Debt | ||
Debt | 17,163,000 | 19,005,000 |
Obligations under capital leases | ||
Long-Term Debt | ||
Debt | $6,756,000 | $7,743,000 |
LongTerm_Debt_Details_2
Long-Term Debt (Details 2) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 18 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||
Sep. 07, 2012 | Aug. 31, 2013 | Sep. 07, 2012 | Mar. 15, 2012 | Sep. 07, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | 29-May-13 | Aug. 31, 2013 | 29-May-14 | Aug. 31, 2013 | Sep. 07, 2012 | Aug. 31, 2013 | Sep. 07, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | 29-May-13 | Sep. 07, 2012 | Sep. 07, 2013 | 29-May-13 | Sep. 07, 2012 | 29-May-14 | Feb. 28, 2013 | Aug. 31, 2013 | Sep. 07, 2012 | Sep. 07, 2013 | 29-May-13 | 29-May-14 | Mar. 15, 2012 | Mar. 15, 2012 | |
ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | ABL Facility | Letter of credit sub-facility | Swing line sub-facility | |
Amendment 1 | Amendment 1 | Amendment 1 | Amendment 1 | Amendment 3 | Amendment 3 | Amendment 3 | Minimum | Minimum | Maximum | Maximum | Maximum | Maximum | Maximum | LIBOR | LIBOR | LIBOR | LIBOR | LIBOR | LIBOR | LIBOR | Base rate | Base rate | Base rate | Base rate | |||||||
1.00 to 1.00 or greater | Less than 1.00 to 1.00 | item | Amendment 1 | Amendment 1 | Amendment 1 | Amendment 1 | Amendment 3 | Amendment 3 | Amendment 3 | Amendment 3 | Minimum | Minimum | Amendment 3 | Amendment 3 | |||||||||||||||||
1.00 to 1.00 or greater | Less than 1.00 to 1.00 | Amendment 1 | Amendment 1 | ||||||||||||||||||||||||||||
Long-Term Debt | |||||||||||||||||||||||||||||||
Maximum borrowing capacity | $170,000,000 | $145,000,000 | $15,000,000 | $20,000,000 | |||||||||||||||||||||||||||
Variable interest rate basis | LIBOR | LIBOR | base rate | base Rate | |||||||||||||||||||||||||||
Margin added to variable interest rate basis (as a percent) | 2.75% | 5.00% | 0.75% | 3.00% | |||||||||||||||||||||||||||
Commitment fee (as a percent) | 0.50% | 0.25% | 0.63% | ||||||||||||||||||||||||||||
Required available borrowing capacity under credit facility | 25,000,000 | 0 | |||||||||||||||||||||||||||||
Available borrowing capacity as a percentage of the lesser of commitments and the borrowing base | 15.00% | ||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 1 | ||||||||||||||||||||||||||||||
Number of consecutive months used in calculating the fixed charge coverage ratio under credit facilities' covenants | 12 months | ||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 1 | 1 | 1 | ||||||||||||||||||||||||||||
Reduction in available borrowings, if fixed charge coverage ratio covenant ratio is not complied | 25,000,000 | ||||||||||||||||||||||||||||||
Base dollar amount used in determining the borrowing base | 65,000,000 | 65,000,000 | 56,000,000 | ||||||||||||||||||||||||||||
Percentage of appraised value of the eligible real property to determine borrowing base | 75.00% | 65.00% | |||||||||||||||||||||||||||||
Percentage of outstanding balance of eligible accounts receivable to determine borrowing base | 85.00% | 70.00% | |||||||||||||||||||||||||||||
Percentage of eligible inventory to determine borrowing base | 60.00% | 40.00% | |||||||||||||||||||||||||||||
Interest rate, variable interest rate floor (as a percent) | 1.25% | 1.25% | |||||||||||||||||||||||||||||
Interest rate, variable interest rate floor removed due to amendment (as a percent) | 1.25% | ||||||||||||||||||||||||||||||
M&T participation amount | 75,000,000 | ||||||||||||||||||||||||||||||
Excess availability threshold amount waived under the credit facility | 25,000,000 | ||||||||||||||||||||||||||||||
Maximum borrowing capacity before amendment | 170,000,000 | ||||||||||||||||||||||||||||||
Reduction in facility as a result of disposition of collateral and unencumbered assets | 1 | ||||||||||||||||||||||||||||||
Amount of disposition of collateral and unencumbered assets | 1 | ||||||||||||||||||||||||||||||
Threshold for reduction in facility as a result of disposition of collateral and unencumbered assets | 15,000,000 | ||||||||||||||||||||||||||||||
Borrowing base | 145,000,000 | ||||||||||||||||||||||||||||||
Number of non-employee directors in special committee | 4 | ||||||||||||||||||||||||||||||
Maximum borrowing capacity that cannot be reduced by M&T without the company's consent | 170,000,000 | ||||||||||||||||||||||||||||||
Springing fixed charge coverage ratio covenant that cannot be increased by M&T without the company's consent | 1 | ||||||||||||||||||||||||||||||
Maximum cushion from management projections with the addition of senior or total debt to EBITDA covenant (as a percent) | 20.00% | ||||||||||||||||||||||||||||||
Maximum cushion from management projections with the addition of net worth covenant (as a percent) | 20.00% | ||||||||||||||||||||||||||||||
Maximum amount of additional permitted indebtedness and related permitted liens that cannot be restricted by M&T without the company's consent | 35,000,000 | ||||||||||||||||||||||||||||||
Advance rate for eligible inventory that cannot be reduced by M&T without the company's consent (as a percent) | 0.6 | 0.4 | |||||||||||||||||||||||||||||
Advance rate for eligible accounts that cannot be reduced by M&T without the Company's consent (as a percent) | 0.85 | 0.7 | |||||||||||||||||||||||||||||
Advance rate for eligible real property that cannot be reduced by M&T without the company's consent (as a percent) | 0.75 | 0.75 | |||||||||||||||||||||||||||||
Advance rate for eligible real property that cannot be reduced by M&T without the company's consent | 65,000,000 | 56,000,000 | |||||||||||||||||||||||||||||
Payment of fees to effect the third amendment | 300,000 | ||||||||||||||||||||||||||||||
Unamortized deferred debt issuance costs expensed to interest expense | $700,000 | ||||||||||||||||||||||||||||||
Weighted average interest rate (as a percent) | 6.25% | ||||||||||||||||||||||||||||||
Effective interest rate (as a percent) | 6.00% |
LongTerm_Debt_Details_3
Long-Term Debt (Details 3) (Secured Notes due 2018, USD $) | 0 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Mar. 04, 2013 | Aug. 31, 2013 |
item | ||
Long-Term Debt | ||
Stated interest rate (as a percent) | 13.00% | |
Cash Interest Portion (as a percent) | 5.00% | 4.00% |
PIK Interest Portion or PIK Interest (as a percent) | 8.00% | 9.00% |
Accrued cash interest | $14.90 | |
Accrued PIK interest | 23.6 | 35 |
PIK interest recorded as an increase to Secured Notes | 24.4 | |
PIK interest recorded as a long-term obligation in other liabilities | 10.6 | |
Interest Rate Increase (as a percent) | 1.00% | |
Interest form election period | 12 months | 12 months |
PIK Interest rate prior to interest form election period (as a percent) | 1.00% | |
Decrease in interest rates as a result of 12-Month Cash Election (as a percent) | 1.00% | |
Number of consecutive annual periods beginning March 15, 2013 | 3 | |
Increase in penalty interest (as a percent) | 0.25% | |
Period for which penalty interest will consecutively increase | 1 year | |
Maximum additional interest rate in case of failure to consummate exchange offer (as a percent) | 1.00% | |
Payment of penalty interest | $0.50 | |
Penalty interest (as a percent) | 0.25% | |
Prior to March 15, 2015 | ||
Long-Term Debt | ||
Redemption price as a percentage of principal amount, if using proceeds of equity offerings | 113.00% | |
Redemption price of debt instrument as a percentage of principal amount | 100.00% | |
Twelve-month period beginning March 15, 2015 | ||
Long-Term Debt | ||
Redemption price of debt instrument as a percentage of principal amount | 106.50% | |
Twelve-month period beginning March 15, 2016 | ||
Long-Term Debt | ||
Redemption price of debt instrument as a percentage of principal amount | 103.25% | |
Twelve-month period beginning March 15, 2017 and thereafter | ||
Long-Term Debt | ||
Redemption price of debt instrument as a percentage of principal amount | 100.00% | |
Maximum | Prior to March 15, 2015 | ||
Long-Term Debt | ||
Percentage of the principal amount that may be redeemed with proceeds from public equity offerings | 35.00% |
LongTerm_Debt_Details_4
Long-Term Debt (Details 4) (Notes due 2018, USD $) | Aug. 31, 2013 | Aug. 31, 2010 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
In Millions, unless otherwise specified | Prior to September 1, 2014 | Twelve-month period beginning September 1, 2014 | Twelve-month period beginning September 1, 2015 | Twelve-month period beginning September 1, 2016 and thereafter | Prior to September 1, 2013 | Maximum | ||
Prior to September 1, 2013 | ||||||||
Long-Term Debt | ||||||||
Face amount of debt | $250 | $250 | ||||||
Redemption price of debt instrument as a percentage of principal amount | 100.00% | 105.50% | 102.75% | 100.00% | ||||
Percentage of the principal amount that may be redeemed with proceeds from public equity offerings | 35.00% | |||||||
Redemption price as a percentage of principal amount, if using proceeds of equity offerings | 111.00% | |||||||
Redemption price as a percentage of principal amount, as a result of change of control | 101.00% |
LongTerm_Debt_Details_5
Long-Term Debt (Details 5) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
In Millions, unless otherwise specified | Land, equipment and other obligations | Land, equipment and other obligations | Land, equipment and other obligations | Land, equipment and other obligations | Land, equipment and other obligations | Land, equipment and other obligations | |
item | Minimum | Minimum | Maximum | Maximum | |||
Long-Term Debt | |||||||
Interest rate (as a percent) | 10.00% | ||||||
Number of revenue bonds | 4 | ||||||
Transferable letters of credit | $5 | $5.40 | |||||
Effective interest rate (as a percent) | 0.20% | 0.23% | 0.43% | 0.46% | |||
Cash overdraft liability | $1.20 | $1.20 | $2.20 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
Income Taxes | ||||
Effective income tax rate | 0.60% | 39.50% | 14.20% | 38.10% |
Tax expense (benefit) | $51 | $5,571 | ($3,424) | ($5,916) |
Retirement_and_Benefit_Program2
Retirement and Benefit Programs (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | |
item | ||||
Retirement and Benefit Programs | ||||
Number of defined benefit plans | 2 | |||
Net periodic benefit cost | ||||
Service cost | $85,000 | $68,000 | $171,000 | $135,000 |
Interest cost | 100,000 | 99,000 | 200,000 | 198,000 |
Expected return on plan assets | -145,000 | -146,000 | -288,000 | -293,000 |
Amortization of prior service cost | 17,000 | 15,000 | 33,000 | 30,000 |
Recognized net actuarial loss | 66,000 | 62,000 | 132,000 | 124,000 |
Total pension expense | 123,000 | 98,000 | 248,000 | 194,000 |
Employer contributions to defined benefit pension plans | 100,000 | |||
Expected additional contribution in the remainder of fiscal year 2014 | $200,000 | $200,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Rock Solid, USD $) | Aug. 31, 2013 | Feb. 28, 2013 |
In Millions, unless otherwise specified | ||
Rock Solid | ||
Commitments and Contingencies | ||
Amount of collateral recorded as a part of restricted cash | $13.60 | |
Reserves for retained losses | $13.90 | $10.80 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
item | ||||
Segment Reporting | ||||
Number of reportable segments | 3 | |||
Segment Reporting | ||||
Indirect selling, administrative and general costs | $17,974 | $17,420 | $37,387 | $35,102 |
Revenue | 242,365 | 260,542 | 390,109 | 418,523 |
Operating income | 27,497 | 31,628 | 13,962 | 24,847 |
Depreciation, depletion and amortization | 13,131 | 13,280 | 25,249 | 25,123 |
Construction materials | ||||
Segment Reporting | ||||
Indirect selling, administrative and general costs | 8,900 | 12,400 | ||
Revenue | 181,803 | 194,144 | 293,022 | 316,426 |
Operating income | 34,987 | 29,458 | 42,342 | 35,288 |
Depreciation, depletion and amortization | 8,966 | 7,585 | 17,055 | 15,301 |
Heavy/highway construction | ||||
Segment Reporting | ||||
Indirect selling, administrative and general costs | 600 | 1,800 | ||
Revenue | 95,944 | 108,963 | 144,360 | 162,946 |
Operating income | 6,065 | 5,422 | 3,542 | 1,939 |
Depreciation, depletion and amortization | 1,697 | 2,920 | 3,773 | 4,817 |
Traffic safety services and equipment | ||||
Segment Reporting | ||||
Indirect selling, administrative and general costs | 1,100 | 1,400 | ||
Revenue | 27,735 | 22,816 | 51,824 | 44,925 |
Operating income | 2,029 | -812 | 1,354 | -1,275 |
Depreciation, depletion and amortization | 1,846 | 1,722 | 3,360 | 3,414 |
Other revenues | ||||
Segment Reporting | ||||
Revenue | 3,428 | 7,150 | ||
Segment totals | ||||
Segment Reporting | ||||
Revenue | 305,482 | 329,351 | 489,206 | 531,447 |
Eliminations | ||||
Segment Reporting | ||||
Revenue | -63,117 | -68,809 | -99,097 | -112,924 |
Corporate and unallocated | ||||
Segment Reporting | ||||
Operating income | -15,584 | -2,440 | -33,276 | -11,105 |
Depreciation, depletion and amortization | $622 | $1,053 | $1,061 | $1,591 |
Condensed_Issuer_Guarantor_and2
Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details) | Aug. 31, 2013 |
Condensed Issuer, Guarantor and Non Guarantor Financial Information | |
Ownership interest in subsidiaries (as a percent) | 100.00% |
Condensed_Issuer_Guarantor_and3
Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 2) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Feb. 29, 2012 |
In Thousands, unless otherwise specified | ||||
Current assets | ||||
Cash and cash equivalents | $4,400 | $9,534 | $7,985 | $15,032 |
Restricted cash | 15,188 | 10,123 | ||
Accounts receivable | 153,240 | 52,271 | ||
Inventories | 128,660 | 125,144 | ||
Deferred income taxes | 13,880 | 12,386 | ||
Other current assets | 8,817 | 8,337 | ||
Total current assets | 324,185 | 217,795 | ||
Property, plant and equipment, net | 361,990 | 371,868 | ||
Goodwill | 89,073 | 89,073 | ||
Other intangible assets | 20,542 | 21,000 | ||
Other assets | 29,962 | 34,452 | ||
Total assets | 825,752 | 734,188 | ||
Current liabilities | ||||
Current maturities of long-term debt | 9,794 | 11,342 | ||
Accounts payable - trade | 62,442 | 20,608 | ||
Accrued liabilities | 67,090 | 54,007 | ||
Total current liabilities | 139,326 | 85,957 | ||
Long-term debt, less current maturities | 627,125 | 566,645 | ||
Deferred income taxes | 50,510 | 52,443 | ||
Other liabilities | 37,443 | 36,733 | ||
Total liabilities | 854,404 | 741,778 | ||
(Deficit) equity | ||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | -31,003 | -9,483 | ||
Noncontrolling interest | 2,351 | 1,893 | ||
Total deficit | -28,652 | -7,590 | ||
Total liabilities and deficit | 825,752 | 734,188 | ||
New Enterprise Stone & Lime Co., Inc. | ||||
Current assets | ||||
Cash and cash equivalents | 29 | 31 | 28 | 7,106 |
Restricted cash | 1,488 | 1,174 | ||
Accounts receivable | 135,846 | 39,128 | ||
Inventories | 113,486 | 109,032 | ||
Deferred income taxes | 12,916 | 11,425 | ||
Other current assets | 7,555 | 6,992 | ||
Total current assets | 271,320 | 167,782 | ||
Property, plant and equipment, net | 340,800 | 350,656 | ||
Goodwill | 83,228 | 83,228 | ||
Other intangible assets | 8,119 | 8,093 | ||
Investment in subsidiaries | 79,821 | 81,430 | ||
Intercompany receivables | 965 | 279 | ||
Other assets | 28,778 | 33,252 | ||
Total assets | 813,031 | 724,720 | ||
Current liabilities | ||||
Current maturities of long-term debt | 9,544 | 11,175 | ||
Accounts payable - trade | 56,442 | 18,343 | ||
Accrued liabilities | 49,631 | 37,640 | ||
Total current liabilities | 115,617 | 67,158 | ||
Intercompany payables | 21,314 | 19,984 | ||
Long-term debt, less current maturities | 620,961 | 559,915 | ||
Intercompany capital leases, less current installments | 7,272 | 7,589 | ||
Deferred income taxes | 42,097 | 43,834 | ||
Other liabilities | 36,773 | 35,723 | ||
Total liabilities | 844,034 | 734,203 | ||
(Deficit) equity | ||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | -31,003 | -9,483 | ||
Total deficit | -31,003 | -9,483 | ||
Total liabilities and deficit | 813,031 | 724,720 | ||
Guarantor Subsidiaries | ||||
Current assets | ||||
Cash and cash equivalents | 19 | 19 | 20 | 476 |
Restricted cash | 105 | 105 | ||
Accounts receivable | 17,934 | 13,129 | ||
Inventories | 15,174 | 16,112 | ||
Deferred income taxes | 964 | 961 | ||
Other current assets | 1,221 | 1,317 | ||
Total current assets | 35,417 | 31,643 | ||
Property, plant and equipment, net | 21,190 | 21,212 | ||
Goodwill | 5,845 | 5,845 | ||
Other intangible assets | 12,423 | 12,907 | ||
Intercompany receivables | 20,672 | 19,984 | ||
Other assets | 1,184 | 1,200 | ||
Total assets | 96,731 | 92,791 | ||
Current liabilities | ||||
Accounts payable - trade | 6,403 | 2,044 | ||
Accrued liabilities | 3,131 | 5,135 | ||
Total current liabilities | 9,534 | 7,179 | ||
Intercompany payables | 95 | |||
Deferred income taxes | 8,413 | 8,609 | ||
Other liabilities | 670 | 1,010 | ||
Total liabilities | 18,712 | 16,798 | ||
(Deficit) equity | ||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | 78,019 | 75,993 | ||
Total deficit | 78,019 | 75,993 | ||
Total liabilities and deficit | 96,731 | 92,791 | ||
Non Guarantors | ||||
Current assets | ||||
Cash and cash equivalents | 4,352 | 9,484 | 7,937 | 7,450 |
Restricted cash | 13,595 | 8,844 | ||
Accounts receivable | 14 | 14 | ||
Net investment in lease | 647 | 634 | ||
Other current assets | 41 | 28 | ||
Total current assets | 18,649 | 19,004 | ||
Property, plant and equipment, net | 7,272 | 7,589 | ||
Intercompany receivables | 51 | |||
Total assets | 25,972 | 26,593 | ||
Current liabilities | ||||
Current maturities of long-term debt | 897 | 801 | ||
Accounts payable - trade | 151 | 221 | ||
Accrued liabilities | 14,328 | 11,232 | ||
Total current liabilities | 15,376 | 12,254 | ||
Intercompany payables | 279 | 279 | ||
Long-term debt, less current maturities | 6,164 | 6,730 | ||
Total liabilities | 21,819 | 19,263 | ||
(Deficit) equity | ||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | 1,802 | 5,437 | ||
Noncontrolling interest | 2,351 | 1,893 | ||
Total deficit | 4,153 | 7,330 | ||
Total liabilities and deficit | 25,972 | 26,593 | ||
Eliminations | ||||
Current assets | ||||
Accounts receivable | -554 | |||
Net investment in lease | -647 | -634 | ||
Total current assets | -1,201 | -634 | ||
Property, plant and equipment, net | -7,272 | -7,589 | ||
Investment in subsidiaries | -79,821 | -81,430 | ||
Intercompany receivables | -21,688 | -20,263 | ||
Total assets | -109,982 | -109,916 | ||
Current liabilities | ||||
Current maturities of long-term debt | -647 | -634 | ||
Accounts payable - trade | -554 | |||
Total current liabilities | -1,201 | -634 | ||
Intercompany payables | -21,688 | -20,263 | ||
Intercompany capital leases, less current installments | -7,272 | -7,589 | ||
Total liabilities | -30,161 | -28,486 | ||
(Deficit) equity | ||||
New Enterprise Stone & Lime Co., Inc. (deficit) equity | -79,821 | -81,430 | ||
Total deficit | -79,821 | -81,430 | ||
Total liabilities and deficit | ($109,982) | ($109,916) |
Condensed_Issuer_Guarantor_and4
Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||||
Revenue | $242,365 | $260,542 | $390,109 | $418,523 |
Cost of revenue (exclusive of items shown separately below) | 181,038 | 195,314 | 308,756 | 328,745 |
Depreciation, depletion and amortization | 13,131 | 13,280 | 25,249 | 25,123 |
Equipment and intangible asset impairment | 452 | 300 | 452 | 300 |
Pension and profit sharing | 2,574 | 2,593 | 4,452 | 4,434 |
Selling, administrative and general expenses | 17,974 | 17,420 | 37,387 | 35,102 |
(Gain) loss on disposals of property, equipment and software | -301 | 7 | -149 | -28 |
Operating income | 27,497 | 31,628 | 13,962 | 24,847 |
Interest expense, net | -18,919 | -17,535 | -38,096 | -40,355 |
Income (loss) before income taxes | 8,578 | 14,093 | -24,134 | -15,508 |
Income tax expense (benefit) | 51 | 5,571 | -3,424 | -5,916 |
Net income (loss) | 8,527 | 8,522 | -20,710 | -9,592 |
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 30 | 14 | 99 | 91 |
Comprehensive income (loss) | 8,557 | 8,536 | -20,611 | -9,501 |
Less: Comprehensive income attributable to noncontrolling interest | -170 | -334 | -909 | -639 |
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | 8,387 | 8,202 | -21,520 | -10,140 |
New Enterprise Stone & Lime Co., Inc. | ||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||||
Revenue | 215,098 | 223,736 | 340,836 | 371,992 |
Cost of revenue (exclusive of items shown separately below) | 160,283 | 164,700 | 270,705 | 293,823 |
Depreciation, depletion and amortization | 11,241 | 11,460 | 21,805 | 21,421 |
Pension and profit sharing | 2,471 | 2,488 | 4,266 | 4,250 |
Selling, administrative and general expenses | 15,657 | 14,554 | 32,336 | 30,231 |
(Gain) loss on disposals of property, equipment and software | -132 | -87 | 6 | -122 |
Operating income | 25,578 | 30,621 | 11,718 | 22,389 |
Interest expense, net | -18,923 | -17,444 | -38,041 | -40,154 |
Income (loss) before income taxes | 6,655 | 13,177 | -26,323 | -17,765 |
Income tax expense (benefit) | 9 | 6,357 | -3,313 | -4,455 |
Equity in earnings of subsidiaries | 1,711 | 1,368 | 1,391 | 3,079 |
Net income (loss) | 8,357 | 8,188 | -21,619 | -10,231 |
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax | 30 | 14 | 99 | 91 |
Comprehensive income (loss) | 8,387 | 8,202 | -21,520 | -10,140 |
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | 8,387 | 8,202 | -21,520 | -10,140 |
Guarantor Subsidiaries | ||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||||
Revenue | 29,050 | 27,079 | 52,262 | 48,699 |
Cost of revenue (exclusive of items shown separately below) | 22,522 | 22,385 | 41,484 | 39,498 |
Depreciation, depletion and amortization | 1,890 | 1,820 | 3,444 | 3,702 |
Equipment and intangible asset impairment | 452 | 300 | 452 | 300 |
Pension and profit sharing | 103 | 105 | 186 | 184 |
Selling, administrative and general expenses | 1,833 | 2,419 | 4,837 | 4,668 |
(Gain) loss on disposals of property, equipment and software | -169 | 94 | -155 | 94 |
Operating income | 2,419 | -44 | 2,014 | 253 |
Interest expense, net | -38 | -71 | -99 | -143 |
Income (loss) before income taxes | 2,381 | -115 | 1,915 | 110 |
Income tax expense (benefit) | 42 | -786 | -111 | -1,461 |
Net income (loss) | 2,339 | 671 | 2,026 | 1,571 |
Comprehensive income (loss) | 2,339 | 671 | 2,026 | 1,571 |
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | 2,339 | 671 | 2,026 | 1,571 |
Non Guarantors | ||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||||
Revenue | 2,890 | 1,975 | 5,306 | 3,953 |
Cost of revenue (exclusive of items shown separately below) | 3,194 | 714 | 4,699 | 1,328 |
Selling, administrative and general expenses | 140 | 103 | 214 | 203 |
Operating income | -444 | 1,158 | 393 | 2,422 |
Interest expense, net | -14 | -127 | -119 | -275 |
Income (loss) before income taxes | -458 | 1,031 | 274 | 2,147 |
Net income (loss) | -458 | 1,031 | 274 | 2,147 |
Comprehensive income (loss) | -458 | 1,031 | 274 | 2,147 |
Less: Comprehensive income attributable to noncontrolling interest | -170 | -334 | -909 | -639 |
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | -628 | 697 | -635 | 1,508 |
Eliminations | ||||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||||
Revenue | -4,673 | 7,752 | -8,295 | -6,121 |
Cost of revenue (exclusive of items shown separately below) | -4,961 | 7,515 | -8,132 | -5,904 |
Selling, administrative and general expenses | 344 | 344 | ||
Operating income | -56 | -107 | -163 | -217 |
Interest expense, net | 56 | 107 | 163 | 217 |
Equity in earnings of subsidiaries | -1,711 | -1,368 | -1,391 | -3,079 |
Net income (loss) | -1,711 | -1,368 | -1,391 | -3,079 |
Comprehensive income (loss) | -1,711 | -1,368 | -1,391 | -3,079 |
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc. | ($1,711) | ($1,368) | ($1,391) | ($3,079) |
Condensed_Issuer_Guarantor_and5
Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 4) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 |
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||
Cash flows from operating activities | ($34,197) | ($43,304) |
Cash flows from investing activities | ||
Capital expenditures | -14,267 | -25,409 |
Proceeds from sale of property and equipment | 364 | 153 |
Change in cash value of life insurance | 2,951 | -3,006 |
Change in restricted cash | -4,916 | -178 |
Net cash used in investing activities | -15,868 | -28,440 |
Cash flows from financing activities | ||
Proceeds from revolving credit | 116,351 | 187,725 |
Repayment of revolving credit | -68,012 | -221,361 |
Proceeds from issuance of long-term debt | 563 | 268,688 |
Repayment of long-term debt | -1,445 | -153,291 |
Payments on capital leases | -2,075 | -2,564 |
Debt issuance costs | -14,062 | |
Distribution to noncontrolling interest | -451 | -438 |
Net cash provided by financing activities | 44,931 | 64,697 |
Net decrease in cash and cash equivalents | -5,134 | -7,047 |
Cash and cash equivalents | ||
Beginning of period | 9,534 | 15,032 |
End of period | 4,400 | 7,985 |
New Enterprise Stone & Lime Co., Inc. | ||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||
Cash flows from operating activities | -36,950 | -46,689 |
Cash flows from investing activities | ||
Capital expenditures | -12,039 | -22,670 |
Proceeds from sale of property and equipment | 349 | 153 |
Change in cash value of life insurance | 2,951 | -3,006 |
Change in restricted cash | -165 | -173 |
Net cash used in investing activities | -8,904 | -25,696 |
Cash flows from financing activities | ||
Proceeds from revolving credit | 116,351 | 187,725 |
Repayment of revolving credit | -68,012 | -221,361 |
Proceeds from issuance of long-term debt | 563 | 268,688 |
Repayment of long-term debt | -975 | -153,119 |
Payments on capital leases | -2,075 | -2,564 |
Debt issuance costs | -14,062 | |
Net cash provided by financing activities | 45,852 | 65,307 |
Net decrease in cash and cash equivalents | -2 | -7,078 |
Cash and cash equivalents | ||
Beginning of period | 31 | 7,106 |
End of period | 29 | 28 |
Guarantor Subsidiaries | ||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||
Cash flows from operating activities | 2,213 | 2,287 |
Cash flows from investing activities | ||
Capital expenditures | -2,228 | -2,739 |
Proceeds from sale of property and equipment | 15 | |
Change in restricted cash | -4 | |
Net cash used in investing activities | -2,213 | -2,743 |
Cash flows from financing activities | ||
Net decrease in cash and cash equivalents | -456 | |
Cash and cash equivalents | ||
Beginning of period | 19 | 476 |
End of period | 19 | 20 |
Non Guarantors | ||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||
Cash flows from operating activities | 3,540 | 1,098 |
Cash flows from investing activities | ||
Change in restricted cash | -4,751 | -1 |
Net cash used in investing activities | -4,751 | -1 |
Cash flows from financing activities | ||
Repayment of long-term debt | -470 | -172 |
Dividends paid | -3,000 | |
Distribution to noncontrolling interest | -451 | -438 |
Net cash provided by financing activities | -3,921 | -610 |
Net decrease in cash and cash equivalents | -5,132 | 487 |
Cash and cash equivalents | ||
Beginning of period | 9,484 | 7,450 |
End of period | 4,352 | 7,937 |
Eliminations | ||
Condensed Issuer, Guarantor and Non Guarantor Financial Information | ||
Cash flows from operating activities | -3,000 | |
Cash flows from financing activities | ||
Dividends paid | 3,000 | |
Net cash provided by financing activities | $3,000 |
Subsequent_Events_Details
Subsequent Events (Details) (Secured Notes) | 6 Months Ended |
Aug. 31, 2013 | |
Subsequent Events | |
Increase in penalty interest (as a percent) | 0.25% |
Maximum additional interest rate in case of failure to consummate exchange offer (as a percent) | 1.00% |
Subsequent events | |
Subsequent Events | |
Increase in penalty interest (as a percent) | 0.25% |
Maximum additional interest rate in case of failure to consummate exchange offer (as a percent) | 1.00% |