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 May 31, 2014

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   o  No   ý

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   o  No   ý

The registrant is a voluntary filer and not subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934.

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 July 10, 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 May 31, 2014

	Page(s)
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Balance Sheets at May 31, 2014 and February 28, 2014	3
Condensed Consolidated Statements of Comprehensive Loss for the three months ended May 31, 2014 and 2013	4
Condensed Consolidated Statements of Cash Flows for the three months ended May 31, 2014 and 2013	5
Notes to Condensed Consolidated Financial Statements	6-26
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26-34
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	34-39
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	39
Item 1A. Risk Factors	39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3. Defaults Upon Senior Securities	39
Item 4. Mine Safety Disclosure	39
Item 5. Other Information	39
Item 6. Exhibits	40
Signature	41
Exhibit Index	42

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ITEM 1. FINANCIAL STATEMENTS

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

Condensed Consolidated Balance Sheets (unaudited)

(In thousands, except share and per share data)	May 31, 2014			February 28, 2014 *
Assets
Current assets
Cash and cash equivalents	$	2,376		$	23,892
Restricted cash	21,548			27,684
Accounts receivable, less reserves of $4,718 and $5,228 respectively	106,122			61,319
Inventories	108,292			107,313
Deferred income taxes	3,713			3,713
Other current assets	7,596			9,005
Assets held for sale	4,552			14,467
Total current assets	254,199			247,393
Property, plant and equipment, net	325,667			333,819
Goodwill	87,976			87,976
Other intangible assets, net	19,735			19,951
Other assets	31,559			32,799
Total assets	$	719,136		$	721,938
Liabilities and Deficit
Current liabilities
Current maturities of long-term debt	$	37,718		$	30,514
Accounts payable — trade	45,949			21,946
Accrued liabilities	51,272			60,507
Total current liabilities	134,939			112,967
Long-term debt, less current maturities	640,560			629,452
Deferred income taxes	33,081			34,890
Other liabilities	39,288			45,965
Total liabilities	847,868			823,274
Commitments and contingencies (Note 8 and Note 2)	0			0
Common stock, Class A, voting, $1 par value	1			1
Common stock, Class B, nonvoting, $1 par value	273			273
Accumulated deficit	(255,306		)	(227,696		)
Additional paid-in capital	126,962			126,962
Accumulated other comprehensive loss	(1,936		)	(1,975		)
Total New Enterprise Stone & Lime Co., Inc. deficit	(130,006		)	(102,435		)
Noncontrolling interest in consolidated subsidiaries	1,274			1,099
Total deficit	(128,732		)	(101,336		)
Total liabilities and deficit	$	719,136		$	721,938

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

* Data derived from audited consolidated balance sheet as of February 28, 2014.

3

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

Condensed Consolidated Statements of Comprehensive Loss (unaudited)

	Three Months Ended May 31,
(In thousands)	2014			2013
Revenue
Construction materials	$	76,645		$	79,953
Heavy/highway construction	44,098			47,893
Traffic safety services and equipment	19,685			19,898
Total revenue	140,428			147,744
Cost of revenue (exclusive of items shown separately below)
Construction materials	61,060			64,076
Heavy/highway construction	44,409			47,404
Traffic safety services and equipment	15,182			16,238
Total cost of revenue	120,651			127,718
Depreciation, depletion and amortization	11,090			12,118
Asset impairment	1,680			—
Pension and profit sharing	1,387			1,878
Selling, administrative and general expenses	15,120			19,413
(Gain) loss on disposals of property, equipment and software	(149		)	152
Operating loss	(9,351		)	(13,535		)
Interest expense, net	(20,326		)	(19,177		)
Loss before income taxes	(29,677		)	(32,712		)
Income tax benefit	(2,242		)	(3,475		)
Net loss	(27,435		)	(29,237		)
Less: Net income attributable to noncontrolling interest	(175		)	(739		)
Net loss attributable to New Enterprise Stone & Lime Co., Inc.	(27,610		)	(29,976		)
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income taxes ($26 and $8, respectively)	39			69
Comprehensive loss	(27,396		)	(29,168		)
Less: Comprehensive income attributable to noncontrolling interest	(175		)	(739		)
Comprehensive loss attributable to New Enterprise Stone & Lime Co., Inc.	$	(27,571	)	$	(29,907	)

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

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

Condensed Consolidated Statements of Cash Flows (unaudited)

	Three Months Ended May 31,
(In thousands)	2014			2013
Reconciliation of net loss to net cash from operating activities
Net loss	$	(27,435	)	$	(29,237	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion and amortization	11,090			12,118
Asset impairment	1,680			—
(Gain) loss on disposals of property, equipment and software	(149		)	152
Non-cash payment-in-kind interest accretion	5,568			5,862
Amortization and write-off of debt issuance costs	1,082			1,570
Deferred income taxes	(1,809		)	(3,630		)
Bad debt expense	343			1,117
Changes in assets and liabilities:
Accounts receivable	(45,050		)	(56,410		)
Inventories	4,464			333
Other assets	1,574			336
Accounts payable	24,003			35,221
Other liabilities	(9,565		)	(3,685		)
Net cash used in operating activities	(34,204		)	(36,253		)
Cash flows from investing activities
Capital expenditures	(4,110		)	(9,491		)
Proceeds from sale of property, equipment, and assets held for sale	939			67
Change in cash value of life insurance	(31		)	3,089
Change in restricted cash	10,236			(4,628		)
Net cash provided by (used in) investing activities	7,034			(10,963		)
Cash flows from financing activities
Proceeds from revolving credit	—			49,419
Repayment of revolving credit	—			(6,324		)
Net proceeds from short-term borrowings	11,528			—
Proceeds from issuance of long-term debt	39			481
Repayment of long-term debt	(4,256		)	(1,091		)
Payments on capital leases	(901		)	(1,096		)
Debt issuance costs	(756		)	—
Distribution to noncontrolling interest	—			(451		)
Net cash provided by financing activities	5,654			40,938
Net decrease in cash and cash equivalents	(21,516		)	(6,278		)
Cash and cash equivalents
Beginning of period	23,892			9,534
End of period	$	2,376		$	3,256

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

5

New Enterprise Stone and Lime Co. Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

For the Quarter Ended May 31, 2014

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, 2014 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, 2014 filed with the Securities and Exchange Commission (“SEC”) on May 21, 2014. 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.

Restructuring

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. and Martin Limestone, Inc., into a new East division and the NESL operating business, Buffalo Crushed Stone, Inc. and Valley Quarries, Inc. 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.

The restructuring activities during the three months ended May 31, 2014 resulted in one-time pre-tax charges of approximately $1.8 million, comprised of approximately $0.1 million for severance and related benefit costs and $1.7 million in outside advisory services related to the implementation of such plan. The Company has accrued approximately $1.2 million of severance costs as a component of accrued expenses in the consolidated balance sheet at May 31, 2014.

6

The following table represents the restructuring charges:

(In thousands)	Total Restructuring
Expected to be incurred through fiscal year 2015	$	12,484
Incurred in fiscal year 2014	$	7,134
Incurred in fiscal year 2015	1,810
Cumulative amount incurred at May 31, 2014	$	8,944

The following table presents changes to Accrued Restructuring:

(In thousands)	Accrued Restructuring
Balance at February 28, 2014	$	1,300
Additional charges incurred	1,810
Payment of restructuring charges	(1,958		)
Balance at May 31, 2014	$	1,152

Assets Held for Sale

The Company classifies assets as held for sale when the all following criteria are met: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year, with a few exceptions; and (v) the asset is being actively marketed for sale at a price that is reasonable, in relation to its current fair value.

On March 14, 2014, the Company concluded the sale of its block manufacturing and Construction Supply Center ("CSC") operations at its New Holland, PA location. In addition to the sale of the certain block manufacturing and CSC facilities, the sale agreement contained certain non-compete provisions which required the Company to close similar facilities at one location as of the settlement date. The assets held for sale are from the construction materials segment, and the total sale price was approximately $8.9 million. The Company provided $4.1 million of the proceeds on the sale of the New Holland assets to the trustee of the $265.0 million13% senior secured noted due 2018 ("the Secured Notes") which may be utilized to purchase additional fixed equipment. Assets related to the sale of block manufacturing and CSC operations at its New Holland locations composed approximately $8.4 million of the total assets held for sale at February 28, 2014.

Assets held for sale at May 31, 2014 are composed of non-core operations related to the Company's block manufacturing facility and CSC facility. The Company recorded an asset impairment of approximately $1.6 million related to equipment and approximately $0.1 million of inventory in the construction materials segment for assets held for sale in the three months ended May 31, 2014. On June 16, 2014, the Company completed the sale of its block manufacturing facility and CSC facility at its Towanda, PA location for $0.5 million.

7

The Company's assets held for sale consisted of the following:

(In thousands)	May 31, 2014		February 28, 2014
Inventory	$	229	$	6,690
PP&E, net of impairment	4,323		7,777
	$	4,552	$	14,467

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 and those differences could be material.

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.

The Company uses a cash pooling arrangement with a single financial institution with specific provisions for the right to offset positive and negative cash balances.

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 consists of the following: 

	May 31,			February 28,
(In thousands)	2014			2014
Costs and estimated earnings in excess of billings	$	18,188		$	9,838
Trade	86,430			51,310
Retainages	6,222			5,399
	110,840			66,547
Allowance for doubtful accounts	(4,718		)	(5,228		)
Accounts receivable, net	$	106,122		$	61,319

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 inventories consist of the following:

	May 31,		February 28,
(In thousands)	2014		2014
Crushed stone, agricultural lime, and sand	$	69,485	$	70,820
Safety equipment	13,404		12,091
Parts, tires, and supplies	10,285		10,187
Raw materials	11,520		10,542
Building materials	1,078		1,012
Other	2,520		2,661
	$	108,292	$	107,313

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:

	May 31,			February 28,
(In thousands)	2014			2014
Limestone and sand acreage	$	148,260		$	148,327
Land, buildings and building improvements	89,956			90,392
Crushing, prestressing, and manufacturing plants	314,827			316,772
Contracting equipment, vehicles and other	294,205			293,336
Construction in progress	2,653			730
Property, plant and equipment	849,901			849,557
Less: Accumulated depreciation and depletion	(524,234		)	(515,738		)
Property, plant and equipment, net	$	325,667		$	333,819

For the three months ended May 31, 2014 and 2013, depreciation expense was $10.2 million and $11.1 million, respectively. 

Goodwill and Other Intangible Assets

Goodwill

Goodwill is tested for impairment on an annual basis or more frequently whenever events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  The impairment test for goodwill is a two-step process.  Under the first step, the fair value of the reporting unit is compared with its carrying value.  If the fair value of the reporting unit is less than its carrying value, an indication of impairment exists and the reporting unit must perform step two of the impairment test.  Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.  If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

Our reporting units were determined based on our organization structure, considering the level at which discrete financial information for businesses is available and regularly reviewed. The Company has three operating segments, which is the basis for determining its reporting units, organized around its three lines of business: (i) construction materials; (ii) heavy/highway construction; and (iii) traffic safety services and equipment. Construction materials include three reporting units within the operating segment based on geographic location. The operating segment of traffic safety services and equipment consists of one reporting unit within the segment based upon the similar economic characteristics of its operations.

9

Our annual goodwill impairment analysis takes place at fiscal year end.  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.

The inputs used within the fair value measurements were categorized within Level 3 of the fair value hierarchy.

Other Intangible Assets

Other intangible assets consist of technology, customer relationships and trademarks acquired in previous acquisitions. The technology, customer relationships and trademarks are amortized over a straight-line basis.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

For the three months ended May 31, 2014 and 2013, amortization of intangible assets was $0.2 million.

Other Noncurrent Assets

The Company’s other noncurrent assets consist of the following:

	May 31,		February 28,
(In thousands)	2014		2014
Deferred financing fees (less current portion of $4,328 and $4,324, respectively)	$	12,137	$	13,207
Capitalized software (net of accumulated amortization of $2,412 and $2,161, respectively)	7,833		8,084
Cash surrender value of life insurance (net of loans of $3,038 and $3,200, respectively)	1,166		1,135
Deferred stripping costs	3,827		3,900
Other	6,596		6,473
Total other assets	$	31,559	$	32,799

Revenue Recognition

The Company recognizes revenue on construction contracts under the percentage-of-completion method of accounting, as measured by the cost incurred to date over estimated total cost.  The typical contract life cycle for these projects can be up to two to four years in duration.  Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to revenues and costs. Revenue from contract change orders is recognized when the contract owner has agreed to the change order with the customer and the related costs are incurred. We do not recognize revenue on a basis of contract claims. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are identified. Contract costs include all direct material, labor, subcontract and other costs and those indirect costs related to contract performance, such as indirect salaries and wages, equipment repairs and depreciation, insurance and payroll taxes. Administrative and general expenses are charged to expense as incurred. Costs and estimated earnings in excess of billings on uncompleted contracts represent the excess of contract revenue recognized to date over billings to date. Billings in excess of costs and estimated earnings on uncompleted contracts represent the excess of billings to date over the amount of revenue recognized to date.  As of May 31, 2014 and February 28, 2014, such amounts are included in accounts receivable (Note 1, “Nature of Operations and Summary of Significant Accounting Policies”) and accrued liabilities (Note 3, “Accrued Liabilities”), respectively, in the consolidated balance sheets.

The Company accounts for custom-built concrete products under the units-of-production method.  Under this method, the revenue is recognized as the units are produced under firm contracts.

The Company generally recognizes revenue on the sale of construction materials and concrete products, other than custom-built concrete products, when the customer takes title and assumes risk of loss. Typically, this occurs when products are shipped.

The Company recognizes equipment rental revenue on a straight-line basis over the specific daily, weekly or monthly terms of the agreements. Revenues from the sale of equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer.

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Impairment of Definite-Lived Long-Lived Assets

Long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company considers an asset group as the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. For our construction materials and heavy/highway construction operations, the lowest level of largely independent identifiable cash flows is at the regional level, which collectively serves a local market. Each region shares and allocates its material production, resources, equipment and business activity among the locations within the region in generating cash flows. Our regions are, i) Central Pennsylvania, ii) Chambersburg, Shippensburg, Gettysburg, Pennsylvania, iii) Lancaster, Pennsylvania, iv) Northeastern Pennsylvania and v) Western New York. The construction materials regions’ long-lived assets predominantly include limestone and sand acreage and crushing, prestressing equipment and manufacturing plants and the heavy/highway construction region’s long lived assets predominantly include contracting equipment and vehicles. The traffic safety services and equipment business includes two asset groups, distinguished between its retail sales and distribution as one asset group and its manufacturing and assembly as the second asset group. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset group.

Recently Issued and Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Public entities are required to apply the revenue recognition standard for annual reporting period beginning on or after December 15, 2016, including interim periods within that annual reporting period. Early application is not permitted. The Company is evaluating the impact of this standard on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the requirements for reporting discontinued operations. Under ASU 2014-08, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, this ASU requires additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The Company has early adopted the provisions of ASU 2014-08 during the fourth quarter of fiscal year 2014. The Company determined that its assets held for sale in the fourth quarter of fiscal year 2014 and the first quarter of fiscal year 2015 did not meet the requirements for discontinued operations.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit Where Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires companies with unrecognized tax benefits, or a portion of unrecognized tax benefits, to present these benefits in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward. 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's adoption of this standard did not 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.

On February 12, 2014, the Company entered into (i) an asset-based revolving credit agreement, dated as of February 12, 2014, among the Company and certain of its subsidiaries party thereto as borrowers, the lenders party thereto, PNC Bank,

11

National Association, as issuer, swing loan lender, administrative agent and collateral agent (the “Revolving Credit Agreement” or “RCA”) and a term loan credit and guaranty agreement, dated as of February 12, 2014, among the Company as borrower, certain subsidiaries of the Company party thereto as guarantors, the lenders party thereto and Cortland Capital Market Services LLC as administrative agent (the “Term Loan Agreement”, and together with RCA, the “Credit Facilities”). The Credit Facilities contain certain financial maintenance and other covenants. In the past, the Company has failed to meet certain operating performance measures as well as the financial covenant requirements set forth under its previous credit facilities, which resulted in the need to obtain several amendments, and should the Company fail in the future, the Company cannot guarantee that it will be able to obtain such amendments. A failure to obtain such amendments could result in an acceleration of its indebtedness under the Credit Facilities and a cross-default under our other indebtedness, including the $250.0 million11% senior notes due 2018 (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 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. We believe we have sufficient financial resources, including cash and cash equivalents, cash from operations and amounts available for borrowing under our asset-based revolving credit agreement, dated February 12, 2014, the RCA, to fund our business and operations, including capital expenditures and debt service obligations, for at least the next twelve months.

3.Accrued Liabilities

Accrued liabilities consist of the following: 

	May 31,		February 28,
(In thousands)	2014		2014
Insurance	$	24,087	$	23,661
Interest	11,673		21,279
Payroll and vacation	8,069		6,484
Withholding taxes	2,216		2,350
Billings in excess of costs and estimated earnings on uncompleted contracts	1,514		1,431
Contract expenses	1,048		727
Other	2,665		4,575
Total accrued liabilities	$	51,272	$	60,507

4.Long-Term Debt

The Company's long-term debt consists of the following:  

	May 31,			February 28,
(In thousands)	2014			2014
RCA ($41.1 million and $36.5 million available as of May 31, 2014 and February 28, 2014, respectively), interest rate of 6.25%	$	33,941		$	22,413
11% Notes, due 2018	250,000			250,000
13% Secured Notes, due 2018	313,001			300,962
Term Loans, interest rate of 8%	70,000			70,000
Land, equipment and other obligations	7,034			11,488
Obligations under capital leases	4,302			5,103
Total debt	678,278			659,966
Less: Current portion	(37,718		)	(30,514		)
Total long-term debt	$	640,560		$	629,452

Refinancing

On February 12, 2014, the Company entered into the RCA providing for revolving credit loans and letters of credit in an aggregate principal amount up to $105.0 million and the Term Loan Agreement providing for term loans in the aggregate principal amount of $70.0 million (the "Term Loans"). The Company utilized the proceeds from borrowings under the Credit Facilities to repay amounts outstanding under, and terminate, the Company’s prior asset based loan facility, dated as

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of March 15, 2012, with M&T as the issuing bank, a lender, the swing lender, the agent and the arranger (the “ABL Facility”).

The RCA bears interest, at the Company’s option, at rates based upon LIBOR, plus a margin of 4.0% (with a LIBOR floor of 1.0%) or the base rate, plus a margin of 3.0%. The unused portion of the revolving credit commitment is subject to a commitment fee at a rate of 0.5%. The Term Loans bear interest, at the Company’s option, at rates based upon the LIBOR plus, a margin of 7.0% (with a LIBOR floor of 1.0%) or the base rate plus a margin of 6.0%.

The Credit Facilities contain a springing maturity date based upon certain events with a final maturity date of February 12, 2019. The Term Loans and the RCA will mature on December 14, 2017 unless the Company refinances its Secured Notes by such date and will mature on June 1, 2018 unless the Company refinances its Notes by such date.

Availability under the RCA is determined pursuant to a borrowing base formula based on eligible receivables and eligible inventory, subject to an availability block and to such other reserves as the Revolver Agent and the Syndication Agent may impose in accordance with the RCA. The availability block is initially $20.0 million but reduces to $10.0 million if the Company achieves a fixed charge coverage ratio of 1.00 to 1.00 as of the end of any fiscal quarter on a rolling four (4) quarter basis and further reduces to $0 if the Company achieves such fixed charge coverage ratio as of the end of the two immediately subsequent fiscal quarters. However, if at any time following the effectiveness of any of the reductions to the availability block the fixed charge coverage ratio as of the end of any quarter measured on a rolling four (4) quarter basis shall be less than 1.00 to 1.00, the availability block shall be increased back to $20.0 million, subject to further reduction as provided above; provided, that such reductions may occur no more than two (2) times, and if the availability block is increased back to $20.0 million following the second reduction, such increase shall be permanent and shall not be subject to further reduction.

The RCA includes a $20.0 million letter of credit sub-facility and a $10.5 million swing loan sub-facility for short-term borrowings. We classify borrowings under the RCA as current due to the nature of the agreement.

Pursuant to the Term Loans, in the event of a voluntary or mandatory prepayment or acceleration of the Term Loans, the Company shall be required to pay principal and a prepayment premium equal to:

Time Period	Percentage
On or prior to 5/12/2015	103.00	%
Between 5/13/2015 and 2/12/2016	102.00	%
2/13/2016 and thereafter	100.00	%

Under the Credit Facilities, during the period from February 1, 2014 through February 28, 2015, the aggregate cash burn of the Company and its subsidiaries, tested on a monthly, cumulative basis, may not exceed by more than $17.5 million the projected aggregate cash burn of the Company and its subsidiaries as shown in the projections provided to the lenders prior to closing. Commencing May 31, 2015, as of the end of each fiscal quarter, the Company will be required to have trailing twelve-month EBITDA in an amount not less than certain amounts specified in the Credit Facilities. Commencing with the fiscal quarter ending May 31, 2017, the Company will be required under the Credit Facilities to maintain as of the end of each fiscal quarter a fixed charge coverage ratio of not less than 1.00 to 1.00 measured on a rolling four quarter basis. The Company also has a capital expenditure limitation of $27.5 million in fiscal year 2015, $40.0 million in fiscal year 2016 and $35.0 million for each fiscal year thereafter through the Credit Facilities' maturity.

The Credit Facilities include affirmative and negative covenants that limit the ability of the Company and its subsidiaries 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) prepaying indebtedness, (viii) making capital expenditures, and (ix) providing negative pledges to third parties. In addition, the Credit Facilities contain conditions to lending, representations and warranties and events of default, including, among other things: (i) payment defaults, (ii) cross-defaults to other material indebtedness, (iii) covenant defaults, (iv) certain events of bankruptcy, (v) the occurrence of a material adverse effect, (vi) material judgments, (vii) change in control, (viii) seizures of material property, (ix) involuntary interruptions of material operations, and (x) certain material events with respect to pension plans.

At May 31, 2014, the weighted average interest rate on the RCA was 6.25%. 

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13% 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.

On February 28, 2014, 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, 2014 in the form of 6% cash payment and 7% payment in kind, which represents $18.9 million and $22.4 million of interest, respectively, for the same 12-month period. At May 31, 2014, the inception-to-date PIK interest was $52.6 million ($48.0 million was recorded as an increase to the Secured Notes and $4.6 million was recorded as a long-term obligation in other liabilities).

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.

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 Secured Notes are guaranteed on a full and unconditional, and joint and several basis, by certain of the Company’s existing and future domestic subsidiaries (the “Guarantors” as described in Note 10, “Condensed Issuer, Guarantor and Non-Guarantor Financial Information”).  The Secured Notes and related guarantees are senior secured obligations of the Company and the Guarantors that rank equally in right of payment with all existing and future senior debt of the Company

14

and the Guarantors, including the Notes and Credit Facilities, and senior to all existing and future subordinated debt of the Company and Guarantors.  The Secured Notes and related guarantees are secured, subject to certain permitted liens and except for certain excluded assets, by first-priority liens on substantially all of the Company’s and Guarantors’ personal property and certain owned and leased real property and second-priority liens on certain real property and substantially all of the Company’s and Guarantors’ accounts receivable, inventory and deposit accounts and related assets and proceeds of the foregoing that secure the RCA on a first-priority basis.

The indenture for the Secured Notes contains restrictive covenants that limit the Company’s ability and the ability of its subsidiaries that are restricted under the indenture to, among other things, incur additional debt, pay dividends or make distributions, repurchase capital stock or make other restricted payments, make certain investments, incur liens, merge, amalgamate or consolidate, sell, transfer, lease or otherwise dispose of all or substantially all assets and enter into transactions with affiliates.

The Indenture governing the Secured Notes required that the Company file a registration statement with the SEC and exchange the Secured Notes for new Secured Notes having terms substantially identical in all material respects to the Secured Notes by March 10, 2013. On June 13, 2013, the Company filed the Secured Notes Registration Statement and concluded the exchange offer on October 30, 2013.  The Company incurred $0.8 million of penalty interest through October 30, 2013. 

11% 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. In fiscal year 2012, the Company recognized a loss on debt retirement of approximately $2.9 million relating to the write off of unamortized debt issuance costs associated with the components of outstanding debt that were paid down.  The write off of the debt issuance costs were recorded as a component of interest expense.  In connection with the issuance of the Notes, the Company incurred costs of approximately $8.3 million which were deferred and are being amortized on the effective interest method through the 2018 maturity date.

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	%

If the Company experiences a change of control, as outlined in the indenture governing the Notes, 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.

The Notes are guaranteed on a full and unconditional, and joint and several, basis by certain of the Company’s existing and future domestic subsidiaries (the “Guarantors” as described in Note 9, “Condensed Issuer, Guarantor and Non-Guarantor Financial Information”). The indenture governing the Notes contains affirmative and negative covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional debt, make restricted payments, dividends or other payments from subsidiaries to the Company, create liens, engage in the sale or transfer of assets and engage in transactions with affiliates. The Company is not required to maintain any affirmative financial ratios or covenants under the indenture governing the Notes.

The indenture governing the Notes required that the Company file a registration statement with the SEC and exchange the Notes for new Notes having terms substantially identical in all material respects to the Notes. The Company filed its registration statement with the SEC for the Notes on August 29, 2011. The registration statement became effective on September 13, 2011, and the Company concluded the exchange offer on October 12, 2011.

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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 and are principally secured by the land and equipment acquired. 

From 1998 through 2005, the Company 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 original issuance of these bonds totaled $25.3 million with dates of maturity through May 2022.  The Company prepaid the remaining bonds in April 2014.

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, 2015 and February 28, 2014, after giving effect to items specifically related to the interim periods.

The effective income tax rates for the three months ended May 31, 2014 and 2013 were 7.6% and 10.6%, respectively, resulting in tax benefit of $2.2 million and $3.5 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 was immaterial for the three months ended May 31, 2014 and 2013, 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. During three months ended May 31, 2014, the Company subsequently restored matching contribution rates for its qualified plan and certain 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 months ended May 31, 2014 and 2013, was as follows:

	Three Months Ended   May 31,
(In thousands)	2014			2013
Net periodic benefit cost
Service cost	$	86		$	86
Interest cost	105			100
Expected return on plan assets	(150		)	(143		)
Amortization of prior service cost	14			16
Recognized net actuarial loss	51			66
Total pension expense	$	106		$	125

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The Company made contributions to the defined benefit pension plans of approximately $0.1 million during the three months ended May 31, 2014, and expects to make additional contributions of approximately $0.2 million in the remainder of fiscal year 2015.

7. Other Noncurrent Liabilities

The Company's other noncurrent liabilities consist of:

	May 31,		February 28,
(In thousands)	2014		2014
Other Noncurrent Liabilities
Reclamation costs	$	19,016	$	18,745
Executive deferred compensation liability	5,765		5,790
PIK accrued interest	4,565		11,035
Other	9,942		10,395
	$	39,288	$	45,965

8.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 self-insurance program for workers’ compensation (Pennsylvania employees) coverage, which is administered by a third party management company. The Company’s self-insurance retention is limited to $1.0 million per occurrence with the excess covered by workers’ compensation excess liability insurance. The Company is required to maintain a $7.2 million surety bond with the Commonwealth of Pennsylvania. Self-insurance costs are accrued based upon the aggregate of the liability for reported claims and an estimated liability for claims incurred but not reported.  The Company also maintains three self-insurance programs for health coverage with losses limited to $0.3 million per employee.  Additionally, the Company is required to and does provide a letter of credit in the amount of $0.3 million to guarantee payment of the deductible portion of its liability coverage which existed prior to January 1, 2008.

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 under this arrangement is recorded as part of restricted cash in the amount of $15.5 million as of May 31, 2014 and February 28, 2014. Exposures for periods prior to the inception of the captive are covered by pre-existing insurance policies. Other accrued amounts included as insurance, which primarily relates to worker’s compensation, included in Note 3, “Accrued Liabilities” totaled $9.2 million and $9.7 million as of May 31, 2014 and February 28, 2014, respectively. Liabilities associated with amounts that are recoverable from insurance companies of approximately $6.0 million were recorded in other noncurrent liabilities in our consolidated balance sheets as of May 31, 2014 and February 28, 2014.

9.Business Segments

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

17

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.

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

	Three Months Ended   May 31,
(In thousands)	2014			2013
Revenue
Construction materials	$	99,113		$	111,217
Heavy/highway construction	44,098			47,893
Traffic safety services and equipment	23,666			24,089
Segment totals	166,877			183,199
Eliminations	(26,449		)	(35,455		)
Total revenue	$	140,428		$	147,744
Operating income (loss)
Construction materials	$	6,087		$	7,357
Heavy/highway construction	(3,097		)	(2,524		)
Traffic safety services and equipment	1,090			(676		)
Corporate and unallocated	(13,431		)	(17,692		)
Total operating loss	$	(9,351	)	$	(13,535	)

	Three Months Ended   May 31,
(In thousands)	2014		2013
Depreciation, depletion and amortization
Construction materials	$	7,198	$	8,089
Heavy/highway construction	2,293		2,076
Traffic safety services and equipment	1,242		1,514
Corporate and unallocated	357		439
Total depreciation, depletion and amortization	$	11,090	$	12,118

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10.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 May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	(1,377	)	$	—	$	3,753		$	—		$	2,376
Restricted cash	5,863			88		15,597			—			21,548
Accounts receivable, net	90,152			15,956		14			—			106,122
Inventories	94,614			13,678		—			—			108,292
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	2,749			964		—			—			3,713
Other current assets	6,758			807		31			—			7,596
Assets held for sale	4,552			—		—			—			4,552
Total current assets	203,311			31,493		20,042			(647		)	254,199
Property, plant and equipment, net	306,383			19,284		6,817			(6,817		)	325,667
Goodwill	82,131			5,845		—			—			87,976
Other intangible assets, net	7,877			11,858		—			—			19,735
Investment in subsidiaries	79,566			—		—			(79,566		)	—
Intercompany receivables	3,308			27,913		(34		)	(31,187		)	—
Other assets	28,131			1,080		2,348			—			31,559
	$	710,707		$	97,473	$	29,173		$	(118,217	)	$	719,136
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	37,519		$	—	$	846		$	(647	)	$	37,718
Accounts payable - trade	38,363			7,275		311			—			45,949
Accrued liabilities	34,502			1,521		15,249			—			51,272
Total current liabilities	110,384			8,796		16,406			(647		)	134,939
Intercompany payables	27,545			2,559		1,083			(31,187		)	—
Long-term debt, less current maturities	634,961			—		5,599			—			640,560
Intercompany capital leases, less current installments	6,817			—		—			(6,817		)	—
Deferred income taxes	24,668			8,413		—			—			33,081
Other liabilities	36,338			602		2,348			—			39,288
Total liabilities	840,713			20,370		25,436			(38,651		)	847,868
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(130,006		)	77,103		2,463			(79,566		)	(130,006		)
Noncontrolling interest	—			—		1,274			—			1,274
Total (deficit) equity	(130,006		)	77,103		3,737			(79,566		)	(128,732		)
Total liabilities and deficit	$	710,707		$	97,473	$	29,173		$	(118,217	)	$	719,136

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Condensed Consolidating Balance Sheet at February 28, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	21,344		$	—	$	2,548		$	—		$	23,892
Restricted cash	11,996			92		15,596			—			27,684
Accounts receivable, net	49,093			12,212		271			(257		)	61,319
Inventories	95,135			12,178		—			—			107,313
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	2,749			964		—			—			3,713
Other current assets	8,131			839		35			—			9,005
Assets held for sate	14,467			—		—			—			14,467
Total current assets	202,915			26,285		19,097			(904		)	247,393
Property, plant and equipment, net	314,140			19,679		6,969			(6,969		)	333,819
Goodwill	82,131			5,845		—			—			87,976
Other intangible assets, net	7,904			12,047		—			—			19,951
Investment in subsidiaries	81,037			—		—			(81,037		)	—
Intercompany receivables	720			27,794		(34		)	(28,480		)	—
Other assets	29,336			1,115		2,348			—			32,799
	$	718,183		$	92,765	$	28,380		$	(117,390	)	$	721,938
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	30,317		$	—	$	844		$	(647	)	$	30,514
Accounts payable - trade	17,892			3,858		453			(257		)	21,946
Accrued liabilities	44,603			1,531		14,373			—			60,507
Total current liabilities	92,812			5,389		15,670			(904		)	112,967
Intercompany payables	27,632			848		—			(28,480		)	—
Long-term debt, less current maturities	623,714			—		5,738			—			629,452
Intercompany capital leases, less current installments	6,969			—		—			(6,969		)	—
Deferred income taxes	26,477			8,413		—			—			34,890
Other liabilities	43,014			603		2,348			—			45,965
Total liabilities	820,618			15,253		23,756			(36,353		)	823,274
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(102,435		)	77,512		3,525			(81,037		)	(102,435		)
Noncontrolling interest	—			—		1,099			—			1,099
Total (deficit) equity	(102,435		)	77,512		4,624			(81,037		)	(101,336		)
Total liabilities and deficit	$	718,183		$	92,765	$	28,380		$	(117,390	)	$	721,938

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Condensed Consolidating Statement of Comprehensive (Loss) Income for the three months ended May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Revenue	$	119,447		$	22,483	$	1,737		$	(3,239	)	$	140,428
Cost of revenue (exclusive of items shown separately below)	104,637			17,708		1,438			(3,132		)	120,651
Depreciation, depletion and amortization	9,806			1,284		—			—			11,090
Equipment and intangible asset impairment	1,680			—		—			—			1,680
Pension and profit sharing	1,342			45		—			—			1,387
Selling, administrative and general expenses	12,743			2,332		45			—			15,120
(Gain) loss on disposals of property, equipment and software	(159		)	10		—			—			(149		)
Operating (loss) income	(10,602		)	1,104		254			(107		)	(9,351		)
Interest expense, net	(20,386		)	9		(56		)	107			(20,326		)
(Loss) income before income taxes	(30,988		)	1,113		198			—			(29,677		)
Income tax benefit	(2,242		)	—		—			—			(2,242		)
Equity in earnings of subsidiaries	1,136			—		—			(1,136		)	—
Net (loss) income	(27,610		)	1,113		198			(1,136		)	(27,435		)
Less: net income attributable to noncontrolling interest	—			—		(175		)	—			(175		)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,610		)	1,113		23			(1,136		)	(27,610		)
Other Comprehensive Income
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—		—			—			39
Comprehensive (loss) income	(27,571		)	1,113		198			(1,136		)	(27,396		)
Less: comprehensive income attributable to noncontrolling interest	—			—		(175		)	—			(175		)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$	(27,571	)	$	1,113	$	23		$	(1,136	)	$	(27,571	)

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Condensed Consolidating Statement of Comprehensive (Loss) Income for the three months ended May 31, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	125,738		$	23,212		$	2,416		$	(3,622	)	$	147,744
Cost of revenue (exclusive of items shown separately below)	110,422			18,962			1,505			(3,171		)	127,718
Depreciation, depletion and amortization	10,564			1,554			—			—			12,118
Pension and profit sharing	1,795			83			—			—			1,878
Selling, administrative and general expenses	16,679			3,004			74			(344		)	19,413
Loss on disposals of property, equipment and software	138			14			—			—			152
Operating (loss) income	(13,860		)	(405		)	837			(107		)	(13,535		)
Interest expense, net	(19,118		)	(61		)	(105		)	107			(19,177		)
(Loss) income before income taxes	(32,978		)	(466		)	732			—			(32,712		)
Income tax expense benefit	(3,322		)	(153		)	—			—			(3,475		)
Equity in earnings of subsidiaries	(320		)	—			—			320			—
Net (loss) income	(29,976		)	(313		)	732			320			(29,237		)
Less: net income attributable to noncontrolling interest	—			—			(739		)	—			(739		)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(29,976		)	(313		)	(7		)	320			(29,976		)
Other Comprehensive Income
Unrealized actuarial gains and amortization of prior service costs, net of income tax	69			—			—			—			69
Comprehensive (loss) income	(29,907		)	(313		)	732			320			(29,168		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(739		)	—			(739		)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$	(29,907	)	$	(313	)	$	(7	)	$	320		$	(29,907	)

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Condensed Consolidating Statement of Cash Flows for the three months ended May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(36,227	)	$	680		$	1,343		$	—	$	(34,204	)
Cash flows from investing activities
Capital expenditures	(3,426		)	(684		)	—			—		(4,110		)
Proceeds from sale of property, equipment and assets held for sale	939			—			—			—		939
Change in cash value of life insurance	(31		)	—			—			—		(31		)
Change in restricted cash	10,233			4			(1		)	—		10,236
Net cash provided by (used in) investing activities	7,715			(680		)	(1		)	—		7,034
Cash flows from financing activities
Net proceeds from short-term borrowings	11,528			—			—			—		11,528
Proceeds from issuance of long-term debt	39			—			—			—		39
Repayment of long-term debt	(4,119		)	—			(137		)	—		(4,256		)
Payments on capital leases	(901		)	—			—			—		(901		)
Debt issuance costs	(756		)	—			—			—		(756		)
Distribution to noncontrolling interest	—			—			—			—		—
Net cash provided by (used in) financing activities	5,791			—			(137		)	—		5,654
Net (decrease) increase in cash and cash equivalents	(22,721		)	—			1,205			—		(21,516		)
Cash and cash equivalents
Beginning of period	21,344			—			2,548			—		23,892
End of period	$	(1,377	)	$	—		$	3,753		$	—	$	2,376

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Condensed Consolidating Statement of Cash Flows for the three months ended May 31, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Cash flows from operating activities	$	(36,279	)	$	758		$	2,268		$	(3,000	)	$	(36,253	)
Cash flows from investing activities
Capital expenditures	(8,718		)	(773		)	—			—			(9,491		)
Proceeds from sale of property and equipment	52			15			—			—			67
Change in cash value of life insurance	3,089			—			—			—			3,089
Change in restricted cash	123			—			(4,751		)	—			(4,628		)
Net cash used in investing activities	(5,454		)	(758		)	(4,751		)	—			(10,963		)
Cash flows from financing activities
Proceeds from revolving credit	49,419			—			—			—			49,419
Repayment of revolving credit	(6,324		)	—			—			—			(6,324		)
Proceeds from issuance of long-term debt	481			—			—			—			481
Repayment of long-term debt	(756		)	—			(335		)	—			(1,091		)
Payments on capital leases	(1,096		)	—			—			—			(1,096		)
Debt issuance costs	—			—			—			—			—
Dividends received (paid)	—			—			(3,000		)	3,000			—
Distribution to noncontrolling interest	—			—			(451		)	—			(451		)
Net cash provided by (used in) financing activities	41,724			—			(3,786		)	3,000			40,938
Net (decrease) increase in cash and cash equivalents	(9		)	—			(6,269		)	—			(6,278		)
Cash and cash equivalents
Beginning of period	31			19			9,484			—			9,534
End of period	$	22		$	19		$	3,215		$	—		$	3,256

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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.  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.

We believe that passage of the Pennsylvania House Bill 1060 (the "Transportation Bill"), which became effective in January 2014, will provide an increase in bidding opportunities in our markets. The increased opportunities did not directly impact our first quarter of fiscal year 2015 activities, but we anticipate it will provide an increase to revenue later in fiscal year 2015. Market conditions modestly improved throughout our geographic regions during the first quarter of fiscal year 2015, however unfavorable weather conditions limited our ability to capitalize on those improvements. Additionally, we believe our first quarter results improved by approximately $5.0 million from the new cost structure when compared to the first quarter of fiscal year 2014 and the benefits will increasingly aid fiscal year 2015 performance. 

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 the NESL operating business, Valley Quarries, Inc. ("Valley") and Buffalo Crushed Stone, Inc. (“BCS”) 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.

The restructuring associated with the activities during the first quarter of fiscal year 2015 resulted in one-time pre-tax charges of approximately $1.8 million, comprised of approximately $0.1 million for severance and related benefit costs and $1.7 million in outside advisory services related to the implementation of such plan. The cost reductions are composed of head-count, operational consolidations, administrative and benefit structure savings.  We are currently working to identifying additional savings associated with the Plan. We continue to execute and evaluate the sale of non-core assets as part of enhancing overall liquidity.

Seasonality and Cyclical Nature of Our Business

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.

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Executive Summary

The following is an income statement and cash flow summary for the three months ended May 31, 2014 as compared to the three months ended May 31, 2013.

• Net revenue decreased$7.3 million (4.9%);

• Operating loss improved by $4.1 million (30.4%);

• Net interest expense increased$1.1 million (5.7%);

• Net cash used in operating activities was favorable by $2.1 million; and

• Cash used in investing activities was favorable by $18.0 million.

RESULTS OF OPERATIONS

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

	Three Months Ended   May 31,
(In thousands)	2014			2013
Net revenue	$	140,428		$	147,744
Cost of revenue (exclusive of items shown separately below)	120,651			127,718
Depreciation, depletion and amortization	11,090			12,118
Asset impairment	1,680			—
Pension and profit sharing	1,387			1,878
Selling, administrative and general expenses	15,120			19,413
(Gain) loss on disposals of property, equipment and software	(149		)	152
Operating loss	(9,351		)	(13,535		)
Interest expense, net	(20,326		)	(19,177		)
Loss before income taxes	(29,677		)	(32,712		)
Income tax benefit	(2,242		)	(3,475		)
Net Loss	$	(27,435	)	$	(29,237	)

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 line items presented below. All non-allocated operating costs are reflected in the corporate and unallocated line item presented below.

The following table summarizes our segment revenue:

	Three Months Ended   May 31,
(In thousands)	2014			2013
Segment Revenue
Construction materials	$	99,113		$	111,217
Heavy/highway construction	44,098			47,893
Traffic safety services and equipment	23,666			24,089
Segment totals	166,877			183,199
Inter-segment eliminations	(26,449		)	(35,455		)
Total revenue	$	140,428		$	147,744

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

	Three Months Ended   May 31,
	2014		2013
Segment Revenue:
Construction materials	59.4	%	60.8	%
Heavy/highway construction	26.4	%	26.1	%
Traffic safety services and equipment	14.2	%	13.1	%
Segment totals	100.0	%	100.0	%

     The following table summarizes the segment cost of revenue:

	Three Months Ended   May 31,
(In thousands)	2014			2013
Segment Cost of Revenue
Construction materials	$	83,528		$	95,340
Heavy/highway construction	44,409			47,404
Traffic safety services and equipment	19,163			20,429
Segment totals	147,100			163,173
Eliminations	(26,449		)	(35,455		)
Total cost of revenue	$	120,651		$	127,718

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

		Three Months Ended   May 31,
		2014		2013
Cost of Revenue as Percent of Revenue (before eliminations)
Construction materials		84.3	%	85.7	%
Heavy/highway construction	*	100.7	%	99.0	%
Traffic safety services and equipment		81.0	%	84.8	%

* Due to fixed costs, as a result of the seasonal nature of our business.

The following table summarizes the segment operating income:

	Three Months Ended   May 31,
(In thousands)	2014			2013
Operating loss:
Construction materials	$	6,087		$	7,357
Heavy/highway construction	(3,097		)	(2,524		)
Traffic safety services and equipment	1,090			(676		)
Segment totals	4,080			4,157
Corporate and unallocated	(13,431		)	(17,692		)
Total operating loss	$	(9,351	)	$	(13,535	)

Three Months Ended May 31, 2014 Compared to Three Months Ended May 31, 2013

Revenue

Total net revenue decreased$7.3 million or 4.9% to $140.4 million for the three months ended May 31, 2014 compared to $147.7 million for the three months ended May 31, 2013.  The decrease in revenue was driven primarily by unfavorable weather conditions and the revenue impact from the sale of certain non-core business activities.

28

Segment revenue for our construction materials business decreased$12.1 million, or 10.9% to $99.1 million for the three months ended May 31, 2014 compared to $111.2 million for the three months ended May 31, 2013.  Revenue decreased for most product lines for the three months ended May 31, 2014 compared to the three months ended May 31, 2013. The adverse weather conditions particularly impacted our hot mix asphalt activity where volume was down approximately 33%. The sale of certain non-core operations decreased our revenues approximately $4.9 million. These decreases were partially offset by improvements in precast/prestressed structural concrete revenue, primarily driven by the delivery and erection of products used in various construction projects.

Segment revenue for our heavy/highway construction business decreased$3.8 million, or 7.9% to $44.1 million for the three months ended May 31, 2014 compared to $47.9 million for the three months ended May 31, 2013.  The decrease in revenue was primarily attributable to unfavorable weather conditions during the quarter ending May 31, 2014, which reduced our construction activities.

Segment revenue for our traffic safety services and equipment businesses decreased$0.4 million, or 1.7% to $23.7 million for the three months ended May 31, 2014 compared to $24.1 million for the three months ended May 31, 2013.  The decrease was primarily related to decrease in service revenue primarily as a result of the decrease in heavy/highway construction activity.

Cost of Revenue

Total cost of revenue decreased$7.0 million or 5.5% to $120.7 million for the three months ended May 31, 2014 compared to approximately $127.7 million for the three months ended May 31, 2013.  Cost of revenue as a percentage of sales decreased0.5% to 85.9% for the three months ended May 31, 2014 compared to 86.4% for the three months ended May 31, 2013, primarily as a result of our cost reduction program.

Segment cost of revenue for our construction materials business as a percentage of its segment revenue decreased1.4% to 84.3% for the three months ended May 31, 2014 compared to 85.7% for the three months ended May 31, 2013.  Segment cost of revenue as a percentage of segment revenue decreased primarily as a result of our cost reduction initiatives.

Segment cost of revenue for our heavy/highway construction business as a percentage of its segment revenue increased1.7% to 100.7% for the three months ended May 31, 2014 compared to 99.0% for the three months ended May 31, 2013. The increase in segment cost of revenue as a percentage of segment revenue was primarily attributable to delays caused by the weather across multiple markets, while our fixed costs remained consistent.

Segment cost of revenue for our traffic services and equipment business as a percentage of its segment revenue decreased3.8% to 81.0% for the three months ended May 31, 2014 compared to 84.8% for the three months ended May 31, 2013. 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$1.0 million, or 8.3% to $11.1 million for the three months ended May 31, 2014 compared to $12.1 million for the three months ended May 31, 2013. The decrease was primarily attributable to approximately $0.3 million less depreciation as a result of assets sold within the past year and approximately $0.7 million related to fully depreciated assets.

Selling, Administrative and General Expenses

Selling, administrative and general expenses decreased$4.3 million, or 22.2% to $15.1 million for the three months ended May 31, 2014 compared to $19.4 million for the three months ended May 31, 2013. The decrease was primarily attributable to benefits from headcount reductions and associated employee benefits related to our cost reduction program, and reduced bad debt expense of $0.8 million, which were slightly offset by additional restructuring charges in the same period.

29

Operating Loss

Operating income for our construction materials business decreased$1.3 million, or 17.6% to $6.1 million for the three months ended May 31, 2014 compared to $7.4 million for the three months ended May 31, 2013. The decrease was primarily driven by decreased hot mix asphalt volume and the impairment of certain non-core operating assets.  Operating income for aggregates increased due to better pricing and the impact of the cost reduction initiatives but was offset by decreased volumes.

Operating loss for our heavy/highway construction business was broadly flat at a loss of $3.1 million for the three months ended May 31, 2014 compared to operating loss of $2.5 million for the three months ended May 31, 2013.  The increase is partially attributable to cold and wet weather conditions.

Operating income for our traffic safety services and equipment businesses increased approximately $1.8 million to $1.1 million for the three months ended May 31, 2014 compared to a loss of $0.7 million for the three months ended May 31, 2013.  The increase in profitability is attributable primarily to improvements in cost controls.

Interest Expense, net

Net interest expense increased$1.1 million, or 5.7% to $20.3 million for the three months ended May 31, 2014 compared to $19.2 million for the three months ended May 31, 2013 due primarily to increased overall indebtedness in the current period.

Income Tax Benefit

The income tax provision for the three months ended May 31, 2014 and May 31, 2013 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 May 31, 2014 and 2013 were 7.6% and 10.6%, respectively, resulting in tax benefit of $2.2 million and $3.5 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.

LIQUIDITY AND CAPITAL RESOURCES

Our sources of liquidity include cash and cash equivalents, cash from operations and amounts available for borrowing under the RCA. As of May 31, 2014 we had borrowed $33.9 million under the RCA with $41.1 million available compared to $22.4 million under the RCA with $36.5 million available as of February 28, 2014. As of May 31, 2014, we had $2.4 million in cash and cash equivalents and working capital of $119.3 million compared to $23.9 million in cash and cash equivalents and working capital of $134.4 million as of February 28, 2014. We carried a higher cash balance as of February 28, 2014 as amounts were borrowed prior to February 28, 2014 to pay the semi annual interest associated with the Notes due on March 1, 2014. Cash balances of $21.5 million and $27.7 million as of May 31, 2014 and February 28, 2014, 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. In December, 2013, the Company provided cash collateral of $10.5 million associated with outstanding letters of credit with M&T Bank, which was returned during the three months ended May 31, 2014 as we secured a replacement letter of credit under the RCA.

On February 12, 2014, the Company entered into the RCA providing for revolving credit loans and letters of credit in an aggregate principal amount up to $105.0 million and the Term Loans providing for term loans in the aggregate principal amount of $70.0 million. The Company utilized the proceeds from the Credit Facilities to repay amounts outstanding under, and terminate, the ABL Facility. Refer to Note 4 “Long-Term Debt” to the condensed consolidated financial statements for further information.

We believe we have sufficient financial resources, including cash and cash equivalents, cash from operations and amounts available for borrowing under the RCA, to fund our business and operations, including capital expenditures and debt service obligations, for at least the next twelve months. Under the Credit Facilities we are subject to certain affirmative and negative convents, of which the Maximum Cash Burn covenant and the Capital Expenditure limits, are the primary financial covenant for the next 12 months. During the period from February 1, 2014 through February 28, 2015, the aggregate Cash Burn of the Company and its subsidiaries, tested on a monthly, cumulative basis, may not exceed by more than $17.5 million

30

the projected aggregate Cash Burn of the Company and its subsidiaries as shown in the projections provided to the lenders prior to entering into the Credit Facilities and capital expenditures may not exceed $27.5 million in our fiscal year 2015. We have included additional information in Note 2. "Risks and Uncertainties" and Note 4. "Long-Term Debt" of the Unaudited Condensed Consolidated Financial Statements included in this Form 10-Q regarding our ability to meet certain operating performance measures and financial covenant requirements.

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.

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 three months ended May 31, 2014 and May 31, 2013.

	Three Months Ended   May 31,
(In thousands)	2014			2013
Net cash (used in) provided by:
Operating activities	$	(34,204	)	$	(36,253	)
Investing activities	7,034			(10,963		)
Financing activities	5,654			40,938
Cash paid for capital expenditures	(4,110		)	(9,491		)

Operating Activities

Net cash used in operating activities decreased$2.1 million to $34.2 million for the three months ended May 31, 2014 compared to net cash used of $36.3 million for the three months ended May 31, 2013. Cash used in operating activities decreased primarily as a result of reduced operating costs.

Investing Activities

Net cash provided by our investing activities increased$18.0 million to $7.0 million in the three months ended May 31, 2014 compared to a use of $11.0 million in the three months ended May 31, 2013. Net cash improved primarily due to proceeds from sale of assets of $0.9 million, reduced capital expenditures of $5.4 million, and restricted cash reduction due to our Wells Fargo letter of credit replacing our financing arrangement with M&T Bank.

Financing Activities

Net cash provided by financing activities decreased$35.2 million to $5.7 million in the three months ended May 31, 2014 compared to $40.9 million in the three months ended May 31, 2013.  The decrease in cash provided by financing activities was primarily due to decreased capital spending and the decrease of cash needed for operating activities.

Capital Expenditures

Cash capital expenditures decreased$5.4 million to $4.1 million for the three months ended May 31, 2014 compared to $9.5 million for the three months ended May 31, 2013. 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 to $25.0 million for the fiscal year 2015, which is below our capital expenditure covenant limit of $27.5 million.

Our Indebtedness

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

31

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.

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 3.5% and 4.25%. We have outstanding letters of credit of $11.9 million and $16.6 million at May 31, 2014 and February 28, 2014, respectively, which were not included in our Consolidated Balance Sheets.

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, 2014 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;

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• 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;

• 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, 2014.

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.

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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 May 31, 2014, we have $33.9 million in indebtedness outstanding under the RCA and $70.0 million under the Term Loans subject to variable interest rates.  Each change of 1.00% in interest rates would result in an approximate  $1.0 million change in our annual interest expense in total on the RCA and Term Loans.  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 this 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 May 31, 2014. Based upon that evaluation, our CEO and CFO concluded that, as of May 31, 2014, 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 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.

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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, 2014, February 28, 2013, February 29, 2012, and February 28, 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 part of our remediation efforts, 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 resources where needed to further strengthen competencies. We have developed and implemented policies and procedures which emphasize adherence to GAAP and made these available to employees on the company’s intranet site. As of this filing, the Board of Directors approved a Delegation of Authority policy that will be effective in fiscal year 2015.We have completed the related internal control design and implementation activities that include financial statement analytical review and disclosure review. We will continue our remediation efforts during the remainder of fiscal year 2015.

• 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 part of our remediation efforts, 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 resources and have appointed a new Chief Financial Officer. Management continues to evaluate personnel and augment resources 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 and will continue to assess the Company's needs during the remainder of fiscal year 2015.

• 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 part of our remediation efforts, we developed and implemented policies and procedures to ensure that we maintain appropriate business and accounting records and formally document the application of GAAP for business transactions for fiscal year 2014. We continue to assess the need for additional policies and procedures based on business needs and changes. In addition, the Board of Directors approved a Delegation of Authority policy that will be effective in fiscal year 2015. We will continue our remediation efforts during the remainder of fiscal year 2015.

• We did not design, maintain or implement policies and procedures to adequately review and account for significant accounting transactions, which were 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 part of our remediation efforts, 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. We have developed and implemented policies and procedures which

35

emphasize adherence to GAAP and made these available to employees on the company’s intranet site. To augment the policies and procedures and provide additional structure, the Board of Directors approved a Delegation of Authority policy that will be effective in fiscal year 2015. We will continue our remediation efforts during the remainder of fiscal year 2015.

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 part of our remediation efforts, 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 review 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 by business process owners. Remediation is expected to be complete in fiscal year 2015.

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.

As part of our remediation efforts, we have developed a risk assessment process. We continue to refine this process as we monitor risks on an informal and formal basis. Our internal audit function aids management in the risk assessment process. This function provided updates to the Board of Directors and Audit Committee for the period ended February 28, 2014. Remediation is expected to be complete during fiscal year 2015.

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 in 2012. 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 part of our remediation efforts, 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 during 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 in 2012. 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

36

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. One new location began operating the new ERP during the fourth quarter. As of this filing, two additional locations began operating the new ERP and remediation is expected to be completed when the one remaining location begins operating the new ERP during 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 sub-ledgers.

As part of our remediation efforts, we have hired new information technology personnel and designated a full-time IT resource to act in an IT governance role, which is responsible for overseeing the completion of the ERP implementation and assisting with information technology general controls remediation. We have continued 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. We will continue our remediation efforts 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 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 manual journal entry process which includes journal entry review and formal approval for fiscal year 2014. As of this filing, we have also implemented an enhanced journal entry process to automate approval capabilities. We have completed our testing of internal control effectiveness and, based on the results, management believes this is no longer a material weakness as of quarter ended May 31, 2014.

• 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 in 2012, 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. We have implemented a formal review and approval process by appropriate personnel that include contracts, billing costing, job performance and account reconciliation. Remediation is expected to be complete during fiscal year 2015.

• 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. 

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This material weakness related to recorded revenue existed at our 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. We implemented activities that have formalized the review and approval process by appropriate personnel that include price, invoice, shipment, adjustments and account reconciliation reviews.  Remediation is expected to be complete during fiscal year 2015.

• 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 in 2012. 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 a monthly physical inventory observation procedure 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. Remediation is expected to be complete in fiscal year 2015.

• 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.

We implemented specialized software that is used to track and analyze these expenses and created a formal review of asset retirement obligations related activity. Remediation is expected to be complete during fiscal year 2015.

• 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 and periodic inventory counts at certain locations of the Company. Remediation is expected to be complete during fiscal year 2015.

• 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. We have implemented formal internal control reviews that include tax filing, provision and disclosure review. We will continue our remediation efforts during 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.

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Working with a third party advisor, we have completed an assessment of our internal control processes and during fiscal year 2014 we began restructuring personnel and duties to address the deficiencies. We will continue our remediation efforts during 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 reporting and related financial statements and we believe the consolidated financial statements included in this report as of and for the period ended February 28, 2014, are fairly stated in all material respects.

Changes in Internal Control Over Financial Reporting

The following update is provided with respect to the material weakness related to the recording of journal entries during the quarter ended May 31, 2014:

• We maintained effective controls over the recording of journal entries, both recurring and non-recurring. Specifically, we have designed and implemented a system journal entry process which includes journal entry review, formal approval and posting. We successfully tested the related controls and we believe 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.

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

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

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	Separation and Release Agreement dated March 27, 2014 by and between the Company and Steven B. Detwiler (incorporated by reference from the Company's current report on Form 8-K file no. 333-176538 filed on March 28, 2014)
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: July 10, 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	Separation and Release Agreement dated March 27, 2014 by and between the Company and Steven B. Detwiler (incorporated by reference from the Company's current report on Form 8-K file no. 333-176538 filed on March 28, 2014)
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: July 10, 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: July 10, 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 May 31, 2014, 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: July 10, 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 May 31, 2014 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: July 10, 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 three months ended May 31, 2014, 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 three months ended May 31, 2014.

Name of Operation *	Number of Inspections	Total Number of S&S Citations	Mine Act §104(b) Orders	Mine Act §104(d) Citations and Orders	Mine Act §110(b)2 Violations	Mine Act §107(a) Orders	Total Dollar Value of Proposed MSHA	Total Number of Mining Related Fatalities	Received Written Notice under Mine Act §104(e) (yes/no)
ASHCOM	1	—	—	—	—	—	—	—	No
BURKHOLDER	2	—	—	—	—	—	—	—	No
CHAMBERSBURG	—	—	—	—	—	—	200	—	No
CLIFFORD	1	—	—	—	—	—	—	—	No
EGYPT	1	—	—	—	—	—	—	—	No
FAIRFIELD	1	—	—	—	—	—	—	—	No
JAYNE BEND	1	—	—	—	—	—	—	—	No
LIMEVILLE	1	—	—	—	—	—	—	—	No
MT. CYDONIA I	1	—	—	—	—	—	—	—	No
MT. CYDONIA III	—	—	—	—	—	—	100	—	No
NAZARETH	1	—	—	—	—	—	—	—	No
ORBISONIA	1	2	—	—	—	—		—	No
ORMROD	1	1	—	—	—	—		—	No
ROARING SPRING	—	—	—	—	—	—	563	—	No
SHESHEQUIN	1	—	—	—	—	—	—	—	No
SHIPPENSBURG	—	—	—	—	—	—	100	—	No
TYRONE FORGE	—	—	—	—	—	—	200	—	No
V-42 (contract)	—	—	—	—	—	—	416	—	No
WEAVERLAND	1	—	—	—	—	—	—	—	No
WEHRLE	1	—	—	—	—	—	100	—	No
TOTAL	15	3	—	—	—	—	1,679	—

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

XML

Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 31, 2014 self-insurance_program	Feb. 28, 2014
Commitments and Contingencies Disclosure [Abstract]
Self insurance retention per occurrence	$ 1.0
Amount of surety bond to be maintained with the Commonwealth of Pennsylvania	7.2
Number of self-insurance programs maintained for health coverage	3
Maximum losses per employee under self-insurance health coverage programs	0.3
Letter of credit provided to guarantee payment of deductible portion of liability coverage which existed prior to January 1, 2008	0.3
Amount of collateral recorded as a part of restricted cash	15.5	15.5
Insurance Claims | Other Noncurrent Liabilities
Other Commitments [Line Items]
Liability related to insurance settlement receivable	6.0	6.0
Rock Solid Insurance Company
Other Commitments [Line Items]
Exposures for periods prior to captive insurance policy	$ 9.2	$ 9.7

XML

Long-Term Debt (Details 3) (USD $) In Millions, unless otherwise specified	0 Months Ended			3 Months Ended			0 Months Ended	5 Months Ended					0 Months Ended
	Feb. 28, 2014 annual_period	Feb. 28, 2014 Prior to March 15, 2015	Feb. 28, 2014 Prior to March 15, 2015 Maximum	May 31, 2014 Twelve-month period beginning March 15, 2015	May 31, 2014 Twelve-month period beginning March 15, 2016	May 31, 2014 Twelve-month period beginning March 15, 2017 and thereafter	Feb. 28, 2014 Secured Notes due 2018	Oct. 30, 2013 Secured Notes due 2018	May 31, 2014 Secured Notes due 2018	Mar. 14, 2014 Secured Notes due 2018	Feb. 28, 2014 Secured Notes due 2018 Secured Notes	Feb. 28, 2014 Secured Notes due 2018 Other Noncurrent Liabilities	Feb. 28, 2014 Secured Notes due 2018 Twelve-month period beginning March 15, 2014
Debt Instrument [Line Items]
Stated interest rate (as a percent)									13.00%	13.00%
Cash Interest Portion (as a percent)							4.00%						6.00%
PIK interest (as a percent)							9.00%						7.00%
Accrued cash interest							$ 18.9
Increase in PIK interest during year							22.4
Accrued PIK interest							52.6				48.0	4.6
Interest form election period	12 months
Debt Instrument, Interest Rate, Increase (Decrease)	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
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 incurred								$ 0.8

XML

Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended
	May 31, 2014 segment	May 31, 2013	Feb. 28, 2014
Accounting Policies [Abstract]
Number of reportable segments	3
Trade Accounts Receivable
Costs and estimated earnings in excess of billings	$ 18,188,000		$ 9,838,000
Trade	86,430,000		51,310,000
Retainages	6,222,000		5,399,000
Accounts receivable, gross	110,840,000		66,547,000
Allowance for doubtful accounts	(4,718,000)		(5,228,000)
Accounts receivable, net	106,122,000		61,319,000	[1]
Inventories
Crushed stone, agricultural lime and sand	69,485,000		70,820,000
Safety equipment	13,404,000		12,091,000
Parts, tires and supplies	10,285,000		10,187,000
Raw materials	11,520,000		10,542,000
Building materials	1,078,000		1,012,000
Other	2,520,000		2,661,000
Total Inventory	108,292,000		107,313,000	[1]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Amortization of intangible assets	200,000	200,000
Other Assets, Noncurrent [Abstract]
Deferred financing fees (less current portion of $4,328 and $4,324, respectively)	12,137,000		13,207,000
Current deferred finance costs	4,328,000		4,324,000
Capitalized software (net of accumulated amortization of $2,412 and $2,161, respectively)	7,833,000		8,084,000
Accumulated amortization	2,412,000		2,161,000
Cash surrender value of life insurance (net of loans of $3,038 and $3,200, respectively)	1,166,000		1,135,000
Loans on life insurance	3,038,000		3,200,000
Deferred stripping costs	3,827,000		3,900,000
Other	6,596,000		6,473,000
Total other assets	$ 31,559,000		$ 32,799,000	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

XML

Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	May 31, 2014	Feb. 28, 2014		May 31, 2013	Feb. 28, 2013
Current assets
Cash and cash equivalents	$ 2,376	$ 23,892	[1]	$ 3,256	$ 9,534
Restricted cash	21,548	27,684	[1]
Accounts receivable, net	106,122	61,319	[1]
Inventories	108,292	107,313	[1]
Net investment in lease	0	0
Deferred income taxes	3,713	3,713	[1]
Other current assets	7,596	9,005	[1]
Assets held for sale	4,552	14,467	[1]
Total current assets	254,199	247,393	[1]
Property, plant and equipment, net	325,667	333,819	[1]
Goodwill	87,976	87,976	[1]
Other intangible assets, net	19,735	19,951	[1]
Investment in subsidiaries	0	0
Intercompany receivables	0	0
Other assets	31,559	32,799	[1]
Total assets	719,136	721,938	[1]
Current liabilities
Current maturities of long-term debt	37,718	30,514	[1]
Accounts payable — trade	45,949	21,946	[1]
Accrued liabilities	51,272	60,507	[1]
Total current liabilities	134,939	112,967	[1]
Intercompany payables	0	0
Long-term debt, less current maturities	640,560	629,452	[1]
Intercompany capital leases, less current installments	0	0
Deferred income taxes	33,081	34,890	[1]
Other liabilities	39,288	45,965	[1]
Total liabilities	847,868	823,274	[1]
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(130,006)	(102,435)	[1]
Noncontrolling interest	1,274	1,099	[1]
Total deficit	(128,732)	(101,336)	[1]
Total liabilities and deficit	719,136	721,938	[1]
New Enterprise Stone & Lime Co., Inc.
Current assets
Cash and cash equivalents	(1,377)	21,344		22	31
Restricted cash	5,863	11,996
Accounts receivable, net	90,152	49,093
Inventories	94,614	95,135
Net investment in lease	0	0
Deferred income taxes	2,749	2,749
Other current assets	6,758	8,131
Assets held for sale	4,552	14,467
Total current assets	203,311	202,915
Property, plant and equipment, net	306,383	314,140
Goodwill	82,131	82,131
Other intangible assets, net	7,877	7,904
Investment in subsidiaries	79,566	81,037
Intercompany receivables	3,308	720
Other assets	28,131	29,336
Total assets	710,707	718,183
Current liabilities
Current maturities of long-term debt	37,519	30,317
Accounts payable — trade	38,363	17,892
Accrued liabilities	34,502	44,603
Total current liabilities	110,384	92,812
Intercompany payables	27,545	27,632
Long-term debt, less current maturities	634,961	623,714
Intercompany capital leases, less current installments	6,817	6,969
Deferred income taxes	24,668	26,477
Other liabilities	36,338	43,014
Total liabilities	840,713	820,618
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(130,006)	(102,435)
Noncontrolling interest	0	0
Total deficit	(130,006)	(102,435)
Total liabilities and deficit	710,707	718,183
Guarantor Subsidiaries
Current assets
Cash and cash equivalents	0	0		19	19
Restricted cash	88	92
Accounts receivable, net	15,956	12,212
Inventories	13,678	12,178
Net investment in lease	0	0
Deferred income taxes	964	964
Other current assets	807	839
Assets held for sale	0	0
Total current assets	31,493	26,285
Property, plant and equipment, net	19,284	19,679
Goodwill	5,845	5,845
Other intangible assets, net	11,858	12,047
Investment in subsidiaries	0	0
Intercompany receivables	27,913	27,794
Other assets	1,080	1,115
Total assets	97,473	92,765
Current liabilities
Current maturities of long-term debt	0	0
Accounts payable — trade	7,275	3,858
Accrued liabilities	1,521	1,531
Total current liabilities	8,796	5,389
Intercompany payables	2,559	848
Long-term debt, less current maturities	0	0
Intercompany capital leases, less current installments	0	0
Deferred income taxes	8,413	8,413
Other liabilities	602	603
Total liabilities	20,370	15,253
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	77,103	77,512
Noncontrolling interest	0	0
Total deficit	77,103	77,512
Total liabilities and deficit	97,473	92,765
Non Guarantors
Current assets
Cash and cash equivalents	3,753	2,548		3,215	9,484
Restricted cash	15,597	15,596
Accounts receivable, net	14	271
Inventories	0	0
Net investment in lease	647	647
Deferred income taxes	0	0
Other current assets	31	35
Assets held for sale	0	0
Total current assets	20,042	19,097
Property, plant and equipment, net	6,817	6,969
Goodwill	0	0
Other intangible assets, net	0	0
Investment in subsidiaries	0	0
Intercompany receivables	(34)	(34)
Other assets	2,348	2,348
Total assets	29,173	28,380
Current liabilities
Current maturities of long-term debt	846	844
Accounts payable — trade	311	453
Accrued liabilities	15,249	14,373
Total current liabilities	16,406	15,670
Intercompany payables	1,083	0
Long-term debt, less current maturities	5,599	5,738
Intercompany capital leases, less current installments	0	0
Deferred income taxes	0	0
Other liabilities	2,348	2,348
Total liabilities	25,436	23,756
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	2,463	3,525
Noncontrolling interest	1,274	1,099
Total deficit	3,737	4,624
Total liabilities and deficit	29,173	28,380
Eliminations
Current assets
Cash and cash equivalents	0	0		0	0
Restricted cash	0	0
Accounts receivable, net	0	(257)
Inventories	0	0
Net investment in lease	(647)	(647)
Deferred income taxes	0	0
Other current assets	0	0
Assets held for sale	0	0
Total current assets	(647)	(904)
Property, plant and equipment, net	(6,817)	(6,969)
Goodwill	0	0
Other intangible assets, net	0	0
Investment in subsidiaries	(79,566)	(81,037)
Intercompany receivables	(31,187)	(28,480)
Other assets	0	0
Total assets	(118,217)	(117,390)
Current liabilities
Current maturities of long-term debt	(647)	(647)
Accounts payable — trade	0	(257)
Accrued liabilities	0	0
Total current liabilities	(647)	(904)
Intercompany payables	(31,187)	(28,480)
Long-term debt, less current maturities	0	0
Intercompany capital leases, less current installments	(6,817)	(6,969)
Deferred income taxes	0	0
Other liabilities	0	0
Total liabilities	(38,651)	(36,353)
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(79,566)	(81,037)
Noncontrolling interest	0	0
Total deficit	(79,566)	(81,037)
Total liabilities and deficit	$ (118,217)	$ (117,390)

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

XML

Retirement and Benefit Programs (Details) (USD $)	3 Months Ended
	May 31, 2014 plan	May 31, 2013
Compensation and Retirement Disclosure [Abstract]
Number of defined benefit plans	2
Net periodic benefit cost
Service cost	$ 86,000	$ 86,000
Interest cost	105,000	100,000
Expected return on plan assets	(150,000)	(143,000)
Amortization of prior service cost	14,000	16,000
Recognized net actuarial loss	51,000	66,000
Total pension expense	106,000	125,000
Employer contributions to defined benefit pension plans	100,000
Expected additional contribution in the remainder of fiscal year 2014	$ 200,000

XML

Accrued Liabilities

3 Months Ended

May 31, 2014

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consist of the following: 

	May 31,		February 28,
(In thousands)	2014		2014
Insurance	$	24,087	$	23,661
Interest	11,673		21,279
Payroll and vacation	8,069		6,484
Withholding taxes	2,216		2,350
Billings in excess of costs and estimated earnings on uncompleted contracts	1,514		1,431
Contract expenses	1,048		727
Other	2,665		4,575
Total accrued liabilities	$	51,272	$	60,507

XML

Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014	May 31, 2013
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	$ 140,428	$ 147,744
Cost of revenue (exclusive of items shown separately below)	120,651	127,718
Depreciation, depletion and amortization	11,090	12,118
Asset impairment	1,680	0
Pension and profit sharing	1,387	1,878
Selling, administrative and general expenses	15,120	19,413
(Gain) loss on disposals of property, equipment and software	(149)	152
Operating (loss) income	(9,351)	(13,535)
Interest expense, net	(20,326)	(19,177)
(Loss) income before income taxes	(29,677)	(32,712)
Income tax benefit	(2,242)	(3,475)
Equity in earnings of subsidiaries	0	0
Net (loss) income	(27,435)	(29,237)
Less: Comprehensive income attributable to noncontrolling interest	(175)	(739)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,610)	(29,976)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39	69
Comprehensive (loss) income	(27,396)	(29,168)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,571)	(29,907)
New Enterprise Stone & Lime Co., Inc.
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	119,447	125,738
Cost of revenue (exclusive of items shown separately below)	104,637	110,422
Depreciation, depletion and amortization	9,806	10,564
Asset impairment	1,680
Pension and profit sharing	1,342	1,795
Selling, administrative and general expenses	12,743	16,679
(Gain) loss on disposals of property, equipment and software	(159)	138
Operating (loss) income	(10,602)	(13,860)
Interest expense, net	(20,386)	(19,118)
(Loss) income before income taxes	(30,988)	(32,978)
Income tax benefit	(2,242)	(3,322)
Equity in earnings of subsidiaries	1,136	(320)
Net (loss) income	(27,610)	(29,976)
Less: Comprehensive income attributable to noncontrolling interest	0	0
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,610)	(29,976)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39	69
Comprehensive (loss) income	(27,571)	(29,907)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,571)	(29,907)
Guarantor Subsidiaries
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	22,483	23,212
Cost of revenue (exclusive of items shown separately below)	17,708	18,962
Depreciation, depletion and amortization	1,284	1,554
Asset impairment	0
Pension and profit sharing	45	83
Selling, administrative and general expenses	2,332	3,004
(Gain) loss on disposals of property, equipment and software	10	14
Operating (loss) income	1,104	(405)
Interest expense, net	9	(61)
(Loss) income before income taxes	1,113	(466)
Income tax benefit	0	(153)
Equity in earnings of subsidiaries	0	0
Net (loss) income	1,113	(313)
Less: Comprehensive income attributable to noncontrolling interest	0	0
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	1,113	(313)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	0	0
Comprehensive (loss) income	1,113	(313)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	1,113	(313)
Non Guarantors
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	1,737	2,416
Cost of revenue (exclusive of items shown separately below)	1,438	1,505
Depreciation, depletion and amortization	0	0
Asset impairment	0
Pension and profit sharing	0	0
Selling, administrative and general expenses	45	74
(Gain) loss on disposals of property, equipment and software	0	0
Operating (loss) income	254	837
Interest expense, net	(56)	(105)
(Loss) income before income taxes	198	732
Income tax benefit	0	0
Equity in earnings of subsidiaries	0	0
Net (loss) income	198	732
Less: Comprehensive income attributable to noncontrolling interest	(175)	(739)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	23	(7)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	0	0
Comprehensive (loss) income	198	732
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	23	(7)
Eliminations
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	(3,239)	(3,622)
Cost of revenue (exclusive of items shown separately below)	(3,132)	(3,171)
Depreciation, depletion and amortization	0	0
Asset impairment	0
Pension and profit sharing	0	0
Selling, administrative and general expenses	0	(344)
(Gain) loss on disposals of property, equipment and software	0	0
Operating (loss) income	(107)	(107)
Interest expense, net	107	107
(Loss) income before income taxes	0	0
Income tax benefit	0	0
Equity in earnings of subsidiaries	(1,136)	320
Net (loss) income	(1,136)	320
Less: Comprehensive income attributable to noncontrolling interest	0	0
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(1,136)	320
Unrealized actuarial gains and amortization of prior service costs, net of income tax	0	0
Comprehensive (loss) income	(1,136)	320
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$ (1,136)	$ 320

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Risks and Uncertainties (Details) (USD $) In Thousands, unless otherwise specified	May 31, 2014	Feb. 28, 2014
Debt Instrument [Line Items]
Debt	$ 678,278	$ 659,966
Notes due 2018
Debt Instrument [Line Items]
Debt	$ 250,000	$ 250,000
Stated interest rate (as a percent)	11.00%

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Nature of Operations and Summary of Significant Accounting Policies (Details 4) (USD $)	3 Months Ended
	May 31, 2014	May 31, 2013	Feb. 28, 2014
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 849,901,000		$ 849,557,000
Less: Accumulated depreciation and depletion	(524,234,000)		(515,738,000)
Property, plant and equipment, net	325,667,000		333,819,000	[1]
Depreciation	10,200,000	11,100,000
Limestone and sand acreage
Property, Plant and Equipment [Line Items]
Property, plant and equipment	148,260,000		148,327,000
Land, buildings and building improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment	89,956,000		90,392,000
Crushing, prestressing and manufacturing plants
Property, Plant and Equipment [Line Items]
Property, plant and equipment	314,827,000		316,772,000
Contracting equipment, vehicles and other
Property, Plant and Equipment [Line Items]
Property, plant and equipment	294,205,000		293,336,000
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 2,653,000		$ 730,000

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014		May 31, 2013
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	$ (34,204)		$ (36,253)
Cash flows from investing activities
Capital expenditures	(4,110)		(9,491)
Proceeds from sale of property, equipment, and assets held for sale	939		67
Change in cash value of life insurance	(31)		3,089
Change in restricted cash	10,236		(4,628)
Net cash provided by (used in) investing activities	7,034		(10,963)
Cash flows from financing activities
Proceeds from revolving credit	0		49,419
Repayment of revolving credit	0		(6,324)
Net proceeds from short-term borrowings	11,528		0
Proceeds from issuance of long-term debt	39		481
Repayment of long-term debt	(4,256)		(1,091)
Payments on capital leases	(901)		(1,096)
Debt issuance costs	(756)		0
Dividends received (paid)			0
Distribution to noncontrolling interest	0		(451)
Net cash provided by financing activities	5,654		40,938
Net decrease in cash and cash equivalents	(21,516)		(6,278)
Cash and cash equivalents
Beginning of period	23,892	[1]	9,534
End of period	2,376		3,256
New Enterprise Stone & Lime Co., Inc.
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	(36,227)		(36,279)
Cash flows from investing activities
Capital expenditures	(3,426)		(8,718)
Proceeds from sale of property, equipment, and assets held for sale	939		52
Change in cash value of life insurance	(31)		3,089
Change in restricted cash	10,233		123
Net cash provided by (used in) investing activities	7,715		(5,454)
Cash flows from financing activities
Proceeds from revolving credit			49,419
Repayment of revolving credit			(6,324)
Net proceeds from short-term borrowings	11,528
Proceeds from issuance of long-term debt	39		481
Repayment of long-term debt	(4,119)		(756)
Payments on capital leases	(901)		(1,096)
Debt issuance costs	(756)		0
Dividends received (paid)			0
Distribution to noncontrolling interest	0		0
Net cash provided by financing activities	5,791		41,724
Net decrease in cash and cash equivalents	(22,721)		(9)
Cash and cash equivalents
Beginning of period	21,344		31
End of period	(1,377)		22
Guarantor Subsidiaries
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	680		758
Cash flows from investing activities
Capital expenditures	(684)		(773)
Proceeds from sale of property, equipment, and assets held for sale	0		15
Change in cash value of life insurance	0		0
Change in restricted cash	4		0
Net cash provided by (used in) investing activities	(680)		(758)
Cash flows from financing activities
Proceeds from revolving credit			0
Repayment of revolving credit			0
Net proceeds from short-term borrowings	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 received (paid)			0
Distribution to noncontrolling interest	0		0
Net cash provided by financing activities	0		0
Net decrease in cash and cash equivalents	0		0
Cash and cash equivalents
Beginning of period	0		19
End of period	0		19
Non Guarantors
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	1,343		2,268
Cash flows from investing activities
Capital expenditures	0		0
Proceeds from sale of property, equipment, and assets held for sale	0		0
Change in cash value of life insurance	0		0
Change in restricted cash	(1)		(4,751)
Net cash provided by (used in) investing activities	(1)		(4,751)
Cash flows from financing activities
Proceeds from revolving credit			0
Repayment of revolving credit			0
Net proceeds from short-term borrowings	0
Proceeds from issuance of long-term debt	0		0
Repayment of long-term debt	(137)		(335)
Payments on capital leases	0		0
Debt issuance costs	0		0
Dividends received (paid)			3,000
Distribution to noncontrolling interest	0		(451)
Net cash provided by financing activities	(137)		(3,786)
Net decrease in cash and cash equivalents	1,205		(6,269)
Cash and cash equivalents
Beginning of period	2,548		9,484
End of period	3,753		3,215
Eliminations
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	0		(3,000)
Cash flows from investing activities
Capital expenditures	0		0
Proceeds from sale of property, equipment, and assets held for sale	0		0
Change in cash value of life insurance	0		0
Change in restricted cash	0		0
Net cash provided by (used in) investing activities	0		0
Cash flows from financing activities
Proceeds from revolving credit			0
Repayment of revolving credit			0
Net proceeds from short-term borrowings	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 received (paid)			(3,000)
Distribution to noncontrolling interest	0		0
Net cash provided by financing activities	0		3,000
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, 2014.

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Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	May 31, 2014	Feb. 28, 2014
Accrued Liabilities
Insurance	$ 24,087	$ 23,661
Interest	11,673	21,279
Payroll and vacation	8,069	6,484
Withholding taxes	2,216	2,350
Billings in excess of costs and estimated earnings on uncompleted contracts	1,514	1,431
Contract expenses	1,048	727
Other	2,665	4,575
Total accrued liabilities	$ 51,272	$ 60,507	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

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Long-Term Debt (Details) (USD $)	May 31, 2014	Mar. 14, 2014	Feb. 28, 2014
Debt Instrument [Line Items]
Debt	$ 678,278,000		$ 659,966,000
Less: Current portion	(37,718,000)		(30,514,000)	[1]
Long-term debt	640,560,000		629,452,000	[1]
RCA
Debt Instrument [Line Items]
Debt	33,941,000		22,413,000
ABL facility, borrowing available	41,100,000		36,500,000
Stated interest rate (as a percent)	6.25%
Notes due 2018
Debt Instrument [Line Items]
Debt	250,000,000		250,000,000
Stated interest rate (as a percent)	11.00%
Secured Notes due 2018
Debt Instrument [Line Items]
Debt	313,001,000	265,000,000	300,962,000
Stated interest rate (as a percent)	13.00%	13.00%
Term loan
Debt Instrument [Line Items]
Debt	70,000,000		70,000,000
Stated interest rate (as a percent)	8.00%
Land, equipment and other obligations
Debt Instrument [Line Items]
Debt	7,034,000		11,488,000
Obligations under capital leases
Debt Instrument [Line Items]
Debt	$ 4,302,000		$ 5,103,000

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

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Risks and Uncertainties

3 Months Ended

May 31, 2014

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.

On February 12, 2014, the Company entered into (i) an asset-based revolving credit agreement, dated as of February 12, 2014, among the Company and certain of its subsidiaries party thereto as borrowers, the lenders party thereto, PNC Bank, National Association, as issuer, swing loan lender, administrative agent and collateral agent (the “Revolving Credit Agreement” or “RCA”) and a term loan credit and guaranty agreement, dated as of February 12, 2014, among the Company as borrower, certain subsidiaries of the Company party thereto as guarantors, the lenders party thereto and Cortland Capital Market Services LLC as administrative agent (the “Term Loan Agreement”, and together with RCA, the “Credit Facilities”). The Credit Facilities contain certain financial maintenance and other covenants. In the past, the Company has failed to meet certain operating performance measures as well as the financial covenant requirements set forth under its previous credit facilities, which resulted in the need to obtain several amendments, and should the Company fail in the future, the Company cannot guarantee that it will be able to obtain such amendments. A failure to obtain such amendments could result in an acceleration of its indebtedness under the Credit Facilities and a cross-default under our other indebtedness, including the $250.0 million11% senior notes due 2018 (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 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. We believe we have sufficient financial resources, including cash and cash equivalents, cash from operations and amounts available for borrowing under our asset-based revolving credit agreement, dated February 12, 2014, the RCA, to fund our business and operations, including capital expenditures and debt service obligations, for at least the next twelve months.

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Long-Term Debt (Details 2) (USD $)		0 Months Ended								0 Months Ended			3 Months Ended			0 Months Ended
	Feb. 28, 2005	Feb. 12, 2014 Credit Facilities	Feb. 12, 2014 RCA availability_block_reduction	May 31, 2014 RCA	Feb. 12, 2014 RCA Letter of credit sub-facility	Feb. 12, 2014 RCA Swing line sub-facility	Feb. 12, 2014 RCA FCCR Requirement Not Achieved	Feb. 12, 2014 RCA FCCR Requirement Achieved Once in Rolling Four Quarter Period	Feb. 12, 2014 RCA FCCR Requirement Achieved Twice Or More in Rolling Four Quarter Period	Feb. 12, 2014 RCA LIBOR	Feb. 12, 2014 RCA Base Rate	Feb. 12, 2014 Term Loan	May 31, 2014 Term Loan Prepayment occurs on or prior to 5/12/2015	May 31, 2014 Term Loan Prepayment between 5/13/2015 and 2/12/2016	May 31, 2014 Term Loan Prepayment occurs on 2/13/2016 and thereafter	Feb. 12, 2014 Term Loan LIBOR	Feb. 12, 2014 Term Loan Base Rate
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 105,000,000.0		$ 20,000,000.0	$ 10,500,000.0
Face amount of debt	25,300,000											70,000,000.0
Margin added to variable interest rate basis (as a percent)										4.00%	3.00%					7.00%	6.00%
Variable interest rate floor										1.00%						1.00%
Commitment fee			0.50%
Availability block							20,000,000.0	10,000,000.0	0
Fixed charge coverage ratio		1.00	1.00
Maximum number off reductions to availability block			2
Prepayment price (as a percentage)													103.00%	102.00%	100.00%
Maximum permitted amount of cash burn in excess of projected		17,500,000
Capital expenditure limitation in fiscal year 2015		27,500,000
Capital expenditure limitation in fiscal year 2016		40,000,000
Capital expenditure limitation in fiscal years after 2016 through maturity		$ 35,000,000
Weighted average interest rate				6.25%

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Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014 segment	May 31, 2013
Segment Reporting [Abstract]
Number of reportable segments	3
Segment Reporting
Revenue	$ 140,428	$ 147,744
Operating income (loss)	(9,351)	(13,535)
Depreciation, depletion and amortization	11,090	12,118
Construction materials
Segment Reporting
Revenue	99,113	111,217
Operating income (loss)	6,087	7,357
Depreciation, depletion and amortization	7,198	8,089
Heavy/highway construction
Segment Reporting
Revenue	44,098	47,893
Operating income (loss)	(3,097)	(2,524)
Depreciation, depletion and amortization	2,293	2,076
Traffic safety services and equipment
Segment Reporting
Revenue	23,666	24,089
Operating income (loss)	1,090	(676)
Depreciation, depletion and amortization	1,242	1,514
Segment totals
Segment Reporting
Revenue	166,877	183,199
Eliminations
Segment Reporting
Revenue	(26,449)	(35,455)
Corporate and unallocated
Segment Reporting
Operating income (loss)	(13,431)	(17,692)
Depreciation, depletion and amortization	$ 357	$ 439

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Condensed Consolidated Balance Sheets (unaudited) (USD $) In Thousands, unless otherwise specified	May 31, 2014	Feb. 28, 2014
Current assets
Cash and cash equivalents	$ 2,376	$ 23,892	[1]
Restricted cash	21,548	27,684	[1]
Accounts receivable, less reserves of $4,718 and $5,228 respectively	106,122	61,319	[1]
Inventories	108,292	107,313	[1]
Deferred income taxes	3,713	3,713	[1]
Other current assets	7,596	9,005	[1]
Assets held for sale	4,552	14,467	[1]
Total current assets	254,199	247,393	[1]
Property, plant and equipment, net	325,667	333,819	[1]
Goodwill	87,976	87,976	[1]
Other intangible assets, net	19,735	19,951	[1]
Other assets	31,559	32,799	[1]
Total assets	719,136	721,938	[1]
Current liabilities
Current maturities of long-term debt	37,718	30,514	[1]
Accounts payable — trade	45,949	21,946	[1]
Accrued liabilities	51,272	60,507	[1]
Total current liabilities	134,939	112,967	[1]
Long-term debt, less current maturities	640,560	629,452	[1]
Deferred income taxes	33,081	34,890	[1]
Other liabilities	39,288	45,965	[1]
Total liabilities	847,868	823,274	[1]
Commitments and contingencies	0	0	[1]
Deficit
Accumulated deficit	(255,306)	(227,696)	[1]
Additional paid-in capital	126,962	126,962	[1]
Accumulated other comprehensive loss	(1,936)	(1,975)	[1]
Total New Enterprise Stone & Lime Co., Inc. deficit	(130,006)	(102,435)	[1]
Noncontrolling interest in consolidated subsidiaries	1,274	1,099	[1]
Total deficit	(128,732)	(101,336)	[1]
Total liabilities and deficit	719,136	721,938	[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, 2014.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014		May 31, 2013
Reconciliation of net loss to net cash from operating activities
Net loss	$ (27,435)		$ (29,237)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion and amortization	11,090		12,118
Asset impairment	1,680		0
(Gain) loss on disposals of property, equipment and software	(149)		152
Non-cash payment-in-kind interest accretion	5,568		5,862
Amortization and write-off of debt issuance costs	1,082		1,570
Deferred income taxes	(1,809)		(3,630)
Bad debt expense	343		1,117
Changes in assets and liabilities:
Accounts receivable	(45,050)		(56,410)
Inventories	4,464		333
Other assets	1,574		336
Accounts payable	24,003		35,221
Other liabilities	(9,565)		(3,685)
Net cash used in operating activities	(34,204)		(36,253)
Cash flows from investing activities
Capital expenditures	(4,110)		(9,491)
Proceeds from sale of property, equipment, and assets held for sale	939		67
Change in cash value of life insurance	(31)		3,089
Change in restricted cash	10,236		(4,628)
Net cash provided by (used in) investing activities	7,034		(10,963)
Cash flows from financing activities
Proceeds from revolving credit	0		49,419
Repayment of revolving credit	0		(6,324)
Net proceeds from short-term borrowings	11,528		0
Proceeds from issuance of long-term debt	39		481
Repayment of long-term debt	(4,256)		(1,091)
Payments on capital leases	(901)		(1,096)
Debt issuance costs	(756)		0
Distribution to noncontrolling interest	0		(451)
Net cash provided by financing activities	5,654		40,938
Net decrease in cash and cash equivalents	(21,516)		(6,278)
Cash and cash equivalents
Beginning of period	23,892	[1]	9,534
End of period	$ 2,376		$ 3,256

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

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Long-Term Debt (Details 5) (USD $) In Millions, unless otherwise specified	84 Months Ended
	Feb. 28, 2005 revenue_bond
Debt Disclosure [Abstract]
Number of revenue bonds issued	4
Face amount of debt	$ 25.3

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Other Noncurrent Liabilities (Tables)

3 Months Ended

May 31, 2014

Other Liabilities Disclosure [Abstract]

Schedule of other noncurrent liabilities

The Company's other noncurrent liabilities consist of:

	May 31,		February 28,
(In thousands)	2014		2014
Other Noncurrent Liabilities
Reclamation costs	$	19,016	$	18,745
Executive deferred compensation liability	5,765		5,790
PIK accrued interest	4,565		11,035
Other	9,942		10,395
	$	39,288	$	45,965

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014	May 31, 2013
Income Tax Disclosure [Abstract]
Effective income tax rate	7.60%	10.60%
Income tax benefit	$ 2,242	$ 3,475

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

3 Months Ended

May 31, 2014

Condensed Issuer, Guarantor and Non Guarantor Financial Information

Schedule of condensed consolidating balance sheet

Condensed Consolidating Balance Sheet at May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	(1,377	)	$	—	$	3,753		$	—		$	2,376
Restricted cash	5,863			88		15,597			—			21,548
Accounts receivable, net	90,152			15,956		14			—			106,122
Inventories	94,614			13,678		—			—			108,292
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	2,749			964		—			—			3,713
Other current assets	6,758			807		31			—			7,596
Assets held for sale	4,552			—		—			—			4,552
Total current assets	203,311			31,493		20,042			(647		)	254,199
Property, plant and equipment, net	306,383			19,284		6,817			(6,817		)	325,667
Goodwill	82,131			5,845		—			—			87,976
Other intangible assets, net	7,877			11,858		—			—			19,735
Investment in subsidiaries	79,566			—		—			(79,566		)	—
Intercompany receivables	3,308			27,913		(34		)	(31,187		)	—
Other assets	28,131			1,080		2,348			—			31,559
	$	710,707		$	97,473	$	29,173		$	(118,217	)	$	719,136
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	37,519		$	—	$	846		$	(647	)	$	37,718
Accounts payable - trade	38,363			7,275		311			—			45,949
Accrued liabilities	34,502			1,521		15,249			—			51,272
Total current liabilities	110,384			8,796		16,406			(647		)	134,939
Intercompany payables	27,545			2,559		1,083			(31,187		)	—
Long-term debt, less current maturities	634,961			—		5,599			—			640,560
Intercompany capital leases, less current installments	6,817			—		—			(6,817		)	—
Deferred income taxes	24,668			8,413		—			—			33,081
Other liabilities	36,338			602		2,348			—			39,288
Total liabilities	840,713			20,370		25,436			(38,651		)	847,868
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(130,006		)	77,103		2,463			(79,566		)	(130,006		)
Noncontrolling interest	—			—		1,274			—			1,274
Total (deficit) equity	(130,006		)	77,103		3,737			(79,566		)	(128,732		)
Total liabilities and deficit	$	710,707		$	97,473	$	29,173		$	(118,217	)	$	719,136

Condensed Consolidating Balance Sheet at February 28, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	21,344		$	—	$	2,548		$	—		$	23,892
Restricted cash	11,996			92		15,596			—			27,684
Accounts receivable, net	49,093			12,212		271			(257		)	61,319
Inventories	95,135			12,178		—			—			107,313
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	2,749			964		—			—			3,713
Other current assets	8,131			839		35			—			9,005
Assets held for sate	14,467			—		—			—			14,467
Total current assets	202,915			26,285		19,097			(904		)	247,393
Property, plant and equipment, net	314,140			19,679		6,969			(6,969		)	333,819
Goodwill	82,131			5,845		—			—			87,976
Other intangible assets, net	7,904			12,047		—			—			19,951
Investment in subsidiaries	81,037			—		—			(81,037		)	—
Intercompany receivables	720			27,794		(34		)	(28,480		)	—
Other assets	29,336			1,115		2,348			—			32,799
	$	718,183		$	92,765	$	28,380		$	(117,390	)	$	721,938
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	30,317		$	—	$	844		$	(647	)	$	30,514
Accounts payable - trade	17,892			3,858		453			(257		)	21,946
Accrued liabilities	44,603			1,531		14,373			—			60,507
Total current liabilities	92,812			5,389		15,670			(904		)	112,967
Intercompany payables	27,632			848		—			(28,480		)	—
Long-term debt, less current maturities	623,714			—		5,738			—			629,452
Intercompany capital leases, less current installments	6,969			—		—			(6,969		)	—
Deferred income taxes	26,477			8,413		—			—			34,890
Other liabilities	43,014			603		2,348			—			45,965
Total liabilities	820,618			15,253		23,756			(36,353		)	823,274
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(102,435		)	77,512		3,525			(81,037		)	(102,435		)
Noncontrolling interest	—			—		1,099			—			1,099
Total (deficit) equity	(102,435		)	77,512		4,624			(81,037		)	(101,336		)
Total liabilities and deficit	$	718,183		$	92,765	$	28,380		$	(117,390	)	$	721,938

Schedule of condensed consolidating statements of comprehensive income (loss)

Condensed Consolidating Statement of Comprehensive (Loss) Income for the three months ended May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Revenue	$	119,447		$	22,483	$	1,737		$	(3,239	)	$	140,428
Cost of revenue (exclusive of items shown separately below)	104,637			17,708		1,438			(3,132		)	120,651
Depreciation, depletion and amortization	9,806			1,284		—			—			11,090
Equipment and intangible asset impairment	1,680			—		—			—			1,680
Pension and profit sharing	1,342			45		—			—			1,387
Selling, administrative and general expenses	12,743			2,332		45			—			15,120
(Gain) loss on disposals of property, equipment and software	(159		)	10		—			—			(149		)
Operating (loss) income	(10,602		)	1,104		254			(107		)	(9,351		)
Interest expense, net	(20,386		)	9		(56		)	107			(20,326		)
(Loss) income before income taxes	(30,988		)	1,113		198			—			(29,677		)
Income tax benefit	(2,242		)	—		—			—			(2,242		)
Equity in earnings of subsidiaries	1,136			—		—			(1,136		)	—
Net (loss) income	(27,610		)	1,113		198			(1,136		)	(27,435		)
Less: net income attributable to noncontrolling interest	—			—		(175		)	—			(175		)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,610		)	1,113		23			(1,136		)	(27,610		)
Other Comprehensive Income
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—		—			—			39
Comprehensive (loss) income	(27,571		)	1,113		198			(1,136		)	(27,396		)
Less: comprehensive income attributable to noncontrolling interest	—			—		(175		)	—			(175		)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$	(27,571	)	$	1,113	$	23		$	(1,136	)	$	(27,571	)

Condensed Consolidating Statement of Comprehensive (Loss) Income for the three months ended May 31, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	125,738		$	23,212		$	2,416		$	(3,622	)	$	147,744
Cost of revenue (exclusive of items shown separately below)	110,422			18,962			1,505			(3,171		)	127,718
Depreciation, depletion and amortization	10,564			1,554			—			—			12,118
Pension and profit sharing	1,795			83			—			—			1,878
Selling, administrative and general expenses	16,679			3,004			74			(344		)	19,413
Loss on disposals of property, equipment and software	138			14			—			—			152
Operating (loss) income	(13,860		)	(405		)	837			(107		)	(13,535		)
Interest expense, net	(19,118		)	(61		)	(105		)	107			(19,177		)
(Loss) income before income taxes	(32,978		)	(466		)	732			—			(32,712		)
Income tax expense benefit	(3,322		)	(153		)	—			—			(3,475		)
Equity in earnings of subsidiaries	(320		)	—			—			320			—
Net (loss) income	(29,976		)	(313		)	732			320			(29,237		)
Less: net income attributable to noncontrolling interest	—			—			(739		)	—			(739		)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(29,976		)	(313		)	(7		)	320			(29,976		)
Other Comprehensive Income
Unrealized actuarial gains and amortization of prior service costs, net of income tax	69			—			—			—			69
Comprehensive (loss) income	(29,907		)	(313		)	732			320			(29,168		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(739		)	—			(739		)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$	(29,907	)	$	(313	)	$	(7	)	$	320		$	(29,907	)

Schedule of condensed consolidating statements of cash flows

Condensed Consolidating Statement of Cash Flows for the three months ended May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(36,227	)	$	680		$	1,343		$	—	$	(34,204	)
Cash flows from investing activities
Capital expenditures	(3,426		)	(684		)	—			—		(4,110		)
Proceeds from sale of property, equipment and assets held for sale	939			—			—			—		939
Change in cash value of life insurance	(31		)	—			—			—		(31		)
Change in restricted cash	10,233			4			(1		)	—		10,236
Net cash provided by (used in) investing activities	7,715			(680		)	(1		)	—		7,034
Cash flows from financing activities
Net proceeds from short-term borrowings	11,528			—			—			—		11,528
Proceeds from issuance of long-term debt	39			—			—			—		39
Repayment of long-term debt	(4,119		)	—			(137		)	—		(4,256		)
Payments on capital leases	(901		)	—			—			—		(901		)
Debt issuance costs	(756		)	—			—			—		(756		)
Distribution to noncontrolling interest	—			—			—			—		—
Net cash provided by (used in) financing activities	5,791			—			(137		)	—		5,654
Net (decrease) increase in cash and cash equivalents	(22,721		)	—			1,205			—		(21,516		)
Cash and cash equivalents
Beginning of period	21,344			—			2,548			—		23,892
End of period	$	(1,377	)	$	—		$	3,753		$	—	$	2,376

Condensed Consolidating Statement of Cash Flows for the three months ended May 31, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Cash flows from operating activities	$	(36,279	)	$	758		$	2,268		$	(3,000	)	$	(36,253	)
Cash flows from investing activities
Capital expenditures	(8,718		)	(773		)	—			—			(9,491		)
Proceeds from sale of property and equipment	52			15			—			—			67
Change in cash value of life insurance	3,089			—			—			—			3,089
Change in restricted cash	123			—			(4,751		)	—			(4,628		)
Net cash used in investing activities	(5,454		)	(758		)	(4,751		)	—			(10,963		)
Cash flows from financing activities
Proceeds from revolving credit	49,419			—			—			—			49,419
Repayment of revolving credit	(6,324		)	—			—			—			(6,324		)
Proceeds from issuance of long-term debt	481			—			—			—			481
Repayment of long-term debt	(756		)	—			(335		)	—			(1,091		)
Payments on capital leases	(1,096		)	—			—			—			(1,096		)
Debt issuance costs	—			—			—			—			—
Dividends received (paid)	—			—			(3,000		)	3,000			—
Distribution to noncontrolling interest	—			—			(451		)	—			(451		)
Net cash provided by (used in) financing activities	41,724			—			(3,786		)	3,000			40,938
Net (decrease) increase in cash and cash equivalents	(9		)	—			(6,269		)	—			(6,278		)
Cash and cash equivalents
Beginning of period	31			19			9,484			—			9,534
End of period	$	22		$	19		$	3,215		$	—		$	3,256

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Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

May 31, 2014

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, 2014 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, 2014 filed with the Securities and Exchange Commission (“SEC”) on May 21, 2014. 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.

Restructuring

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. and Martin Limestone, Inc., into a new East division and the NESL operating business, Buffalo Crushed Stone, Inc. and Valley Quarries, Inc. 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.

The restructuring activities during the three months ended May 31, 2014 resulted in one-time pre-tax charges of approximately $1.8 million, comprised of approximately $0.1 million for severance and related benefit costs and $1.7 million in outside advisory services related to the implementation of such plan. The Company has accrued approximately $1.2 million of severance costs as a component of accrued expenses in the consolidated balance sheet at May 31, 2014.

The following table represents the restructuring charges:

(In thousands)	Total Restructuring
Expected to be incurred through fiscal year 2015	$	12,484
Incurred in fiscal year 2014	$	7,134
Incurred in fiscal year 2015	1,810
Cumulative amount incurred at May 31, 2014	$	8,944

The following table presents changes to Accrued Restructuring:

(In thousands)	Accrued Restructuring
Balance at February 28, 2014	$	1,300
Additional charges incurred	1,810
Payment of restructuring charges	(1,958		)
Balance at May 31, 2014	$	1,152

Assets Held for Sale

The Company classifies assets as held for sale when the all following criteria are met: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year, with a few exceptions; and (v) the asset is being actively marketed for sale at a price that is reasonable, in relation to its current fair value.

On March 14, 2014, the Company concluded the sale of its block manufacturing and Construction Supply Center ("CSC") operations at its New Holland, PA location. In addition to the sale of the certain block manufacturing and CSC facilities, the sale agreement contained certain non-compete provisions which required the Company to close similar facilities at one location as of the settlement date. The assets held for sale are from the construction materials segment, and the total sale price was approximately $8.9 million. The Company provided $4.1 million of the proceeds on the sale of the New Holland assets to the trustee of the $265.0 million13% senior secured noted due 2018 ("the Secured Notes") which may be utilized to purchase additional fixed equipment. Assets related to the sale of block manufacturing and CSC operations at its New Holland locations composed approximately $8.4 million of the total assets held for sale at February 28, 2014.

Assets held for sale at May 31, 2014 are composed of non-core operations related to the Company's block manufacturing facility and CSC facility. The Company recorded an asset impairment of approximately $1.6 million related to equipment and approximately $0.1 million of inventory in the construction materials segment for assets held for sale in the three months ended May 31, 2014. On June 16, 2014, the Company completed the sale of its block manufacturing facility and CSC facility at its Towanda, PA location for $0.5 million.

The Company's assets held for sale consisted of the following:

(In thousands)	May 31, 2014		February 28, 2014
Inventory	$	229	$	6,690
PP&E, net of impairment	4,323		7,777
	$	4,552	$	14,467

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 and those differences could be material.

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.

The Company uses a cash pooling arrangement with a single financial institution with specific provisions for the right to offset positive and negative cash balances.

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 consists of the following: 

	May 31,			February 28,
(In thousands)	2014			2014
Costs and estimated earnings in excess of billings	$	18,188		$	9,838
Trade	86,430			51,310
Retainages	6,222			5,399
	110,840			66,547
Allowance for doubtful accounts	(4,718		)	(5,228		)
Accounts receivable, net	$	106,122		$	61,319

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 inventories consist of the following:

	May 31,		February 28,
(In thousands)	2014		2014
Crushed stone, agricultural lime, and sand	$	69,485	$	70,820
Safety equipment	13,404		12,091
Parts, tires, and supplies	10,285		10,187
Raw materials	11,520		10,542
Building materials	1,078		1,012
Other	2,520		2,661
	$	108,292	$	107,313

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:

	May 31,			February 28,
(In thousands)	2014			2014
Limestone and sand acreage	$	148,260		$	148,327
Land, buildings and building improvements	89,956			90,392
Crushing, prestressing, and manufacturing plants	314,827			316,772
Contracting equipment, vehicles and other	294,205			293,336
Construction in progress	2,653			730
Property, plant and equipment	849,901			849,557
Less: Accumulated depreciation and depletion	(524,234		)	(515,738		)
Property, plant and equipment, net	$	325,667		$	333,819

For the three months ended May 31, 2014 and 2013, depreciation expense was $10.2 million and $11.1 million, respectively. 

Goodwill and Other Intangible Assets

Goodwill

Goodwill is tested for impairment on an annual basis or more frequently whenever events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  The impairment test for goodwill is a two-step process.  Under the first step, the fair value of the reporting unit is compared with its carrying value.  If the fair value of the reporting unit is less than its carrying value, an indication of impairment exists and the reporting unit must perform step two of the impairment test.  Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.  If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

Our reporting units were determined based on our organization structure, considering the level at which discrete financial information for businesses is available and regularly reviewed. The Company has three operating segments, which is the basis for determining its reporting units, organized around its three lines of business: (i) construction materials; (ii) heavy/highway construction; and (iii) traffic safety services and equipment. Construction materials include three reporting units within the operating segment based on geographic location. The operating segment of traffic safety services and equipment consists of one reporting unit within the segment based upon the similar economic characteristics of its operations.

Our annual goodwill impairment analysis takes place at fiscal year end.  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.

The inputs used within the fair value measurements were categorized within Level 3 of the fair value hierarchy.

Other Intangible Assets

Other intangible assets consist of technology, customer relationships and trademarks acquired in previous acquisitions. The technology, customer relationships and trademarks are amortized over a straight-line basis.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

For the three months ended May 31, 2014 and 2013, amortization of intangible assets was $0.2 million.

Other Noncurrent Assets

The Company’s other noncurrent assets consist of the following:

	May 31,		February 28,
(In thousands)	2014		2014
Deferred financing fees (less current portion of $4,328 and $4,324, respectively)	$	12,137	$	13,207
Capitalized software (net of accumulated amortization of $2,412 and $2,161, respectively)	7,833		8,084
Cash surrender value of life insurance (net of loans of $3,038 and $3,200, respectively)	1,166		1,135
Deferred stripping costs	3,827		3,900
Other	6,596		6,473
Total other assets	$	31,559	$	32,799

Revenue Recognition

The Company recognizes revenue on construction contracts under the percentage-of-completion method of accounting, as measured by the cost incurred to date over estimated total cost.  The typical contract life cycle for these projects can be up to two to four years in duration.  Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to revenues and costs. Revenue from contract change orders is recognized when the contract owner has agreed to the change order with the customer and the related costs are incurred. We do not recognize revenue on a basis of contract claims. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are identified. Contract costs include all direct material, labor, subcontract and other costs and those indirect costs related to contract performance, such as indirect salaries and wages, equipment repairs and depreciation, insurance and payroll taxes. Administrative and general expenses are charged to expense as incurred. Costs and estimated earnings in excess of billings on uncompleted contracts represent the excess of contract revenue recognized to date over billings to date. Billings in excess of costs and estimated earnings on uncompleted contracts represent the excess of billings to date over the amount of revenue recognized to date.  As of May 31, 2014 and February 28, 2014, such amounts are included in accounts receivable (Note 1, “Nature of Operations and Summary of Significant Accounting Policies”) and accrued liabilities (Note 3, “Accrued Liabilities”), respectively, in the consolidated balance sheets.

The Company accounts for custom-built concrete products under the units-of-production method.  Under this method, the revenue is recognized as the units are produced under firm contracts.

The Company generally recognizes revenue on the sale of construction materials and concrete products, other than custom-built concrete products, when the customer takes title and assumes risk of loss. Typically, this occurs when products are shipped.

The Company recognizes equipment rental revenue on a straight-line basis over the specific daily, weekly or monthly terms of the agreements. Revenues from the sale of equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer.

Impairment of Definite-Lived Long-Lived Assets

Long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company considers an asset group as the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. For our construction materials and heavy/highway construction operations, the lowest level of largely independent identifiable cash flows is at the regional level, which collectively serves a local market. Each region shares and allocates its material production, resources, equipment and business activity among the locations within the region in generating cash flows. Our regions are, i) Central Pennsylvania, ii) Chambersburg, Shippensburg, Gettysburg, Pennsylvania, iii) Lancaster, Pennsylvania, iv) Northeastern Pennsylvania and v) Western New York. The construction materials regions’ long-lived assets predominantly include limestone and sand acreage and crushing, prestressing equipment and manufacturing plants and the heavy/highway construction region’s long lived assets predominantly include contracting equipment and vehicles. The traffic safety services and equipment business includes two asset groups, distinguished between its retail sales and distribution as one asset group and its manufacturing and assembly as the second asset group. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset group.

Recently Issued and Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Public entities are required to apply the revenue recognition standard for annual reporting period beginning on or after December 15, 2016, including interim periods within that annual reporting period. Early application is not permitted. The Company is evaluating the impact of this standard on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the requirements for reporting discontinued operations. Under ASU 2014-08, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, this ASU requires additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The Company has early adopted the provisions of ASU 2014-08 during the fourth quarter of fiscal year 2014. The Company determined that its assets held for sale in the fourth quarter of fiscal year 2014 and the first quarter of fiscal year 2015 did not meet the requirements for discontinued operations.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit Where Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires companies with unrecognized tax benefits, or a portion of unrecognized tax benefits, to present these benefits in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward. 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's adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

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Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	May 31, 2014	Feb. 28, 2014
Accounts receivable, reserves	$ 4,718	$ 5,228
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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Nature of Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 31, 2014

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, 2014 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, 2014 filed with the Securities and Exchange Commission (“SEC”) on May 21, 2014. 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.

Restructuring

Restructuring

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. and Martin Limestone, Inc., into a new East division and the NESL operating business, Buffalo Crushed Stone, Inc. and Valley Quarries, Inc. 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.

The restructuring activities during the three months ended May 31, 2014 resulted in one-time pre-tax charges of approximately $1.8 million, comprised of approximately $0.1 million for severance and related benefit costs and $1.7 million in outside advisory services related to the implementation of such plan. The Company has accrued approximately $1.2 million of severance costs as a component of accrued expenses in the consolidated balance sheet at May 31, 2014.

Assets Held for Sale

Assets Held for Sale

The Company classifies assets as held for sale when the all following criteria are met: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year, with a few exceptions; and (v) the asset is being actively marketed for sale at a price that is reasonable, in relation to its current fair value.

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 and those differences could be material.

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.

The Company uses a cash pooling arrangement with a single financial institution with specific provisions for the right to offset positive and negative cash balances.

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.

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

Goodwill is tested for impairment on an annual basis or more frequently whenever events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  The impairment test for goodwill is a two-step process.  Under the first step, the fair value of the reporting unit is compared with its carrying value.  If the fair value of the reporting unit is less than its carrying value, an indication of impairment exists and the reporting unit must perform step two of the impairment test.  Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.  If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

Our reporting units were determined based on our organization structure, considering the level at which discrete financial information for businesses is available and regularly reviewed. The Company has three operating segments, which is the basis for determining its reporting units, organized around its three lines of business: (i) construction materials; (ii) heavy/highway construction; and (iii) traffic safety services and equipment. Construction materials include three reporting units within the operating segment based on geographic location. The operating segment of traffic safety services and equipment consists of one reporting unit within the segment based upon the similar economic characteristics of its operations.

Our annual goodwill impairment analysis takes place at fiscal year end.  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.

The inputs used within the fair value measurements were categorized within Level 3 of the fair value hierarchy.

Other Intangible Assets

Other intangible assets consist of technology, customer relationships and trademarks acquired in previous acquisitions. The technology, customer relationships and trademarks are amortized over a straight-line basis.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue on construction contracts under the percentage-of-completion method of accounting, as measured by the cost incurred to date over estimated total cost.  The typical contract life cycle for these projects can be up to two to four years in duration.  Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to revenues and costs. Revenue from contract change orders is recognized when the contract owner has agreed to the change order with the customer and the related costs are incurred. We do not recognize revenue on a basis of contract claims. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are identified. Contract costs include all direct material, labor, subcontract and other costs and those indirect costs related to contract performance, such as indirect salaries and wages, equipment repairs and depreciation, insurance and payroll taxes. Administrative and general expenses are charged to expense as incurred. Costs and estimated earnings in excess of billings on uncompleted contracts represent the excess of contract revenue recognized to date over billings to date. Billings in excess of costs and estimated earnings on uncompleted contracts represent the excess of billings to date over the amount of revenue recognized to date.  As of May 31, 2014 and February 28, 2014, such amounts are included in accounts receivable (Note 1, “Nature of Operations and Summary of Significant Accounting Policies”) and accrued liabilities (Note 3, “Accrued Liabilities”), respectively, in the consolidated balance sheets.

The Company accounts for custom-built concrete products under the units-of-production method.  Under this method, the revenue is recognized as the units are produced under firm contracts.

The Company generally recognizes revenue on the sale of construction materials and concrete products, other than custom-built concrete products, when the customer takes title and assumes risk of loss. Typically, this occurs when products are shipped.

The Company recognizes equipment rental revenue on a straight-line basis over the specific daily, weekly or monthly terms of the agreements. Revenues from the sale of equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer.

Impairment of Definite-Lived Long-Lived Assets

Impairment of Definite-Lived Long-Lived Assets

Long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company considers an asset group as the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. For our construction materials and heavy/highway construction operations, the lowest level of largely independent identifiable cash flows is at the regional level, which collectively serves a local market. Each region shares and allocates its material production, resources, equipment and business activity among the locations within the region in generating cash flows. Our regions are, i) Central Pennsylvania, ii) Chambersburg, Shippensburg, Gettysburg, Pennsylvania, iii) Lancaster, Pennsylvania, iv) Northeastern Pennsylvania and v) Western New York. The construction materials regions’ long-lived assets predominantly include limestone and sand acreage and crushing, prestressing equipment and manufacturing plants and the heavy/highway construction region’s long lived assets predominantly include contracting equipment and vehicles. The traffic safety services and equipment business includes two asset groups, distinguished between its retail sales and distribution as one asset group and its manufacturing and assembly as the second asset group. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset group.

Recently Issued and Adopted Accounting Standards

Recently Issued and Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Public entities are required to apply the revenue recognition standard for annual reporting period beginning on or after December 15, 2016, including interim periods within that annual reporting period. Early application is not permitted. The Company is evaluating the impact of this standard on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the requirements for reporting discontinued operations. Under ASU 2014-08, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, this ASU requires additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The Company has early adopted the provisions of ASU 2014-08 during the fourth quarter of fiscal year 2014. The Company determined that its assets held for sale in the fourth quarter of fiscal year 2014 and the first quarter of fiscal year 2015 did not meet the requirements for discontinued operations.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit Where Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires companies with unrecognized tax benefits, or a portion of unrecognized tax benefits, to present these benefits in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward. 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's adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

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Document and Entity Information	3 Months Ended
	May 31, 2014	Jul. 10, 2014 Common Stock, Class A	Jul. 10, 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	May 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		500	273,285

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

3 Months Ended

May 31, 2014

Accounting Policies [Abstract]

Schedule of restructuring and related costs

The following table represents the restructuring charges:

(In thousands)	Total Restructuring
Expected to be incurred through fiscal year 2015	$	12,484
Incurred in fiscal year 2014	$	7,134
Incurred in fiscal year 2015	1,810
Cumulative amount incurred at May 31, 2014	$	8,944

The following table presents changes to Accrued Restructuring:

(In thousands)	Accrued Restructuring
Balance at February 28, 2014	$	1,300
Additional charges incurred	1,810
Payment of restructuring charges	(1,958		)
Balance at May 31, 2014	$	1,152

Schedule of assets held-for-sale

The Company's assets held for sale consisted of the following:

(In thousands)	May 31, 2014		February 28, 2014
Inventory	$	229	$	6,690
PP&E, net of impairment	4,323		7,777
	$	4,552	$	14,467

Schedule of total accounts receivable

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

	May 31,			February 28,
(In thousands)	2014			2014
Costs and estimated earnings in excess of billings	$	18,188		$	9,838
Trade	86,430			51,310
Retainages	6,222			5,399
	110,840			66,547
Allowance for doubtful accounts	(4,718		)	(5,228		)
Accounts receivable, net	$	106,122		$	61,319

Schedule of total inventory

The Company’s total inventories consist of the following:

	May 31,		February 28,
(In thousands)	2014		2014
Crushed stone, agricultural lime, and sand	$	69,485	$	70,820
Safety equipment	13,404		12,091
Parts, tires, and supplies	10,285		10,187
Raw materials	11,520		10,542
Building materials	1,078		1,012
Other	2,520		2,661
	$	108,292	$	107,313

Schedule of property, plant and equipment

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

	May 31,			February 28,
(In thousands)	2014			2014
Limestone and sand acreage	$	148,260		$	148,327
Land, buildings and building improvements	89,956			90,392
Crushing, prestressing, and manufacturing plants	314,827			316,772
Contracting equipment, vehicles and other	294,205			293,336
Construction in progress	2,653			730
Property, plant and equipment	849,901			849,557
Less: Accumulated depreciation and depletion	(524,234		)	(515,738		)
Property, plant and equipment, net	$	325,667		$	333,819

Schedule of long term other assets

The Company’s other noncurrent assets consist of the following:

	May 31,		February 28,
(In thousands)	2014		2014
Deferred financing fees (less current portion of $4,328 and $4,324, respectively)	$	12,137	$	13,207
Capitalized software (net of accumulated amortization of $2,412 and $2,161, respectively)	7,833		8,084
Cash surrender value of life insurance (net of loans of $3,038 and $3,200, respectively)	1,166		1,135
Deferred stripping costs	3,827		3,900
Other	6,596		6,473
Total other assets	$	31,559	$	32,799

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Condensed Consolidated Statements of Comprehensive Loss (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014	May 31, 2013
Revenue
Construction materials	$ 76,645	$ 79,953
Heavy/highway construction	44,098	47,893
Traffic safety services and equipment	19,685	19,898
Total revenue	140,428	147,744
Cost of revenue (exclusive of items shown separately below)
Construction materials	61,060	64,076
Heavy/highway construction	44,409	47,404
Traffic safety services and equipment	15,182	16,238
Total cost of revenue	120,651	127,718
Depreciation, depletion and amortization	11,090	12,118
Asset impairment	1,680	0
Pension and profit sharing	1,387	1,878
Selling, administrative and general expenses	15,120	19,413
(Gain) loss on disposals of property, equipment and software	(149)	152
Operating (loss) income	(9,351)	(13,535)
Interest expense, net	(20,326)	(19,177)
(Loss) income before income taxes	(29,677)	(32,712)
Income tax benefit	(2,242)	(3,475)
Net (loss) income	(27,435)	(29,237)
Less: Comprehensive income attributable to noncontrolling interest	(175)	(739)
Net loss attributable to New Enterprise Stone & Lime Co., Inc.	(27,610)	(29,976)
Unrealized actuarial gains and amortization of prior service costs, net of income taxes ($26 and $8, respectively)	39	69
Comprehensive (loss) income	(27,396)	(29,168)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$ (27,571)	$ (29,907)

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Retirement and Benefit Programs

3 Months Ended

May 31, 2014

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. During three months ended May 31, 2014, the Company subsequently restored matching contribution rates for its qualified plan and certain 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 months ended May 31, 2014 and 2013, was as follows:

	Three Months Ended   May 31,
(In thousands)	2014			2013
Net periodic benefit cost
Service cost	$	86		$	86
Interest cost	105			100
Expected return on plan assets	(150		)	(143		)
Amortization of prior service cost	14			16
Recognized net actuarial loss	51			66
Total pension expense	$	106		$	125

The Company made contributions to the defined benefit pension plans of approximately $0.1 million during the three months ended May 31, 2014, and expects to make additional contributions of approximately $0.2 million in the remainder of fiscal year 2015.

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Income Taxes

3 Months Ended

May 31, 2014

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, 2015 and February 28, 2014, after giving effect to items specifically related to the interim periods.

The effective income tax rates for the three months ended May 31, 2014 and 2013 were 7.6% and 10.6%, respectively, resulting in tax benefit of $2.2 million and $3.5 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 was immaterial for the three months ended May 31, 2014 and 2013, respectively, primarily as a result of net operating losses.

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Segment Reporting (Tables)

3 Months Ended

May 31, 2014

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   May 31,
(In thousands)	2014			2013
Revenue
Construction materials	$	99,113		$	111,217
Heavy/highway construction	44,098			47,893
Traffic safety services and equipment	23,666			24,089
Segment totals	166,877			183,199
Eliminations	(26,449		)	(35,455		)
Total revenue	$	140,428		$	147,744
Operating income (loss)
Construction materials	$	6,087		$	7,357
Heavy/highway construction	(3,097		)	(2,524		)
Traffic safety services and equipment	1,090			(676		)
Corporate and unallocated	(13,431		)	(17,692		)
Total operating loss	$	(9,351	)	$	(13,535	)

	Three Months Ended   May 31,
(In thousands)	2014		2013
Depreciation, depletion and amortization
Construction materials	$	7,198	$	8,089
Heavy/highway construction	2,293		2,076
Traffic safety services and equipment	1,242		1,514
Corporate and unallocated	357		439
Total depreciation, depletion and amortization	$	11,090	$	12,118

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Accrued Liabilities (Tables)

3 Months Ended

May 31, 2014

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consist of the following: 

	May 31,		February 28,
(In thousands)	2014		2014
Insurance	$	24,087	$	23,661
Interest	11,673		21,279
Payroll and vacation	8,069		6,484
Withholding taxes	2,216		2,350
Billings in excess of costs and estimated earnings on uncompleted contracts	1,514		1,431
Contract expenses	1,048		727
Other	2,665		4,575
Total accrued liabilities	$	51,272	$	60,507

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Segment Reporting

3 Months Ended

May 31, 2014

Segment Reporting [Abstract]

Segment Reporting

Business Segments

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.

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

	Three Months Ended   May 31,
(In thousands)	2014			2013
Revenue
Construction materials	$	99,113		$	111,217
Heavy/highway construction	44,098			47,893
Traffic safety services and equipment	23,666			24,089
Segment totals	166,877			183,199
Eliminations	(26,449		)	(35,455		)
Total revenue	$	140,428		$	147,744
Operating income (loss)
Construction materials	$	6,087		$	7,357
Heavy/highway construction	(3,097		)	(2,524		)
Traffic safety services and equipment	1,090			(676		)
Corporate and unallocated	(13,431		)	(17,692		)
Total operating loss	$	(9,351	)	$	(13,535	)

	Three Months Ended   May 31,
(In thousands)	2014		2013
Depreciation, depletion and amortization
Construction materials	$	7,198	$	8,089
Heavy/highway construction	2,293		2,076
Traffic safety services and equipment	1,242		1,514
Corporate and unallocated	357		439
Total depreciation, depletion and amortization	$	11,090	$	12,118

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Other Noncurrent Liabilities

3 Months Ended

May 31, 2014

Other Liabilities Disclosure [Abstract]

Other Noncurrent Liabilities

Other Noncurrent Liabilities

The Company's other noncurrent liabilities consist of:

	May 31,		February 28,
(In thousands)	2014		2014
Other Noncurrent Liabilities
Reclamation costs	$	19,016	$	18,745
Executive deferred compensation liability	5,765		5,790
PIK accrued interest	4,565		11,035
Other	9,942		10,395
	$	39,288	$	45,965

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Commitments and Contingencies

3 Months Ended

May 31, 2014

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 self-insurance program for workers’ compensation (Pennsylvania employees) coverage, which is administered by a third party management company. The Company’s self-insurance retention is limited to $1.0 million per occurrence with the excess covered by workers’ compensation excess liability insurance. The Company is required to maintain a $7.2 million surety bond with the Commonwealth of Pennsylvania. Self-insurance costs are accrued based upon the aggregate of the liability for reported claims and an estimated liability for claims incurred but not reported.  The Company also maintains three self-insurance programs for health coverage with losses limited to $0.3 million per employee.  Additionally, the Company is required to and does provide a letter of credit in the amount of $0.3 million to guarantee payment of the deductible portion of its liability coverage which existed prior to January 1, 2008.

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 under this arrangement is recorded as part of restricted cash in the amount of $15.5 million as of May 31, 2014 and February 28, 2014. Exposures for periods prior to the inception of the captive are covered by pre-existing insurance policies. Other accrued amounts included as insurance, which primarily relates to worker’s compensation, included in Note 3, “Accrued Liabilities” totaled $9.2 million and $9.7 million as of May 31, 2014 and February 28, 2014, respectively. Liabilities associated with amounts that are recoverable from insurance companies of approximately $6.0 million were recorded in other noncurrent liabilities in our consolidated balance sheets as of May 31, 2014 and February 28, 2014.

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Condensed Issuer, Guarantor and Non Guarantor Financial Information

3 Months Ended

May 31, 2014

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 May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	(1,377	)	$	—	$	3,753		$	—		$	2,376
Restricted cash	5,863			88		15,597			—			21,548
Accounts receivable, net	90,152			15,956		14			—			106,122
Inventories	94,614			13,678		—			—			108,292
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	2,749			964		—			—			3,713
Other current assets	6,758			807		31			—			7,596
Assets held for sale	4,552			—		—			—			4,552
Total current assets	203,311			31,493		20,042			(647		)	254,199
Property, plant and equipment, net	306,383			19,284		6,817			(6,817		)	325,667
Goodwill	82,131			5,845		—			—			87,976
Other intangible assets, net	7,877			11,858		—			—			19,735
Investment in subsidiaries	79,566			—		—			(79,566		)	—
Intercompany receivables	3,308			27,913		(34		)	(31,187		)	—
Other assets	28,131			1,080		2,348			—			31,559
	$	710,707		$	97,473	$	29,173		$	(118,217	)	$	719,136
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	37,519		$	—	$	846		$	(647	)	$	37,718
Accounts payable - trade	38,363			7,275		311			—			45,949
Accrued liabilities	34,502			1,521		15,249			—			51,272
Total current liabilities	110,384			8,796		16,406			(647		)	134,939
Intercompany payables	27,545			2,559		1,083			(31,187		)	—
Long-term debt, less current maturities	634,961			—		5,599			—			640,560
Intercompany capital leases, less current installments	6,817			—		—			(6,817		)	—
Deferred income taxes	24,668			8,413		—			—			33,081
Other liabilities	36,338			602		2,348			—			39,288
Total liabilities	840,713			20,370		25,436			(38,651		)	847,868
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(130,006		)	77,103		2,463			(79,566		)	(130,006		)
Noncontrolling interest	—			—		1,274			—			1,274
Total (deficit) equity	(130,006		)	77,103		3,737			(79,566		)	(128,732		)
Total liabilities and deficit	$	710,707		$	97,473	$	29,173		$	(118,217	)	$	719,136

Condensed Consolidating Balance Sheet at February 28, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	21,344		$	—	$	2,548		$	—		$	23,892
Restricted cash	11,996			92		15,596			—			27,684
Accounts receivable, net	49,093			12,212		271			(257		)	61,319
Inventories	95,135			12,178		—			—			107,313
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	2,749			964		—			—			3,713
Other current assets	8,131			839		35			—			9,005
Assets held for sate	14,467			—		—			—			14,467
Total current assets	202,915			26,285		19,097			(904		)	247,393
Property, plant and equipment, net	314,140			19,679		6,969			(6,969		)	333,819
Goodwill	82,131			5,845		—			—			87,976
Other intangible assets, net	7,904			12,047		—			—			19,951
Investment in subsidiaries	81,037			—		—			(81,037		)	—
Intercompany receivables	720			27,794		(34		)	(28,480		)	—
Other assets	29,336			1,115		2,348			—			32,799
	$	718,183		$	92,765	$	28,380		$	(117,390	)	$	721,938
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	30,317		$	—	$	844		$	(647	)	$	30,514
Accounts payable - trade	17,892			3,858		453			(257		)	21,946
Accrued liabilities	44,603			1,531		14,373			—			60,507
Total current liabilities	92,812			5,389		15,670			(904		)	112,967
Intercompany payables	27,632			848		—			(28,480		)	—
Long-term debt, less current maturities	623,714			—		5,738			—			629,452
Intercompany capital leases, less current installments	6,969			—		—			(6,969		)	—
Deferred income taxes	26,477			8,413		—			—			34,890
Other liabilities	43,014			603		2,348			—			45,965
Total liabilities	820,618			15,253		23,756			(36,353		)	823,274
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(102,435		)	77,512		3,525			(81,037		)	(102,435		)
Noncontrolling interest	—			—		1,099			—			1,099
Total (deficit) equity	(102,435		)	77,512		4,624			(81,037		)	(101,336		)
Total liabilities and deficit	$	718,183		$	92,765	$	28,380		$	(117,390	)	$	721,938

Condensed Consolidating Statement of Comprehensive (Loss) Income for the three months ended May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Revenue	$	119,447		$	22,483	$	1,737		$	(3,239	)	$	140,428
Cost of revenue (exclusive of items shown separately below)	104,637			17,708		1,438			(3,132		)	120,651
Depreciation, depletion and amortization	9,806			1,284		—			—			11,090
Equipment and intangible asset impairment	1,680			—		—			—			1,680
Pension and profit sharing	1,342			45		—			—			1,387
Selling, administrative and general expenses	12,743			2,332		45			—			15,120
(Gain) loss on disposals of property, equipment and software	(159		)	10		—			—			(149		)
Operating (loss) income	(10,602		)	1,104		254			(107		)	(9,351		)
Interest expense, net	(20,386		)	9		(56		)	107			(20,326		)
(Loss) income before income taxes	(30,988		)	1,113		198			—			(29,677		)
Income tax benefit	(2,242		)	—		—			—			(2,242		)
Equity in earnings of subsidiaries	1,136			—		—			(1,136		)	—
Net (loss) income	(27,610		)	1,113		198			(1,136		)	(27,435		)
Less: net income attributable to noncontrolling interest	—			—		(175		)	—			(175		)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(27,610		)	1,113		23			(1,136		)	(27,610		)
Other Comprehensive Income
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—		—			—			39
Comprehensive (loss) income	(27,571		)	1,113		198			(1,136		)	(27,396		)
Less: comprehensive income attributable to noncontrolling interest	—			—		(175		)	—			(175		)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$	(27,571	)	$	1,113	$	23		$	(1,136	)	$	(27,571	)

Condensed Consolidating Statement of Comprehensive (Loss) Income for the three months ended May 31, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	125,738		$	23,212		$	2,416		$	(3,622	)	$	147,744
Cost of revenue (exclusive of items shown separately below)	110,422			18,962			1,505			(3,171		)	127,718
Depreciation, depletion and amortization	10,564			1,554			—			—			12,118
Pension and profit sharing	1,795			83			—			—			1,878
Selling, administrative and general expenses	16,679			3,004			74			(344		)	19,413
Loss on disposals of property, equipment and software	138			14			—			—			152
Operating (loss) income	(13,860		)	(405		)	837			(107		)	(13,535		)
Interest expense, net	(19,118		)	(61		)	(105		)	107			(19,177		)
(Loss) income before income taxes	(32,978		)	(466		)	732			—			(32,712		)
Income tax expense benefit	(3,322		)	(153		)	—			—			(3,475		)
Equity in earnings of subsidiaries	(320		)	—			—			320			—
Net (loss) income	(29,976		)	(313		)	732			320			(29,237		)
Less: net income attributable to noncontrolling interest	—			—			(739		)	—			(739		)
Net (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	(29,976		)	(313		)	(7		)	320			(29,976		)
Other Comprehensive Income
Unrealized actuarial gains and amortization of prior service costs, net of income tax	69			—			—			—			69
Comprehensive (loss) income	(29,907		)	(313		)	732			320			(29,168		)
Less: comprehensive income attributable to noncontrolling interest	—			—			(739		)	—			(739		)
Comprehensive (loss) income attributable to New Enterprise Stone & Lime Co., Inc.	$	(29,907	)	$	(313	)	$	(7	)	$	320		$	(29,907	)

Condensed Consolidating Statement of Cash Flows for the three months ended May 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(36,227	)	$	680		$	1,343		$	—	$	(34,204	)
Cash flows from investing activities
Capital expenditures	(3,426		)	(684		)	—			—		(4,110		)
Proceeds from sale of property, equipment and assets held for sale	939			—			—			—		939
Change in cash value of life insurance	(31		)	—			—			—		(31		)
Change in restricted cash	10,233			4			(1		)	—		10,236
Net cash provided by (used in) investing activities	7,715			(680		)	(1		)	—		7,034
Cash flows from financing activities
Net proceeds from short-term borrowings	11,528			—			—			—		11,528
Proceeds from issuance of long-term debt	39			—			—			—		39
Repayment of long-term debt	(4,119		)	—			(137		)	—		(4,256		)
Payments on capital leases	(901		)	—			—			—		(901		)
Debt issuance costs	(756		)	—			—			—		(756		)
Distribution to noncontrolling interest	—			—			—			—		—
Net cash provided by (used in) financing activities	5,791			—			(137		)	—		5,654
Net (decrease) increase in cash and cash equivalents	(22,721		)	—			1,205			—		(21,516		)
Cash and cash equivalents
Beginning of period	21,344			—			2,548			—		23,892
End of period	$	(1,377	)	$	—		$	3,753		$	—	$	2,376

Condensed Consolidating Statement of Cash Flows for the three months ended May 31, 2013

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Cash flows from operating activities	$	(36,279	)	$	758		$	2,268		$	(3,000	)	$	(36,253	)
Cash flows from investing activities
Capital expenditures	(8,718		)	(773		)	—			—			(9,491		)
Proceeds from sale of property and equipment	52			15			—			—			67
Change in cash value of life insurance	3,089			—			—			—			3,089
Change in restricted cash	123			—			(4,751		)	—			(4,628		)
Net cash used in investing activities	(5,454		)	(758		)	(4,751		)	—			(10,963		)
Cash flows from financing activities
Proceeds from revolving credit	49,419			—			—			—			49,419
Repayment of revolving credit	(6,324		)	—			—			—			(6,324		)
Proceeds from issuance of long-term debt	481			—			—			—			481
Repayment of long-term debt	(756		)	—			(335		)	—			(1,091		)
Payments on capital leases	(1,096		)	—			—			—			(1,096		)
Debt issuance costs	—			—			—			—			—
Dividends received (paid)	—			—			(3,000		)	3,000			—
Distribution to noncontrolling interest	—			—			(451		)	—			(451		)
Net cash provided by (used in) financing activities	41,724			—			(3,786		)	3,000			40,938
Net (decrease) increase in cash and cash equivalents	(9		)	—			(6,269		)	—			(6,278		)
Cash and cash equivalents
Beginning of period	31			19			9,484			—			9,534
End of period	$	22		$	19		$	3,215		$	—		$	3,256

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Long-Term Debt (Details 4) (USD $)		0 Months Ended	3 Months Ended			0 Months Ended	12 Months Ended
	Feb. 28, 2005	Aug. 31, 2010 Debt Instrument Redemption Period Prior to September 1, 2014	May 31, 2014 Twelve-month period beginning September 1, 2014	May 31, 2014 Twelve-month period beginning September 1, 2015	May 31, 2014 Twelve-month period beginning September 1, 2016 and thereafter	Aug. 31, 2010 Notes due 2018	Feb. 29, 2012 Notes due 2018
Debt Instrument [Line Items]
Face amount of debt	$ 25,300,000					$ 250,000,000.0
Loss on debt retirement							2,900,000
Unamortized debt issuance costs						$ 8,300,000
Redemption price of debt instrument as a percentage of principal amount		100.00%	105.50%	102.75%	100.00%
Redemption price as a percentage of principal amount, as a result of change of control						101.00%

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Retirement and Benefit Programs (Tables)

3 Months Ended

May 31, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic pension expense recognized

Net periodic pension expense recognized for the three months ended May 31, 2014 and 2013, was as follows:

	Three Months Ended   May 31,
(In thousands)	2014			2013
Net periodic benefit cost
Service cost	$	86		$	86
Interest cost	105			100
Expected return on plan assets	(150		)	(143		)
Amortization of prior service cost	14			16
Recognized net actuarial loss	51			66
Total pension expense	$	106		$	125

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Nature of Operations and Summary of Significant Accounting Policies (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended	15 Months Ended
	May 31, 2014	Feb. 28, 2014	May 31, 2014
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred	$ 1,810	$ 7,134	$ 8,944
Restructuring reserve	1,152	1,300	1,152
Expected restructuring charges	12,484
Restructuring Reserve [Roll Forward]
Balance at February 28, 2014	1,300
Additional charges incurred	1,810	7,134	8,944
Payment of restructuring charges	(1,958)
Balance at May 31, 2014	1,152	1,300	1,152
Severance
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred	100
Restructuring reserve	1,200		1,200
Restructuring Reserve [Roll Forward]
Additional charges incurred	100
Balance at May 31, 2014	1,200		1,200
Outside advisory services
Restructuring Cost and Reserve [Line Items]
Restructuring charges incurred	1,700
Restructuring Reserve [Roll Forward]
Additional charges incurred	$ 1,700

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details)	May 31, 2014
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Ownership interest in subsidiaries (as a percent)	100.00%

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Condensed Consolidated Statements of Comprehensive Loss (unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 31, 2014	May 31, 2013
Statement of Comprehensive Income [Abstract]
Unrealized actuarial gains and amortization of prior service costs, income tax	$ 26	$ 8

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Long-Term Debt

3 Months Ended

May 31, 2014

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The Company's long-term debt consists of the following:  

	May 31,			February 28,
(In thousands)	2014			2014
RCA ($41.1 million and $36.5 million available as of May 31, 2014 and February 28, 2014, respectively), interest rate of 6.25%	$	33,941		$	22,413
11% Notes, due 2018	250,000			250,000
13% Secured Notes, due 2018	313,001			300,962
Term Loans, interest rate of 8%	70,000			70,000
Land, equipment and other obligations	7,034			11,488
Obligations under capital leases	4,302			5,103
Total debt	678,278			659,966
Less: Current portion	(37,718		)	(30,514		)
Total long-term debt	$	640,560		$	629,452

Refinancing

On February 12, 2014, the Company entered into the RCA providing for revolving credit loans and letters of credit in an aggregate principal amount up to $105.0 million and the Term Loan Agreement providing for term loans in the aggregate principal amount of $70.0 million (the "Term Loans"). The Company utilized the proceeds from borrowings under the Credit Facilities to repay amounts outstanding under, and terminate, the Company’s prior asset based loan facility, dated as of March 15, 2012, with M&T as the issuing bank, a lender, the swing lender, the agent and the arranger (the “ABL Facility”).

The RCA bears interest, at the Company’s option, at rates based upon LIBOR, plus a margin of 4.0% (with a LIBOR floor of 1.0%) or the base rate, plus a margin of 3.0%. The unused portion of the revolving credit commitment is subject to a commitment fee at a rate of 0.5%. The Term Loans bear interest, at the Company’s option, at rates based upon the LIBOR plus, a margin of 7.0% (with a LIBOR floor of 1.0%) or the base rate plus a margin of 6.0%.

The Credit Facilities contain a springing maturity date based upon certain events with a final maturity date of February 12, 2019. The Term Loans and the RCA will mature on December 14, 2017 unless the Company refinances its Secured Notes by such date and will mature on June 1, 2018 unless the Company refinances its Notes by such date.

Availability under the RCA is determined pursuant to a borrowing base formula based on eligible receivables and eligible inventory, subject to an availability block and to such other reserves as the Revolver Agent and the Syndication Agent may impose in accordance with the RCA. The availability block is initially $20.0 million but reduces to $10.0 million if the Company achieves a fixed charge coverage ratio of 1.00 to 1.00 as of the end of any fiscal quarter on a rolling four (4) quarter basis and further reduces to $0 if the Company achieves such fixed charge coverage ratio as of the end of the two immediately subsequent fiscal quarters. However, if at any time following the effectiveness of any of the reductions to the availability block the fixed charge coverage ratio as of the end of any quarter measured on a rolling four (4) quarter basis shall be less than 1.00 to 1.00, the availability block shall be increased back to $20.0 million, subject to further reduction as provided above; provided, that such reductions may occur no more than two (2) times, and if the availability block is increased back to $20.0 million following the second reduction, such increase shall be permanent and shall not be subject to further reduction.

The RCA includes a $20.0 million letter of credit sub-facility and a $10.5 million swing loan sub-facility for short-term borrowings. We classify borrowings under the RCA as current due to the nature of the agreement.

Pursuant to the Term Loans, in the event of a voluntary or mandatory prepayment or acceleration of the Term Loans, the Company shall be required to pay principal and a prepayment premium equal to:

Time Period	Percentage
On or prior to 5/12/2015	103.00	%
Between 5/13/2015 and 2/12/2016	102.00	%
2/13/2016 and thereafter	100.00	%

Under the Credit Facilities, during the period from February 1, 2014 through February 28, 2015, the aggregate cash burn of the Company and its subsidiaries, tested on a monthly, cumulative basis, may not exceed by more than $17.5 million the projected aggregate cash burn of the Company and its subsidiaries as shown in the projections provided to the lenders prior to closing. Commencing May 31, 2015, as of the end of each fiscal quarter, the Company will be required to have trailing twelve-month EBITDA in an amount not less than certain amounts specified in the Credit Facilities. Commencing with the fiscal quarter ending May 31, 2017, the Company will be required under the Credit Facilities to maintain as of the end of each fiscal quarter a fixed charge coverage ratio of not less than 1.00 to 1.00 measured on a rolling four quarter basis. The Company also has a capital expenditure limitation of $27.5 million in fiscal year 2015, $40.0 million in fiscal year 2016 and $35.0 million for each fiscal year thereafter through the Credit Facilities' maturity.

The Credit Facilities include affirmative and negative covenants that limit the ability of the Company and its subsidiaries 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) prepaying indebtedness, (viii) making capital expenditures, and (ix) providing negative pledges to third parties. In addition, the Credit Facilities contain conditions to lending, representations and warranties and events of default, including, among other things: (i) payment defaults, (ii) cross-defaults to other material indebtedness, (iii) covenant defaults, (iv) certain events of bankruptcy, (v) the occurrence of a material adverse effect, (vi) material judgments, (vii) change in control, (viii) seizures of material property, (ix) involuntary interruptions of material operations, and (x) certain material events with respect to pension plans.

At May 31, 2014, the weighted average interest rate on the RCA was 6.25%. 

13% 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.

On February 28, 2014, 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, 2014 in the form of 6% cash payment and 7% payment in kind, which represents $18.9 million and $22.4 million of interest, respectively, for the same 12-month period. At May 31, 2014, the inception-to-date PIK interest was $52.6 million ($48.0 million was recorded as an increase to the Secured Notes and $4.6 million was recorded as a long-term obligation in other liabilities).

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.

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 Secured Notes are guaranteed on a full and unconditional, and joint and several basis, by certain of the Company’s existing and future domestic subsidiaries (the “Guarantors” as described in Note 10, “Condensed Issuer, Guarantor and Non-Guarantor Financial Information”).  The Secured Notes and related guarantees are senior secured obligations of the Company and the Guarantors that rank equally in right of payment with all existing and future senior debt of the Company and the Guarantors, including the Notes and Credit Facilities, and senior to all existing and future subordinated debt of the Company and Guarantors.  The Secured Notes and related guarantees are secured, subject to certain permitted liens and except for certain excluded assets, by first-priority liens on substantially all of the Company’s and Guarantors’ personal property and certain owned and leased real property and second-priority liens on certain real property and substantially all of the Company’s and Guarantors’ accounts receivable, inventory and deposit accounts and related assets and proceeds of the foregoing that secure the RCA on a first-priority basis.

The indenture for the Secured Notes contains restrictive covenants that limit the Company’s ability and the ability of its subsidiaries that are restricted under the indenture to, among other things, incur additional debt, pay dividends or make distributions, repurchase capital stock or make other restricted payments, make certain investments, incur liens, merge, amalgamate or consolidate, sell, transfer, lease or otherwise dispose of all or substantially all assets and enter into transactions with affiliates.

The Indenture governing the Secured Notes required that the Company file a registration statement with the SEC and exchange the Secured Notes for new Secured Notes having terms substantially identical in all material respects to the Secured Notes by March 10, 2013. On June 13, 2013, the Company filed the Secured Notes Registration Statement and concluded the exchange offer on October 30, 2013.  The Company incurred $0.8 million of penalty interest through October 30, 2013. 

11% 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. In fiscal year 2012, the Company recognized a loss on debt retirement of approximately $2.9 million relating to the write off of unamortized debt issuance costs associated with the components of outstanding debt that were paid down.  The write off of the debt issuance costs were recorded as a component of interest expense.  In connection with the issuance of the Notes, the Company incurred costs of approximately $8.3 million which were deferred and are being amortized on the effective interest method through the 2018 maturity date.

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	%

If the Company experiences a change of control, as outlined in the indenture governing the Notes, 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.

The Notes are guaranteed on a full and unconditional, and joint and several, basis by certain of the Company’s existing and future domestic subsidiaries (the “Guarantors” as described in Note 9, “Condensed Issuer, Guarantor and Non-Guarantor Financial Information”). The indenture governing the Notes contains affirmative and negative covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional debt, make restricted payments, dividends or other payments from subsidiaries to the Company, create liens, engage in the sale or transfer of assets and engage in transactions with affiliates. The Company is not required to maintain any affirmative financial ratios or covenants under the indenture governing the Notes.

The indenture governing the Notes required that the Company file a registration statement with the SEC and exchange the Notes for new Notes having terms substantially identical in all material respects to the Notes. The Company filed its registration statement with the SEC for the Notes on August 29, 2011. The registration statement became effective on September 13, 2011, and the Company concluded the exchange offer on October 12, 2011.

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 and are principally secured by the land and equipment acquired. 

From 1998 through 2005, the Company 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 original issuance of these bonds totaled $25.3 million with dates of maturity through May 2022.  The Company prepaid the remaining bonds in April 2014.

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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Nature of Operations and Summary of Significant Accounting Policies (Details 3) (USD $)							3 Months Ended
	May 31, 2014	Feb. 28, 2014	Mar. 14, 2014 New Holland Sale	May 31, 2014 Secured Notes due 2018	Mar. 14, 2014 Secured Notes due 2018	Feb. 28, 2014 Secured Notes due 2018	May 31, 2014 Construction materials	Feb. 28, 2014 Construction materials	Mar. 14, 2014 Construction materials New Holland Sale	Feb. 28, 2014 Construction materials New Holland Sale	Jun. 16, 2014 Subsequent Event New Holland Sale
Significant Acquisitions and Disposals [Line Items]
Proceeds from sale									$ 8,900,000		$ 500,000
Restricted cash for capital purchases			4,100,000
Debt	678,278,000	659,966,000		313,001,000	265,000,000	300,962,000
Stated interest rate (as a percent)				13.00%	13.00%
Impairment of equipment							1,600,000
Inventory impairment							100,000
Assets Held-for-sale, at Carrying Value [Abstract]
Inventory							229,000	6,690,000
PP&E, net of impairment							4,323,000	7,777,000
Total assets held-for-sale							$ 4,552,000	$ 14,467,000		$ 8,400,000

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Other Noncurrent Liabilities (Details) (USD $) In Thousands, unless otherwise specified	May 31, 2014	Feb. 28, 2014
Other Noncurrent Liabilities
Reclamation costs	$ 19,016	$ 18,745
Executive deferred compensation liability	5,765	5,790
PIK accrued interest	4,565	11,035
Other	9,942	10,395
Total other noncurrent liabilities	$ 39,288	$ 45,965	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2014.

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Long-Term Debt (Tables)

3 Months Ended

May 31, 2014

Debt Instrument [Line Items]

Schedule of long-term debt

The Company's long-term debt consists of the following:  

	May 31,			February 28,
(In thousands)	2014			2014
RCA ($41.1 million and $36.5 million available as of May 31, 2014 and February 28, 2014, respectively), interest rate of 6.25%	$	33,941		$	22,413
11% Notes, due 2018	250,000			250,000
13% Secured Notes, due 2018	313,001			300,962
Term Loans, interest rate of 8%	70,000			70,000
Land, equipment and other obligations	7,034			11,488
Obligations under capital leases	4,302			5,103
Total debt	678,278			659,966
Less: Current portion	(37,718		)	(30,514		)
Total long-term debt	$	640,560		$	629,452

Term Loan

Debt Instrument [Line Items]

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

Pursuant to the Term Loans, in the event of a voluntary or mandatory prepayment or acceleration of the Term Loans, the Company shall be required to pay principal and a prepayment premium equal to:

Time Period	Percentage
On or prior to 5/12/2015	103.00	%
Between 5/13/2015 and 2/12/2016	102.00	%
2/13/2016 and thereafter	100.00	%

Secured Notes due 2018

Debt Instrument [Line Items]

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

Debt Instrument [Line Items]

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	%