10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended November 30, 2013

OR

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

For the transition period from              to             .

Commission file number: 333-176538

NEW ENTERPRISE STONE & LIME CO., INC.

(Exact name of registrant as specified in its charter)

Delaware	23-1374051
(State or other jurisdiction of  incorporation or organization)	(I.R.S. Employer  Identification Number)
3912 Brumbaugh Road  P.O. Box 77  New Enterprise, PA	16664
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (814) 766-2211

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   ý  No   o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   ý  No   o

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

Large accelerated filero	Accelerated filero
Non-accelerated filerx	Smaller reporting companyo
(Do not check if a smaller reporting company)

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

As of January 13, 2014, the number of shares outstanding of the registrant’s Class A Voting Common Stock, $1.00 par value, was 500 shares and the number of shares outstanding of the registrant’s Class B Non-Voting Common Stock, $1.00 par value, was 273,285 shares.

New Enterprise Stone & Lime Co., Inc. and Subsidiaries

Table of Contents

Quarter Ended November 30, 2013

	Page(s)
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at November 30, 2013 and February 28, 2013	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended November 30, 2013 and 2012	4
Condensed Consolidated Statements of Cash Flows for the nine months ended November 30, 2013 and 2012	5
Consolidated Statements of Changes in Equity (Deficit)	6
Notes to Unaudited Condensed Consolidated Financial Statements	7-27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27-42
Item 3. Quantitative and Qualitative Disclosures About Market Risk	42
Item 4. Controls and Procedures	42-50
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3. Defaults Upon Senior Securities	51
Item 4. Mine Safety Disclosure	51
Item 5. Other Information	51
Item 6. Exhibits	52
Signature	53
Exhibit Index	54

2

ITEM 1. FINANCIAL STATEMENTS

New Enterprise Stone & Lime Co., Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)	November 30, 2013			February 28, 2013
Assets	(unaudited)			*
Current assets
Cash and cash equivalents	$	2,074		$	9,534
Restricted cash	15,058			10,123
Accounts receivable, less reserves of $4,290 and $3,515 respectively	133,866			52,271
Inventories	122,021			125,144
Deferred income taxes	14,028			12,386
Other current assets	8,451			8,337
Total current assets	295,498			217,795
Property, plant and equipment, net	352,408			371,868
Goodwill	89,073			89,073
Other intangible assets	20,312			21,000
Other assets	27,884			34,452
Total assets	$	785,175		$	734,188
Liabilities and Deficit
Current liabilities
Current maturities of long-term debt	$	11,401		$	11,342
Accounts payable — trade	47,858			20,608
Accrued liabilities	56,883			54,007
Total current liabilities	116,142			85,957
Long-term debt, less current maturities	621,473			566,645
Deferred income taxes	50,337			52,443
Other liabilities	32,510			36,733
Total liabilities	820,462			741,778
Commitments and contingencies (Note 7 and Note 2)	0			0
Deficit
Common stock, Class A, voting, $1 par value	1			1
Common stock, Class B, nonvoting, $1 par value	273			273
Accumulated deficit	(161,173		)	(134,297		)
Additional paid-in capital	126,962			126,962
Accumulated other comprehensive loss	(2,274		)	(2,422		)
Total New Enterprise Stone & Lime Co., Inc. deficit	(36,211		)	(9,483		)
Noncontrolling interest in consolidated subsidiaries	924			1,893
Total deficit	(35,287		)	(7,590		)
Total liabilities and deficit	$	785,175		$	734,188

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

* Data derived from audited consolidated balance sheet as of February 28, 2013.

3

New Enterprise Stone & Lime Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)

	Three Months Ended November 30,						Nine Months Ended November 30,
(In thousands)	2013			2012			2013			2012
Revenue
Construction materials	$	109,291		$	97,856		$	311,411		$	314,633
Heavy/highway construction	92,432			71,012			236,792			228,138
Traffic safety services and equipment	19,623			19,440			63,252			59,928
Other revenues	—			1,928			—			6,060
Total revenue	221,346			190,236			611,455			608,759
Cost of revenue (exclusive of items shown separately below)
Construction materials	75,267			74,222			215,322			221,008
Heavy/highway construction	85,725			64,269			220,621			211,395
Traffic safety services and equipment	14,434			15,476			48,239			46,848
Other expenses	—			840			—			4,301
Total cost of revenue	175,426			154,807			484,182			483,552
Depreciation, depletion and amortization	11,741			13,381			36,990			38,504
Equipment and intangible asset impairment	—			—			452			300
Pension and profit sharing	2,055			2,050			6,507			6,484
Selling, administrative and general expenses	18,945			18,107			56,332			53,209
(Gain) loss on disposals of property, equipment and software	(497		)	22			(646		)	(6		)
Operating income	13,676			1,869			27,638			26,716
Interest expense, net	(19,162		)	(17,626		)	(57,258		)	(57,981		)
Loss before income taxes	(5,486		)	(15,757		)	(29,620		)	(31,265		)
Income tax benefit	(401		)	(6,909		)	(3,825		)	(12,825		)
Net loss	(5,085		)	(8,848		)	(25,795		)	(18,440		)
Unrealized actuarial gains and amortization of prior service costs, net of income taxes	49			46			148			137
Comprehensive loss	(5,036		)	(8,802		)	(25,647		)	(18,303		)
Less: Comprehensive income attributable to noncontrolling interest	(172		)	(365		)	(1,081		)	(1,004		)
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	$	(5,208	)	$	(9,167	)	$	(26,728	)	$	(19,307	)

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

4

New Enterprise Stone & Lime Co., Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

	Nine Months Ended November 30,
(In thousands)	2013			2012
Reconciliation of net loss to net cash from operating activities
Net loss	$	(25,795	)	$	(18,440	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion and amortization	36,990			38,504
Equipment and intangible asset impairment	452			300
Gain on disposals of property, equipment and software	(646		)	(6		)
Non-cash payment-in-kind interest accretion	17,630			17,117
Amortization and write-off of debt issuance costs	3,703			9,145
Deferred income taxes	(3,749		)	(12,818		)
Bad debt expense	1,678			1,249
Changes in assets and liabilities:
Accounts receivable	(82,266		)	(34,687		)
Inventories	3,123			2,908
Other assets	169			(3,121		)
Accounts payable	27,251			827
Other liabilities	4,455			(9,211		)
Net cash used in operating activities	(17,005		)	(8,233		)
Cash flows from investing activities
Capital expenditures	(16,912		)	(31,910		)
Proceeds from sale of property and equipment	801			194
Change in cash value of life insurance	3,266			(3,013		)
Change in restricted cash	(4,935		)	(133		)
Net cash used in investing activities	(17,780		)	(34,862		)
Cash flows from financing activities
Proceeds from revolving credit	252,739			224,413
Repayment of revolving credit	(215,418		)	(283,361		)
Proceeds from issuance of long-term debt	563			268,513
Repayment of long-term debt	(5,236		)	(154,029		)
Payments on capital leases	(3,023		)	(3,846		)
Debt issuance costs	(250		)	(14,062		)
Distribution to noncontrolling interest	(2,050		)	(1,084		)
Net cash provided by financing activities	27,325			36,544
Net decrease in cash and cash equivalents	(7,460		)	(6,551		)
Cash and cash equivalents
Beginning of period	9,534			15,032
End of period	$	2,074		$	8,481

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

5

New Enterprise Stone & Lime Co., Inc. and Subsidiaries

Consolidated Statement of Changes in Equity (Deficit)

(In thousands)	Common Stock, Class A			Common Stock, Class B		Accumulated Deficit			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Total New Enterprise Stone & Lime Co., Inc. Equity (Deficit)			Noncontrolling Interest			Total (Deficit) Equity
Balance, February 29, 2012 *	21			251		(76,779		)	126,964			(2,181		)	48,276			1,592			49,868
Net loss	—			—		(57,518		)	—			—			(57,518		)	1,384			(56,134		)
Pension adjustment, net of tax of $104	—			—		—			—			(241		)	(241		)	—			(241		)
Exchange of Class A voting common stock for Class B non-voting common stock	(20		)	22		—			(2		)	—			—			—			—
Distribution to noncontrolling interest	—			—		—			—			—			—			(1,083		)	(1,083		)
Balance, February 28, 2013 *	1			273		(134,297		)	126,962			(2,422		)	(9,483		)	1,893			(7,590		)
Net loss	—			—		(26,876		)	—			—			(26,876		)	1,081			(25,795		)
Pension adjustment, net of tax of $99	—			—		—			—			148			148			—			148
Distribution to noncontrolling interest	—			—		—			—			—			—			(2,050		)	(2,050		)
Balance, November 30, 2013 (unaudited)	$	1		$	273	$	(161,173	)	$	126,962		$	(2,274	)	$	(36,211	)	$	924		$	(35,287	)

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

* Data derived from audited consolidated statements of changes in equity (deficit).

6

New Enterprise Stone and Lime Co. Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

For the Quarter Ended November 30, 2013

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. The condensed balance sheet data at February 28, 2013 and the consolidated statement of changes in equity (deficit) at February 28, 2013 and February 29, 2012, were derived from audited financial statements, but do not include all disclosures required by 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 loss and comprehensive loss to both New Enterprise Stone & Lime Co., Inc. and its noncontrolling interest holders. For the periods presented, the net 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.  The Company reclassified costs associated with certain non-core operations along with costs associated with shared equipment across regional operations from “Selling, administrative and general” to “Cost of revenue”.  Further the Company reclassified costs associated with managing the equipment between “Construction materials” and “Heavy/highway construction” within “Cost of revenue” in the prior year.  These reclassifications had no effect on the Company's Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc., Statement of cash flows, Operating income or the Balance sheet.

7

Restructuring

In conjunction with the third amendment of the Asset Based Loan ("ABL") Facility, the Company adopted a cost reduction and operational efficiency plan. During the first nine months of fiscal year 2014, we expensed approximately $4.0 million primarily attributable to severance and outside advisory services related to the implementation of the plan.

Out of Period Adjustments

For the nine months ended November 30, 2013, the Company recorded out of period pre-tax loss of approximately $0.1 million primarily related to an increase in cost of revenue of $1.1 million and offset by depreciation of $1.0 million.

Management does not believe these out of period errors are material to the unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended November 30, 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 November 30, 2013, the balance under our cash pooling arrangement was $5.8 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: 

	November 30,			February 28,
(In thousands)	2013			2013
Costs and estimated earnings in excess of billings	$	22,010		$	4,265
Trade	111,236			48,392
Retainages	4,910			3,129
	138,156			55,786
Allowance for doubtful accounts	(4,290		)	(3,515		)
Accounts receivable, net	$	133,866		$	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.

8

The Company’s total inventory consists of the following:

	November 30,		February 28,
(In thousands)	2013		2013
Crushed stone, agricultural lime, and sand	$	77,162	$	76,927
Safety equipment	12,921		16,057
Parts, tires, and supplies	11,702		11,331
Raw materials	10,211		9,247
Concrete blocks	3,369		4,210
Building materials	3,812		3,921
Other	2,844		3,451
	$	122,021	$	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:

	November 30,			February 28,
(In thousands)	2013			2013
Limestone and sand acreage	$	144,630		$	144,076
Land, buildings and building improvements	100,828			100,074
Crushing, prestressing, and manufacturing plants	332,343			326,066
Contracting equipment, vehicles and other	299,494			300,450
Construction in progress	1,779			5,680
Property, plant and equipment	879,074			876,346
Less: Accumulated depreciation and depletion	(526,666		)	(504,478		)
Property, plant and equipment, net	$	352,408		$	371,868

For three months ended November 30, 2013 and 2012 depreciation expense was $10.7 million and $12.5 million, respectively.  For the nine months ended November 30, 2013 and 2012, depreciation expense was $33.7 million and $35.4 million, respectively.

The Company recorded an asset impairment of $0.5 million related to equipment in the traffic safety services and equipment segment sold in August 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 nine months ended November 30, 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.

9

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 analysis 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.  As a result of the annual impairment review completed as of February 28, 2013, the Company concluded that an indefinite useful life was no longer supported for trademarks and they are now being amortized over 30 and 50 years.

For the three months ended November 30, 2013 and 2012, amortization of intangible assets was $0.2 million. For the nine months ended November 30, 2013 and 2012, amortization of intangible assets was $0.7 million and $0.5 million, respectively. For the nine months ended November 30, 2012, the Company recorded a $0.3 million impairment of its traffic safety services and equipment segments trademark due to changes in underlying assumptions.

Other Assets

The Company’s long term other assets consist of the following:

	November 30,		February 28,
(In thousands)	2013		2013
Deferred financing fees (less current portion of $3,658)	$	11,070	$	14,523
Capitalized software (net of accumulated amortization of $1,891 and $1,080, respectively)	8,363		9,211
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively)	1,072		4,338
Deferred stripping costs	3,876		3,868
Other	3,503		2,512
Total other assets	$	27,884	$	34,452

New Accounting Standards

Recently Adopted Accounting Standards

In February 2013, the FASB issued ASU No. 2013-2, 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. 2012-2, 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.

10

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.

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 credit facilities, to fund the business and operations for at least the next 12 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, 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 certain credit facilities and a cross default under its other indebtedness, including the Company’s $250 million11% senior notes due 2018 (the “Notes”) and the Company’s $265.0 million ($301.0 million outstanding as of November 30, 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 10. “Subsequent Events” for disclosure of recent changes to the Company's credit facilities.

The Company was required to register and exchange the Secured Notes by March 10, 2013 or be subject to penalty interest.  The Company completed the exchange offer for the Secured Notes on October 30, 2013. The Company incurred $0.8 million in penalty interest.

3.Accrued Liabilities

Accrued liabilities consisted of the following: 

	November 30,		February 28,
(In thousands)	2013		2013
Insurance	$	25,823	$	19,715
Interest	10,398		18,962
Payroll and vacation	9,530		8,281
Withholding taxes	1,744		1,640
Billings in excess of costs and estimated earnings on uncompleted contracts	6,255		1,529
Contract expenses	515		209
Other	2,618		3,671
Total accrued liabilities	$	56,883	$	54,007

11

4.Long-Term Debt

	November 30,			February 28,
(In thousands)	2013			2013
ABL Facility ($71.8 million available as of November 30, 2013)	$	57,973		$	24,314
Secured Notes due 2018	300,962			276,925
Notes due 2018	250,000			250,000
Land, equipment and other obligations	18,129			19,005
Obligations under capital leases	5,810			7,743
Total debt	632,874			577,987
Less: Current portion	(11,401		)	(11,342		)
Total long-term debt	$	621,473		$	566,645

Asset-Based Loan Facility

The following is a description our ABL Facility, including all amendments thereto, as of November 30, 2013.

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 was to 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 ("Secured Notes") on a first-priority basis, except for certain real property.

Amendment of ABL Facility

First Amendment

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 17, 2012, December 26, 2012 and February 22, 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.  We were subject to

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the adjusted borrowing base calculation as of February 28, 2013 and November 30, 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 Manufacturers and Traders Trust Company ("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 November 30, 2013, M&T had not syndicated the ABL Facility and had not modified the terms of the ABL Facility.  See the discussion below concerning the potential modifications by M&T. Refer to Note 10. "Subsequent Events" for additional information.

Second Amendment

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.

Third Amendment

On May 29, 2013, we entered into the third amendment to the ABL Facility.  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 5.00%; (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 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.  Refer to Note 10. "Subsequent Events" for additional information. 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.

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 nine months endedNovember 30, 2013.

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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 November 30, 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. Refer to Note 10. "Subsequent Events" for additional information.

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 1.00 to 1.00 for the immediately preceding four fiscal quarters or 12 consecutive months, as applicable.  As of November 30, 2013, the Company’s Fixed Charge Coverage Ratio was below 1.00 to 1.00. 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 1.00 to 1.00, the Company’s available borrowings under the ABL Facility will be reduced by $25.0 million. Refer to Note 10. "Subsequent Events" for additional information.

A fixed charge coverage 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 1.00 to 1.00, the borrowing base will be equal to the sum of (a) the lesser of (i) $56.0 million (from $65.0 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 1.00 to 1.00, if its minimum excess availability reaches $25.0 million (See amendment above).

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;

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• 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 November 30, 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. Refer to 10. "Subsequent Events" for additional information.

Interest Rate and Availability

As of November 30, 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 6.8% for the nine months ended November 30, 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. 

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

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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 November 30, 2013, PIK interest was $41.0 million ($36.0 million was recorded as an increase to the Secured Notes and $5.0 million was recorded as a long-term obligation in other liabilities).

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	106.50	%
2016	103.25	%
2017 and thereafter	100.00	%

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.

The Company was 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 the Company completes the exchange offer for the Secured Notes.  On June 13, 2013, the Company filed the Secured Notes Registration Statement and concluded the exchange offer on October 30, 2013.  For the nine months endedNovember 30, 2013 the Company incurred $0.8 million of penalty interest. 

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	105.50	%
2015	102.75	%
2016 and thereafter	100.00	%

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

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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.

The Company issued the 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 $4.6 million and $5.4 million as of November 30, 2013 and February 28, 2013, respectively.  The effective interest rate on these bonds ranged from 0.20% to 0.43% for nine months ended November 30, 2013 and 0.23% to 0.46% for the nine months ended November 30, 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 $5.8 million and $2.2 million, which is included within the current portion of long-term debt as of November 30, 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.

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, after giving effect to items specifically related to the interim periods.

The effective income tax rates for the three months ended November 30, 2013 and 2012 were 7.3% and 43.8%, respectively, resulting in tax benefit of $0.4 million and $6.9 million, respectively. The effective income tax rates for the nine months ended November 30, 2013 and 2012 were 12.9% and 41.0%, respectively, resulting in tax benefit of $3.8 million and $12.8 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.

Cash paid for income taxes were not material for the three and nine months ended November 30, 2013 and 2012, respectively, primarily as a result of net operating losses.

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 loss. 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.

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 nine months ended November 30, 2013 and 2012, was as follows:

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	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Net periodic benefit cost
Service cost	86			$	67		$	257		$	203
Interest cost	100			99			300			297
Expected return on plan assets	(143		)	(147		)	(431		)	(439		)
Amortization of prior service cost	17			15			50			45
Recognized net actuarial loss	66			62			198			186
Total pension expense	$	126		$	96		$	374		$	292

The Company made contributions to the defined benefit pension plans of approximately $0.2 million during the nine months ended November 30, 2013, and expects to make additional contributions of approximately $0.1 million in the remainder of fiscal year 2014.

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 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 November 30, 2013.  Reserves for retained losses within this captive, which are recorded in accrued liabilities in our condensed consolidated balance sheets, were approximately $14.8 million and $10.8 million as of November 30, 2013 and February 28, 2013, respectively.  Exposures for periods prior to the inception of the captive are covered by pre-existing insurance policies.

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 management's 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 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.

Operating income for the three months ended November 30, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $3.5 million and $1.3 million for construction materials and heavy/highway construction segments respectively. Operating profit for the nine months ended November 30, 2012, as

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reflected in the financial data below, included allocated indirect selling, administrative and general costs of $15.9 million and $3.2 million for construction materials and heavy/highway construction segments, respectively.

The following is a summary of certain financial data for the Company’s operating segments:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Revenue
Construction materials	$	166,235		$	142,106		$	459,257		$	463,452
Heavy/highway construction	92,433			71,969			236,793			234,915
Traffic safety services and equipment	23,108			21,104			74,932			69,219
Other revenues	—			6,735			—			13,885
Segment totals	281,776			241,914			770,982			781,471
Eliminations	(60,430		)	(51,678		)	(159,527		)	(172,712		)
Total net revenue	$	221,346		$	190,236		$	611,455		$	608,759
Operating income (loss)
Construction materials	$	23,883		$	9,573		$	66,227		$	44,861
Heavy/highway construction	4,317			563			7,859			4,661
Traffic safety services and equipment	1,986			875			3,339			(400		)
Corporate and unallocated	(16,510		)	(9,142		)	(49,787		)	(22,406		)
Total operating income	$	13,676		$	1,869		$	27,638		$	26,716

	Three Months Ended   November 30,				Nine Months Ended   November 30,
(In thousands)	2013		2012		2013		2012
Depreciation, depletion and amortization
Construction materials	$	8,107	$	5,831	$	25,162	$	21,132
Heavy/highway construction	2,088		4,037		5,861		8,854
Traffic safety services and equipment	1,304		2,128		4,664		5,542
Corporate and unallocated	242		1,385		1,303		2,976
Total depreciation, depletion and amortization	$	11,741	$	13,381	$	36,990	$	38,504

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.

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Condensed Consolidating Balance Sheet at November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	73		$	3	$	1,998		—			$	2,074
Restricted cash	1,357			106		13,595			—			15,058
Accounts receivable	117,451			16,402		1,856			(1,843		)	133,866
Inventories	109,045			12,976		—			—			122,021
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	13,064			964		—			—			14,028
Other current assets	7,463			948		40			—			8,451
Total current assets	248,453			31,399		18,136			(2,490		)	295,498
Property, plant and equipment, net	331,861			20,547		7,120			(7,120		)	352,408
Goodwill	83,228			5,845		—			—			89,073
Other intangible assets	8,077			12,235		—			—			20,312
Investment in subsidiaries	82,021			—		—			(82,021		)	—
Intercompany receivables	999			25,194		(34		)	(26,159		)	—
Other assets	26,734			1,150		—			—			27,884
	$	781,373		$	96,370	$	25,222		$	(117,790	)	$	785,175
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	11,152		$	—	$	896		$	(647	)	11,401
Accounts payable - trade	45,476			3,994		231			(1,843		)	47,858
Accrued liabilities	38,768			2,943		15,172			—			56,883
Total current liabilities	95,396			6,937		16,299			(2,490		)	116,142
Intercompany payables	25,785			95		279			(26,159		)	—
Long-term debt, less current maturities	615,512			—		5,961			—			621,473
Intercompany capital leases, less current installments	7,120			—		—			(7,120		)	—
Deferred income taxes	41,924			8,413		—			—			50,337
Other liabilities	31,847			663		—			—			32,510
Total liabilities	817,584			16,108		22,539			(35,769		)	820,462
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(36,211		)	80,262		1,759			(82,021		)	(36,211		)
Noncontrolling interest	—			—		924			—			924
Total (deficit) equity	(36,211		)	80,262		2,683			(82,021		)	(35,287		)
Total liabilities and deficit	$	781,373		$	96,370	$	25,222		$	(117,790	)	$	785,175

20

Condensed Consolidating Balance Sheet at February 28, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors		Eliminations			Total
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		)
Total liabilities and deficit	$	724,720		$	92,791	$	26,593	$	(109,916	)	$	734,188

21

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Revenue	$	198,687		$	25,950	$	1,819		$	(5,110	)	$	221,346
Cost of revenue (exclusive of items shown separately below)	158,526			20,353		1,465			(4,918		)	175,426
Depreciation, depletion and amortization	10,392			1,349		—			—			11,741
Equipment and intangible asset impairment	—			—		—			—			—
Pension and profit sharing	1,988			67		—			—			2,055
Selling, administrative and general expenses	16,925			1,940		80			—			18,945
(Gain) loss on disposals of property, equipment and software	(516		)	19		—			—			(497		)
Operating income (loss)	11,372			2,222		274			(192		)	13,676
Interest expense, net	(19,230		)	21		(145		)	192			(19,162		)
Income (loss) before income taxes	(7,858		)	2,243		129			—			(5,486		)
Income tax expense (benefit)	(401		)	—		—			—			(401		)
Equity in earnings of subsidiaries	2,200			—		—			(2,200		)	—
Net income (loss)	(5,257		)	2,243		129			(2,200		)	(5,085		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	49			—		—			—			49
Comprehensive income (loss)	(5,208		)	2,243		129			(2,200		)	(5,036		)
Less: comprehensive income attributable to noncontrolling interest	—			—		(172		)	—			(172		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(5,208	)	$	2,243	$	(43	)	$	(2,200	)	$	(5,208	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	168,021		$	22,644		$	1,974		$	(2,403	)	$	190,236
Cost of revenue (exclusive of items shown separately below)	138,912			17,383			807			(2,295		)	154,807
Depreciation, depletion and amortization	9,445			3,936			—			—			13,381
Equipment and intangible asset impairment	—			—			—			—			—
Pension and profit sharing	1,963			87			—			—			2,050
Selling, administrative and general expenses	15,884			2,128			95			—			18,107
(Gain) loss on disposals of property, equipment and software	15			7			—			—			22
Operating income (loss)	1,802			(897		)	1,072			(108		)	1,869
Interest expense, net	(17,597		)	(69		)	(68		)	108			(17,626		)
Income (loss) before income taxes	(15,795		)	(966		)	1,004			—			(15,757		)
Income tax expense (benefit)	(5,551		)	(1,358		)	—			—			(6,909		)
Equity in earnings of subsidiaries	1,031			—			—			(1,031		)	—
Net income (loss)	(9,213		)	392			1,004			(1,031		)	(8,848		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	46			—			—			—			46
Comprehensive income (loss)	(9,167		)	392			1,004			(1,031		)	(8,802		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(365		)	—			(365		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(9,167	)	$	392		$	639		$	(1,031	)	$	(9,167	)

22

Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	539,523		$	78,212		$	7,125		$	(13,405	)	$	611,455
Cost of revenue (exclusive of items shown separately below)	429,231			61,837			6,164			(13,050		)	484,182
Depreciation, depletion and amortization	32,197			4,793			—			—			36,990
Equipment and intangible asset impairment	—			452			—			—			452
Pension and profit sharing	6,254			253			—			—			6,507
Selling, administrative and general expenses	49,261			6,777			294			—			56,332
(Gain) loss on disposals of property, equipment and software	(510		)	(136		)	—			—			(646		)
Operating income (loss)	23,090			4,236			667			(355		)	27,638
Interest expense, net	(57,271		)	(78		)	(264		)	355			(57,258		)
Income (loss) before income taxes	(34,181		)	4,158			403			—			(29,620		)
Income tax expense (benefit)	(3,714		)	(111		)	—			—			(3,825		)
Equity in earnings of subsidiaries	3,591			—			—			(3,591		)	—
Net income (loss)	(26,876		)	4,269			403			(3,591		)	(25,795		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	148			—			—			—			148
Comprehensive income (loss)	(26,728		)	4,269			403			(3,591		)	(25,647		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(1,081		)	—			(1,081		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(26,728	)	$	4,269		$	(678	)	$	(3,591	)	$	(26,728	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	540,013		$	71,343		$	5,927		$	(8,524	)	$	608,759
Cost of revenue (exclusive of items shown separately below)	432,735			56,881			2,135			(8,199		)	483,552
Depreciation, depletion and amortization	30,866			7,638			—			—			38,504
Equipment and intangible asset impairment	—			300			—			—			300
Pension and profit sharing	6,213			271			—			—			6,484
Selling, administrative and general expenses	46,115			6,796			298			—			53,209
(Gain) loss on disposals of property, equipment and software	(107		)	101			—			—			(6		)
Operating income (loss)	24,191			(644		)	3,494			(325		)	26,716
Interest expense, net	(57,751		)	(212		)	(343		)	325			(57,981		)
Income (loss) before income taxes	(33,560		)	(856		)	3,151			—			(31,265		)
Income tax expense (benefit)	(10,006		)	(2,819		)	—			—			(12,825		)
Equity in earnings of subsidiaries	4,110			—			—			(4,110		)	—
Net income (loss)	(19,444		)	1,963			3,151			(4,110		)	(18,440		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	137			—			—			—			137
Comprehensive income (loss)	(19,307		)	1,963			3,151			(4,110		)	(18,303		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(1,004		)	—			(1,004		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(19,307	)	$	1,963		$	2,147		$	(4,110	)	$	(19,307	)

23

Condensed Consolidating Statement of Cash Flows for the nine months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Cash flows from operating activities	$	(19,836	)	$	2,842		$	2,989		$	(3,000	)	$	(17,005	)
Cash flows from investing activities
Capital expenditures	(14,040		)	(2,872		)	—			—			(16,912		)
Proceeds from sale of property and equipment	786			15			—			—			801
Change in cash value of life insurance	3,266			—			—			—			3,266
Change in restricted cash	(183		)	(1		)	(4,751		)	—			(4,935		)
Net cash used in investing activities	(10,171		)	(2,858		)	(4,751		)	—			(17,780		)
Cash flows from financing activities
Proceeds from revolving credit	252,739			—			—			—			252,739
Repayment of revolving credit	(215,418		)	—			—			—			(215,418		)
Proceeds from issuance of long-term debt	563			—			—			—			563
Repayment of long-term debt	(4,562		)	—			(674		)	—			(5,236		)
Payments on capital leases	(3,023		)	—			—			—			(3,023		)
Debt issuance costs	(250		)	—			—			—			(250		)
Dividends paid	—			—			(3,000		)	3,000			—
Distribution to noncontrolling interest	—			—			(2,050		)	—			(2,050		)
Net cash provided by (used in) financing activities	30,049			—			(5,724		)	3,000			27,325
Net increase (decrease) in cash and cash equivalents	42			(16		)	(7,486		)	—			(7,460		)
Cash and cash equivalents
Beginning of period	31			19			9,484			—			9,534
End of period	$	73		$	3		$	1,998		$	—		$	2,074

24

Condensed Consolidating Statement of Cash Flows for the nine months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(13,020	)	$	2,325		$	2,462		—		$	(8,233	)
Cash flows from investing activities
Capital expenditures	(29,133		)	(2,777		)	—			—		(31,910		)
Proceeds from sale of property and equipment	194			—			—			—		194
Change in cash value of life insurance	(3,013		)	—			—			—		(3,013		)
Change in restricted cash	(127		)	(4		)	(2		)	—		(133		)
Net cash used in investing activities	(32,079		)	(2,781		)	(2		)	—		(34,862		)
Cash flows from financing activities
Proceeds from revolving credit	224,413			—			—			—		224,413
Repayment of revolving credit	(283,361		)	—			—			—		(283,361		)
Proceeds from issuance of long-term debt	268,513			—			—			—		268,513
Repayment of long-term debt	(153,639		)	—			(390		)	—		(154,029		)
Payments on capital leases	(3,846		)	—			—			—		(3,846		)
Debt issuance costs	(14,062		)	—			—			—		(14,062		)
Distribution to noncontrolling interest	—			—			(1,084		)	—		(1,084		)
Net cash provided by (used in) financing activities	38,018			—			(1,474		)	—		36,544
Net (decrease) increase in cash and cash equivalents	(7,081		)	(456		)	986			—		(6,551		)
Cash and cash equivalents
Beginning of period	7,106			476			7,450			—		15,032
End of period	$	25		$	20		$	8,436		$	—	$	8,481

10. Subsequent Events

On December 13, 2013, the Company entered into the fourth amendment to the ABL Facility, containing modifications which the Company negotiated with Fortress Credit Corp. (the “New Lender”). In connection with the fourth amendment, the New Lender agreed to an assignment of all of the outstanding loans and commitments under the ABL Facility by M&T to the New Lender.

The fourth amendment retains the overall $145.0 million amount of the ABL Facility by providing a term loan in the amount of $85.0 million, with a revolving credit commitment of $60.0 million. The Company had approximately $50.0 million outstanding under the ABL Facility immediately prior to the fourth amendment.

The combined term loan and revolving credit borrowings will continue to be subject to a borrowing base formula. The fourth amendment increases the advance rates that are applicable while the fixed charge coverage ratio is less than 1.00 to 1.00 as follows: (i) as to eligible accounts receivable, from 70% to 77.5%; and (ii) as to eligible inventory, from 40% to 50%. The advance rates as to eligible real estate remains the same. In addition, the fourth amendment retains the March 15, 2017 maturity date.

The fourth amendment extends the date after which the Company must comply with a fixed charge coverage ratio of 1.00 to 1.00 if it does not maintain minimum excess availability of $25.0 million by one year, until November 30, 2015.

The fourth amendment also terminates the fee letter and supplemental fee letter between M&T and the Company, which letters purported to give M&T the ability to modify the terms of the ABL Facility, subject to certain limitations. The fourth amendment further removes the obligation that the Company’s previously disclosed business plan focused on cost reductions and operational efficiencies must be reasonably acceptable in scope, timing and process to M&T.

25

Outstanding balances under the term loan and the revolving credit facility will bear interest at a rate per annum equal to, at the Company’s option, either (a) a base rate plus 5.0% or (b) a LIBOR rate (but not less than 1.25%) plus 7.00%. The unused portion of the revolving credit commitment will be subject to a commitment fee at a rate of 2.00% per annum.

Until M&T is replaced as the letter of credit issuing bank under the ABL Facility, the letter of credit sublimit under the ABL Facility is reduced from $15.0 million to $12.5 million, but the fourth amendment gives the Company the ability to obtain letters of credit from third parties to compensate for such reduction. To the extent that the Company posts cash collateral in order to procure the issuance of letters of credit (either under the ABL Facility or by third parties up to agreed limits), there will be an increase in the borrowing base equal to the amount by which such cash collateral exceeds the face amount of such letters of credit, not to exceed 3.00% of the face amount of such letters of credit. M&T is obligated to remain as Issuing Bank and Agent until March 31, 2014 unless a replacement issuing bank or successor agent, as applicable, has been appointed, and to provide cash management services to the Company until the six month anniversary of the fourth amendment effective date. The fourth amendment removes the swing line facility.

While the Company believes that the amended ABL Facility will allow it to meet its longer term liquidity requirements, it continues its previously announced efforts to refinance the ABL Facility in order to obtain increased liquidity at lower cost. There can be no assurances that the Company will be able to obtain such refinancing on favorable terms or at all. The Company will pay a 1.00% prepayment premium if it refinances the ABL Facility on or prior to January 31, 2014 (or on or prior to February 14, 2014 if the Company has posted a non-refundable deposit equal to such prepayment premium by January 31, 2014). The following premiums otherwise apply to prepayments of the term loan and reductions of the revolving commitments: (w) five percent (5.00%) on or prior to the first anniversary of the fourth amendment effective date, (x) three percent (3.00%) after the first anniversary of the fourth amendment effective date but on or prior to the second anniversary of the fourth amendment effective date, (y) one percent (1.00%) after the second anniversary of the fourth amendment effective date but on or prior to the third anniversary of the fourth amendment effective date and (z) zero percent (0%) after the third anniversary of the fourth amendment effective date.

In connection with certain mandatory prepayments of the term loan, there will be an increase to the revolving credit commitments in the amount of such prepayments to preserve availability under the ABL Facility.

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

We are a leading 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, we are one of the top 10 construction aggregates producers based on tonnage of crushed stone produced and one of the top 50 highway contractors based on revenues in the United States, according to industry surveys.

We operate in three segments based upon the nature of our products and services: construction materials, heavy/highway construction and traffic safety services and equipment. Our construction materials operations are comprised of aggregate production (crushed stone and construction sand and gravel), hot mix asphalt production, ready mixed concrete production and the production of concrete products, including precast/prestressed structural concrete components and masonry blocks. Another of our core businesses, heavy/highway construction, includes heavy construction, blacktop paving and other site preparation services. Our heavy/highway construction operations are primarily supplied with construction materials from our construction materials operation. Our third core business, traffic safety services and equipment, consists primarily of sales, leasing and servicing of general and specialty traffic control and work zone safety equipment and devices to industrial construction end-users.

Our core businesses operate primarily in Pennsylvania and western New York, except for our traffic safety services and equipment business, which maintains a national sales network for our traffic safety products and provides traffic maintenance and protection services primarily in the eastern United States.

Our revenue is derived from sales to customers that serve multiple end-use markets. Because of the diversity of construction materials and services that we offer, we are able to meet a wide range of customer requirements on a local scale.  We may not always know the end-use for our materials due to the diversity of our product offerings and the fact that our customers serve the various end-use markets, such as public or private sector. However, we believe based upon reasonable assumptions and knowledge of our customers and the possible end-use of particular materials and services, that in fiscal year 2013 approximately 55% to 60% of our revenue was derived from public sector end-use markets and 40% to 45% of our revenue was derived from private sector end-use markets, with approximately three-fourths of our private sector revenue being from non-residential construction.

The majority of our construction contracts are obtained through competitive bidding in response to advertisements and as a result of the letting schedule provided by PennDOT. Our bidding activity is affected by several factors including the nature and volume of available jobs on which to bid, contract backlog, available personnel, current utilization of equipment and other resources, and competitive considerations. Bidding activity, contract backlog and revenue resulting from the award of new contracts may vary significantly from period to period.

Our typical construction project begins with the preparation and submission of a bid to a customer. If selected as the successful bidder, we generally enter into a contract with the customer that provides for payment upon completion of specified work or units of work as identified in the contract. Our contracts frequently call for retainage (a specified percentage withheld from each payment) until the contract is completed and the work accepted by the customer.

Almost all of our products are produced and consumed outdoors. Our financial results for any quarter do not necessarily indicate the results expected for the year because seasonal changes and other weather-related conditions can affect the production and sales volumes of our products. Normally, the highest sales and earnings are in the second and third quarters and the lowest are in the first and fourth quarters. Our sales and earnings are sensitive to national, regional and local economic conditions and particularly to cyclical swings in construction spending, especially in the private sector. Our primary balance sheet accounts, such as accounts receivable and accounts payable, vary greatly during these peak periods, but return to historical levels as our operating cycle is completed each fiscal year. Thus, the results from operating for the nine months ended November 30, 2013 are not indicative of full year results.

Demand for our products is primarily dependent on the overall health of the economy, and federal, state and local public funding levels. The primary end uses for our products include infrastructure projects such as highways, bridges, and other public institutions, as well as private residential and non-residential construction. A stagnant or declining economy will generally result in reduced demand for construction and construction materials in the private sector. This reduced demand increases competition for private sector projects and will ultimately increase competition in the public sector as companies migrate from bidding on scarce private sector work to projects in the public sector. Greater competition can reduce our

27

revenues and/or have a downward impact on our gross profit margins. In addition, a stagnant or declining economy tends to produce less tax revenue for public agencies, thereby decreasing a source of funds available for spending on public infrastructure improvements. Some funding sources that have been specifically earmarked for infrastructure spending, such as diesel and gasoline taxes, are not as directly affected by a stagnant or declining economy, unless actual consumption is reduced. While some states and localities may seek to redirect funds related to diesel and gasoline taxes in an effort to balance their budgets, the Commonwealth of Pennsylvania currently does not allow for such activities. Funds earmarked for infrastructure purposes in the Commonwealth of Pennsylvania are constitutionally required to be used for that purpose.

We are encouraged by the new $2.3 billion Transportation Bill adopted by the Commonwealth of Pennsylvania (the "Transportation Bill"), but to date we have not experienced the impact of this momentous legislation. Market conditions remained challenging through the first nine months of fiscal year 2014 although improved weather conditions in the third quarter helped boost revenue. We also experienced a one-time unanticipated increase in activity during the third quarter, however it is too early to determine if a positive trend has emerged. Competition remains strong as a result of the weak public and private sector demand, with residential and commercial contractors bidding aggressively on projects, which continues to affect our profitability.

As our operating season is effectively complete, we look to diligently control costs through the winter months and continue to enhance our cost savings and operational efficiency plan. We are also continuing to focus on remediating the material weaknesses in our internal controls and implementing the ERP at the remaining locations of the Company. We believe that the combination of a single ERP platform with strong internal controls will enhance our financial as well as management reporting which will in turn provide us more reliable and timely information to run the business.

Cost Savings and Operational Efficiency Plan

During the second quarter of fiscal year 2014, we initiated a cost savings and operational efficiency plan (the “Plan”).  The Plan has focused on head-count reductions, operational efficiencies, and administrative savings.  Under the Plan, we realigned our current divisional structure by combining Eastern Industries, Inc. ("Eastern"), and Martin Limestone, Inc. ("Martin"), into a new East division and, NESL operating business and Valley Quarries, Inc. ("Valley") into a new West division.  This has resulted in modification of the senior level organizational structure which we anticipate will reduce costs and streamline responsibilities and decision making.

While we have decided to realign divisions for management purposes, we will continue to market and sell under the various brands that we have today, including ASTI Transportation Systems Inc., Buffalo Crushed Stone Inc., Eastern, Martin, NESL Operations, Precision Solar Controls Inc. ("PSC"), Protection Services Inc. ("PSI"), Valley, Newcrete Products and Work Area Protection Corp. ("WAPCO").  We believe that these brands are known in the market and have reputations which we value and will keep.

We believe the Plan and activities to date will reduce pre-tax operating costs by at least $30 million annually commencing in fiscal year 2015 and will be composed of head-count, operational consolidation, administrative and benefit structure savings.  We are currently working to identifying additional savings associated with the Plan.  We believe the restructuring associated with the activities to date is expected to result in one-time pre-tax charges of approximately $5.0 to $6.0 million, comprised of approximately $2.0 to $2.5 million for severance and related benefit costs and $3.0 to $3.5 million in other cash charges. The foregoing savings do not include potential asset sales, although we are continuing to evaluate the sale of non-core assets as part of enhancing overall liquidity. During the first nine months we expensed approximately $4.0 million primarily attributable to severance and outside advisory services related to the implementation of the plan.

Transportation Bill 

On November 25, 2013, Governor Tom Corbett signed into law the Transportation Bill, which we believe is the most significant transportation funding package the Commonwealth of Pennsylvania has enacted in recent times. 

    In summary, the Transportation Bill represents a five-year, additional $2.3 billion funding plan which directs money in the following many ways. The $2.3 billion in additional revenues will be generated from increases to user fees which include fuel taxes, registration and licensing fees, and various traffic violation fines, surcharges and permits. We have not experienced any incremental revenue associated with the Transportation Bill in the nine months ended November 30, 2013.

While we have just begun the process of analyzing how the new law will impact the highway construction industry for years to come, much of the decisions regarding future letting schedules and specific project selections have yet to be

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determined and finalized by PennDOT.  Because the revenues increase over the course of the next five years, we expect this to be an ongoing process as PennDOT evaluates what additional projects they can move to construction. PennDOT’s anticipated 2014 letting forecast of $1.5 billion will increase to approximately $2.0 billion as a result of the Transportation Bill.  PennDOT plans to direct the additional $500.0 million in lettings in 2014.  Under the new law, PennDOT is granted $500.0 million in additional bonding authority to allow it to expedite projects while additional revenues flow to the Commonwealth.  PennDOT has not announced its plans or schedule of how it will use such bonding authority to advance construction projects.

Executive Summary

The following is an income statement summary for the three months ended November 30, 2013 as compared to the three months ended November 30, 2012 and a cash flow summary for the nine months ended November 30, 2013 as compared to the nine months ended November 30, 2012.

• Net revenue increased$31.1 million (16.4%);

• Operating income increased$11.8 million (621.1%);

• Net interest expense increased$1.6 million (9.1%);

• Net cash used in operating activities increased$8.8 million; and

• Cash used in investing activities decreased$17.1 million.

RESULTS OF OPERATIONS

The following table summarizes our operating results on a consolidated basis:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Net revenue	$	221,346		$	190,236		$	611,455		$	608,759
Cost of revenue (exclusive of items shown separately below)	175,426			154,807			484,182			483,552
Depreciation, depletion and amortization	11,741			13,381			36,990			38,504
Equipment and intangible asset impairment	—			—			452			300
Pension and profit sharing	2,055			2,050			6,507			6,484
Selling, administrative and general expenses	18,945			18,107			56,332			53,209
(Gain) loss on disposals of property, equipment and software	(497		)	22			(646		)	(6		)
Operating income	13,676			1,869			27,638			26,716
Interest expense, net	(19,162		)	(17,626		)	(57,258		)	(57,981		)
Loss before income taxes	(5,486		)	(15,757		)	(29,620		)	(31,265		)
Income tax expense (benefit)	(401		)	(6,909		)	(3,825		)	(12,825		)
Net Loss	$	(5,085	)	$	(8,848	)	$	(25,795	)	$	(18,440	)

The tables below disclose revenue and operating data for our reportable segments before certain inter and intra segment eliminations. We include inter-segment and certain intra-segment sales in our comparative analysis of revenue at the product line level and this presentation is consistent with the basis on which we review results of operations. Net revenue and operating income exclude inter-segment sales and delivery revenues and costs. We also operate ancillary port operations and certain rental operations, which are included in construction materials (other non-core business operations for fiscal year 2013) line items presented below. All non-allocated operating costs are reflected in the corporate and unallocated line item presented below.

Prior to fiscal year 2014, the Company reported other revenues separately, which management now includes within the construction materials segment.  Additionally, in the first quarter of fiscal year 2014, management began assessing performance of its operations without the allocation of indirect costs of its selling, administrative and general expense.  Indirect 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. Operating profit for the three months ended November 30, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $3.5 million and $1.3 million for construction materials and heavy/highway construction. Operating profit for the nine months ended November 30, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $15.9 million and $3.2 million for construction materials and heavy/highway construction segments.

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The following table summarizes our segment revenue:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Segment Revenue
Construction materials	$	166,235		$	142,106		$	459,257		$	463,452
Heavy/highway construction	92,433			71,969			236,793			234,915
Traffic safety services and equipment	23,108			21,104			74,932			69,219
Other revenues	—			6,735			—			13,885
Segment totals	281,776			241,914			770,982			781,471
Inter-segment eliminations	(60,430		)	(51,678		)	(159,527		)	(172,712		)
Total net revenue	$	221,346		$	190,236		$	611,455		$	608,759

The following table summarizes the percentage of segment revenue by our primary lines of business:

	Three Months Ended   November 30,				Nine Months Ended   November 30,
	2013		2012		2013		2012
Segment Revenue:
Construction materials	59.0	%	58.8	%	59.6	%	59.2	%
Heavy/highway construction	32.8	%	29.7	%	30.7	%	30.1	%
Traffic safety services and equipment	8.2	%	8.7	%	9.7	%	8.9	%
Other revenues			2.8	%			1.8	%
Segment totals	100.0	%	100.0	%	100.0	%	100.0	%

     The following table summarizes the segment cost of revenue:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Segment Cost of Revenue
Construction materials	$	132,210		$	118,472		$	363,168		$	369,827
Heavy/highway construction	85,726			65,226			220,622			218,172
Traffic safety services and equipment	17,920			17,140			59,919			56,139
Other revenues	—			5,647			—			12,126
Segment totals	235,856			206,485			643,709			656,264
Eliminations	(60,430		)	(51,678		)	(159,527		)	(172,712		)
Total cost of revenue	$	175,426		$	154,807		$	484,182		$	483,552

     The following table summarizes the segment cost of revenue as a percent of segment revenue:

	Three Months Ended   November 30,				Nine Months Ended   November 30,
	2013		2012		2013		2013
Cost of Revenue as Percent of Revenue (before eliminations)
Construction materials	79.5	%	83.4	%	79.1	%	79.8	%
Heavy/highway construction	92.7	%	90.6	%	93.2	%	92.9	%
Traffic safety services and equipment	77.5	%	81.2	%	80.0	%	81.1	%

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The following table summarizes the segment operating income:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Operating income (loss):
Construction materials	$	23,883		$	9,573		$	66,227		$	44,861
Heavy/highway construction	4,317			563			7,859			4,661
Traffic safety services and equipment	1,986			875			3,339			(400		)
Other non-core business operations	—			827			—			538
Segment totals	30,186			11,838			77,425			49,660
Corporate and unallocated	(16,510		)	(9,969		)	(49,787		)	(22,944		)
Total operating income	$	13,676		$	1,869		$	27,638		$	26,716

Three Months Ended November 30, 2013 Compared to Three Months Ended November 30, 2012

Revenue

Total net revenue increased$31.1 million or 16.4% to $221.3 million for the three months ended November 30, 2013 compared to $190.2 million for the three months ended November 30, 2012.  The increase in revenue was driven primarily by favorable weather conditions and unanticipated one-time activity in the construction materials and heavy/highway construction segments resulting in a year-to-date catchup.

Segment revenue for our construction materials business increased$24.1 million, or 17.0% to $166.2 million for the three months ended November 30, 2013 compared to $142.1 million for the three months ended November 30, 2012.  Prior to fiscal year 2014, the Company reported other revenues separately, which management now includes within the construction materials segment. Therefore, on a comparative basis this increase was $17.4 million.  Revenue increased for most product lines for the three months ended November 30, 2013 compared to the three months ended November 30, 2012. The increase in revenue was attributable primarily to increased sales of aggregates with the volume of tons shipped and consumed increasing by approximately 21.4% for the three months ended November 30, 2013 compared to the three months ended November 30, 2012.

Segment revenue for our heavy/highway construction business increased$20.4 million, or 28.3% to $92.4 million for the three months ended November 30, 2013 compared to $72.0 million for the three months ended November 30, 2012.  The increase in revenue was driven by our ability to complete more work in the three months ended November 30, 2013 compared to the three months ended November 30, 2012 primarily due to one-time unanticipated projects and favorable weather conditions.

Segment revenue for our traffic safety services and equipment businesses increased$2.0 million, or 9.5% to $23.1 million for the three months ended November 30, 2013 compared to $21.1 million for the three months ended November 30, 2012.  The increase was attributed to the increase of internal sales related primarily to the increase in heavy/highway construction; external sales remained relatively flat when compared to the three months ending November 30, 2012.

Cost of Revenue

Total cost of revenue increased$20.6 million or 13.3% to $175.4 million for the three months ended November 30, 2013 compared to approximately $154.8 million for the three months ended November 30, 2012.  Cost of revenue as a percentage of sales decreased2.1% to 79.3% for the three months ended November 30, 2013 compared to 81.4% for the three months ended November 30, 2012.

Segment cost of revenue for our construction materials business as a percentage of its segment revenue decreased3.9% to 79.5% for the three months ended November 30, 2013 compared to 83.4% for the three months ended November 30, 2012.  Segment cost of revenue as a percentage of segment revenue decreased primarily from increased sales volumes over similar fixed costs.

Segment cost of revenue for our heavy/highway construction business as a percentage of its segment revenue increased2.1% to 92.7% for the three months ended November 30, 2013 compared to 90.6% for the three months ended November 30,

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2012. The increase in segment cost of revenue as a percentage of segment revenue was primarily attributable to the timing and completion of lower margin jobs in our eastern markets.

Segment cost of revenue for our traffic services and equipment business as a percentage of its segment revenue decreased3.7% to 77.5% for the three months ended November 30, 2013 compared to 81.2% for the three months ended November 30, 2012. The decrease in segment cost of revenue as a percentage of segment revenue was attributable to relatively stable sales with improvements in cost controls.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization decreased$1.7 million, or 12.7% to $11.7 million for the three months ended November 30, 2013 compared to $13.4 million for the three months ended November 30, 2012. The decrease was primarily attributable to $1.2 million of depreciation in the prior year that did not recur in the current year related to capitalized asset retirement obligations and assets related to a previous acquisition that were fully depreciated in the current year.

Selling, Administrative and General Expenses

Selling, administrative and general expenses increased$0.8 million, or 4.4% to $18.9 million for the three months ended November 30, 2013 compared to $18.1 million for the three months ended November 30, 2012. The increase was primarily attributable to strategic consulting expenses, partially offset by a decrease in bonuses and legal and accounting fees.

Operating Income

     Operating income for our construction materials business increased$14.3 million, or 149.0% to $23.9 million for the three months ended November 30, 2013 compared to $9.6 million for the three months ended November 30, 2012.  There were $3.5 million of allocated indirect costs included in operating income for the three months ended November 30, 2012, which were included in corporate and unallocated for the three months ended November 30, 2013.  Operating income for construction materials on a comparative basis increased$10.8 million, or 82.4%, primarily driven by increased profit attributable to aggregates and hot mix asphalt.  Operating income on a comparative basis for aggregates increased$5.9 million and hot mix asphalt increased$2.4 million both increases due primarily to increased volumes with similar fixed costs.

Operating income for our heavy/highway construction business increased$3.7 million to $4.3 million for the three months ended November 30, 2013 compared to operating income of $0.6 million for the three months ended November 30, 2012.  The increase is partially attributable to $1.3 million of allocated indirect costs included in operating income for the three months ended November 30, 2012.  Operating income on a comparative basis increased$2.4 million due to the general timing of the completion of various jobs and change orders.

Operating income for our traffic safety services and equipment businesses increased$1.1 million to $2.0 million for the three months ended November 30, 2013 compared to $0.9 million for the three months ended November 30, 2012.  The increase in profitability is attributable primarily to improvements in cost controls.

Interest Expense, net

Net interest expense increased$1.6 million, or 9.1% to $19.2 million for the three months ended November 30, 2013 compared to $17.6 million for the three months ended November 30, 2012 due primarily to increased overall indebtedness in the current period.

Income Tax Benefit

The income tax provision for the three months ended November 30, 2013 and November 30, 2012 consisted of federal and state taxes that are based on the estimated effective tax rates applicable for the full fiscal years ending February 28, 2014 and February 28, 2013, respectively, after giving effect to items specifically related to the interim periods.

Our effective tax rates for the three months ended November 30, 2013 and 2012 were 7.3% and 43.8%, respectively, resulting in tax benefit of $0.4 million and $6.9 million, respectively. The principal factor affecting the comparability of the effective income tax rates for the respective periods is our assessment of the realizability of the current period projected pre-tax loss. We recorded a valuation allowance on the portion of the current period federal and state income tax losses that we believe is not more likely than not to be realized.

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Nine Months Ended November 30, 2013 Compared to Nine Months Ended November 30, 2012

Revenue

Total net revenue increased$2.7 million or 0.4% to $611.5 million for the nine months ended November 30, 2013 compared to $608.8 million for the nine months ended November 30, 2012. 

Segment revenue for our construction materials business decreased$4.2 million, or 0.9% to $459.3 million for the nine months ended November 30, 2013 compared to $463.5 million for the nine months ended November 30, 2012.  Prior to fiscal year 2014, the Company reported other revenues separately, which management now includes within the construction materials segment. Therefore, on a comparative basis segment revenue decreased by $18.0 million.  This decrease was primarily attributable to decreased hot mix asphalt revenue of $24.5 million, or 12.6% due to lower volumes shipped and consumed as a result of the completion of a large interstate job in our northern markets in the prior year and diminished demand in our central markets. The decrease in hot mix asphalt segment revenue was partially offset by a $4.1 millionincrease in aggregates revenue.

Segment revenue for our heavy/highway construction business increased$1.9 million, or 0.8% to $236.8 million for the nine months ended November 30, 2013 compared to $234.9 million for the nine months ended November 30, 2012. Although we continue to experience strong competition, as well as a reduced number of projects, in the public and commercial markets, revenue increased slightly due primarily to one-time unanticipated activity and favorable weather conditions in the third quarter of fiscal year 2014 which allowed us to complete more work.

Segment revenue for our traffic safety services and equipment businesses increased$5.7 million, or 8.2% to $74.9 million for the nine months ended November 30, 2013 compared to $69.2 million for the nine months ended November 30, 2012. The increase was attributed to several factors including the continued benefits of previously introduced product offerings and increased market share in certain locations and favorable weather conditions in the third quarter of fiscal year 2014.

Cost of Revenue

Total cost of revenue increased$0.6 million or 0.1% to $484.2 million for the nine months ended November 30, 2013 compared to $483.6 million for the nine months ended November 30, 2012.  Cost of revenue as a percentage of sales decreased 0.2% to 79.2% for the nine months ended November 30, 2013 compared to 79.4% for the nine months ended November 30, 2012.  

Segment cost of revenue for our construction materials business as a percentage of its segment revenue decreased0.7% to 79.1% for the nine months ended November 30, 2013 compared to 79.8% for the nine months ended November 30, 2012. This decrease resulted primarily from increased volumes with the fixed cost structure remaining flat.

Segment cost of revenue for our heavy/highway construction business as a percentage of its segment revenue were relatively flat at 93.2% for the nine months ended November 30, 2013 up from 92.9% for the nine months ended November 30, 2012.

Segment cost of revenue for our traffic services and equipment business as a percentage of its segment revenue decreased1.1% to 80.0% for the nine months ended November 30, 2013 compared to 81.1% for the nine months ended November 30, 2012. The improvement is attributable to diligent cost controls.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization decreased$1.5 million, or 3.9% to $37.0 million for the nine months ended November 30, 2013 compared to $38.5 million for the nine months ended November 30, 2012. The decrease was primarily attributable to $1.2 million of depreciation in the prior year that did not recur in the current year related to capitalized asset retirement obligations and assets related to a previous acquisition were fully depreciated in the current year.

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Selling, Administrative and General Expenses

Selling, administrative and general expenses increased$3.1 million, or 5.8% to $56.3 million for the nine months ended November 30, 2013 compared to $53.2 million for the nine months ended November 30, 2012. The increase was primarily attributable to higher professional fees related to accounting and compliance and strategic consulting fees of $4.4 million and $1.5 million, respectively which was partially offset by a decrease of approximately $3.0 million in ERP expenses.

Operating Income

Operating income for our construction materials business increased$21.3 million, or 47.4% to $66.2 million for the nine months ended November 30, 2013 compared to $44.9 million for the nine months ended November 30, 2012. The increase was attributable to $15.9 million of allocated indirect costs included in operating income for the nine months ended November 30, 2012, which were included in corporate and unallocated for the nine months ended November 30, 2013. Operating income on a comparative basis increased$5.4 million, or 8.9%, primarily driven by increased aggregates operating income, partially offset by decreased hot mix asphalt operating income.  Operating income from aggregates on a comparative basis increased$8.1 million due primarily to increased volumes with similar fixed costs. Operating income from hot mix asphalt on a comparative basis decreased$4.9 million due primarily to decreased volumes.

Operating income for our heavy/highway construction business increased$3.2 million to $7.9 million for the nine months ended November 30, 2013 compared to operating income of $4.7 million for the nine months ended November 30, 2012. The increase in profitability is attributable to $3.2 million of allocated indirect costs included in operating income for the nine months ended November 30, 2012.  Operating income on a comparative basis was flat.

Operating income for our traffic safety services and equipment businesses increased$3.7 million to $3.3 million for the nine months ended November 30, 2013 compared to a loss of $0.4 million for the nine months ended November 30, 2012. The increase in profitability is attributable primarily to increased revenues and improvements in cost controls.

Interest Expense, net

Net interest expense decreased$0.7 million, or 1.2% to $57.3 million for the nine months ended November 30, 2013 compared to $58.0 million for the nine months ended November 30, 2012. This decrease is primarily a result of the write-off of deferred financing fees in the prior year of $6.4 million associated with the refinancing which we did not incur in the current period, largely offset by increased interest expense incurred during the nine months ended November 30, 2013 due to increased overall indebtedness.

Income Tax Benefit

The income tax provisions for the nine months ended November 30, 2013 and 2012 consist of federal and state taxes that are based on the estimated effective tax rates applicable for the full fiscal years ending February 28, 2014 and February 28, 2013, respectively, after giving effect to items specifically related to the interim periods.

Our effective tax rates for the nine months endedNovember 30, 2013 and 2012 were 12.9% and 41.0%, respectively, resulting in tax benefit of $3.8 million and $12.8 million, respectively. The principal factor affecting the comparability of the effective income tax rates for the respective periods is our assessment of the realizability of the current period projected income tax loss. We recorded a valuation allowance on the portion of the current period federal and state income tax losses that we believe are not more likely than not to be realized. We reversed a valuation allowance related to a portion of our 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 nine months endedNovember 30, 2013.

LIQUIDITY AND CAPITAL RESOURCES

Our sources of liquidity include cash and cash equivalents, cash from operations and amounts available for borrowing under our credit facilities. As of November 30, 2013, we had borrowed $58.0 million under the ABL Facility with 71.8 million available under the third amendment to the ABL Facility as discussed below. As of November 30, 2013, we had $2.1 million in cash and cash equivalents and working capital of $179.4 million as compared to $9.5 million in cash and cash equivalents and

working capital of $131.8 million as of February 28, 2013. We maintain company owned life insurance policies with cash surrender values (“CSV”) from which we obtained $3.2 million of cash in the form of a loan against the $4.3 million of CSV which was used for working capital purposes.

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Given the nature and seasonality of our business, we typically experience significant fluctuations in working capital needs and balances during our peak summer season; these amounts are converted to cash over the course of our normal operating cycle.

Restricted cash balances of $15.1 million and $10.1 million as of November 30, 2013 and February 28, 2013, respectively, were restricted in certain consolidated subsidiaries for bond sinking fund and insurance requirements, as well as collateral on outstanding letters of credit or rentals.

Asset-Based Loan Facility

The following is a description of our ABL Facility, including all amendments thereto, as of November 30, 2013. On December 13, 2013, we entered into the fourth amendment to the ABL facility which modified certain of the terms described below. A detailed description of these modifications is provided below. Refer to Note. 10. "Subsequent Events" to the condensed consolidated financial statements for further information.

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.

Amendment of ABL Facility

First Amendment

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 17, 2012, December 26, 2012 and February 22, 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 November 30, 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

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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 November 30, 2013, M&T had not syndicated the ABL Facility and had not modified the terms of the ABL Facility.  See the discussion below concerning the potential modifications by M&T. Refer to Note 10. "Subsequent Events" to the condensed consolidated financial statements for further information.

Second Amendment

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.

Third Amendment

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 engaged an adviser 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. Refer to Note 10. "Subsequent Events" to the condensed consolidated financial statements for further information. 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.

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 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 nine months endedNovember 30, 2013.

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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 November 30, 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. Refer to Note 10. "Subsequent Events" to the condensed consolidated financial statements for further information.

If at any time after November 30, 2014 excess availability is less than the greater of (i) $25.0 million or (ii) 15.0% 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 1.00 to 1.00 for the immediately preceding four fiscal quarters or twelve consecutive months, as applicable.  As of November 30, 2013, the Company’s Fixed Charge Coverage Ratio was below 1.00 to 1.00. 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 1.00 to 1.00, our available borrowings under the ABL Facility will be reduced by $25.0 million.

A fixed charge coverage 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 1.00 to 1.00, the borrowing base will be equal to the sum of (a) the lesser of (i) $56.0 million (from $65.0 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 1.00 to 1.00, if its minimum excess availability reaches $25.0 million (See amendment above).

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;

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• 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 November 30, 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. Refer to 10. "Subsequent Events: for additional information.

Fourth Amendment

On December 13, 2013, we entered into the fourth amendment to the ABL Facility, containing modifications which it negotiated with Fortress Credit Corp. (the “New Lender”). In connection with the fourth amendment, the New Lender agreed to an assignment of all of the outstanding loans and commitments under the ABL Facility by M&T to the New Lender. Refer to Note 10. "Subsequent Events" to the condensed consolidated financial statements for further information.

Interest Rate and Availability

As of November 30, 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 6.8% for the nine months ended November 30, 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.

In addition, in connection with the third amendment, M&T agreed to reduce the overall commitment to $145.0 million and waive the $25.0 million minimum excess availability threshold for the fixed charge coverage ratio until November 30, 2014.

We believe we have sufficient financial resources, including cash and cash equivalents, cash from operations and amounts available for borrowing under our ABL Facility, to fund our business and operations for at least the next twelve months, including capital expenditures and debt service obligations. However, in the past we have failed to meet certain operating performance measures as well as the financial covenant requirements set forth under our previous credit facilities and our ABL Facility, which resulted in the need to obtain several amendments, and should we fail in the future, we cannot guarantee that we will be able to obtain such amendments. A failure to obtain such amendments could result in an acceleration of our indebtedness under the ABL Facility and a cross-default under our other indebtedness, including the Notes and Secured Notes. If the lenders were to accelerate the due dates of our indebtedness or if current sources of liquidity prove to be insufficient, there can be no assurance that we 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.

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Cash Flows

The following table summarizes our net cash provided by or used in operating activities, investing activities and financing activities and our capital expenditures for the nine months ended November 30, 2013 and November 30, 2012.

	Nine Months Ended   November 30,
(In thousands)	2013			2012
Net cash (used in) provided by:
Operating activities	$	(17,005	)	$	(8,233	)
Investing activities	(17,780		)	(34,862		)
Financing activities	27,325			36,544
Cash paid for capital expenditures	(16,912		)	(31,910		)

Operating Activities

Net cash used in operating activities increased$8.8 million to $17.0 million for the nine months ended November 30, 2013 compared to $8.2 million for the nine months ended November 30, 2012. Cash used in operating activities increased primarily as a result of change in working capital, mostly driven by increased activity in the quarter ending November 30, 2013, combined with opening balance sheet differences. Revenue in quarter ended February 29, 2012 was 13.0% higher than revenue in quarter ended February 28, 2013

Investing Activities

Net cash used in our investing activities decreased$17.1 million to $17.8 million in the nine months ended November 30, 2013 compared to $34.9 million in the nine months ended November 30, 2012. Net cash used improved primarily due to reduced capital expenditures of $15.0 million and a positive $6.3 million change year over year related to cash surrender value of  insurance activity.  These reductions in investment spending were partially offset by increased cash collateral of $4.8 million related to our captive insurance arrangement.

Financing Activities

Net cash provided by financing activities decreased$9.2 million to $27.3 million in the nine months ended November 30, 2013 compared to $36.5 million in the nine months ended November 30, 2012.  The decrease in cash provided by financing activities was primarily due to decreased capital spending and partially offset by additional cash needed for operating activities.

Capital Expenditures

Cash capital expenditures decreased$15.0 million to $16.9 million for the nine months ended November 30, 2013 compared to $31.9 million for the nine months ended November 30, 2012. This decrease was a result of lower spending on manufacturing and other plant related equipment. We expect total cash capital expenditures to be approximately $20.0 - $25.0 million for the fiscal year 2014. We expect cash capital expenditures in fiscal year 2015 to also be approximately $20.0 - $25.0 million.

Long-Term Debt

ABL Facility and Senior Secured Notes

On March 15, 2012, we completed the sale of $265.0 million of  the Secured Notes.  In connection with the sale of the Secured Notes, we also entered into the ABL Facility. We utilized the proceeds from the sale of the Secured Notes and the ABL Facility to prepay all amounts outstanding under our prior credit agreement and certain other debt.

Refer to Note 4. “Long-Term Debt” and Note 10. "Subsequent Events" to the condensed consolidated financial statements for further information.

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Notes Due 2018

In August 2010, we sold $250.0 million aggregate principal amount of the Notes. Interest on the Notes is payable semiannually in arrears on March 1 and September 1 of each year. The proceeds from the issuance of the Notes were used to pay down debt.

Refer to Note 4 “Long-Term Debt” to the condensed consolidated financial statements for further information.

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 is subject to annual principal maturities each year which, is funded on a 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.

Refer to Note 4 “Long-Term Debt” to the condensed consolidated financial statements for further information.

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.

Changes in Future Contractual Obligations

There were no material changes to the contractual obligations disclosed in our Annual Report on Form 10-K “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Debt and Contractual Obligations”, except interest payments as noted below.

The following table presents, as of February 28, 2013, our future interest payments as presented in the Form 10-K.

Total		2015		2016		2017		2018		Thereafter
$	242,312	$	47,648	$	52,336	$	54,059	$	69,336	$	18,933

On December 13, 2013 we entered into the fourth amendment to the ABL Facility. The new agreement replaced the $145.0 million ABL Facility with an $85.0 million term loan and a revolver of $60.0 million. The impact on future interest payments are included in the table below. Refer to Note 10. "Subsequent Events" to the condensed consolidated financial statements for further information.

Total			2015		2016		2017		2018		Thereafter
$	262,333	*	$	54,193	$	58,719	$	60,389	$	71,079	$	17,953

* Future interest payments were calculated based upon $85.0 million outstanding using the applicable fixed and floating rates charged by our lender as of the date of the refinancing. The primary cause for the increase in future interest payments relates to the increase in the outstanding balance of the credit facility compared to the prior year.

Off Balance Sheet Arrangements

We provide from time to time in the ordinary course of business letters of credit. Letters of credit bear interest and fees between 0.5% and 3.5%. We have outstanding letters of credit of $17.4 million and $11.9 million at November 30, 2013 and February 28, 2013, respectively, which were not included in our Consolidated Balance Sheets.

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Critical Accounting Policies and Significant Judgments and Estimates

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period.

On an ongoing basis, management evaluates its estimates, including those related to the carrying amount of property, plant and equipment; valuation of receivables, inventories, goodwill and intangible assets; recognition of revenue and loss contracts 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. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a detailed discussion of significant accounting policies that may involve a higher degree of judgment or complexity, refer to Note 1 “Summary of Significant Accounting Policies” as reported in our notes to our financial statements for the fiscal year ended February 28, 2013 as filed as part of the Company’s Annual Report on Form 10-K and our financial statements herein.

Recently Issued Accounting Standards

Refer to Note 1, “Nature of Operations and Summary of Significant Accounting Policies” to the condensed consolidated financial statements for a discussion of recent accounting guidance and pronouncements.

Forward-looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, in particular, statements about our plans, strategies and prospects under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” You can identify certain forward-looking statements by our use of forward-looking terminology such as, but not limited to, “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “likely,” “will,” “would,” “could” and similar expressions that identify forward-looking statements. All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our operations. The occurrence of the events described and the achievement of the expected results depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q.  Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:

• material weaknesses and significant deficiencies in our internal controls over financial reporting;

• risks associated with the cyclical nature of our business and dependence on activity within the construction industry; 

• declines in public sector construction and reductions in governmental funding which could continue to adversely   affect our operations and results;

• our reliance on private investment in infrastructure and a slower than normal recovery which continue to adversely affect our results;

• a decline in the funding of Pennsylvania Department of Transportation, which we refer to as PennDot, the Pennsylvania Turnpike Commission, the New York State Thruway Authority or other state agencies;

• difficult and volatile conditions in the credit markets may adversely affect our financial position, results of operations and cash flows;

• the potential for our lender to modify the terms of our asset-based loan facility;

• the risk of default of our existing and future indebtedness, which may result in an acceleration of our indebtedness hereunder;

• the potential to inaccurately estimate the overall risks, requirements or costs when we bid on or negotiate a contract that is ultimately awarded to us;

• the weather and seasonality;

• our operation in a highly competitive industry within our local markets; 

• our dependence upon securing and permitting aggregate reserves in strategically located areas;

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• risks related to our ability to acquire other businesses in our industry and successfully integrate them with our existing operations;

• risks associated with our capital-intensive business;

• risks related to our ability to meet schedule or performance requirements of our contracts;

• changes to environmental, health and safety laws;

• our dependence on our senior management;

• our ability to recruit additional management and other personnel and our ability to grow our business effectively or successfully implement our growth plans;

• the potential for labor disputes to disrupt operations of our businesses;

• special hazards related to our operations that may cause personal injury or property damage;

• unexpected self-insurance claims and reserve estimates;

• material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications;

• cancellation of significant contracts or our disqualification from bidding for new contracts;

• general business and economic conditions, particularly an economic downturn; and

• the other factors discussed under Item 1A-Risk Factors in our Annual Report on Form 10-K for our fiscal year ended February 28, 2013.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure to financial market risks, including changes in commodity prices, interest rates and other relevant market prices.

Commodity Price Risk

We are subject to commodity price risk with respect to price changes in energy, including fossil fuels, electricity and natural gas for production of hot mix asphalt and cement and diesel fuel for distribution and production related vehicles. We attempt to limit our exposure to changes in commodity prices by putting sales price escalators in place for most public contracts, and we aggressively seek to obtain escalators on private and commercial contracts.

Interest Rate Risk

We are subject to interest rate risk in connection with borrowings under our indebtedness.  As of November 30, 2013, we have $58.0 million in indebtedness outstanding under our ABL Facility subject to variable interest rates.  Each change of 1.00% in interest rates would result in an approximate  $0.6 million change in our annual interest expense in total on our ABL Facility.  Any debt we incur in the future could also bear interest at floating rates.

ITEM 4 - CONTROLS AND PROCEDURES

The information provided in this Item 4 - Controls and Procedures is as of the date of the filing of this Form 10-Q.

This report includes the certifications attached as Exhibits 31.1 and 31.2 of our CEO and CFO required by Rule 13a-14 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act are designed to provide reasonable assurance that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Our management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of November 30,

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2013. Based upon that evaluation, our CEO and CFO concluded that, as of November 30, 2013, our disclosure controls and procedures were not effective as a result of the material weaknesses in internal control over financial reporting described below.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed under the supervision of the Company’s CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”).  Internal control over financial reporting includes those policies and procedures that:

(i)  pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii)  provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and

(iii)  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our financial statements for the years ended February 28, 2013, 2012 and 2011, management identified certain material weaknesses in our internal control over financial reporting as further described below.

We did not maintain an effective control environment primarily attributable to the following:

• We did not maintain an effective control environment that consistently emphasized adherence to GAAP. This control deficiency, which was identified in 2011 by the Company’s independent auditors and elevated to a material weakness in fiscal 2012 in part because of difficulties encountered with the ERP implementation, led to adjustments identified by both management and the Company’s independent auditors during the fiscal year 2013, 2012 and 2011 financial closing and reporting process. None of these adjustments resulted in the requirement to restate previously issued financial statements.

As noted in our remediation plan below, we have hired professional finance resources to enhance accounting and aid in financial reporting and internal control capabilities. Additionally, we reorganized existing resources to better match the accounting needs of the organization. Management continues to evaluate personnel and augment where needed to further strengthen competencies. As of this filing, the procedures and select policies are final and available to employees on the company’s dedicated policy and procedure intranet site. We have completed the related internal control design and implementation activities that include financial statement analytical review, and disclosure review. We plan to complete our testing of internal control effectiveness for year-end 2014.

• In the areas of finance, tax, accounting and information technology departments, we did not ensure a sufficient complement of personnel with an appropriate level of knowledge, experience and training commensurate with our structure and accounting and financial reporting requirements, which was identified as a material weakness by management during the fiscal 2012 year-end financial reporting process.

As noted in our remediation plan below, we have hired professional finance resources to enhance accounting and aid in financial reporting and internal control capabilities. Specifically, we hired a Director of Financial Reporting, Business Unit Controller, Internal Audit Director, Internal Audit resource and have appointed a new Chief Financial Officer. Management continues to evaluate personnel and augment where needed to further strengthen competencies. Therefore these areas continue to improve through the hiring of professionals with the appropriate educational backgrounds and business experiences, and through our support of their continuing professional education.  Additionally, we have augmented these resources with support from third party professional finance resources.

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• We did not ensure complete and accurate business documentation to support certain transactions and accounting records. The controls in these areas with respect to the creation, maintenance and retention of complete and accurate business records were not effective. This was primarily attributable to the ERP implementation in fiscal year 2012 and identified by management and the Company’s independent auditors during the 2012 year-end financial reporting process.

As noted in our remediation plan below, we are implementing policies and procedures to ensure that we maintain appropriate business and accounting records and formally document the application of generally accepted accounting principles for business transactions for fiscal year-end 2014. As of this filing, formal procedures and select policies have been approved by the respective business leaders and communicated. We plan to complete policy implementation and our testing of internal control effectiveness for year-end 2014. 

• We did not design, maintain or implement policies and procedures to adequately review and account for significant accounting transactions, which was identified as a material weakness during the 2012 fiscal year-end financial reporting process. Specifically, we did not maintain and communicate sufficient and consistent accounting policies, which limited our ability to make accounting decisions and to detect and correct accounting errors.

As noted in our remediation plan below, we have provided internal control training to reinforce the importance of our control environment for Finance, Accounting, Information Technology Department personnel and all operations managers across the Company. We have hired professional finance resources in these areas to enhance accounting and financial reporting competencies and aid internal control capabilities. As of this filing, formal procedures and select policies have been approved by the respective business leaders and communicated. We plan to complete policy implementation and our testing for effectiveness for year-end 2014.

We did not maintain effective monitoring of controls:

• We did not maintain effective monitoring of controls in areas related to period end financial reporting process, revenue recognition, cash, contracts, inventory, property, plant and equipment and estimates in accruals. This deficiency resulted from either not having adequate controls designed and in place or not achieving the intended operating effectiveness of controls which was identified as a material weakness during the 2012 fiscal year-end financial reporting process by management and its independent auditors.

As noted in our remediation plan below, we have provided internal control training to reinforce the importance of our control environment for Finance, Accounting, Information Technology Department personnel and all operations managers across the Company. We have implemented a series of management reports to augment our analytical processes. We have completed the related internal control design and implementation activities that include financial statement analytical review, account reconciliation review, inventory cycle counts, numerous review and approval controls in these areas, and an internal control certification. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We do not maintain an internal audit or similar function. As a result of this deficiency which was considered a material weakness during the 2012 year-end financial reporting process by management and its independent auditors, we did not have an adequate independent, objective body to assess, monitor, and evaluate the intended operating effectiveness of controls or to conduct operational audits for the identification of recommendations to improve operating effectiveness of the organization.

As noted in our remediation plan below, we have hired an experienced Director of Internal Audit and an Internal Audit resource. An internal audit function was formally in place and provided updates to the Board of Directors for the quarterly period ended November 30, 2013. As of this filing, the internal audit function reports to the Audit Committee.

We did not maintain effective controls over risk assessment:

• We did not maintain processes to evaluate certain business and related fraud risks which may have an impact on the integrity of financial reporting. This deficiency resulted from either not having adequate controls designed and in place or not achieving the intended operating effectiveness of controls and was identified as a material weakness during the fiscal 2012 year-end financial reporting process by management.

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As noted in our remediation plan below, we have developed a risk assessment process as part of our remediation efforts. We continue to refine this process as we monitor risks on an informal and formal basis. An internal audit function was formally in place and aids managements in the risk assessment process. This function provided updates to the Board of Directors for the quarterly period ended November 30, 2013.

We did not maintain effective controls over information and communication:

• We did not maintain effective controls over information and communication, specifically around reports and financial data, as we had several issues with our ERP implementation. Thus, we had issues in providing the identification, capture, and exchange of information in a form and time frame that enabled our employees to carry out their responsibilities. Specifically, due to the system implementation, there were issues associated with the actual information/reports provided, which proved to be a pervasive issue. This deficiency which was identified by management and its independent auditors in fiscal year 2012, resulted from either not having adequate controls designed and in place or not achieving the intended operating effectiveness of controls.

As noted in our remediation plan below, in the locations that operate our new ERP, we have provided further training and made configuration changes such that our ERP is operating in a more effective manner. We have hired new information technology personnel, who are responsible for overseeing the completion of the ERP implementation and assisting with information technology general controls remediation. Additionally, we have provided internal control training to reinforce the importance of our control environment for Finance, Accounting, Information Technology Department personnel and all operations managers across the Company. We have designed information technology general controls and we have begun implementation. We expect that remediation will be complete once the ERP has been implemented at other locations in fiscal year 2015.

The material weaknesses in our control environment, monitoring of controls, information and communication, and risk assessments contributed to additional material weaknesses in various control activities as set forth below:

• We did not maintain effective controls over the implementation of a new ERP. Specifically, we did not implement appropriate logical security design and testing, perform sufficient data conversion testing, maintain appropriate system documentation, or provide sufficient end user training during the implementation of the ERP. During the implementation of the ERP, management did not provide appropriate logical security design and testing, perform sufficient data conversion testing, and maintain appropriate system documentation. This material weakness was identified by management and the Company’s independent auditors during the fiscal year 2012 financial reporting process. This material weakness contributed to other control issues described below.

As described above, we have provided training, made configuration changes to our ERP, and provided training to staff. We have designed information technology general controls and we have begun implementation. Remediation is expected to be completed once the ERP has been implemented at other locations in fiscal year 2015.

• We did not implement appropriate information technology controls related to change management, data integrity, access and segregation of duties. This material weakness, which was previously identified as a significant deficiency in prior years by our independent auditors and elevated to a material weakness in fiscal 2012 due to issues with our ERP implementation, resulted in both not having adequate automated and manual controls designed and in place and not achieving the intended operating effectiveness of controls to ensure accuracy of our financial reporting. For example, we did not maintain adequate segregation of duties around most accounting processes and did not have adequate integrity verification of our subledgers.

As noted in our remediation plan below, we have hired new information technology personnel and designated a full-time IT resource to act in an IT governance role, who is responsible for overseeing the completion of the ERP implementation and assisting with information technology general controls remediation. We have begun to assess the existing roles and responsibilities and remediate system access and functionality issues. Additionally, we have provided internal control training to reinforce the importance of our control environment for Finance, Accounting, Operations, Information Technology Department personnel and all operations managers across the Company. We are evaluating segregation of duties and have designed information technology general controls which we have begun implementation. Remediation is expected to be completed once the ERP has been implemented at other locations in fiscal year 2015.

• We did not maintain effective controls over the recording of journal entries, both recurring and non-recurring. Specifically, effective controls were not in place to ensure that journal entries were properly prepared, included

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sufficient supporting documentation, or were reviewed and approved to ensure the validity, accuracy and completeness of the journal entries. For example, due to data conversion issues during the Company’s ERP implementation, recurring and manual journal entries were recorded duplicate times, in wrong periods and/or in reverse. This material weakness which was identified by management and the Company’s independent auditors during the 2012 year-end reporting process, resulted in additional procedures performed by management and contributed to other deficiencies, some of which have resulted in additional material weaknesses and adjustments during the fiscal year 2013 and 2012 year-end financial closing processes.

We have designed and implemented a journal entry process which includes journal entry review and formal approval. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls over the recording of intercompany transactions. Specifically, effective controls were not in place to ensure that intercompany balances were properly reconciled and eliminated on a timely basis. For example, due to certain subsidiaries being converted to a new ERP system in January 2012, we did not initially match and reconcile intercompany billings and expenses. This material weakness, which was identified by management and the Company’s independent auditors during the 2012 financial reporting process, resulted in additional procedures performed by management and adjustments during the fiscal year 2013 and 2012 year-end financial closing and reporting process.

We have implemented manual processes and checklists to ensure the proper tracking and elimination of intercompany activity. As of this filing, we have completed internal control design and implementation activities that include financial statement analytical review and the completion and review of intercompany account reconciliation. Further, upon the implementation of the ERP at all locations, an automated process will be implemented to eliminate and track intercompany activity.

• We did not maintain effective controls over accounting for contracts. Specifically, we did not design and maintain effective controls over the reconciliation of contract billings and accruals to the general ledger, or formally analyze the recognition of contract revenue, profit and loss. For example, as a result of the ERP conversion, intercompany contracts were incorrectly classified as third party contracts and contract expenses for certain multi-year contracts were under accrued. This material weakness, which was identified by management during the 2012 financial reporting process, resulted in additional procedures performed by management and adjustments during the fiscal years 2013 and 2012 year-end financial closing and reporting processes.

We have established a manual process to track and eliminate intercompany activity as described above. Additionally, we implemented a training program and analytical tools as of the first quarter of fiscal year 2014. As of this filing, we have completed internal control design and implementation activities that have formalized the review and approval process by appropriate personnel that include contracts, billing costing, job performance and account reconciliation. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls to ensure the completeness and accuracy of recorded revenue. Specifically, we did not design and maintain effective controls over pricing, billing practices and credit memos. For example, during conversion to the new ERP several customers were invoiced incorrect prices which resulted in significant billing adjustments credit memos. This material weakness which was identified during the fiscal 2012 year-end audit by management, in conjunction with our independent auditors resulted in additional procedures performed by management and adjustments in both fiscal 2013 and 2012.

This material weakness related to recorded revenue existed at our Traffic Safety locations. At the Traffic Safety locations during the first quarter of fiscal year 2014 we began implementation of a new billing system and updated and documented our revenue procedures. As of this filing, we have completed internal control design and implementation activities that have formalized the review and approval process by appropriate personnel that include price, invoice, shipment, adjustments and account reconciliation reviews. We plan to complete our testing of internal control effectiveness for year-end 2014. 

• We did not maintain effective controls to ensure the completeness, accuracy, cutoff and valuation of accounts receivable. Specifically, we did not timely reconcile accounts receivable balances and did not implement and maintain a formal review process. Further, we did not have an effective process in place to determine and appropriately assess the adequacy of accounts receivable valuation reserves. There also is no required formal approval process to determine and write off uncollectible account balances.

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This material weakness, which was identified by our independent auditors during the 2012 year-end audit, resulted in additional procedures performed by management and adjustments during the fiscal year 2013 and 2012 year-end financial closing and reporting processes.

We have developed integrity reports for the locations utilizing the new ERP to ensure subledger activity is properly posted to the general ledger. As of this filing, we have completed internal control design and implementation activities that include the review of customer accounts receivable aging for appropriateness, formal approval of accounts receivable write-offs, and accounts receivable reconciliation review. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls over the completeness and accuracy of property, plant and equipment and related depreciation expense. Specifically, we did not design and maintain effective controls to ensure that assets are properly capitalized on our books. For example, certain capital expenditures were inappropriately expensed while other expenditures were inappropriately capitalized as fixed assets. This material weakness, which was identified by our independent auditors during our fiscal 2012 year-end audit, resulted in additional procedures performed by management and adjustments during the fiscal years 2013 and 2012 year-end financial closing and reporting processes.

We established a manual review process during the fourth quarter of fiscal year 2013 to review capital expenditures and formalized the capital expenditure policy which was approved by the Board of Directors during the first quarter of fiscal year 2014. As of this filing, we have completed internal control design and implementation activities that include the review and approval of additions, disposals, construction in process and repair expenditures. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls over the completeness and accuracy of capitalized software costs and related amortization expense. Specifically, we did not design and maintain effective controls to ensure that capitalized software costs are properly capitalized on our books. For example, the company did not have a formal process in place to evaluate and determine the appropriate classification of costs incurred. This material weakness, which was identified by our independent auditors during the fiscal 2012 audit, resulted in additional procedures performed by management and adjustments during the fiscal years 2013 and 2012 year-end financial closing and reporting processes.

Management has not implemented any new material capitalized software projects since fiscal year 2013. Additionally, we have implemented a capital expenditure policy approved by the Board of Directors during the first quarter of fiscal year 2014. As of this filing, we have completed internal control design and implementation activities that include the review and approval of additions, disposals, construction in process and repair expenditures. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls over the completeness and accuracy of our accounting estimates related to inventory reserves. Specifically, we did not design and maintain effective controls with respect to the review and analysis of excess and obsolete inventory and lower of cost or market considerations due to lack of empirical data available upon converting to our new ERP. This material weakness, which was identified by management in conjunction with our independent auditors during the fiscal year 2012 audit, resulted in adjustments identified through additional procedures performed by management in fiscal years 2013 and 2012.

We have implemented physical inventory observation procedures at certain locations in lieu of a failed perpetual system. We have created system reports to provide inventory information at our Traffic Safety locations to identify and assess lower of cost or market and obsolete inventory issues. Additionally, we have contracted for third party physical inventory observations to be performed at our quarry locations twice a year. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls over the estimation process related to changes in asset retirement obligations and related activity. Specifically, we did not design and maintain effective controls to ensure that changes in asset retirement obligations were properly estimated and recorded timely on our books. This material weakness, which was identified by the Company’s independent auditors during the year-end fiscal 2012 reporting process, resulted in additional procedures performed by management and adjustments during the fiscal year 2013 and 2012 year-end financial closing and reporting processes.

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While not fully implemented, we have established a manual process to review asset retirement obligations related activity. We expect to formally document the controls to ensure robust review procedures are implemented for fiscal year-end 2014. We plan to complete our testing of internal control effectiveness for year-end 2014. 

• We did not maintain effective controls over the completeness, accuracy and cutoff of our inventory counts. Specifically, we did not design and maintain effective controls and policies with respect to physical inventory counting procedures, including the appropriate level of review. For example, we did not ensure results of physical inventory counts were completely and accurately recorded in the newly implemented ERP system. We also did not initially capitalize inventory variances for materials, labor, and overhead. This material weakness, which was identified by the Company’s independent auditors during the fiscal 2012 year-end financial reporting process, resulted in adjustments identified through additional procedures performed by management in fiscal years 2013 and 2012.

As mentioned above, we have implemented monthly physical inventory observations at certain locations of the Company. As of this filing, we have completed internal control design and implementation activities that include inventory cycle counts. We plan to complete our testing of internal control effectiveness for year-end 2014.

• We did not maintain effective controls to ensure the completeness and timely recording of accounts payable and accrued liabilities. Specifically, we did not timely reconcile accounts payable and accrued liabilities or properly accrue for invoices payable in the period. For example, invoices for certain receipts of goods and services were improperly recorded in the period after they were received while other invoices were incorrectly recorded twice during the ERP implementation. This material weakness which was identified by management and the Company’s independent auditors during the year-end fiscal 2012 reporting process, resulted in additional procedures performed by management and adjustments identified by management and our independent auditors for fiscal year 2013 and 2012.

In addition to the implementation of integrity reports for locations operating on the new ERP, we have also established training, reports, and procedures around the accounts payable and accrual process as of the first quarter of fiscal year 2014. As of this filing, we have completed internal control design and implementation activities that include the review and approval of accruals and accounts payable reconciliation. We plan to complete our testing of internal control effectiveness for year-end 2014. 

• We did not maintain effective controls over the completeness, accuracy and valuation of our deferred tax assets and liabilities. Specifically, we did not design and maintain effective controls with respect to accounting for the difference between the book and tax bases of the company’s property, plant and equipment and capital leases. This material weakness which was identified by management and our independent auditors in fiscal 2011 resulted in additional procedures performed by management and adjustments identified by management and our independent auditors during the fiscal year 2013, 2012, 2011 year-end and first quarter fiscal 2014 financial closing and reporting processes.

We have contracted third party advisors to provide training and support related to our tax provision preparation. As of this filing, we have completed internal control design activities that include tax filing, provision and disclosure review. Remediation is expected to take place in fiscal year 2015.

• We did not adequately segregate the duties of personnel within our Accounting Department, including those related to cash management, payroll processing, accounts payable processing, and accounts receivable and general ledger maintenance, due to an insufficient complement of staff. This material weakness which was identified by our independent auditors in prior years but elevated to a material weakness in fiscal year 2012, resulted in additional procedures performed by management and adjustments identified by management and our independent auditors during the fiscal year 2013, 2012 and 2011 year-end financial closing and reporting processes.

Working with a third party advisor, we have completed an assessment of our internal control processes and as of the first quarter of fiscal year 2014 we have begun restructuring personnel and duties to address the deficiencies. Remediation will be completed once the ERP has been implemented at other locations in fiscal year 2015.

Misstatements could result in substantially all of the accounts and disclosures associated with the material weaknesses described above and as a result a material misstatement in our annual or interim consolidated financial statements would not be prevented or detected in a timely manner. Management has performed procedures designed to determine the reliability of our financial

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reporting and related financial statements and we believe the consolidated financial statements included in this report as of and for the period ended November 30, 2013, are fairly stated in all material respects.

Plans for Remediation of Material Weaknesses

At the direction and with the full support of executive management, we continue our efforts to improve our internal control over financial reporting through the execution of our company wide remediation plan. This plan focused on internal control over financial reporting and leverages specialized third party resources and key personnel across locations, functions and various levels of management based on the Committee of Sponsoring Organizations (“COSO”) Internal Control- Integrated Framework. This framework has provided our management with a basis to perform a risk based evaluation of its control environment involving internal controls over financial reporting and develop the remediation plan. The plan includes the identification and design of key controls, documentation of processes, targeted training, as well as the creation of related policies and procedures. We are leveraging technology through the use of an electronic tool to monitor key control activities and are implementing our testing strategy that is overseen by our Director of Internal Audit. In the locations that operate our new ERP, we have provided further training and made configuration changes such that our ERP is operating in a more effective manner. In addition, over the past year, we have made progress in improving our internal control processes and procedures, including documenting our business processes. We continue to execute on the remediation plan approved by our Board of Directors with the Director of Internal Audit providing updates. The Steering Committee continues to provide oversight and direction, with accountability to the Board of Directors, for the remediation of the material weaknesses. Specific initiatives to date have been focused on the following:

• We have hired professional finance resources to enhance accounting and aid in financial reporting and internal control capabilities. Specifically, we hired a Director of Financial Reporting, Business Unit Controller, Director of Internal Audit, Internal Audit resource and have appointed a new Chief Financial Officer. These areas continue to improve through our hiring efforts and through the use of supplemental professional finance resources.  The formal testing and evaluation of changes in this area were tested successfully. Management continues to evaluate personnel and augment where needed to further strengthen competencies

• We have hired a third party advisor, who assisting management with its remediation efforts.

• We have hired new information technology personnel, who are responsible for overseeing the completion of the ERP implementation and assisting with information technology general controls remediation.

• We have provided internal control training to reinforce the importance of our control environment for Finance, Accounting, Information Technology Department personnel and all operations managers across the Company.

• We have implemented a series of management reports to augment our analytical processes.

•  We have developed a risk assessment process as part of our remediation efforts and continue to refine as we monitor risks on an informal and formal basis as our remediation efforts progress.

• We have completed internal control design and implementation activities and are in the process of testing of internal control effectiveness. The formal testing and evaluation of these controls are expected to be completed for fiscal year-end 2014.

The following remediation efforts have been completed or are expected to be completed for fiscal year-end 2014:

• We continue implementing policies and procedures to ensure that we maintain appropriate business and accounting records and formally document the application of generally accepted accounting principles for business transactions. As of this filing, formal procedures and select policies have been approved by the respective business leaders and communicated.

• We performed a review and continue to evaluate existing Accounting, Tax and Information Technology Department personnel with the goals of enhancing our complement of resources with a higher degree of accounting and internal control knowledge, experience, and training.

• We are documenting and formalizing our period end financial reporting processes, including the implementation of a monthly close checklist and formal policies and procedures concerning journal entries, account reconciliations,

49

accrued expenses and estimates. We anticipate this will increase the accuracy and efficiency of our monthly close process.

• We are implementing policies and procedures to ensure that we maintain appropriate business and accounting records and formally document the application of generally accepted accounting principles for business transactions. As of this filing, the procedures and select policies are final and available to employees on our dedicated policy and procedure intranet site.

• We are implementing policies and procedures to ensure revenue is properly valued and recognized. The formal testing and evaluation of these controls are expected to be completed in early  fiscal year 2015. As of this filing, the procedures are final and available to employees, as well as several key policies.

•

• Although every employee signs a code of ethics when hired, we are instituting an annual code of ethics review process for key management employees to reinforce, both internally and externally, our commitment to a strong, effective control environment, with high ethical standards and financial reporting integrity.

The following remediation efforts are expected to be completed by fiscal year-end 2015:

• We are implementing procedures and controls to manage segregation of duties risk within the organization and to ensure that any issues with information technology general controls are identified, formalized and remediated throughout the organization. Remediation will take place once the ERP has been implemented at other locations in fiscal year 2015

We believe the plan described above, as implemented, will improve the design and operating effectiveness of our internal control over financial reporting. As we continue our remediation efforts over internal control over financial reporting, we will perform additional procedures to confirm that our financial statements continue to be fairly stated in all material respects. As detailed above, we do not anticipate that we will be able to remediate all of the material weaknesses during our fiscal year ending February 28, 2014.

Changes in Internal Control Over Financial Reporting

We maintained an internal audit or similar function for the period ended November 30, 2013. We have an adequate independent, objective body to assess, monitor, and evaluate the intended operating effectiveness of controls or to conduct operational audits for the identification of recommendations to improve operating effectiveness of the organization. This function provides updates to the Board of Directors and presently reports to the CFO. As of this filing, the internal audit function reports to the Audit Committee. Management has concluded that this is no longer a material weakness.

PART II. OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

We are a party from time to time to legal proceedings relating to our operations. Our ultimate legal and financial liability in respect to all legal proceedings in which we are involved at any given time cannot be estimated with any certainty. However, based upon examination of such matters and consultation with counsel, management currently believes that the ultimate outcome of these contingencies will not have a material adverse effect on our consolidated financial position, although the resolution in any reporting period of one or more of these matters could have a significant impact on our results of operations and/or cash flows for that period.

ITEM 1A - RISK FACTORS

You should carefully consider the risks described in the Form 10-K, as amended, including those disclosed under the caption “Risk Factors,” which could materially affect our business, financial condition or future results.  Additional regulatory and other risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.  If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.  The risks described in our Form 10-K have not materially changed.

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ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

There are no other defaults upon senior securities.

ITEM 4 - MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 of this Quarterly Report on Form 10-Q.

ITEM 5 - OTHER INFORMATION

None.

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ITEM 6 - EXHIBITS

Exhibit Number	Description
10.1		Amendment No. 4 to Credit Agreement, dated as of December 13, 2013, by and among New Enterprise Stone & Lime Co., Inc., as Borrower, the subsidiary guarantors party thereto, Manufacturers and Traders Trust Company, as Agent and the other lender parties signatory thereto (includes Exhibit A to Amendment No 4, the amended and restated Credit Agreement) (incorporated by reference from the Company's current report on Form 8-K file No. 133-176538) filed on December 19, 2013).
31.1*	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act, as amended.
31.2*	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act, as amended.
32.1**	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2**	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
95**	Mine Safety Disclosures
101.INS XBRL***	Instance document
101.SCH XBRL***	Taxonomy Extension Schema
101.CAL XBRL***	Taxonomy Extension Calculation Linkbase
101.DEF XBRL***	Taxonomy Extension Definition Linkbase
101.LAB XBRL***	Taxonomy Extension Label Linkbase
101.PRE XBRL***	Taxonomy Extension Presentation Linkbase

*       Filed herewith.

**     Furnished herewith.

***   Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NEW ENTERPRISE STONE & LIME CO., INC.
Date:  January 13, 2014	By:	/s/Albert L. Stone
		Albert L. Stone
		Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
10.1		Amendment No. 4 to Credit Agreement, dated as of December 13, 2013, by and among New Enterprise Stone & Lime Co., Inc., as Borrower, the subsidiary guarantors party thereto, Manufacturers and Traders Trust Company, as Agent and the other lender parties signatory thereto (includes Exhibit A to Amendment No 4, the amended and restated Credit Agreement) (incorporated by reference from the Company's current report on Form 8-K file No. 133-176538) filed on December 19, 2013).
31.1*	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act, as amended.
31.2*	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act, as amended.
32.1**	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2**	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
95**	Mine Safety Disclosures
101.INS XBRL***	Instance document
101.SCH XBRL***	Taxonomy Extension Schema
101.CAL XBRL***	Taxonomy Extension Calculation Linkbase
101.DEF XBRL***	Taxonomy Extension Definition Linkbase
101.LAB XBRL***	Taxonomy Extension Label Linkbase
101.PRE XBRL***	Taxonomy Extension Presentation Linkbase

*        Filed herewith.

**      Furnished herewith.

***   Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files.

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Paul I. Detwiler, III, certify that:

1.                  I have reviewed this report on Form 10-Q of New Enterprise Stone & Lime Co., Inc.;

2.                  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.                  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.                  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)                 Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)                 Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)                  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)                 Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.                  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)                 All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)                 Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 13, 2014
	/s/ Paul I. Detwiler, III
	Paul I. Detwiler, III
	President, Chief Executive Officer and Secretary

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Albert L. Stone, certify that:

1.                  I have reviewed this report on Form 10-Q of New Enterprise Stone & Lime Co., Inc.;

2.                  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.                  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.                  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)                 Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)                 Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)                  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)                 Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.                  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)                 All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)                 Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 13, 2014
	/s/ Albert L. Stone
	Albert L. Stone
	Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of New Enterprise Stone & Lime Co., Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Paul I. Detwiler, III, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i)          the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)       the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 13, 2014

/s/ Paul I. Detwiler, III

Paul I. Detwiler, III

President, Chief Executive Officer and Secretary

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of New Enterprise Stone & Lime Co., Inc. (the “Company”) on Form 10-Q for the quarter ended November 30 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Albert L. Stone, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i)          the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)       the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 13, 2014

/s/ Albert L. Stone

Albert L. Stone

Senior Vice President and Chief Financial Officer

EX-95

Exhibit 95

MSHA Citations and Litigation

Pursuant to Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), operators of a coal or other mine that file reports under Section 13(a) of the Exchange Act must include in each periodic report filed with the SEC certain information regarding health and safety violations at their mines.

The Dodd-Frank Act requires disclosure of the following categories of violations, orders and citations under the Federal Mine Safety and Health Act of 1977 (“Mine Act”): (1) Section 104 S&S Citations, which are citations issued for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard; (2) Section 104(b) Orders, which are orders issued upon a follow up inspection where the inspector finds the violation previously cited has not been totally abated in the prescribed time period; (3) Section 104(d) Citations and Orders, which are issued upon violations of mandatory health or safety standards caused by an unwarrantable failure of the operator to comply with the standards; (4) Section 110(b)(2) Violations, which result from the reckless and repeated failure to eliminate a known violation; (5) Section 107(a) Orders, which are given when the Mine Safety and Health Administration “MSHA” determines that an imminent danger exists and results in an order of immediate withdrawal from the area of the mine affected by the condition; and (6) written notices from MSHA of a pattern or potential to have a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under Section 104(e). In addition, the Dodd-Frank Act requires the disclosure of the total dollar value of proposed assessments from MSHA under the Mine Act, and the total number of mining related fatalities.

During the nine months ended November 30, 2013, none of our operations: (i) received Section 104(b) Orders; (ii) had any flagrant violations under Section 110(b)(2); (iii) received section 104(d) Citations and Orders, which are issued upon violations of mandatory health or safety standards caused by an unwarrantable failure of the operator to comply with the standards; (iv) received notice from MSHA of a pattern of violations of mandatory health or safety standards under Section 104(e); or (v) had any mining-related fatalities.

The subsequent table lists the number of inspections, the number of S&S citations and the total dollar value of proposed assessments from MSHA under the Mine Act for the quarterly period ended November 30, 2013.

	Number of	Total Number of S&S	Mine Act § 104(b)	Mine Act § 104(d) Citations and	Mine Act § 110(b)2	Mine Act § 107(a)	Total Dollar Value of Proposed MSHA		Total Number of Mining Related	Received Written Notice under Mine Act §104(e)
Name of Operation *	Inspections	Citations	Orders	Orders	Violations	Orders	Assessments		Fatalities	(yes/no)
ALFRED STATION	1	—	—	—	—	—	$	—	—	No
CENTRAL CITY	1	—	—	—	—	—	200		—	No
COMO	1	—	—	—	—	—	—		—	No
ELIZABETHVILLE	2	2	—	—	—	—	—		—	No
FAIRFIELD	1	—	—	—	—	—	—		—	No
FRANKLINVILLE	1	—	—	—	—	—	—		—	No
GETTYSBURG	1	—	—	—	—	—	308		—	No
HONEYBROOK	1	1	—	—	—	—	660		—	No
MARTINS CREEK	1	—	—	—	—	—	—		—	No
MT. CYDONIA III	—	—	—	—	—	—	200		—	No
NAGINEY	1	1	—	—	—	—	—		—	No
NARVON	1	—	—	—	—	—	—		—	No
NAZARETH	1	—	—	—	—	—	—		—	No
ORMROD	1	1	—	—	—	—	—		—	No
ROARING SPRING	1	—	—	—	—	—	300		—	No
SCHOENECK	1	1	—	—	—	—	—		—	No
SHAMOKIN	1	—	—	—	—	—	—		—	No
SHE SHE QUIN	1	—	—	—	—	—	100		—	No
SOMERSET	2	1	—	—	—	—	885		—	No
TYRONE FORGE	1	—	—	—	—	—	—		—	No
WEHRLE	—	—	—	—	—	—	176		—	No
TOTALS	21	7	—	—	—	—	$	2,829	—

*Only operations that have received violations, citations, orders and/or proposed assessments issued under the Mine Act have been included in this table.

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details)	Nov. 30, 2013
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Ownership interest in subsidiaries (as a percent)	100.00%

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Long-Term Debt (Details 4) (USD $)	9 Months Ended
	Nov. 30, 2013	Aug. 31, 2010
Long-Term Debt
Face amount of debt		$ 250,000,000
Redemption price as a percentage of principal amount, as a result of change of control	101.00%
Prior to September 1, 2014
Long-Term Debt
Redemption price of debt instrument as a percentage of principal amount	100.00%
Twelve-month period beginning September 1, 2014
Long-Term Debt
Redemption price of debt instrument as a percentage of principal amount	105.50%
Twelve-month period beginning September 1, 2015
Long-Term Debt
Redemption price of debt instrument as a percentage of principal amount	102.75%
Twelve-month period beginning September 1, 2016 and thereafter
Long-Term Debt
Redemption price of debt instrument as a percentage of principal amount	100.00%
Prior to September 1, 2013
Long-Term Debt
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%

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Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013	Nov. 30, 2012
Operating income	$ 13,676,000	$ 1,869,000	$ 27,638,000	$ 26,716,000
Depreciation expense	10,700,000	12,500,000	33,700,000	35,400,000
Restatement adjustment
Cost of Revenue			1,100,000
Depreciation expense			1,000,000
Net out of period adjustment related to loss for construction in progress written off, inventory and other | Restatement adjustment
Operating income			$ 100,000

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 4) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 30, 2013		Nov. 30, 2012
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	$ (17,005)		$ (8,233)
Cash flows from investing activities
Capital expenditures	(16,912)		(31,910)
Proceeds from sale of property and equipment	801		194
Change in cash value of life insurance	3,266		(3,013)
Change in restricted cash	(4,935)		(133)
Net cash used in investing activities	(17,780)		(34,862)
Cash flows from financing activities
Proceeds from revolving credit	252,739		224,413
Repayment of revolving credit	(215,418)		(283,361)
Proceeds from issuance of long-term debt	563		268,513
Repayment of long-term debt	(5,236)		(154,029)
Payments on capital leases	(3,023)		(3,846)
Debt issuance costs	(250)		(14,062)
Dividends paid	0
Distribution to noncontrolling interest	(2,050)		(1,084)
Net cash provided by financing activities	27,325		36,544
Net decrease in cash and cash equivalents	(7,460)		(6,551)
Cash and cash equivalents
Beginning of period	9,534	[1]	15,032
End of period	2,074		8,481
New Enterprise Stone & Lime Co., Inc.
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	(19,836)		(13,020)
Cash flows from investing activities
Capital expenditures	(14,040)		(29,133)
Proceeds from sale of property and equipment	786		194
Change in cash value of life insurance	3,266		(3,013)
Change in restricted cash	(183)		(127)
Net cash used in investing activities	(10,171)		(32,079)
Cash flows from financing activities
Proceeds from revolving credit	252,739		224,413
Repayment of revolving credit	(215,418)		(283,361)
Proceeds from issuance of long-term debt	563		268,513
Repayment of long-term debt	(4,562)		(153,639)
Payments on capital leases	(3,023)		(3,846)
Debt issuance costs	(250)		(14,062)
Dividends paid	0
Distribution to noncontrolling interest	0		0
Net cash provided by financing activities	30,049		38,018
Net decrease in cash and cash equivalents	42		(7,081)
Cash and cash equivalents
Beginning of period	31		7,106
End of period	73		25
Guarantor Subsidiaries
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	2,842		2,325
Cash flows from investing activities
Capital expenditures	(2,872)		(2,777)
Proceeds from sale of property and equipment	15		0
Change in cash value of life insurance	0		0
Change in restricted cash	(1)		(4)
Net cash used in investing activities	(2,858)		(2,781)
Cash flows from financing activities
Proceeds from revolving credit	0		0
Repayment of revolving credit	0		0
Proceeds from issuance of long-term debt	0		0
Repayment of long-term debt	0		0
Payments on capital leases	0		0
Debt issuance costs	0		0
Dividends paid	0
Distribution to noncontrolling interest	0		0
Net cash provided by financing activities	0		0
Net decrease in cash and cash equivalents	(16)		(456)
Cash and cash equivalents
Beginning of period	19		476
End of period	3		20
Non Guarantors
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	2,989		2,462
Cash flows from investing activities
Capital expenditures	0		0
Proceeds from sale of property and equipment	0		0
Change in cash value of life insurance	0		0
Change in restricted cash	(4,751)		(2)
Net cash used in investing activities	(4,751)		(2)
Cash flows from financing activities
Proceeds from revolving credit	0		0
Repayment of revolving credit	0		0
Proceeds from issuance of long-term debt	0		0
Repayment of long-term debt	(674)		(390)
Payments on capital leases	0		0
Debt issuance costs	0		0
Dividends paid	(3,000)
Distribution to noncontrolling interest	(2,050)		(1,084)
Net cash provided by financing activities	(5,724)		(1,474)
Net decrease in cash and cash equivalents	(7,486)		986
Cash and cash equivalents
Beginning of period	9,484		7,450
End of period	1,998		8,436
Eliminations
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	(3,000)		0
Cash flows from investing activities
Capital expenditures	0		0
Proceeds from sale of property and equipment	0		0
Change in cash value of life insurance	0		0
Change in restricted cash	0		0
Net cash used in investing activities	0		0
Cash flows from financing activities
Proceeds from revolving credit	0		0
Repayment of revolving credit	0		0
Proceeds from issuance of long-term debt	0		0
Repayment of long-term debt	0		0
Payments on capital leases	0		0
Debt issuance costs	0		0
Dividends paid	3,000
Distribution to noncontrolling interest	0		0
Net cash provided by financing activities	3,000		0
Net decrease in cash and cash equivalents	0		0
Cash and cash equivalents
Beginning of period	0		0
End of period	$ 0		$ 0

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Nov. 30, 2013	Feb. 28, 2013
Commitments and Contingencies Disclosure [Abstract]
Collateral Amount Recorded as Part of Restricted Cash	$ 13.6
Liability for Claims and Claims Adjustment Expense	$ 14.8	$ 10.8

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Risks and Uncertainties

9 Months Ended

Nov. 30, 2013

Risks and Uncertainties [Abstract]

Risks and Uncertainties

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 credit facilities, to fund the business and operations for at least the next 12 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, 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 certain credit facilities and a cross default under its other indebtedness, including the Company’s $250 million11% senior notes due 2018 (the “Notes”) and the Company’s $265.0 million ($301.0 million outstanding as of November 30, 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 10. “Subsequent Events” for disclosure of recent changes to the Company's credit facilities.

The Company was required to register and exchange the Secured Notes by March 10, 2013 or be subject to penalty interest.  The Company completed the exchange offer for the Secured Notes on October 30, 2013. The Company incurred $0.8 million in penalty interest.

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Subsequent Events (Details) (USD $)		0 Months Ended	6 Months Ended	9 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended						0 Months Ended
	Aug. 31, 2010	Sep. 05, 2012 ABL facility	Sep. 07, 2012 ABL facility	Nov. 30, 2013 ABL facility	Mar. 15, 2012 ABL facility	Sep. 07, 2012 ABL facility Amendment 1	Mar. 15, 2012 Letter of credit sub-facility	Dec. 12, 2013 Subsequent events ABL facility Amendment 1	Dec. 12, 2013 Subsequent events Letter of credit sub-facility	Dec. 13, 2013 Subsequent events Asset Based Secured Revolving, Fourth Amendment	Sep. 07, 2012 Subsequent events Asset Based Secured Revolving, Fourth Amendment	Dec. 13, 2013 Subsequent events Asset Based Secured Revolving, Fourth Amendment Base Rate	Dec. 13, 2013 Subsequent events Asset Based Secured Revolving, Fourth Amendment London Interbank Offered Rate (LIBOR)	Dec. 13, 2013 Subsequent events Asset Based Secured Revolving, Fourth Amendment Term loan	Dec. 13, 2013 Subsequent events Asset Based Secured Revolving, Fourth Amendment Revolving Credit Facility	Dec. 13, 2013 Subsequent events Asset Based Secured Revolving, Fourth Amendment Letter of credit sub-facility	Dec. 12, 2013 Subsequent events Asset Based Secured Revolving, Third Amendment
Subsequent Events
ABL facility maximum borrowing capacity					$ 170,000,000.0		$ 15,000,000.0		$ 15,000,000	$ 145,000,000					$ 60,000,000	$ 12,500,000.0
Term loan face amount	250,000,000													85,000,000
ABL facility outstanding prior to amendment																	50,000,000
Fixed charge coverage ratio										1.00
Percentage of outstanding balance of eligible accounts receivable to determine borrowing base		85.00%				70.00%		70.00%			77.50%
Percentage of eligible inventory to determine borrowing base		60.00%				40.00%		40.00%			50.00%
Excess availability threshold amount waived under the credit facility				$ 25,000,000.0						$ 25,000,000
Margin added to variable interest rate basis (as a percent)												5.00%	7.00%
Minimum variable rate													1.25%
Commitment fee			0.50%							2.00%
Increase in borrowing base																3.00%
Prepayment premium prior to January 31, 2014										1.00%
Prepayment premium on or prior to the first anniversary										5.00%
Prepayment premium after the first anniversary, prior to the second anniversary										3.00%
Prepayment premium after the second anniversary, prior to the third anniversary										1.00%
Prepayment premium after the third anniversary										0.00%

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Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Feb. 28, 2013
Accrued Liabilities
Insurance	$ 25,823	$ 19,715
Interest	10,398	18,962
Payroll and vacation	9,530	8,281
Withholding taxes	1,744	1,640
Billings in excess of costs and estimated earnings on uncompleted contracts	6,255	1,529
Contract expenses	515	209
Other	2,618	3,671
Total accrued liabilities	$ 56,883	$ 54,007	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Risks and Uncertainties (Details) (USD $)	9 Months Ended
	Nov. 30, 2013	Aug. 31, 2010
Risks and Uncertainties
Face amount of debt		$ 250,000,000
Interest rate (as a percent)	13.00%
Penalty interest paid	800,000
Minimum
Risks and Uncertainties
Period for which sufficient financial resources are available to fund business and operations	12 months
Notes
Risks and Uncertainties
Face amount of debt	250,000,000.0
Interest rate (as a percent)	11.00%
Secured Notes
Risks and Uncertainties
Face amount of debt	265,000,000.0
Amount outstanding	$ 301,000,000
Interest rate (as a percent)	13.00%

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Long-Term Debt (Details) (USD $)	Nov. 30, 2013	Feb. 28, 2013
Long-Term Debt
Debt	$ 632,874,000	$ 577,987,000
Less: Current portion	(11,401,000)	(11,342,000)	[1]
Long-term debt	621,473,000	566,645,000	[1]
ABL facility
Long-Term Debt
Debt	57,973,000	24,314,000
ABL facility, borrowing available	71,800,000
Secured Notes due 2018
Long-Term Debt
Debt	300,962,000	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	18,129,000	19,005,000
Obligations under capital leases
Long-Term Debt
Debt	$ 5,810,000	$ 7,743,000

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Long-Term Debt (Details 2) (USD $)	0 Months Ended	6 Months Ended	9 Months Ended	12 Months Ended		0 Months Ended				0 Months Ended	6 Months Ended	9 Months Ended		0 Months Ended	9 Months Ended	0 Months Ended			0 Months Ended	6 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended	6 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended	0 Months Ended
	Sep. 05, 2012 ABL facility	Sep. 07, 2012 ABL facility	Nov. 30, 2013 ABL facility	May 27, 2013 ABL facility	Mar. 15, 2012 ABL facility	Sep. 07, 2012 ABL facility Amendment 1	Nov. 30, 2013 ABL facility Amendment 1	Nov. 30, 2013 ABL facility Amendment 1 1.00 to 1.00 or greater	Nov. 30, 2013 ABL facility Amendment 1 Less than 1.00 to 1.00	May 29, 2013 ABL facility Amendment 3 non-employee_director	Nov. 30, 2013 ABL facility Amendment 3	Nov. 30, 2013 ABL facility Amendment 3	Nov. 30, 2013 ABL facility Minimum	Sep. 07, 2012 ABL facility Minimum Amendment 1	Nov. 30, 2013 ABL facility Maximum	Sep. 07, 2012 ABL facility Maximum Amendment 1	Nov. 30, 2013 ABL facility Maximum Amendment 1 1.00 to 1.00 or greater	Nov. 30, 2013 ABL facility Maximum Amendment 1 Less than 1.00 to 1.00	May 29, 2013 ABL facility Maximum Amendment 3	Sep. 07, 2012 ABL facility Base rate	Nov. 30, 2013 ABL facility Base rate	May 29, 2013 ABL facility Base rate Amendment 3	Nov. 30, 2013 ABL facility Base rate Amendment 3	Sep. 07, 2012 ABL facility LIBOR	Nov. 30, 2013 ABL facility LIBOR	May 29, 2013 ABL facility LIBOR Amendment 3	Nov. 30, 2013 ABL facility LIBOR Amendment 3	Sep. 07, 2012 ABL facility LIBOR Minimum Amendment 1	Mar. 15, 2012 Letter of credit sub-facility	Mar. 15, 2012 Swing line sub-facility
Long-Term Debt
Maximum borrowing capacity					$ 170,000,000.0					$ 145,000,000.0																			$ 15,000,000.0	$ 20,000,000.0
Variable interest rate basis																					base rate		base rate		LIBOR		LIBOR
Margin added to variable interest rate basis (as a percent)																				0.75%		3.00%	3.00%	2.75%		5.00%	5.00%
Commitment fee		0.50%											0.25%		0.625%
Interest rate, variable interest rate floor (as a percent)																												1.25%
M&T participation amount																75,000,000.0
Excess availability threshold amount waived under the credit facility			25,000,000.0							25,000,000.0
Maximum borrowing capacity before amendment										170,000,000.0
Borrowing base																			145,000,000.0
Variable interest rate floor removed due to amendment (as a percent)																										1.25%	1.25%
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
Number of non-employee directors in special committee										4
Debt Amendment Fees												300,000
Deferred Financing Fees Recognized as Interest Expense												700,000
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													1.0	1.0	1.0	1.0
Number of consecutive months used in calculating the fixed charge coverage ratio under credit facilities' covenants			12 months
Reduction in available borrowings, if fixed charge coverage ratio covenant ratio is not complied				25,000,000.0								25,000,000.0
Base dollar amount used in determining the borrowing base	65,000,000.0					56,000,000.0
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%
Maximum borrowing capacity that cannot be reduced by M&T without the company's consent							170,000,000.0
Springing fixed charge coverage ratio covenant that cannot be increased by M&T without the company's consent							1.00
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							35,000,000.0
Advance rate for eligible inventory that cannot be reduced by M&T without the company's consent (as a percent)								60.00%	40.00%
Advance rate for eligible accounts that cannot be reduced by M&T without the Company's consent (as a percent)								85.00%	70.00%
Advance rate for eligible real property that cannot be reduced by M&T without the company's consent (as a percent)																	75.00%	75.00%
Advance rate for eligible real property that cannot be reduced by M&T without the company's consent								$ 65,000,000.0	$ 56,000,000.0

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Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

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. The condensed balance sheet data at February 28, 2013 and the consolidated statement of changes in equity (deficit) at February 28, 2013 and February 29, 2012, were derived from audited financial statements, but do not include all disclosures required by 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 loss and comprehensive loss to both New Enterprise Stone & Lime Co., Inc. and its noncontrolling interest holders. For the periods presented, the net 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.  The Company reclassified costs associated with certain non-core operations along with costs associated with shared equipment across regional operations from “Selling, administrative and general” to “Cost of revenue”.  Further the Company reclassified costs associated with managing the equipment between “Construction materials” and “Heavy/highway construction” within “Cost of revenue” in the prior year.  These reclassifications had no effect on the Company's Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc., Statement of cash flows, Operating income or the Balance sheet.

Restructuring

In conjunction with the third amendment of the Asset Based Loan ("ABL") Facility, the Company adopted a cost reduction and operational efficiency plan. During the first nine months of fiscal year 2014, we expensed approximately $4.0 million primarily attributable to severance and outside advisory services related to the implementation of the plan.

Out of Period Adjustments

For the nine months ended November 30, 2013, the Company recorded out of period pre-tax loss of approximately $0.1 million primarily related to an increase in cost of revenue of $1.1 million and offset by depreciation of $1.0 million.

Management does not believe these out of period errors are material to the unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended November 30, 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 November 30, 2013, the balance under our cash pooling arrangement was $5.8 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: 

	November 30,			February 28,
(In thousands)	2013			2013
Costs and estimated earnings in excess of billings	$	22,010		$	4,265
Trade	111,236			48,392
Retainages	4,910			3,129
	138,156			55,786
Allowance for doubtful accounts	(4,290		)	(3,515		)
Accounts receivable, net	$	133,866		$	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:

	November 30,		February 28,
(In thousands)	2013		2013
Crushed stone, agricultural lime, and sand	$	77,162	$	76,927
Safety equipment	12,921		16,057
Parts, tires, and supplies	11,702		11,331
Raw materials	10,211		9,247
Concrete blocks	3,369		4,210
Building materials	3,812		3,921
Other	2,844		3,451
	$	122,021	$	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:

	November 30,			February 28,
(In thousands)	2013			2013
Limestone and sand acreage	$	144,630		$	144,076
Land, buildings and building improvements	100,828			100,074
Crushing, prestressing, and manufacturing plants	332,343			326,066
Contracting equipment, vehicles and other	299,494			300,450
Construction in progress	1,779			5,680
Property, plant and equipment	879,074			876,346
Less: Accumulated depreciation and depletion	(526,666		)	(504,478		)
Property, plant and equipment, net	$	352,408		$	371,868

For three months ended November 30, 2013 and 2012 depreciation expense was $10.7 million and $12.5 million, respectively.  For the nine months ended November 30, 2013 and 2012, depreciation expense was $33.7 million and $35.4 million, respectively.

The Company recorded an asset impairment of $0.5 million related to equipment in the traffic safety services and equipment segment sold in August 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 nine months ended November 30, 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 analysis 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.  As a result of the annual impairment review completed as of February 28, 2013, the Company concluded that an indefinite useful life was no longer supported for trademarks and they are now being amortized over 30 and 50 years.

For the three months ended November 30, 2013 and 2012, amortization of intangible assets was $0.2 million. For the nine months ended November 30, 2013 and 2012, amortization of intangible assets was $0.7 million and $0.5 million, respectively. For the nine months ended November 30, 2012, the Company recorded a $0.3 million impairment of its traffic safety services and equipment segments trademark due to changes in underlying assumptions.

Other Assets

The Company’s long term other assets consist of the following:

	November 30,		February 28,
(In thousands)	2013		2013
Deferred financing fees (less current portion of $3,658)	$	11,070	$	14,523
Capitalized software (net of accumulated amortization of $1,891 and $1,080, respectively)	8,363		9,211
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively)	1,072		4,338
Deferred stripping costs	3,876		3,868
Other	3,503		2,512
Total other assets	$	27,884	$	34,452

New Accounting Standards

Recently Adopted Accounting Standards

In February 2013, the FASB issued ASU No. 2013-2, 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. 2012-2, 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.

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Long-Term Debt (Details 3) (USD $) In Millions, unless otherwise specified	0 Months Ended	9 Months Ended							6 Months Ended		0 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended
	Mar. 04, 2013	Nov. 30, 2013 annual_period	Nov. 30, 2013 Prior to March 15, 2015	Nov. 30, 2013 Twelve-month period beginning March 15, 2015	Nov. 30, 2013 Twelve-month period beginning March 15, 2016	Nov. 30, 2013 Twelve-month period beginning March 15, 2017 and thereafter	Nov. 30, 2013 Maximum Prior to March 15, 2015	Nov. 30, 2013 ABL facility	Sep. 07, 2012 ABL facility Debt Instrument Variable Rate Base LIBOR	Sep. 07, 2012 ABL facility Base rate	May 29, 2013 ABL facility Amendment 3 Debt Instrument Variable Rate Base LIBOR	Nov. 30, 2013 ABL facility Amendment 3 Debt Instrument Variable Rate Base LIBOR	May 29, 2013 ABL facility Amendment 3 Base rate	Nov. 30, 2013 ABL facility Amendment 3 Base rate
Long-Term Debt
Weighted average interest rate								6.25%
Effective interest rate								6.80%
Variable rate basis spread									2.75%	0.75%	5.00%	5.00%	3.00%	3.00%
Variable interest rate floor removed due to amendment (as a percent)											1.25%	1.25%
Stated interest rate (as a percent)		13.00%
Cash Interest Portion (as a percent)	5.00%	4.00%
PIK interest (as a percent)	8.00%	9.00%
Interest form election period	12 months	12 months
Interest Rate Increase (as a percent)		1.00%
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
Accrued cash interest	$ 14.9
Accrued PIK interest	23.6	41.0
PIK interest recorded in secured notes		36.0
PIK interest recorded in other liabilities		5.0
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			113.00%
Redemption price of debt instrument as a percentage of principal amount			100.00%	106.50%	103.25%	100.00%
Penalty interest (as a percent)		25.00%
Maximum additional interest rate in case of failure to consummate exchange offer (as a percent)		1.00%
Period for which penalty interest will consecutively increase		1 year
Increase in penalty interest (as a percent)		0.25%
Payments of Debt Instrument Penalty Interest		$ 0.8

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Feb. 28, 2013		Nov. 30, 2012	Feb. 29, 2012
Current assets
Cash and cash equivalents	$ 2,074	$ 9,534	[1]	$ 8,481	$ 15,032
Restricted cash	15,058	10,123	[1]
Accounts receivable	133,866	52,271	[1]
Inventories	122,021	125,144	[1]
Net investment in lease	0	0
Deferred income taxes	14,028	12,386	[1]
Other current assets	8,451	8,337	[1]
Total current assets	295,498	217,795	[1]
Property, plant and equipment, net	352,408	371,868	[1]
Goodwill	89,073	89,073	[1]
Other intangible assets	20,312	21,000	[1]
Investment in subsidiaries	0	0
Intercompany receivables	0	0
Other assets	27,884	34,452	[1]
Total assets	785,175	734,188	[1]
Current liabilities
Current maturities of long-term debt	11,401	11,342	[1]
Accounts payable - trade	47,858	20,608	[1]
Accrued liabilities	56,883	54,007	[1]
Total current liabilities	116,142	85,957	[1]
Intercompany payables	0	0
Long-term debt, less current maturities	621,473	566,645	[1]
Intercompany capital leases, less current installments	0	0
Deferred income taxes	50,337	52,443	[1]
Other liabilities	32,510	36,733	[1]
Total liabilities	820,462	741,778	[1]
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(36,211)	(9,483)	[1]
Noncontrolling interest	924	1,893	[1]
Total deficit	(35,287)	(7,590)	[1],[2]		49,868	[2]
Total liabilities and deficit	785,175	734,188	[1]
New Enterprise Stone & Lime Co., Inc.
Current assets
Cash and cash equivalents	73	31		25	7,106
Restricted cash	1,357	1,174
Accounts receivable	117,451	39,128
Inventories	109,045	109,032
Net investment in lease	0	0
Deferred income taxes	13,064	11,425
Other current assets	7,463	6,992
Total current assets	248,453	167,782
Property, plant and equipment, net	331,861	350,656
Goodwill	83,228	83,228
Other intangible assets	8,077	8,093
Investment in subsidiaries	82,021	81,430
Intercompany receivables	999	279
Other assets	26,734	33,252
Total assets	781,373	724,720
Current liabilities
Current maturities of long-term debt	11,152	11,175
Accounts payable - trade	45,476	18,343
Accrued liabilities	38,768	37,640
Total current liabilities	95,396	67,158
Intercompany payables	25,785	19,984
Long-term debt, less current maturities	615,512	559,915
Intercompany capital leases, less current installments	7,120	7,589
Deferred income taxes	41,924	43,834
Other liabilities	31,847	35,723
Total liabilities	817,584	734,203
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(36,211)	(9,483)
Noncontrolling interest	0	0
Total deficit	(36,211)	(9,483)
Total liabilities and deficit	781,373	724,720
Guarantor Subsidiaries
Current assets
Cash and cash equivalents	3	19		20	476
Restricted cash	106	105
Accounts receivable	16,402	13,129
Inventories	12,976	16,112
Net investment in lease	0	0
Deferred income taxes	964	961
Other current assets	948	1,317
Total current assets	31,399	31,643
Property, plant and equipment, net	20,547	21,212
Goodwill	5,845	5,845
Other intangible assets	12,235	12,907
Investment in subsidiaries	0	0
Intercompany receivables	25,194	19,984
Other assets	1,150	1,200
Total assets	96,370	92,791
Current liabilities
Current maturities of long-term debt	0	0
Accounts payable - trade	3,994	2,044
Accrued liabilities	2,943	5,135
Total current liabilities	6,937	7,179
Intercompany payables	95	0
Long-term debt, less current maturities	0	0
Intercompany capital leases, less current installments	0	0
Deferred income taxes	8,413	8,609
Other liabilities	663	1,010
Total liabilities	16,108	16,798
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	80,262	75,993
Noncontrolling interest	0	0
Total deficit	80,262	75,993
Total liabilities and deficit	96,370	92,791
Non Guarantors
Current assets
Cash and cash equivalents	1,998	9,484		8,436	7,450
Restricted cash	13,595	8,844
Accounts receivable	1,856	14
Inventories	0	0
Net investment in lease	647	634
Deferred income taxes	0	0
Other current assets	40	28
Total current assets	18,136	19,004
Property, plant and equipment, net	7,120	7,589
Goodwill	0	0
Other intangible assets	0	0
Investment in subsidiaries	0	0
Intercompany receivables	(34)	0
Other assets	0	0
Total assets	25,222	26,593
Current liabilities
Current maturities of long-term debt	896	801
Accounts payable - trade	231	221
Accrued liabilities	15,172	11,232
Total current liabilities	16,299	12,254
Intercompany payables	279	279
Long-term debt, less current maturities	5,961	6,730
Intercompany capital leases, less current installments	0	0
Deferred income taxes	0	0
Other liabilities	0	0
Total liabilities	22,539	19,263
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	1,759	5,437
Noncontrolling interest	924	1,893
Total deficit	2,683	7,330
Total liabilities and deficit	25,222	26,593
Eliminations
Current assets
Cash and cash equivalents	0	0		0	0
Restricted cash	0	0
Accounts receivable	(1,843)	0
Inventories	0	0
Net investment in lease	(647)	(634)
Deferred income taxes	0	0
Other current assets	0	0
Total current assets	(2,490)	(634)
Property, plant and equipment, net	(7,120)	(7,589)
Goodwill	0	0
Other intangible assets	0	0
Investment in subsidiaries	(82,021)	(81,430)
Intercompany receivables	(26,159)	(20,263)
Other assets	0	0
Total assets	(117,790)	(109,916)
Current liabilities
Current maturities of long-term debt	(647)	(634)
Accounts payable - trade	(1,843)	0
Accrued liabilities	0	0
Total current liabilities	(2,490)	(634)
Intercompany payables	(26,159)	(20,263)
Long-term debt, less current maturities	0	0
Intercompany capital leases, less current installments	(7,120)	(7,589)
Deferred income taxes	0	0
Other liabilities	0	0
Total liabilities	(35,769)	(28,486)
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(82,021)	(81,430)
Noncontrolling interest	0	0
Total deficit	(82,021)	(81,430)
Total liabilities and deficit	$ (117,790)	$ (109,916)

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

[2] Data derived from audited consolidated statements of changes in equity (deficit).

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Feb. 28, 2013
Current assets
Cash and cash equivalents	$ 2,074	$ 9,534	[1]
Restricted cash	15,058	10,123	[1]
Accounts receivable, less reserves of $4,290 and $3,515 respectively	133,866	52,271	[1]
Inventories	122,021	125,144	[1]
Deferred income taxes	14,028	12,386	[1]
Other current assets	8,451	8,337	[1]
Total current assets	295,498	217,795	[1]
Property, plant and equipment, net	352,408	371,868	[1]
Goodwill	89,073	89,073	[1]
Other intangible assets	20,312	21,000	[1]
Other assets	27,884	34,452	[1]
Total assets	785,175	734,188	[1]
Current liabilities
Current maturities of long-term debt	11,401	11,342	[1]
Accounts payable - trade	47,858	20,608	[1]
Accrued liabilities	56,883	54,007	[1]
Total current liabilities	116,142	85,957	[1]
Long-term debt, less current maturities	621,473	566,645	[1]
Deferred income taxes	50,337	52,443	[1]
Other liabilities	32,510	36,733	[1]
Total liabilities	820,462	741,778	[1]
Commitments and contingencies (Note 7 and Note 2)	0	0	[1]
Deficit
Accumulated deficit	(161,173)	(134,297)	[1]
Additional paid-in capital	126,962	126,962	[1]
Accumulated other comprehensive loss	(2,274)	(2,422)	[1]
Total New Enterprise Stone & Lime Co., Inc. deficit	(36,211)	(9,483)	[1]
Noncontrolling interest in consolidated subsidiaries	924	1,893	[1]
Total deficit	(35,287)	(7,590)	[1],[2]
Total liabilities and deficit	785,175	734,188	[1]
Common Stock, Class A
Deficit
Common stock	1	1	[1]
Common Stock, Class B
Deficit
Common stock	$ 273	$ 273	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

[2] Data derived from audited consolidated statements of changes in equity (deficit).

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Consolidated Statement of Changes in Equity (Deficit) Statement (USD $) In Thousands, unless otherwise specified		Total		Common Stock Common Stock, Class A	Common Stock Common Stock, Class B	Accumulated Deficit	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Total New Enterprise Stone & Lime Co., Inc. Equity (Deficit)	Noncontrolling Interest
Beginning balance at Feb. 29, 2012	[1]	$ 49,868		$ 21	$ 251	$ (76,779)	$ 126,964	$ (2,181)	$ 48,276	$ 1,592
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss		(56,134)				(57,518)			(57,518)	1,384
Pension adjustment, net of tax of $104 and $99		(241)						(241)	(241)
Exchange of Class A voting common stock for Class B non-voting common stock		0		(20)	22		(2)
Distribution to noncontrolling interest		(1,083)								(1,083)
Ending balance at Feb. 28, 2013	[1]	(7,590)	[2]	1	273	(134,297)	126,962	(2,422)	(9,483)	1,893
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss		(25,795)				(26,876)			(26,876)	1,081
Pension adjustment, net of tax of $104 and $99		148						148	148
Distribution to noncontrolling interest		(2,050)								(2,050)
Ending balance at Nov. 30, 2013		$ (35,287)		$ 1	$ 273	$ (161,173)	$ 126,962	$ (2,274)	$ (36,211)	$ 924

[1] Data derived from audited consolidated statements of changes in equity (deficit).

[2] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013	Nov. 30, 2012
Income Tax Disclosure [Abstract]
Effective income tax rate	7.30%	43.80%	12.90%	41.00%
Tax expense (benefit)	$ (401)	$ (6,909)	$ (3,825)	$ (12,825)

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Retirement and Benefit Programs (Tables)

9 Months Ended

Nov. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic pension expense recognized

Net periodic pension expense recognized for the three and nine months ended November 30, 2013 and 2012, was as follows:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Net periodic benefit cost
Service cost	86			$	67		$	257		$	203
Interest cost	100			99			300			297
Expected return on plan assets	(143		)	(147		)	(431		)	(439		)
Amortization of prior service cost	17			15			50			45
Recognized net actuarial loss	66			62			198			186
Total pension expense	$	126		$	96		$	374		$	292

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Retirement and Benefit Programs (Details) (USD $)	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013 plan	Nov. 30, 2012
Compensation and Retirement Disclosure [Abstract]
Number of defined benefit plans			2
Net periodic benefit cost
Service cost	$ 86,000	$ 67,000	$ 257,000	$ 203,000
Interest cost	100,000	99,000	300,000	297,000
Expected return on plan assets	(143,000)	(147,000)	(431,000)	(439,000)
Amortization of prior service cost	17,000	15,000	50,000	45,000
Recognized net actuarial loss	66,000	62,000	198,000	186,000
Total pension expense	126,000	96,000	374,000	292,000
Employer contributions to defined benefit pension plans			200,000
Expected additional contribution in the remainder of fiscal year 2014			$ 100,000

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Tables)

9 Months Ended

Nov. 30, 2013

Condensed Issuer, Guarantor and Non Guarantor Financial Information

Schedule of condensed consolidating balance sheet

Condensed Consolidating Balance Sheet at November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	73		$	3	$	1,998		—			$	2,074
Restricted cash	1,357			106		13,595			—			15,058
Accounts receivable	117,451			16,402		1,856			(1,843		)	133,866
Inventories	109,045			12,976		—			—			122,021
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	13,064			964		—			—			14,028
Other current assets	7,463			948		40			—			8,451
Total current assets	248,453			31,399		18,136			(2,490		)	295,498
Property, plant and equipment, net	331,861			20,547		7,120			(7,120		)	352,408
Goodwill	83,228			5,845		—			—			89,073
Other intangible assets	8,077			12,235		—			—			20,312
Investment in subsidiaries	82,021			—		—			(82,021		)	—
Intercompany receivables	999			25,194		(34		)	(26,159		)	—
Other assets	26,734			1,150		—			—			27,884
	$	781,373		$	96,370	$	25,222		$	(117,790	)	$	785,175
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	11,152		$	—	$	896		$	(647	)	11,401
Accounts payable - trade	45,476			3,994		231			(1,843		)	47,858
Accrued liabilities	38,768			2,943		15,172			—			56,883
Total current liabilities	95,396			6,937		16,299			(2,490		)	116,142
Intercompany payables	25,785			95		279			(26,159		)	—
Long-term debt, less current maturities	615,512			—		5,961			—			621,473
Intercompany capital leases, less current installments	7,120			—		—			(7,120		)	—
Deferred income taxes	41,924			8,413		—			—			50,337
Other liabilities	31,847			663		—			—			32,510
Total liabilities	817,584			16,108		22,539			(35,769		)	820,462
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(36,211		)	80,262		1,759			(82,021		)	(36,211		)
Noncontrolling interest	—			—		924			—			924
Total (deficit) equity	(36,211		)	80,262		2,683			(82,021		)	(35,287		)
Total liabilities and deficit	$	781,373		$	96,370	$	25,222		$	(117,790	)	$	785,175

Condensed Consolidating Balance Sheet at February 28, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors		Eliminations			Total
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		)
Total liabilities and deficit	$	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 November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Revenue	$	198,687		$	25,950	$	1,819		$	(5,110	)	$	221,346
Cost of revenue (exclusive of items shown separately below)	158,526			20,353		1,465			(4,918		)	175,426
Depreciation, depletion and amortization	10,392			1,349		—			—			11,741
Equipment and intangible asset impairment	—			—		—			—			—
Pension and profit sharing	1,988			67		—			—			2,055
Selling, administrative and general expenses	16,925			1,940		80			—			18,945
(Gain) loss on disposals of property, equipment and software	(516		)	19		—			—			(497		)
Operating income (loss)	11,372			2,222		274			(192		)	13,676
Interest expense, net	(19,230		)	21		(145		)	192			(19,162		)
Income (loss) before income taxes	(7,858		)	2,243		129			—			(5,486		)
Income tax expense (benefit)	(401		)	—		—			—			(401		)
Equity in earnings of subsidiaries	2,200			—		—			(2,200		)	—
Net income (loss)	(5,257		)	2,243		129			(2,200		)	(5,085		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	49			—		—			—			49
Comprehensive income (loss)	(5,208		)	2,243		129			(2,200		)	(5,036		)
Less: comprehensive income attributable to noncontrolling interest	—			—		(172		)	—			(172		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(5,208	)	$	2,243	$	(43	)	$	(2,200	)	$	(5,208	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	168,021		$	22,644		$	1,974		$	(2,403	)	$	190,236
Cost of revenue (exclusive of items shown separately below)	138,912			17,383			807			(2,295		)	154,807
Depreciation, depletion and amortization	9,445			3,936			—			—			13,381
Equipment and intangible asset impairment	—			—			—			—			—
Pension and profit sharing	1,963			87			—			—			2,050
Selling, administrative and general expenses	15,884			2,128			95			—			18,107
(Gain) loss on disposals of property, equipment and software	15			7			—			—			22
Operating income (loss)	1,802			(897		)	1,072			(108		)	1,869
Interest expense, net	(17,597		)	(69		)	(68		)	108			(17,626		)
Income (loss) before income taxes	(15,795		)	(966		)	1,004			—			(15,757		)
Income tax expense (benefit)	(5,551		)	(1,358		)	—			—			(6,909		)
Equity in earnings of subsidiaries	1,031			—			—			(1,031		)	—
Net income (loss)	(9,213		)	392			1,004			(1,031		)	(8,848		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	46			—			—			—			46
Comprehensive income (loss)	(9,167		)	392			1,004			(1,031		)	(8,802		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(365		)	—			(365		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(9,167	)	$	392		$	639		$	(1,031	)	$	(9,167	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	539,523		$	78,212		$	7,125		$	(13,405	)	$	611,455
Cost of revenue (exclusive of items shown separately below)	429,231			61,837			6,164			(13,050		)	484,182
Depreciation, depletion and amortization	32,197			4,793			—			—			36,990
Equipment and intangible asset impairment	—			452			—			—			452
Pension and profit sharing	6,254			253			—			—			6,507
Selling, administrative and general expenses	49,261			6,777			294			—			56,332
(Gain) loss on disposals of property, equipment and software	(510		)	(136		)	—			—			(646		)
Operating income (loss)	23,090			4,236			667			(355		)	27,638
Interest expense, net	(57,271		)	(78		)	(264		)	355			(57,258		)
Income (loss) before income taxes	(34,181		)	4,158			403			—			(29,620		)
Income tax expense (benefit)	(3,714		)	(111		)	—			—			(3,825		)
Equity in earnings of subsidiaries	3,591			—			—			(3,591		)	—
Net income (loss)	(26,876		)	4,269			403			(3,591		)	(25,795		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	148			—			—			—			148
Comprehensive income (loss)	(26,728		)	4,269			403			(3,591		)	(25,647		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(1,081		)	—			(1,081		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(26,728	)	$	4,269		$	(678	)	$	(3,591	)	$	(26,728	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	540,013		$	71,343		$	5,927		$	(8,524	)	$	608,759
Cost of revenue (exclusive of items shown separately below)	432,735			56,881			2,135			(8,199		)	483,552
Depreciation, depletion and amortization	30,866			7,638			—			—			38,504
Equipment and intangible asset impairment	—			300			—			—			300
Pension and profit sharing	6,213			271			—			—			6,484
Selling, administrative and general expenses	46,115			6,796			298			—			53,209
(Gain) loss on disposals of property, equipment and software	(107		)	101			—			—			(6		)
Operating income (loss)	24,191			(644		)	3,494			(325		)	26,716
Interest expense, net	(57,751		)	(212		)	(343		)	325			(57,981		)
Income (loss) before income taxes	(33,560		)	(856		)	3,151			—			(31,265		)
Income tax expense (benefit)	(10,006		)	(2,819		)	—			—			(12,825		)
Equity in earnings of subsidiaries	4,110			—			—			(4,110		)	—
Net income (loss)	(19,444		)	1,963			3,151			(4,110		)	(18,440		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	137			—			—			—			137
Comprehensive income (loss)	(19,307		)	1,963			3,151			(4,110		)	(18,303		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(1,004		)	—			(1,004		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(19,307	)	$	1,963		$	2,147		$	(4,110	)	$	(19,307	)

Schedule of condensed consolidating statements of cash flows

Condensed Consolidating Statement of Cash Flows for the nine months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Cash flows from operating activities	$	(19,836	)	$	2,842		$	2,989		$	(3,000	)	$	(17,005	)
Cash flows from investing activities
Capital expenditures	(14,040		)	(2,872		)	—			—			(16,912		)
Proceeds from sale of property and equipment	786			15			—			—			801
Change in cash value of life insurance	3,266			—			—			—			3,266
Change in restricted cash	(183		)	(1		)	(4,751		)	—			(4,935		)
Net cash used in investing activities	(10,171		)	(2,858		)	(4,751		)	—			(17,780		)
Cash flows from financing activities
Proceeds from revolving credit	252,739			—			—			—			252,739
Repayment of revolving credit	(215,418		)	—			—			—			(215,418		)
Proceeds from issuance of long-term debt	563			—			—			—			563
Repayment of long-term debt	(4,562		)	—			(674		)	—			(5,236		)
Payments on capital leases	(3,023		)	—			—			—			(3,023		)
Debt issuance costs	(250		)	—			—			—			(250		)
Dividends paid	—			—			(3,000		)	3,000			—
Distribution to noncontrolling interest	—			—			(2,050		)	—			(2,050		)
Net cash provided by (used in) financing activities	30,049			—			(5,724		)	3,000			27,325
Net increase (decrease) in cash and cash equivalents	42			(16		)	(7,486		)	—			(7,460		)
Cash and cash equivalents
Beginning of period	31			19			9,484			—			9,534
End of period	$	73		$	3		$	1,998		$	—		$	2,074

Condensed Consolidating Statement of Cash Flows for the nine months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(13,020	)	$	2,325		$	2,462		—		$	(8,233	)
Cash flows from investing activities
Capital expenditures	(29,133		)	(2,777		)	—			—		(31,910		)
Proceeds from sale of property and equipment	194			—			—			—		194
Change in cash value of life insurance	(3,013		)	—			—			—		(3,013		)
Change in restricted cash	(127		)	(4		)	(2		)	—		(133		)
Net cash used in investing activities	(32,079		)	(2,781		)	(2		)	—		(34,862		)
Cash flows from financing activities
Proceeds from revolving credit	224,413			—			—			—		224,413
Repayment of revolving credit	(283,361		)	—			—			—		(283,361		)
Proceeds from issuance of long-term debt	268,513			—			—			—		268,513
Repayment of long-term debt	(153,639		)	—			(390		)	—		(154,029		)
Payments on capital leases	(3,846		)	—			—			—		(3,846		)
Debt issuance costs	(14,062		)	—			—			—		(14,062		)
Distribution to noncontrolling interest	—			—			(1,084		)	—		(1,084		)
Net cash provided by (used in) financing activities	38,018			—			(1,474		)	—		36,544
Net (decrease) increase in cash and cash equivalents	(7,081		)	(456		)	986			—		(6,551		)
Cash and cash equivalents
Beginning of period	7,106			476			7,450			—		15,032
End of period	$	25		$	20		$	8,436		$	—	$	8,481

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Consolidated Statement of Changes in Equity (Deficit) (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Nov. 30, 2013	Feb. 28, 2013
Statement of Stockholders' Equity [Abstract]
Pension adjustment, tax benefit (expense)	$ (99)	$ 104

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Nov. 30, 2013	Feb. 28, 2013
Accounts receivable, reserves	$ 4,290	$ 3,515
Common Stock, Class A
Redeemable Common stock, par value (in dollars per share)	$ 1	$ 1
Common Stock, Class B
Redeemable Common stock, par value (in dollars per share)	$ 1	$ 1

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Subsequent Events

9 Months Ended

Nov. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On December 13, 2013, the Company entered into the fourth amendment to the ABL Facility, containing modifications which the Company negotiated with Fortress Credit Corp. (the “New Lender”). In connection with the fourth amendment, the New Lender agreed to an assignment of all of the outstanding loans and commitments under the ABL Facility by M&T to the New Lender.

The fourth amendment retains the overall $145.0 million amount of the ABL Facility by providing a term loan in the amount of $85.0 million, with a revolving credit commitment of $60.0 million. The Company had approximately $50.0 million outstanding under the ABL Facility immediately prior to the fourth amendment.

The combined term loan and revolving credit borrowings will continue to be subject to a borrowing base formula. The fourth amendment increases the advance rates that are applicable while the fixed charge coverage ratio is less than 1.00 to 1.00 as follows: (i) as to eligible accounts receivable, from 70% to 77.5%; and (ii) as to eligible inventory, from 40% to 50%. The advance rates as to eligible real estate remains the same. In addition, the fourth amendment retains the March 15, 2017 maturity date.

The fourth amendment extends the date after which the Company must comply with a fixed charge coverage ratio of 1.00 to 1.00 if it does not maintain minimum excess availability of $25.0 million by one year, until November 30, 2015.

The fourth amendment also terminates the fee letter and supplemental fee letter between M&T and the Company, which letters purported to give M&T the ability to modify the terms of the ABL Facility, subject to certain limitations. The fourth amendment further removes the obligation that the Company’s previously disclosed business plan focused on cost reductions and operational efficiencies must be reasonably acceptable in scope, timing and process to M&T.

Outstanding balances under the term loan and the revolving credit facility will bear interest at a rate per annum equal to, at the Company’s option, either (a) a base rate plus 5.0% or (b) a LIBOR rate (but not less than 1.25%) plus 7.00%. The unused portion of the revolving credit commitment will be subject to a commitment fee at a rate of 2.00% per annum.

Until M&T is replaced as the letter of credit issuing bank under the ABL Facility, the letter of credit sublimit under the ABL Facility is reduced from $15.0 million to $12.5 million, but the fourth amendment gives the Company the ability to obtain letters of credit from third parties to compensate for such reduction. To the extent that the Company posts cash collateral in order to procure the issuance of letters of credit (either under the ABL Facility or by third parties up to agreed limits), there will be an increase in the borrowing base equal to the amount by which such cash collateral exceeds the face amount of such letters of credit, not to exceed 3.00% of the face amount of such letters of credit. M&T is obligated to remain as Issuing Bank and Agent until March 31, 2014 unless a replacement issuing bank or successor agent, as applicable, has been appointed, and to provide cash management services to the Company until the six month anniversary of the fourth amendment effective date. The fourth amendment removes the swing line facility.

While the Company believes that the amended ABL Facility will allow it to meet its longer term liquidity requirements, it continues its previously announced efforts to refinance the ABL Facility in order to obtain increased liquidity at lower cost. There can be no assurances that the Company will be able to obtain such refinancing on favorable terms or at all. The Company will pay a 1.00% prepayment premium if it refinances the ABL Facility on or prior to January 31, 2014 (or on or prior to February 14, 2014 if the Company has posted a non-refundable deposit equal to such prepayment premium by January 31, 2014). The following premiums otherwise apply to prepayments of the term loan and reductions of the revolving commitments: (w) five percent (5.00%) on or prior to the first anniversary of the fourth amendment effective date, (x) three percent (3.00%) after the first anniversary of the fourth amendment effective date but on or prior to the second anniversary of the fourth amendment effective date, (y) one percent (1.00%) after the second anniversary of the fourth amendment effective date but on or prior to the third anniversary of the fourth amendment effective date and (z) zero percent (0%) after the third anniversary of the fourth amendment effective date.

In connection with certain mandatory prepayments of the term loan, there will be an increase to the revolving credit commitments in the amount of such prepayments to preserve availability under the ABL Facility.

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Document and Entity Information	9 Months Ended
	Nov. 30, 2013	Jan. 13, 2014 Common Stock, Class A	Jan. 13, 2014 Common Stock, Class B
Entity Registrant Name	New Enterprise Stone & Lime Co., Inc.
Entity Central Index Key	0001527032
Current Fiscal Year End Date	--02-28
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Nov. 30, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		500	273,285

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

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. The condensed balance sheet data at February 28, 2013 and the consolidated statement of changes in equity (deficit) at February 28, 2013 and February 29, 2012, were derived from audited financial statements, but do not include all disclosures required by 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 loss and comprehensive loss to both New Enterprise Stone & Lime Co., Inc. and its noncontrolling interest holders. For the periods presented, the net loss and comprehensive income (loss) attributable to noncontrolling interest are the same amounts.

Reclassifications

Reclassifications

Certain items previously reported in prior period financial statement captions have been conformed to agree with current presentation.  The Company reclassified costs associated with certain non-core operations along with costs associated with shared equipment across regional operations from “Selling, administrative and general” to “Cost of revenue”.  Further the Company reclassified costs associated with managing the equipment between “Construction materials” and “Heavy/highway construction” within “Cost of revenue” in the prior year.  These reclassifications had no effect on the Company's Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc., Statement of cash flows, Operating income or the Balance sheet.

Restructuring

Restructuring

In conjunction with the third amendment of the Asset Based Loan ("ABL") Facility, the Company adopted a cost reduction and operational efficiency plan.

Out of Period Adjustment

Management does not believe these out of period errors are material to the unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended November 30, 2013 or to any prior periods.

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.

Trade Accounts Receivable

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.

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.

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.

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.

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 nine months ended November 30, 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 analysis 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.  As a result of the annual impairment review completed as of February 28, 2013, the Company concluded that an indefinite useful life was no longer supported for trademarks and they are now being amortized over 30 and 50 years.

New Accounting Standards

New Accounting Standards

Recently Adopted Accounting Standards

In February 2013, the FASB issued ASU No. 2013-2, 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. 2012-2, 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.

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Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013	Nov. 30, 2012
Revenue
Construction materials	$ 109,291	$ 97,856	$ 311,411	$ 314,633
Heavy/highway construction	92,432	71,012	236,792	228,138
Traffic safety services and equipment	19,623	19,440	63,252	59,928
Other revenues	0	1,928	0	6,060
Total revenue	221,346	190,236	611,455	608,759
Cost of revenue (exclusive of items shown separately below)
Construction materials	75,267	74,222	215,322	221,008
Heavy/highway construction	85,725	64,269	220,621	211,395
Traffic safety services and equipment	14,434	15,476	48,239	46,848
Other expenses	0	840	0	4,301
Total cost of revenue	175,426	154,807	484,182	483,552
Depreciation, depletion and amortization	11,741	13,381	36,990	38,504
Equipment and intangible asset impairment	0	0	452	300
Pension and profit sharing	2,055	2,050	6,507	6,484
Selling, administrative and general expenses	18,945	18,107	56,332	53,209
(Gain) loss on disposals of property, equipment and software	(497)	22	(646)	(6)
Operating income	13,676	1,869	27,638	26,716
Interest expense, net	(19,162)	(17,626)	(57,258)	(57,981)
Loss before income taxes	(5,486)	(15,757)	(29,620)	(31,265)
Income tax benefit	(401)	(6,909)	(3,825)	(12,825)
Net loss	(5,085)	(8,848)	(25,795)	(18,440)
Unrealized actuarial gains and amortization of prior service costs, net of income taxes	49	46	148	137
Comprehensive loss	(5,036)	(8,802)	(25,647)	(18,303)
Less: Comprehensive income attributable to noncontrolling interest	(172)	(365)	(1,081)	(1,004)
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	$ (5,208)	$ (9,167)	$ (26,728)	$ (19,307)

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Income Taxes

9 Months Ended

Nov. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

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, after giving effect to items specifically related to the interim periods.

The effective income tax rates for the three months ended November 30, 2013 and 2012 were 7.3% and 43.8%, respectively, resulting in tax benefit of $0.4 million and $6.9 million, respectively. The effective income tax rates for the nine months ended November 30, 2013 and 2012 were 12.9% and 41.0%, respectively, resulting in tax benefit of $3.8 million and $12.8 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.

Cash paid for income taxes were not material for the three and nine months ended November 30, 2013 and 2012, respectively, primarily as a result of net operating losses.

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Long-Term Debt

9 Months Ended

Nov. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

	November 30,			February 28,
(In thousands)	2013			2013
ABL Facility ($71.8 million available as of November 30, 2013)	$	57,973		$	24,314
Secured Notes due 2018	300,962			276,925
Notes due 2018	250,000			250,000
Land, equipment and other obligations	18,129			19,005
Obligations under capital leases	5,810			7,743
Total debt	632,874			577,987
Less: Current portion	(11,401		)	(11,342		)
Total long-term debt	$	621,473		$	566,645

Asset-Based Loan Facility

The following is a description our ABL Facility, including all amendments thereto, as of November 30, 2013.

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 was to 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 ("Secured Notes") on a first-priority basis, except for certain real property.

Amendment of ABL Facility

First Amendment

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 17, 2012, December 26, 2012 and February 22, 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.  We were subject to the adjusted borrowing base calculation as of February 28, 2013 and November 30, 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 Manufacturers and Traders Trust Company ("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 November 30, 2013, M&T had not syndicated the ABL Facility and had not modified the terms of the ABL Facility.  See the discussion below concerning the potential modifications by M&T. Refer to Note 10. "Subsequent Events" for additional information.

Second Amendment

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.

Third Amendment

On May 29, 2013, we entered into the third amendment to the ABL Facility.  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 5.00%; (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 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.  Refer to Note 10. "Subsequent Events" for additional information. 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.

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 nine months endedNovember 30, 2013.

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 November 30, 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. Refer to Note 10. "Subsequent Events" for additional information.

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 1.00 to 1.00 for the immediately preceding four fiscal quarters or 12 consecutive months, as applicable.  As of November 30, 2013, the Company’s Fixed Charge Coverage Ratio was below 1.00 to 1.00. 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 1.00 to 1.00, the Company’s available borrowings under the ABL Facility will be reduced by $25.0 million. Refer to Note 10. "Subsequent Events" for additional information.

A fixed charge coverage 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 1.00 to 1.00, the borrowing base will be equal to the sum of (a) the lesser of (i) $56.0 million (from $65.0 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 1.00 to 1.00, if its minimum excess availability reaches $25.0 million (See amendment above).

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 November 30, 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. Refer to 10. "Subsequent Events" for additional information.

Interest Rate and Availability

As of November 30, 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 6.8% for the nine months ended November 30, 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. 

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 November 30, 2013, PIK interest was $41.0 million ($36.0 million was recorded as an increase to the Secured Notes and $5.0 million was recorded as a long-term obligation in other liabilities).

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	106.50	%
2016	103.25	%
2017 and thereafter	100.00	%

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.

The Company was 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 the Company completes the exchange offer for the Secured Notes.  On June 13, 2013, the Company filed the Secured Notes Registration Statement and concluded the exchange offer on October 30, 2013.  For the nine months endedNovember 30, 2013 the Company incurred $0.8 million of penalty interest. 

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	105.50	%
2015	102.75	%
2016 and thereafter	100.00	%

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.

The Company issued the 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 $4.6 million and $5.4 million as of November 30, 2013 and February 28, 2013, respectively.  The effective interest rate on these bonds ranged from 0.20% to 0.43% for nine months ended November 30, 2013 and 0.23% to 0.46% for the nine months ended November 30, 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 $5.8 million and $2.2 million, which is included within the current portion of long-term debt as of November 30, 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.

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Segment Reporting (Tables)

9 Months Ended

Nov. 30, 2013

Segment Reporting [Abstract]

Summary of certain financial data for the company's operating segments

The following is a summary of certain financial data for the Company’s operating segments:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Revenue
Construction materials	$	166,235		$	142,106		$	459,257		$	463,452
Heavy/highway construction	92,433			71,969			236,793			234,915
Traffic safety services and equipment	23,108			21,104			74,932			69,219
Other revenues	—			6,735			—			13,885
Segment totals	281,776			241,914			770,982			781,471
Eliminations	(60,430		)	(51,678		)	(159,527		)	(172,712		)
Total net revenue	$	221,346		$	190,236		$	611,455		$	608,759
Operating income (loss)
Construction materials	$	23,883		$	9,573		$	66,227		$	44,861
Heavy/highway construction	4,317			563			7,859			4,661
Traffic safety services and equipment	1,986			875			3,339			(400		)
Corporate and unallocated	(16,510		)	(9,142		)	(49,787		)	(22,406		)
Total operating income	$	13,676		$	1,869		$	27,638		$	26,716

	Three Months Ended   November 30,				Nine Months Ended   November 30,
(In thousands)	2013		2012		2013		2012
Depreciation, depletion and amortization
Construction materials	$	8,107	$	5,831	$	25,162	$	21,132
Heavy/highway construction	2,088		4,037		5,861		8,854
Traffic safety services and equipment	1,304		2,128		4,664		5,542
Corporate and unallocated	242		1,385		1,303		2,976
Total depreciation, depletion and amortization	$	11,741	$	13,381	$	36,990	$	38,504

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Nature of Operations and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

Schedule of total accounts receivable

The Company’s total accounts receivable consisted of the following: 

	November 30,			February 28,
(In thousands)	2013			2013
Costs and estimated earnings in excess of billings	$	22,010		$	4,265
Trade	111,236			48,392
Retainages	4,910			3,129
	138,156			55,786
Allowance for doubtful accounts	(4,290		)	(3,515		)
Accounts receivable, net	$	133,866		$	52,271

Schedule of total inventory

The Company’s total inventory consists of the following:

	November 30,		February 28,
(In thousands)	2013		2013
Crushed stone, agricultural lime, and sand	$	77,162	$	76,927
Safety equipment	12,921		16,057
Parts, tires, and supplies	11,702		11,331
Raw materials	10,211		9,247
Concrete blocks	3,369		4,210
Building materials	3,812		3,921
Other	2,844		3,451
	$	122,021	$	125,144

Schedule of property, plant and equipment

The Company’s property, plant and equipment consist of the following:

	November 30,			February 28,
(In thousands)	2013			2013
Limestone and sand acreage	$	144,630		$	144,076
Land, buildings and building improvements	100,828			100,074
Crushing, prestressing, and manufacturing plants	332,343			326,066
Contracting equipment, vehicles and other	299,494			300,450
Construction in progress	1,779			5,680
Property, plant and equipment	879,074			876,346
Less: Accumulated depreciation and depletion	(526,666		)	(504,478		)
Property, plant and equipment, net	$	352,408		$	371,868

Schedule of long term other assets

The Company’s long term other assets consist of the following:

	November 30,		February 28,
(In thousands)	2013		2013
Deferred financing fees (less current portion of $3,658)	$	11,070	$	14,523
Capitalized software (net of accumulated amortization of $1,891 and $1,080, respectively)	8,363		9,211
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively)	1,072		4,338
Deferred stripping costs	3,876		3,868
Other	3,503		2,512
Total other assets	$	27,884	$	34,452

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Segment Reporting

9 Months Ended

Nov. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

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 management's 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 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.

Operating income for the three months ended November 30, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $3.5 million and $1.3 million for construction materials and heavy/highway construction segments respectively. Operating profit for the nine months ended November 30, 2012, as reflected in the financial data below, included allocated indirect selling, administrative and general costs of $15.9 million and $3.2 million for construction materials and heavy/highway construction segments, respectively.

The following is a summary of certain financial data for the Company’s operating segments:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Revenue
Construction materials	$	166,235		$	142,106		$	459,257		$	463,452
Heavy/highway construction	92,433			71,969			236,793			234,915
Traffic safety services and equipment	23,108			21,104			74,932			69,219
Other revenues	—			6,735			—			13,885
Segment totals	281,776			241,914			770,982			781,471
Eliminations	(60,430		)	(51,678		)	(159,527		)	(172,712		)
Total net revenue	$	221,346		$	190,236		$	611,455		$	608,759
Operating income (loss)
Construction materials	$	23,883		$	9,573		$	66,227		$	44,861
Heavy/highway construction	4,317			563			7,859			4,661
Traffic safety services and equipment	1,986			875			3,339			(400		)
Corporate and unallocated	(16,510		)	(9,142		)	(49,787		)	(22,406		)
Total operating income	$	13,676		$	1,869		$	27,638		$	26,716

	Three Months Ended   November 30,				Nine Months Ended   November 30,
(In thousands)	2013		2012		2013		2012
Depreciation, depletion and amortization
Construction materials	$	8,107	$	5,831	$	25,162	$	21,132
Heavy/highway construction	2,088		4,037		5,861		8,854
Traffic safety services and equipment	1,304		2,128		4,664		5,542
Corporate and unallocated	242		1,385		1,303		2,976
Total depreciation, depletion and amortization	$	11,741	$	13,381	$	36,990	$	38,504

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Retirement and Benefit Programs

9 Months Ended

Nov. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Retirement and Benefit Programs

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 loss. 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.

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 nine months ended November 30, 2013 and 2012, was as follows:

	Three Months Ended   November 30,						Nine Months Ended   November 30,
(In thousands)	2013			2012			2013			2012
Net periodic benefit cost
Service cost	86			$	67		$	257		$	203
Interest cost	100			99			300			297
Expected return on plan assets	(143		)	(147		)	(431		)	(439		)
Amortization of prior service cost	17			15			50			45
Recognized net actuarial loss	66			62			198			186
Total pension expense	$	126		$	96		$	374		$	292

The Company made contributions to the defined benefit pension plans of approximately $0.2 million during the nine months ended November 30, 2013, and expects to make additional contributions of approximately $0.1 million in the remainder of fiscal year 2014.

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Commitments and Contingencies

9 Months Ended

Nov. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 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 November 30, 2013.  Reserves for retained losses within this captive, which are recorded in accrued liabilities in our condensed consolidated balance sheets, were approximately $14.8 million and $10.8 million as of November 30, 2013 and February 28, 2013, respectively.  Exposures for periods prior to the inception of the captive are covered by pre-existing insurance policies.

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Condensed Issuer, Guarantor and Non Guarantor Financial Information

9 Months Ended

Nov. 30, 2013

Condensed Issuer, Guarantor and Non Guarantor Financial Information

Condensed Issuer, Guarantor and Non Guarantor Financial Information

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 November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	73		$	3	$	1,998		—			$	2,074
Restricted cash	1,357			106		13,595			—			15,058
Accounts receivable	117,451			16,402		1,856			(1,843		)	133,866
Inventories	109,045			12,976		—			—			122,021
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	13,064			964		—			—			14,028
Other current assets	7,463			948		40			—			8,451
Total current assets	248,453			31,399		18,136			(2,490		)	295,498
Property, plant and equipment, net	331,861			20,547		7,120			(7,120		)	352,408
Goodwill	83,228			5,845		—			—			89,073
Other intangible assets	8,077			12,235		—			—			20,312
Investment in subsidiaries	82,021			—		—			(82,021		)	—
Intercompany receivables	999			25,194		(34		)	(26,159		)	—
Other assets	26,734			1,150		—			—			27,884
	$	781,373		$	96,370	$	25,222		$	(117,790	)	$	785,175
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	11,152		$	—	$	896		$	(647	)	11,401
Accounts payable - trade	45,476			3,994		231			(1,843		)	47,858
Accrued liabilities	38,768			2,943		15,172			—			56,883
Total current liabilities	95,396			6,937		16,299			(2,490		)	116,142
Intercompany payables	25,785			95		279			(26,159		)	—
Long-term debt, less current maturities	615,512			—		5,961			—			621,473
Intercompany capital leases, less current installments	7,120			—		—			(7,120		)	—
Deferred income taxes	41,924			8,413		—			—			50,337
Other liabilities	31,847			663		—			—			32,510
Total liabilities	817,584			16,108		22,539			(35,769		)	820,462
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(36,211		)	80,262		1,759			(82,021		)	(36,211		)
Noncontrolling interest	—			—		924			—			924
Total (deficit) equity	(36,211		)	80,262		2,683			(82,021		)	(35,287		)
Total liabilities and deficit	$	781,373		$	96,370	$	25,222		$	(117,790	)	$	785,175

Condensed Consolidating Balance Sheet at February 28, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors		Eliminations			Total
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		)
Total liabilities and deficit	$	724,720		$	92,791	$	26,593	$	(109,916	)	$	734,188

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Revenue	$	198,687		$	25,950	$	1,819		$	(5,110	)	$	221,346
Cost of revenue (exclusive of items shown separately below)	158,526			20,353		1,465			(4,918		)	175,426
Depreciation, depletion and amortization	10,392			1,349		—			—			11,741
Equipment and intangible asset impairment	—			—		—			—			—
Pension and profit sharing	1,988			67		—			—			2,055
Selling, administrative and general expenses	16,925			1,940		80			—			18,945
(Gain) loss on disposals of property, equipment and software	(516		)	19		—			—			(497		)
Operating income (loss)	11,372			2,222		274			(192		)	13,676
Interest expense, net	(19,230		)	21		(145		)	192			(19,162		)
Income (loss) before income taxes	(7,858		)	2,243		129			—			(5,486		)
Income tax expense (benefit)	(401		)	—		—			—			(401		)
Equity in earnings of subsidiaries	2,200			—		—			(2,200		)	—
Net income (loss)	(5,257		)	2,243		129			(2,200		)	(5,085		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	49			—		—			—			49
Comprehensive income (loss)	(5,208		)	2,243		129			(2,200		)	(5,036		)
Less: comprehensive income attributable to noncontrolling interest	—			—		(172		)	—			(172		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(5,208	)	$	2,243	$	(43	)	$	(2,200	)	$	(5,208	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	168,021		$	22,644		$	1,974		$	(2,403	)	$	190,236
Cost of revenue (exclusive of items shown separately below)	138,912			17,383			807			(2,295		)	154,807
Depreciation, depletion and amortization	9,445			3,936			—			—			13,381
Equipment and intangible asset impairment	—			—			—			—			—
Pension and profit sharing	1,963			87			—			—			2,050
Selling, administrative and general expenses	15,884			2,128			95			—			18,107
(Gain) loss on disposals of property, equipment and software	15			7			—			—			22
Operating income (loss)	1,802			(897		)	1,072			(108		)	1,869
Interest expense, net	(17,597		)	(69		)	(68		)	108			(17,626		)
Income (loss) before income taxes	(15,795		)	(966		)	1,004			—			(15,757		)
Income tax expense (benefit)	(5,551		)	(1,358		)	—			—			(6,909		)
Equity in earnings of subsidiaries	1,031			—			—			(1,031		)	—
Net income (loss)	(9,213		)	392			1,004			(1,031		)	(8,848		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	46			—			—			—			46
Comprehensive income (loss)	(9,167		)	392			1,004			(1,031		)	(8,802		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(365		)	—			(365		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(9,167	)	$	392		$	639		$	(1,031	)	$	(9,167	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	539,523		$	78,212		$	7,125		$	(13,405	)	$	611,455
Cost of revenue (exclusive of items shown separately below)	429,231			61,837			6,164			(13,050		)	484,182
Depreciation, depletion and amortization	32,197			4,793			—			—			36,990
Equipment and intangible asset impairment	—			452			—			—			452
Pension and profit sharing	6,254			253			—			—			6,507
Selling, administrative and general expenses	49,261			6,777			294			—			56,332
(Gain) loss on disposals of property, equipment and software	(510		)	(136		)	—			—			(646		)
Operating income (loss)	23,090			4,236			667			(355		)	27,638
Interest expense, net	(57,271		)	(78		)	(264		)	355			(57,258		)
Income (loss) before income taxes	(34,181		)	4,158			403			—			(29,620		)
Income tax expense (benefit)	(3,714		)	(111		)	—			—			(3,825		)
Equity in earnings of subsidiaries	3,591			—			—			(3,591		)	—
Net income (loss)	(26,876		)	4,269			403			(3,591		)	(25,795		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	148			—			—			—			148
Comprehensive income (loss)	(26,728		)	4,269			403			(3,591		)	(25,647		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(1,081		)	—			(1,081		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(26,728	)	$	4,269		$	(678	)	$	(3,591	)	$	(26,728	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	540,013		$	71,343		$	5,927		$	(8,524	)	$	608,759
Cost of revenue (exclusive of items shown separately below)	432,735			56,881			2,135			(8,199		)	483,552
Depreciation, depletion and amortization	30,866			7,638			—			—			38,504
Equipment and intangible asset impairment	—			300			—			—			300
Pension and profit sharing	6,213			271			—			—			6,484
Selling, administrative and general expenses	46,115			6,796			298			—			53,209
(Gain) loss on disposals of property, equipment and software	(107		)	101			—			—			(6		)
Operating income (loss)	24,191			(644		)	3,494			(325		)	26,716
Interest expense, net	(57,751		)	(212		)	(343		)	325			(57,981		)
Income (loss) before income taxes	(33,560		)	(856		)	3,151			—			(31,265		)
Income tax expense (benefit)	(10,006		)	(2,819		)	—			—			(12,825		)
Equity in earnings of subsidiaries	4,110			—			—			(4,110		)	—
Net income (loss)	(19,444		)	1,963			3,151			(4,110		)	(18,440		)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	137			—			—			—			137
Comprehensive income (loss)	(19,307		)	1,963			3,151			(4,110		)	(18,303		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(1,004		)	—			(1,004		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(19,307	)	$	1,963		$	2,147		$	(4,110	)	$	(19,307	)

Condensed Consolidating Statement of Cash Flows for the nine months ended November 30, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Cash flows from operating activities	$	(19,836	)	$	2,842		$	2,989		$	(3,000	)	$	(17,005	)
Cash flows from investing activities
Capital expenditures	(14,040		)	(2,872		)	—			—			(16,912		)
Proceeds from sale of property and equipment	786			15			—			—			801
Change in cash value of life insurance	3,266			—			—			—			3,266
Change in restricted cash	(183		)	(1		)	(4,751		)	—			(4,935		)
Net cash used in investing activities	(10,171		)	(2,858		)	(4,751		)	—			(17,780		)
Cash flows from financing activities
Proceeds from revolving credit	252,739			—			—			—			252,739
Repayment of revolving credit	(215,418		)	—			—			—			(215,418		)
Proceeds from issuance of long-term debt	563			—			—			—			563
Repayment of long-term debt	(4,562		)	—			(674		)	—			(5,236		)
Payments on capital leases	(3,023		)	—			—			—			(3,023		)
Debt issuance costs	(250		)	—			—			—			(250		)
Dividends paid	—			—			(3,000		)	3,000			—
Distribution to noncontrolling interest	—			—			(2,050		)	—			(2,050		)
Net cash provided by (used in) financing activities	30,049			—			(5,724		)	3,000			27,325
Net increase (decrease) in cash and cash equivalents	42			(16		)	(7,486		)	—			(7,460		)
Cash and cash equivalents
Beginning of period	31			19			9,484			—			9,534
End of period	$	73		$	3		$	1,998		$	—		$	2,074

Condensed Consolidating Statement of Cash Flows for the nine months ended November 30, 2012

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(13,020	)	$	2,325		$	2,462		—		$	(8,233	)
Cash flows from investing activities
Capital expenditures	(29,133		)	(2,777		)	—			—		(31,910		)
Proceeds from sale of property and equipment	194			—			—			—		194
Change in cash value of life insurance	(3,013		)	—			—			—		(3,013		)
Change in restricted cash	(127		)	(4		)	(2		)	—		(133		)
Net cash used in investing activities	(32,079		)	(2,781		)	(2		)	—		(34,862		)
Cash flows from financing activities
Proceeds from revolving credit	224,413			—			—			—		224,413
Repayment of revolving credit	(283,361		)	—			—			—		(283,361		)
Proceeds from issuance of long-term debt	268,513			—			—			—		268,513
Repayment of long-term debt	(153,639		)	—			(390		)	—		(154,029		)
Payments on capital leases	(3,846		)	—			—			—		(3,846		)
Debt issuance costs	(14,062		)	—			—			—		(14,062		)
Distribution to noncontrolling interest	—			—			(1,084		)	—		(1,084		)
Net cash provided by (used in) financing activities	38,018			—			(1,474		)	—		36,544
Net (decrease) increase in cash and cash equivalents	(7,081		)	(456		)	986			—		(6,551		)
Cash and cash equivalents
Beginning of period	7,106			476			7,450			—		15,032
End of period	$	25		$	20		$	8,436		$	—	$	8,481

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Long-Term Debt (Details 5) (USD $) In Millions, unless otherwise specified			9 Months Ended
	Nov. 30, 2013	Feb. 28, 2013	Nov. 30, 2013 Land, equipment and other obligations	Feb. 28, 2013 Land, equipment and other obligations	Nov. 30, 2013 Land, equipment and other obligations Minimum	Nov. 30, 2012 Land, equipment and other obligations Minimum	Nov. 30, 2013 Land, equipment and other obligations Maximum	Nov. 30, 2012 Land, equipment and other obligations Maximum
Long-Term Debt
Interest rate			10.00%
Transferable letters of credit			$ 4.6	$ 5.4
Effective interest rate					0.20%	0.23%	0.43%	0.46%
Cash overdraft liability	$ 5.8	$ 2.2

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Long-Term Debt (Tables)

9 Months Ended

Nov. 30, 2013

Long-Term Debt

Schedule of long-term debt

	November 30,			February 28,
(In thousands)	2013			2013
ABL Facility ($71.8 million available as of November 30, 2013)	$	57,973		$	24,314
Secured Notes due 2018	300,962			276,925
Notes due 2018	250,000			250,000
Land, equipment and other obligations	18,129			19,005
Obligations under capital leases	5,810			7,743
Total debt	632,874			577,987
Less: Current portion	(11,401		)	(11,342		)
Total long-term debt	$	621,473		$	566,645

Secured Notes due 2018

Long-Term Debt

Schedule of percentages of principal amount at which Notes may be redeemed

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	106.50	%
2016	103.25	%
2017 and thereafter	100.00	%

Notes due 2018

Long-Term Debt

Schedule of percentages of principal amount at which Notes may be redeemed

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	105.50	%
2015	102.75	%
2016 and thereafter	100.00	%

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Nature of Operations and Summary of Significant Accounting Policies (Details 2) (USD $)	3 Months Ended		9 Months Ended				1 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013 segment	Nov. 30, 2012	Feb. 28, 2013		Aug. 31, 2013 Traffic safety services and equipment	Nov. 30, 2013 Limestone and sand acreage	Feb. 28, 2013 Limestone and sand acreage	Nov. 30, 2013 Land, buildings and building improvements	Feb. 28, 2013 Land, buildings and building improvements	Nov. 30, 2013 Crushing, prestressing and manufacturing plants	Feb. 28, 2013 Crushing, prestressing and manufacturing plants	Nov. 30, 2013 Contracting equipment, vehicles and other	Feb. 28, 2013 Contracting equipment, vehicles and other	Nov. 30, 2013 Construction in progress	Feb. 28, 2013 Construction in progress
Accounting Policies [Abstract]
Number of reportable segments			3
Restructuring Costs [Abstract]
Cost reduction and operational efficiency expenses			$ 4,000,000
Cash and Cash Equivalents and Restricted Cash
Bank overdraft balance	5,800,000		5,800,000		2,200,000
Trade Accounts Receivable
Costs and estimated earnings in excess of billings	22,010,000		22,010,000		4,265,000
Trade	111,236,000		111,236,000		48,392,000
Retainages	4,910,000		4,910,000		3,129,000
Accounts receivable, gross	138,156,000		138,156,000		55,786,000
Allowance for doubtful accounts	(4,290,000)		(4,290,000)		(3,515,000)
Accounts receivable, net	133,866,000		133,866,000		52,271,000	[1]
Inventories
Crushed stone, agricultural lime and sand	77,162,000		77,162,000		76,927,000
Safety equipment	12,921,000		12,921,000		16,057,000
Parts, tires and supplies	11,702,000		11,702,000		11,331,000
Raw materials	10,211,000		10,211,000		9,247,000
Concrete blocks	3,369,000		3,369,000		4,210,000
Building materials	3,812,000		3,812,000		3,921,000
Other	2,844,000		2,844,000		3,451,000
Total Inventory	122,021,000		122,021,000		125,144,000	[1]
Property, Plant and Equipment
Property, plant and equipment	879,074,000		879,074,000		876,346,000			144,630,000	144,076,000	100,828,000	100,074,000	332,343,000	326,066,000	299,494,000	300,450,000	1,779,000	5,680,000
Less: Accumulated depreciation and depletion	(526,666,000)		(526,666,000)		(504,478,000)
Property, plant and equipment, net	352,408,000		352,408,000		371,868,000	[1]
Depreciation expense	10,700,000	12,500,000	33,700,000	35,400,000
Asset impairment charges	$ 0	$ 0	$ 452,000	$ 300,000			$ 500,000

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013	Nov. 30, 2012	Feb. 28, 2013
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	$ 221,346	$ 190,236	$ 611,455	$ 608,759
Cost of revenue (exclusive of items shown separately below)	175,426	154,807	484,182	483,552
Depreciation, depletion and amortization	11,741	13,381	36,990	38,504
Equipment and intangible asset impairment	0	0	452	300
Pension and profit sharing	2,055	2,050	6,507	6,484
Selling, administrative and general expenses	18,945	18,107	56,332	53,209
(Gain) loss on disposals of property, equipment and software	(497)	22	(646)	(6)
Operating income	13,676	1,869	27,638	26,716
Interest expense, net	(19,162)	(17,626)	(57,258)	(57,981)
Loss before income taxes	(5,486)	(15,757)	(29,620)	(31,265)
Income tax benefit	(401)	(6,909)	(3,825)	(12,825)
Equity in earnings of subsidiaries	0	0	0	0
Net loss	(5,085)	(8,848)	(25,795)	(18,440)	(56,134)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	49	46	148	137
Comprehensive loss	(5,036)	(8,802)	(25,647)	(18,303)
Less: Comprehensive income attributable to noncontrolling interest	(172)	(365)	(1,081)	(1,004)
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	(5,208)	(9,167)	(26,728)	(19,307)
New Enterprise Stone & Lime Co., Inc.
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	198,687	168,021	539,523	540,013
Cost of revenue (exclusive of items shown separately below)	158,526	138,912	429,231	432,735
Depreciation, depletion and amortization	10,392	9,445	32,197	30,866
Equipment and intangible asset impairment	0	0	0	0
Pension and profit sharing	1,988	1,963	6,254	6,213
Selling, administrative and general expenses	16,925	15,884	49,261	46,115
(Gain) loss on disposals of property, equipment and software	(516)	15	(510)	(107)
Operating income	11,372	1,802	23,090	24,191
Interest expense, net	(19,230)	(17,597)	(57,271)	(57,751)
Loss before income taxes	(7,858)	(15,795)	(34,181)	(33,560)
Income tax benefit	(401)	(5,551)	(3,714)	(10,006)
Equity in earnings of subsidiaries	2,200	1,031	3,591	4,110
Net loss	(5,257)	(9,213)	(26,876)	(19,444)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	49	46	148	137
Comprehensive loss	(5,208)	(9,167)	(26,728)	(19,307)
Less: Comprehensive income attributable to noncontrolling interest	0	0	0	0
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	(5,208)	(9,167)	(26,728)	(19,307)
Guarantor Subsidiaries
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	25,950	22,644	78,212	71,343
Cost of revenue (exclusive of items shown separately below)	20,353	17,383	61,837	56,881
Depreciation, depletion and amortization	1,349	3,936	4,793	7,638
Equipment and intangible asset impairment	0	0	452	300
Pension and profit sharing	67	87	253	271
Selling, administrative and general expenses	1,940	2,128	6,777	6,796
(Gain) loss on disposals of property, equipment and software	19	7	(136)	101
Operating income	2,222	(897)	4,236	(644)
Interest expense, net	21	(69)	(78)	(212)
Loss before income taxes	2,243	(966)	4,158	(856)
Income tax benefit	0	(1,358)	(111)	(2,819)
Equity in earnings of subsidiaries	0	0	0	0
Net loss	2,243	392	4,269	1,963
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	0	0	0	0
Comprehensive loss	2,243	392	4,269	1,963
Less: Comprehensive income attributable to noncontrolling interest	0	0	0	0
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	2,243	392	4,269	1,963
Non Guarantors
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	1,819	1,974	7,125	5,927
Cost of revenue (exclusive of items shown separately below)	1,465	807	6,164	2,135
Depreciation, depletion and amortization	0	0	0	0
Equipment and intangible asset impairment	0	0	0	0
Pension and profit sharing	0	0	0	0
Selling, administrative and general expenses	80	95	294	298
(Gain) loss on disposals of property, equipment and software	0	0	0	0
Operating income	274	1,072	667	3,494
Interest expense, net	(145)	(68)	(264)	(343)
Loss before income taxes	129	1,004	403	3,151
Income tax benefit	0	0	0	0
Equity in earnings of subsidiaries	0	0	0	0
Net loss	129	1,004	403	3,151
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	0	0	0	0
Comprehensive loss	129	1,004	403	3,151
Less: Comprehensive income attributable to noncontrolling interest	(172)	(365)	(1,081)	(1,004)
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	(43)	639	(678)	2,147
Eliminations
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	(5,110)	(2,403)	(13,405)	(8,524)
Cost of revenue (exclusive of items shown separately below)	(4,918)	(2,295)	(13,050)	(8,199)
Depreciation, depletion and amortization	0	0	0	0
Equipment and intangible asset impairment	0	0	0	0
Pension and profit sharing	0	0	0	0
Selling, administrative and general expenses	0	0	0	0
(Gain) loss on disposals of property, equipment and software	0	0	0	0
Operating income	(192)	(108)	(355)	(325)
Interest expense, net	192	108	355	325
Loss before income taxes	0	0	0	0
Income tax benefit	0	0	0	0
Equity in earnings of subsidiaries	(2,200)	(1,031)	(3,591)	(4,110)
Net loss	(2,200)	(1,031)	(3,591)	(4,110)
Unrealized actuarial gains (losses) and amortization of prior service costs, net of income tax	0	0	0	0
Comprehensive loss	(2,200)	(1,031)	(3,591)	(4,110)
Less: Comprehensive income attributable to noncontrolling interest	0	0	0	0
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	$ (2,200)	$ (1,031)	$ (3,591)	$ (4,110)

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 30, 2013		Nov. 30, 2012
Reconciliation of net loss to net cash from operating activities
Net loss	$ (25,795)		$ (18,440)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion and amortization	36,990		38,504
Equipment and intangible asset impairment	452		300
Gain on disposals of property, equipment and software	(646)		(6)
Non-cash payment-in-kind interest accretion	17,630		17,117
Amortization and write-off of debt issuance costs	3,703		9,145
Deferred income taxes	(3,749)		(12,818)
Bad debt expense	1,678		1,249
Changes in assets and liabilities:
Accounts receivable	(82,266)		(34,687)
Inventories	3,123		2,908
Other assets	169		(3,121)
Accounts payable	27,251		827
Other liabilities	4,455		(9,211)
Net cash used in operating activities	(17,005)		(8,233)
Cash flows from investing activities
Capital expenditures	(16,912)		(31,910)
Proceeds from sale of property and equipment	801		194
Change in cash value of life insurance	3,266		(3,013)
Change in restricted cash	(4,935)		(133)
Net cash used in investing activities	(17,780)		(34,862)
Cash flows from financing activities
Proceeds from revolving credit	252,739		224,413
Repayment of revolving credit	(215,418)		(283,361)
Proceeds from issuance of long-term debt	563		268,513
Repayment of long-term debt	(5,236)		(154,029)
Payments on capital leases	(3,023)		(3,846)
Debt issuance costs	(250)		(14,062)
Distribution to noncontrolling interest	(2,050)		(1,084)
Net cash provided by financing activities	27,325		36,544
Net decrease in cash and cash equivalents	(7,460)		(6,551)
Cash and cash equivalents
Beginning of period	9,534	[1]	15,032
End of period	$ 2,074		$ 8,481

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Accrued Liabilities

9 Months Ended

Nov. 30, 2013

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following: 

	November 30,		February 28,
(In thousands)	2013		2013
Insurance	$	25,823	$	19,715
Interest	10,398		18,962
Payroll and vacation	9,530		8,281
Withholding taxes	1,744		1,640
Billings in excess of costs and estimated earnings on uncompleted contracts	6,255		1,529
Contract expenses	515		209
Other	2,618		3,671
Total accrued liabilities	$	56,883	$	54,007

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Nature of Operations and Summary of Significant Accounting Policies (Details 3) (USD $)	3 Months Ended				9 Months Ended
	Nov. 30, 2013	Feb. 28, 2013		Nov. 30, 2012	Nov. 30, 2013	Nov. 30, 2012
Accounting Policies [Abstract]
Changes in carrying value of goodwill					$ 0
Adjustment to the carrying values of goodwill		0
Other Intangible Assets
Amortization of intangible assets	200,000			200,000	700,000	500,000
Other Assets
Deferred financing fees (less current portion of $3,658)	11,070,000	14,523,000			11,070,000
Deferred financing fees, current	3,658,000	3,658,000			3,658,000
Capitalized software (net of accumulated amortization of $1,891 and $1,080, respectively)	8,363,000	9,211,000			8,363,000
Capitalized software, accumulated amortization	1,891,000	1,080,000			1,891,000
Cash surrender value of life insurance (net of loans of $3,204 and $0, respectively)	1,072,000	4,338,000			1,072,000
Loans outstanding on cash surrender value of life insurance	3,204,000	0			3,204,000
Deferred stripping costs	3,876,000	3,868,000			3,876,000
Other	3,503,000	2,512,000			3,503,000
Total other assets	27,884,000	34,452,000	[1]		27,884,000
Technology
Other Intangible Assets
Amortization period					15 years
Customer relationships
Other Intangible Assets
Amortization period					20 years
Trademarks
Other Intangible Assets
Impairment of trademark					$ 300,000
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

[1] Data derived from audited consolidated balance sheet as of February 28, 2013.

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Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013 segment	Nov. 30, 2012
Segment Reporting
Number of reportable segments			3
Indirect selling, administrative and general costs	$ 18,945	$ 18,107	$ 56,332	$ 53,209
Revenue	221,346	190,236	611,455	608,759
Operating income	13,676	1,869	27,638	26,716
Depreciation, depletion and amortization	11,741	13,381	36,990	38,504
Construction materials
Segment Reporting
Indirect selling, administrative and general costs		3,500		15,900
Revenue	166,235	142,106	459,257	463,452
Operating income	23,883	9,573	66,227	44,861
Depreciation, depletion and amortization	8,107	5,831	25,162	21,132
Heavy/highway construction
Segment Reporting
Indirect selling, administrative and general costs		1,300		3,200
Revenue	92,433	71,969	236,793	234,915
Operating income	4,317	563	7,859	4,661
Depreciation, depletion and amortization	2,088	4,037	5,861	8,854
Traffic safety services and equipment
Segment Reporting
Revenue	23,108	21,104	74,932	69,219
Operating income	1,986	875	3,339	(400)
Depreciation, depletion and amortization	1,304	2,128	4,664	5,542
Other revenues
Segment Reporting
Revenue	0	6,735	0	13,885
Segment totals
Segment Reporting
Revenue	281,776	241,914	770,982	781,471
Eliminations
Segment Reporting
Revenue	(60,430)	(51,678)	(159,527)	(172,712)
Corporate and unallocated
Segment Reporting
Operating income	(16,510)	(9,142)	(49,787)	(22,406)
Depreciation, depletion and amortization	$ 242	$ 1,385	$ 1,303	$ 2,976

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Accrued Liabilities (Tables)

9 Months Ended

Nov. 30, 2013

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consisted of the following: 

	November 30,		February 28,
(In thousands)	2013		2013
Insurance	$	25,823	$	19,715
Interest	10,398		18,962
Payroll and vacation	9,530		8,281
Withholding taxes	1,744		1,640
Billings in excess of costs and estimated earnings on uncompleted contracts	6,255		1,529
Contract expenses	515		209
Other	2,618		3,671
Total accrued liabilities	$	56,883	$	54,007