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 August 31, 2015

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   ý  No   o

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 filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company o
(Do not check if a smaller reporting company)

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

As of October 13, 2015, 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 August 31, 2015

	Page(s)
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Balance Sheets at August 31, 2015 and February 28, 2015	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended August 31, 2015 and 2014	4
Condensed Consolidated Statements of Cash Flows for the six months ended August 31, 2015 and 2014	5
Notes to Condensed Consolidated Financial Statements	6-30
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30-41
Item 3. Quantitative and Qualitative Disclosures About Market Risk	41
Item 4. Controls and Procedures	41-44
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	44
Item 1A. Risk Factors	45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3. Defaults Upon Senior Securities	45
Item 4. Mine Safety Disclosure	45
Item 5. Other Information	45
Item 6. Exhibits	46
Signature	47
Exhibit Index	48

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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)	August 31, 2015			February 28, 2015 *
Assets
Current assets
Cash and cash equivalents	$	21,425		$	13,293
Restricted cash	17,022			17,177
Accounts receivable, less reserves of $3,848 and $4,564 respectively	160,028			49,901
Inventories	106,161			102,206
Deferred income taxes	2,630			2,630
Other current assets	9,746			8,885
Assets held for sale	9,888			8,517
Total current assets	326,900			202,609
Property, plant and equipment, net	299,322			310,274
Goodwill	81,492			87,132
Other intangible assets, net	17,814			18,933
Other noncurrent assets	30,732			31,422
Total assets	$	756,260		$	650,370
Liabilities and Deficit
Current liabilities
Current maturities of long-term debt	$	39,349		$	8,528
Accounts payable - trade	53,679			15,652
Accrued liabilities	79,683			64,880
Total current liabilities	172,711			89,060
Long-term debt, less current maturities	664,122			650,267
Deferred income taxes	29,206			28,727
Other noncurrent liabilities	45,461			46,274
Total liabilities	911,500			814,328
Commitments and contingencies (Note 2 and Note 8)	0			0
Common stock, Class A, voting, $1 par value	1			1
Common stock, Class B, nonvoting, $1 par value	273			273
Accumulated deficit	(282,227		)	(290,887		)
Additional paid-in capital	126,962			126,962
Accumulated other comprehensive loss	(2,041		)	(2,119		)
Total New Enterprise Stone & Lime Co., Inc. deficit	(157,032		)	(165,770		)
Noncontrolling interest in consolidated subsidiaries	1,792			1,812
Total deficit	(155,240		)	(163,958		)
Total liabilities and deficit	$	756,260		$	650,370

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

* Data derived from audited consolidated balance sheet as of February 28, 2015.

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

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

	Three Months Ended August 31,						Six Months Ended August 31,
(In thousands)	2015			2014			2015			2014
Revenue
Construction materials	$	115,853		$	123,500		$	185,731		$	200,145
Heavy/highway construction	107,799			101,624			158,480			145,722
Traffic safety services and equipment	22,903			22,445			43,060			42,130
Total revenue	246,555			247,569			387,271			387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)
Construction materials	62,762			78,500			111,603			139,925
Heavy/highway construction	97,982			91,763			148,223			136,988
Traffic safety services and equipment	16,956			16,288			32,824			31,509
Total cost of revenue	177,700			186,551			292,650			308,422
Depreciation, depletion and amortization	10,344			11,157			20,299			22,247
Asset impairment	—			3,343			183			5,023
Selling, administrative and general expenses	11,697			14,649			26,401			29,936
Gain on disposals of property, equipment and software	(3,733		)	(161		)	(3,833		)	(310		)
Operating income	50,547			32,030			51,571			22,679
Interest expense, net	(21,146		)	(20,380		)	(42,216		)	(40,706		)
Income (loss) before income taxes	29,401			11,650			9,355			(18,027		)
Income tax expense (benefit)	1,331			900			423			(1,342		)
Net income (loss)	28,070			10,750			8,932			(16,685		)
Less: Net income attributable to noncontrolling interest	(137		)	(177		)	(272		)	(352		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933			10,573			8,660			(17,037		)
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income taxes	39			38			78			77
Comprehensive income (loss)	28,109			10,788			9,010			(16,608		)
Less: Comprehensive income attributable to noncontrolling interest	(137		)	(177		)	(272		)	(352		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	27,972		$	10,611		$	8,738		$	(16,960	)

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)

	Six Months Ended August 31,
(In thousands)	2015			2014
Reconciliation of net income (loss) to net cash from operating activities
Net income (loss)	$	8,932		$	(16,685	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation, depletion and amortization	20,299			22,247
Asset impairment	183			5,023
Gain on disposals of property, equipment and software	(3,833		)	(310		)
Non-cash payment-in-kind interest accretion	10,165			11,045
Amortization and write-off of debt issuance costs	2,164			2,164
Deferred income taxes	479			(843		)
Bad debt	84			928
Changes in assets and liabilities:
Accounts receivable	(99,981		)	(96,504		)
Inventories	(4,163		)	3,979
Other assets	(1,650		)	1,347
Accounts payable	36,924			49,324
Other liabilities	16,265			2,092
Net cash used in operating activities	(14,132		)	(16,193		)
Cash flows from investing activities
Capital expenditures	(11,830		)	(11,829		)
Proceeds from sale of property, equipment and assets held for sale	5,849			1,177
Change in cash value of life insurance	—			(75		)
Change in restricted cash	154			12,194
Net cash (used in) provided by investing activities	(5,827		)	1,467
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091			24,675
Repayments of other debt	(813		)	(4,445		)
Payments on capital leases	(896		)	(1,594		)
Debt issuance costs	—			(756		)
Distribution to noncontrolling interest	(291		)	—
Net cash provided by financing activities	28,091			17,880
Net increase in cash and cash equivalents	8,132			3,154
Cash and cash equivalents
Beginning of period	13,293			23,892
End of period	$	21,425		$	27,046

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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

Notes to the Unaudited Condensed Consolidated Financial Statements

For the Quarter Ended August 31, 2015

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.

Construction materials is comprised of aggregate production, including crushed stone and construction sand and gravel, hot mix asphalt production, and ready mixed concrete production.  Heavy/highway construction includes heavy construction, blacktop paving and other site preparation services. The Company's heavy/highway construction operations are primarily supplied with construction materials from our construction materials segment.  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.

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”) and include the accounts of the Company and its wholly owned subsidiary companies, and their wholly owned subsidiary companies, and entities where the Company has a controlling equity interest. 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 year-end condensed balance sheet data at February 28, 2015 was derived from audited financial statements, but does 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, 2015 filed with the Securities and Exchange Commission (“SEC”) on May 18, 2015. The results for interim periods are not necessarily indicative of the results for the full fiscal year ending February 29, 2016 ("fiscal 2016").

Related Party Transactions

The Company has certain related party transactions, including: (i) an arrangement to lease its precast/prestressed structural concrete operations in Roaring Spring, PA to an entity controlled by a member of the Company's Board of Directors and stockholder; (ii) investments in Means to Go., LLC, in which the Company has an ownership interest of 50% or less, and an aircraft lease agreement with Means to Go, LLC; (iii) South Woodbury, L.P. owns an office building in Roaring Spring, PA and an office building that is being used as the Company's corporate headquarters in New Enterprise, PA; and (iv) payments of consulting fees to Larry R. Webber, a director of the Company, per a management consulting agreement.

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. All material intercompany balances and transactions have been eliminated in consolidation.

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Reclassifications

Certain items previously reported in prior period financial statement captions have been conformed to agree with the current presentation. The expenses associated with certain benefit programs previously disclosed within the Pension and profit sharing caption have been reclassified to the Cost of revenue and to the Selling, administrative and general captions in the Condensed Consolidated Statements of Comprehensive Income (Loss) in the amounts of $1.7 million and $0.2 million, respectively for the three months ended August 31, 2014 and $3.0 million and $0.3 million, respectively, for the six months endedAugust 31, 2014. The reclassification had no effect on Operating income, Comprehensive income (loss) within the Condensed Consolidated Statements of Comprehensive Income (Loss), the Condensed Consolidated Statement of Cash Flows, or the Condensed Consolidated Balance Sheets.

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 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.  In addition, the Company has agreed to provide cash dominion for all accounts associated with this arrangement. Accordingly, the Company classifies net aggregate cash overdraft positions as other obligations within the current maturities of long-term debt, as applicable.

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 allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable, including service charges.  The Company determines the allowance based on historical write-off experience, specific identification based on a review of individual past due balances and their composition, and the nature of the customer.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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

	August 31,			February 28,
(In thousands)	2015			2015
Costs and estimated earnings in excess of billings	$	37,000		$	7,392
Trade	120,467			39,792
Retainages	6,409			7,281
	163,876			54,465
Allowance for doubtful accounts	(3,848		)	(4,564		)
Accounts receivable, net	$	160,028		$	49,901

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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:

	August 31,		February 28,
(In thousands)	2015		2015
Crushed stone, agricultural lime and sand	$	70,615	$	70,112
Safety equipment	16,805		14,187
Parts, tires and supplies	7,369		7,753
Raw materials	9,304		7,980
Building materials	1,141		1,066
Other	927		1,108
Total inventories	$	106,161	$	102,206

Property, Plant and Equipment

Property, plant and equipment are carried at cost.  Assets under capital leases are stated at the lesser of the present value of minimum lease payments or the fair value of the leased item.  Provision for depreciation is generally computed over estimated service lives by the straight-line method.

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

	August 31,			February 28,
(In thousands)	2015			2015
Limestone and sand acreage	$	145,012		$	146,293
Land, buildings and building improvements	78,713			87,097
Crushing, prestressing and manufacturing plants	304,686			305,923
Contracting equipment vehicles and other	317,218			307,644
Construction in progress	5,989			3,923
Property, plant and equipment	851,618			850,880
Less: Accumulated depreciation and depletion	(552,296		)	(540,606		)
Property, plant and equipment, net	$	299,322		$	310,274

For the three months ended August 31, 2015 and 2014, depreciation expense was $9.0 million and $9.9 million, respectively.  For the six months ended August 31, 2015 and 2014, depreciation expense was $18.1 million and $20.1 million, respectively. 

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 quality 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.

During the six months ended August 31, 2015, the Company finalized its sale of certain properties previously recorded in Assets Held for Sale at February 28, 2015 for $7.1 million and the assumption of $1.1 million in liabilities. The Company recorded a gain of approximately $3.1 million and recorded additional impairment of approximately $0.1 million on these sales in the six months ended August 31, 2015.

8

During the six months ended August 31, 2015, the Company entered into and completed the sale of certain assets for $11.2 million, and the assumption of $0.3 million of liabilities, pending final purchase price adjustments. Goodwill and Other intangibles of $6.3 million were allocated to the sale of these business operations. The sale of these business operations resulted in a gain of $0.6 million. Due to the timing of closing, the Company did not receive the cash proceeds until subsequent to August 31, 2015, as such the Company recorded a receivable and other assets which is included in Accounts receivable and Other noncurrent assets on the Condensed Consolidated Balance Sheet.

During the six months ended August 31, 2015, the Company determined it was going to sell certain assets, which totaled $6.4 million. The assets were classified as part of Assets Held for Sale as of August 31, 2015. No additional impairments were recorded. The remaining Assets Held for Sale at August 31, 2015 are comprised primarily of non-core operations related to excess property at its Wescosville, PA location and excess office buildings.

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

	August 31, 2015		February 28, 2015
Inventory	$	—	$	961
PP&E, net of impairment	9,888		7,556
Total assets held for sale	$	9,888	$	8,517

Restructuring

The Company initiated, during fiscal year 2014, and substantially concluded in fiscal year 2015, a cost savings and operational efficiency plan (the “Plan”).  The Plan focused on headcount reductions, operational efficiencies, administrative savings, and a management realignment. 

The following table presents changes to Accrued restructuring, included in Accrued liabilities on the Condensed Consolidated Financial Statements:

(In thousands)	Accrued restructuring
Balance at February 28, 2015	$	1,461
Additional accruals recorded	—
Payments on or reductions of accrued restructuring charges	1,200
Balance at August 31, 2015	$	261

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.

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

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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 under the first step, step two does not need to be performed.

Our reporting units were determined based on our organizational 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 as of 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 as of February 28, 2015.

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

During the three and six months ended August 31, 2015, the Company allocated $5.6 million of Goodwill to the sale of certain assets.

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.

During the three and six months ended August 31, 2015, the Company allocated $0.7 million of other intangibles to the sale of certain assets.

Other Noncurrent Assets

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

	August 31,		February 28,
(In thousands)	2015		2015
Deferred financing fees (less current portion of $2,394 and $2,905, respectively)	$	8,662	$	10,314
Capitalized software (net of accumulated amortization of $3,909 and $3,364, respectively)	7,247		7,553
Cash surrender value of life insurance (net of loans of $3,035)	1,250		1,249
Deferred stripping costs	4,967		4,514
Other	8,606		7,792
Total other noncurrent assets	$	30,732	$	31,422

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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.  Our construction contracts are primarily fixed-price contracts. 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 for the full amount of estimated loss in the period in which evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue and are recorded as an additional cost (rather than as a reduction of revenue). 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 August 31, 2015 and February 28, 2015, 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 Condensed Consolidated Balance Sheets.

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 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 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.

Other revenue consists of sales of miscellaneous materials, scrap and other products that do not fall into our other primary lines of business. The Company generally recognizes revenue when the customer takes title and assumes risk of loss, the price is fixed or determinable and collection is reasonably assured.

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. We have realigned our current regional structure by combining Lancaster, Pennsylvania and Northeastern Pennsylvania into our Eastern Region, Central Pennsylvania, Chambersburg, Shippensburg and Gettysburg Pennsylvania into our Western Region, and Western New York into our North Region. 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 August 2015, the FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting  (SEC Update). ASU 2015-15 is being issued to clarify the SEC staff’s positionon presenting and measuring debt issuance costs incurred in connection with line-of-

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credit arrangements given the lack of guidance on this topic in ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendment is effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. The amendments in all three parts of this Update are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. An entity should apply the amendments in Parts I and II retrospectively for all financial statements presented. An entity should apply the amendments on Part III prospectively. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. Effective for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The amendments in this Update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. Effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services—Insurance (Topic 944): Disclosures about Short-Duration Contracts. Effective for public business entities for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The Company does not expect this standard to impact its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Effective for annual and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption of the amendments in this update are permitted. The Company does not expect this standard to impact its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-04, Compensation - Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. Early adoption of the amendments in this update are permitted. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2015 and for interim periods within fiscal years beginning after December 15, 2016. Early adoption of the amendments in this update are permitted for financial statements that have not been previously issued. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

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In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standards requires an entity's management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Public entities are required to apply standards for annual reporting periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted. The Company is evaluating the impact of this standard on its 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, 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 (ii) term loan credit and guaranty agreement, 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 Loans”, and together with RCA, the “Credit Facilities”). The Credit Facilities contain certain financial maintenance and other covenants (Note 4, "Long-Term Debt"). 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 the $265 million13% senior secured notes due 2018 (the "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 RCA, to fund our business and operations, including capital expenditures and debt service obligations, for at least the next twelve months. At August 31, 2015, the Company was in compliance with all of its financial covenants.

3.Accrued Liabilities

Accrued liabilities consist of the following: 

	August 31,		February 28,
(In thousands)	2015		2015
Insurance	$	27,927	$	24,565
Interest	25,406		23,408
Payroll and vacation	9,107		5,805
Withholding taxes	1,478		858
Billings in excess of costs and estimated earnings on uncompleted contracts	3,138		3,082
Contract expenses *	5,888		2,676
Other	6,739		4,486
Total accrued liabilities	$	79,683	$	64,880

* Included within contract expenses is $1.1 million and $1.5 million of provision for loss contracts as of August 31, 2015 and February 28, 2015, respectively.

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4.Long-Term Debt

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

	August 31,			February 28,
(In thousands)	2015			2015
RCA ($46.8 million and $27.3 million available as of August 31, 2015 and February 28, 2015, respectively)	$	35,963		$	5,873
11% Notes, due 2018	250,000			250,000
13% Secured Notes, due 2018	335,294			323,956
Term Loans, interest rate of 8%	70,000			70,000
Other obligations	12,214			8,966
Total debt	703,471			658,795
Less: Current portion	(39,349		)	(8,528		)
Total long-term debt	$	664,122		$	650,267

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%. At August 31, 2015, the weighted average interest rate on the RCA was 6.58%. 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%. At August 31, 2015 the weighted average interest rate on the Term Loans was 8.0%.

Effective August 31, 2015, the Company obtained an amendment to the Credit Facility which allowed (i) certain assets to be added to a schedule of permitted asset sales and dispositions, and (ii) permitted the Company to incur additional capital expenditures equal to the unrestricted net cash proceeds received from the asset sales permitted under the terms of the Credit Agreements, as amended.

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 2, 2018 unless the Company refinances its Notes by June 1, 2018.

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 Company achieved a fixed charge coverage ratio (as defined in the Credit Facilities) of greater than 1:00 to 1:00 as of August 31, 2015; therefore the availability block will be reduced by $10.0 million.

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. As of August 31, 2015, the Company had $16.7 million of letters of credit outstanding under the sub-facility. 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	%

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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 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.

As of August 31, 2015, the Company was in compliance with all of its covenant requirements.

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.

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 or (ii) subject to any Interest Rate Increase (as defined below), initially at the rate of 4% per annum in cash 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. 

On March 4, 2015, the Company notified the trustee of its Secured Notes that it had elected to pay interest on the Secured Notes for the 12-month period commencing March 15, 2015 in the form of 7% cash payment and 6% payment in kind, which represents $23.8 million and $20.4 million of interest, respectively, for the same 12-month period. At August 31, 2015, the inception-to-date PIK interest was $79.5 million ($70.3 million was recorded as an increase to the Secured Notes and $9.2 million was recorded as a long-term obligation in other liabilities).

With respect to any interest payment payable after March 15, 2017, interest will be payable solely in cash. In addition, at the beginning of and with respect to each 12-month period that begins on March 15, 2013, March 15, 2014, and March 15, 2015, the interest rate on the Secured Notes as of such date permanently increased by an additional 1.0% per annum (an "Interest Rate Increase") unless the Company delivered 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 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 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. 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. 

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At any time prior to March 15, 2015, the Company was permitted to 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 was also permitted to 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 are redeemable, in whole or in part, at the redemption prices specified as follows:

Date	Percentage
March 15, 2015 to March 14, 2016	106.50	%
March 15, 2016 to March 14, 2017	103.25	%
March 15, 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 on September 15, 2017 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 11, “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 a Registration Statement on Form S-4 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 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.

On or after September 1, 2014, the Company was permitted to 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 12-month period beginning on September 1 of the years indicated below:

Date	Percentage
September 1, 2014 to August 31, 2015	105.50	%
September 1, 2015 to August 31, 2016	102.75	%
September 1, 2016 and thereafter	100.00	%

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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 11, “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 a Registration Statement on Form S-4 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.

Other Obligations

The Company has various notes, mortgages, leases and other financing arrangements resulting from the purchase of principally land, machinery and equipment. All loans provide for at least annual payments and are principally secured by the land and equipment acquired. Capital lease 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. The Company incurred $5.0 million of new obligations under various financing arrangements related to equipment, assets and other in the quarter ended August 31, 2015.

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 29, 2016 and February 28, 2015, after giving effect to items specifically related to the interim periods.

The effective income tax rates for the three months ended August 31, 2015 and 2014 were 4.5% and 7.7%, respectively, resulting in tax expense of $1.3 million and $0.9 million, respectively. The effective income tax rates for the six months ended August 31, 2015 and 2014 were 4.5% and 7.4%, respectively, resulting in tax expense of $0.4 million and tax benefit of $1.3 million, respectively. The principal factor affecting the comparability of the effective income tax rates for the respective periods is the Company’s assessment of the realizability of the current year projected income tax loss. The Company recorded a valuation allowance on the portion of the current year federal and state income tax losses that it believes are not more likely than not to be realized. The Company’s determination of its valuation allowance considers the impact of utilization of alternative minimum tax net operating loss and alternative minimum tax credit carryforwards.

Cash paid for income taxes was immaterial for the three and six months ended August 31, 2015 and 2014, 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 included within Cost of revenue and Selling, administrative and general expenses in the amounts of $1.4 million and $0.1 million, respectively, for the three months ended August 31, 2015, and $1.7 million and $0.2 million, respectively for the three months ended August 31, 2014. The expense associated with these programs is included within Cost of revenue and Selling, administrative and general expenses in the amounts of $2.9 million and $0.2 million, respectively, for the six months ended August 31, 2015, and $3.0 million and $0.3 million, respectively for the six months ended August 31, 2014.

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 was as follows:

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	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Net periodic benefit cost
Service cost	$	78		$	86		$	156		$	172
Interest cost	93			105			186			210
Expected return on plan assets	(155		)	(150		)	(310		)	(300		)
Amortization of prior service cost	13			14			26			28
Recognized net actuarial loss	54			50			108			101
Total pension expense	$	83		$	105		$	166		$	211

The Company made contributions to the defined benefit pension plans of approximately $0.2 million during the six months ended August 31, 2015 and August 31, 2014, and expects to make additional contributions of approximately $0.2 million in the remainder of fiscal year 2016.

7. Other Noncurrent Liabilities

The Company's other noncurrent liabilities consist of:

	August 31,		February 28,
(In thousands)	2015		2015
Reclamation costs	$	19,222	$	18,835
Executive deferred compensation liability	5,441		5,512
PIK accrued interest	9,221		10,394
Other	11,577		11,533
	$	45,461	$	46,274

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 claim with the excess covered by workers’ compensation excess liability insurance. The Company is required to maintain a $2.4 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 four self-insurance programs for health coverage with losses limited to $0.3 million per member per year.  Additionally, the Company is required to and does provide a letter of credit in the amount of $0.1 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. Rock Solid is required to maintain a Collateral Trust Agreement with an insurer for 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 August 31, 2015 and February 28, 2015 in our Condensed Consolidated Balance Sheets. Reserves for retained losses within this captive, which are recorded in accrued liabilities in our Condensed Consolidated Balance Sheets, were approximately $17.9 million and $15.5 million as of August 31, 2015 and February 28, 2015, respectively. 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 $10.0 million and $9.1 million as of August 31, 2015 and February 28, 2015, respectively. Included in Other noncurrent assets is approximately $6.7 million as of August 31, 2015 for recoverable amounts from insurance companies for claims in excess of deductibility. Liabilities associated with amounts that are payable by insurance companies of approximately

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$6.7 million were recorded in other noncurrent liabilities in our Condensed Consolidated Balance Sheets as of August 31, 2015 and February 28, 2015.

On December 15, 2014, the Company entered into an arrangement to lease its precast/prestressed structural concrete operations in Roaring Spring, PA for a term of seven years to an entity controlled by a member of the Company's Board of Directors and stockholder, James W. Van Buren, who is the principal of MacInnis Group, LLC ("the Lessee").

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.  A description of the services and product offerings within each of the Company’s segments is provided below.

The Company reviews earnings of the segments principally at the operating profit level 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 profit consists of revenue less operating 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 profit. These costs include corporate administrative functions, unallocated corporate functions and other business line administrative functions. 

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

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Revenue
Construction materials	$	178,280		$	178,408		$	270,146		$	277,521
Heavy/highway construction	107,799			101,624			158,480			145,722
Traffic safety services and equipment	27,336			27,155			51,498			50,821
Segment totals	313,415			307,187			480,124			474,064
Eliminations	(66,860		)	(59,618		)	(92,853		)	(86,067		)
Total revenue	$	246,555		$	247,569		$	387,271		$	387,997
Operating income
Construction materials	$	48,996		$	39,303		$	62,656		$	45,390
Heavy/highway construction	8,203			7,986			6,991			4,889
Traffic safety services and equipment	3,207			2,613			4,816			3,703
Corporate and unallocated	(9,859		)	(17,872		)	(22,892		)	(31,303		)
Total operating income	$	50,547		$	32,030		$	51,571		$	22,679

	Three Months Ended   August 31,				Six Months Ended   August 31,
(In thousands)	2015		2014		2015		2014
Depreciation, depletion and amortization
Construction materials	$	6,858	$	7,531	$	13,523	$	14,729
Heavy/highway construction	1,880		2,045		3,577		4,338
Traffic safety services and equipment	1,261		1,201		2,496		2,443
Corporate and unallocated	345		380		703		737
Total depreciation, depletion and amortization	$	10,344	$	11,157	$	20,299	$	22,247

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10.Supplemental Disclosures of Cash Flow Information

The following table shows the supplemental information related to our cash flows for the six months ended August 31, 2015 and August 31, 2014:

(In thousands)	August 31, 2015		August 31, 2014
Capital lease and other non-cash obligations incurred	$	5,974	$	1,837
Cash paid for interest, net of amounts capitalized	27,898		25,488

11.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.

20

Condensed Consolidating Balance Sheet at August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	14,391		$	1,197	$	5,837		$	—		$	21,425
Restricted cash	1,172			61		15,789			—			17,022
Accounts receivable, net	142,862			17,160		6			—			160,028
Inventories	89,383			16,778		—			—			106,161
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	1,918			712		—			—			2,630
Other current assets	9,730			—		16			—			9,746
Assets held for sale	3,522			6,366		—			—			9,888
Total current assets	262,978			42,274		22,295			(647		)	326,900
Property, plant and equipment, net	284,582			14,740		5,961			(5,961		)	299,322
Goodwill	75,647			5,845		—			—			81,492
Other intangible assets, net	6,897			10,917		—			—			17,814
Investment in subsidiaries	91,251			—		—			(91,251		)	—
Intercompany receivables	3,308			29,572		(149		)	(32,731		)	—
Other noncurrent assets	27,477			907		2,348			—			30,732
Total Assets	$	752,140		$	104,255	$	30,455		$	(130,590	)	$	756,260
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	39,996		$	—	$	—		$	(647	)	$	39,349
Accounts payable - trade	45,601			7,765		313			—			53,679
Accrued liabilities	60,737			1,942		17,004			—			79,683
Total current liabilities	146,334			9,707		17,317			(647		)	172,711
Intercompany payables	31,527			1,204		—			(32,731		)	—
Long-term debt, less current maturities	658,817			—		5,305			—			664,122
Obligations under capital leases, less current maturities	5,961			—		—			(5,961		)	—
Deferred income taxes	23,945			5,261		—			—			29,206
Other noncurrent liabilities	42,588			525		2,348			—			45,461
Total liabilities	909,172			16,697		24,970			(39,339		)	911,500
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(157,032		)	87,558		3,693			(91,251		)	(157,032		)
Noncontrolling interest	—			—		1,792			—			1,792
Total (deficit) equity	(157,032		)	87,558		5,485			(91,251		)	(155,240		)
Total liabilities and (deficit) equity	$	752,140		$	104,255	$	30,455		$	(130,590	)	$	756,260

21

Condensed Consolidating Balance Sheet at February 28, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	8,633		$	60		$	4,600		$	—		$	13,293
Restricted cash	1,301			88			15,788			—			17,177
Accounts receivable, net	39,125			10,762			14			—			49,901
Inventories	87,995			14,211			—			—			102,206
Net investment in lease	—			—			1,198			(1,198		)	—
Deferred income taxes	1,918			712			—			—			2,630
Other current assets	8,038			836			11			—			8,885
Assets held for sale	8,517			—			—			—			8,517
Total current assets	155,527			26,669			21,611			(1,198		)	202,609
Property, plant and equipment, net	290,137			20,137			5,810			(5,810		)	310,274
Goodwill	81,287			5,845			—			—			87,132
Other intangible assets, net	7,640			11,293			—			—			18,933
Investment in subsidiaries	85,531			—			—			(85,531		)	—
Intercompany receivables	3,308			29,169			(34		)	(32,443		)	—
Other noncurrent assets	28,097			977			2,348			—			31,422
Total Assets	$	651,527		$	94,090		$	29,735		$	(124,982	)	$	650,370
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	8,955		$	—		$	771		$	(1,198	)	$	8,528
Accounts payable - trade	8,510			6,265			331			546			15,652
Accrued liabilities	47,876			1,508			15,496			—			64,880
Total current liabilities	65,341			7,773			16,598			(652		)	89,060
Intercompany payables	34,087			(1,098		)	—			(32,989		)	—
Long-term debt, less current maturities	645,228			—			5,039			—			650,267
Obligations under capital leases, less current maturities	5,810			—			—			(5,810		)	—
Deferred income taxes	23,466			5,261			—			—			28,727
Other noncurrent liabilities	43,365			561			2,348			—			46,274
Total liabilities	817,297			12,497			23,985			(39,451		)	814,328
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(165,770		)	81,593			3,938			(85,531		)	(165,770		)
Noncontrolling interest	—			—			1,812			—			1,812
Total (deficit) equity	(165,770		)	81,593			5,750			(85,531		)	(163,958		)
Total liabilities and (deficit) equity	$	651,527		$	94,090		$	29,735		$	(124,982	)	$	650,370

22

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	222,167		$	24,388		$	229		$	(229	)	$	246,555
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	160,022			17,600			217			(139		)	177,700
Depreciation, depletion and amortization	9,036			1,308			—			—			10,344
Asset impairment	—			—			—			—			—
Selling, administrative and general expenses	10,144			1,513			40			—			11,697
Gain on disposals of property, equipment and software	(3,730		)	(3		)	—			—			(3,733		)
Operating income (loss)	46,695			3,970			(28		)	(90		)	50,547
Interest (expense) income, net	(21,215		)	43			(64		)	90			(21,146		)
Income (loss) before income taxes	25,480			4,013			(92		)	—			29,401
Income tax expense	1,331			—			—			—			1,331
Equity in earnings of subsidiaries	3,784			—			—			(3,784		)	—
Net income (loss)	27,933			4,013			(92		)	(3,784		)	28,070
Less: Net income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933			4,013			(229		)	(3,784		)	27,933
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—			—			—			39
Comprehensive income (loss)	27,972			4,013			(92		)	(3,784		)	28,109
Less: Comprehensive income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	27,972		$	4,013		$	(229	)	$	(3,784	)	$	27,972

23

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

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	223,377		$	24,192		$	1,724		$	(1,724	)	$	247,569
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	168,423			18,226			1,518			(1,616		)	186,551
Depreciation, depletion and amortization	9,905			1,252			—			—			11,157
Asset impairment	3,343			—			—			—			3,343
Selling, administrative and general expenses	12,924			1,670			55			—			14,649
Gain loss on disposals of property, equipment and software	(142		)	(19		)	—			—			(161		)
Operating income (loss)	28,924			3,063			151			(108		)	32,030
Interest (expense) income, net	(20,427		)	(6		)	(55		)	108			(20,380		)
Income (loss) before income taxes	8,497			3,057			96			—			11,650
Income tax expense	900			—			—			—			900
Equity in earnings of subsidiaries	2,976			—			—			(2,976		)	—
Net income (loss)	10,573			3,057			96			(2,976		)	10,750
Less: Net income attributable to noncontrolling interest	—			—			(177		)	—			(177		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	10,573			3,057			(81		)	(2,976		)	10,573
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	38			—			—			—			38
Comprehensive income (loss)	10,611			3,057			96			(2,976		)	10,788
Less: Comprehensive income attributable to noncontrolling interest	—			—			(177		)	—			(177		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	10,611		$	3,057		$	(81	)	$	(2,976	)	$	10,611

24

Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	341,691		$	45,775		$	3,420		$	(3,615	)	$	387,271
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	258,673			34,269			3,172			(3,464		)	292,650
Depreciation, depletion and amortization	17,717			2,582			—			—			20,299
Asset impairment	160			23			—			—			183
Selling, administrative and general expenses	23,231			3,047			123			—			26,401
Gain on disposals of property, equipment and software	(3,783		)	(50		)	—			—			(3,833		)
Operating income (loss)	45,693			5,904			125			(151		)	51,571
Interest (expense) income, net	(42,330		)	61			(98		)	151			(42,216		)
Income (loss) before income taxes	3,363			5,965			27			—			9,355
Income tax expense	423			—			—			—			423
Equity in earnings of subsidiaries	5,720			—			—			(5,720		)	—
Net income (loss)	8,660			5,965			27			(5,720		)	8,932
Less: Net income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	8,660			5,965			(245		)	(5,720		)	8,660
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	78			—			—			—			78
Comprehensive income (loss)	8,738			5,965			27			(5,720		)	9,010
Less: Comprehensive income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	8,738		$	5,965		$	(245	)	$	(5,720	)	$	8,738

25

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

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	342,824		$	46,675		$	3,461		$	(4,963	)	$	387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	274,241			35,973			2,956			(4,748		)	308,422
Depreciation, depletion and amortization	19,711			2,536			—			—			22,247
Asset impairment	5,023			—			—			—			5,023
Selling, administrative and general expenses	25,828			4,008			100			—			29,936
Gain loss on disposals of property, equipment and software	(301		)	(9		)	—			—			(310		)
Operating income (loss)	18,322			4,167			405			(215		)	22,679
Interest (expense) income, net	(40,813		)	3			(111		)	215			(40,706		)
Income (loss) before income taxes	(22,491		)	4,170			294			—			(18,027		)
Income tax benefit	(1,342		)	—			—			—			(1,342		)
Equity in earnings of subsidiaries	4,112			—			—			(4,112		)	—
Net income (loss)	(17,037		)	4,170			294			(4,112		)	(16,685		)
Less: Net income attributable to noncontrolling interest	—			—			(352		)	—			(352		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	(17,037		)	4,170			(58		)	(4,112		)	(17,037		)
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	77			—			—			—			77
Comprehensive income (loss)	(16,960		)	4,170			294			(4,112		)	(16,608		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			(352		)	—			(352		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(16,960	)	$	4,170		$	(58	)	$	(4,112	)	$	(16,960	)

26

Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(17,276	)	$	1,110	$	2,034		$	—	$	(14,132	)
Cash flows from investing activities
Capital expenditures	(11,830		)	—		—			—		(11,830		)
Proceeds from sale of property, equipment and assets held for sale	5,849			—		—			—		5,849
Change in cash value of life insurance	—			—		—			—		—
Change in restricted cash	128			27		(1		)	—		154
Net cash (used in) provided by investing activities	(5,853		)	27		(1		)	—		(5,827		)
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091			—		—			—		30,091
Repayments of other debt	(308		)	—		(505		)	—		(813		)
Payments on capital leases	(896		)	—		—			—		(896		)
Distribution to noncontrolling interest	—			—		(291		)	—		(291		)
Net cash provided by (used in) financing activities	28,887			—		(796		)	—		28,091
Net increase in cash and cash equivalents	5,758			1,137		1,237			—		8,132
Cash and cash equivalents
Beginning of period	8,633			60		4,600			—		13,293
End of period	$	14,391		$	1,197	$	5,837		$	—	$	21,425

27

Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(19,103	)	$	992		$	1,918		$	—	$	(16,193	)
Cash flows from investing activities
Capital expenditures	(11,014		)	(815		)	—			—		(11,829		)
Proceeds from sale of property and equipment, and assets held for sale	1,177			—			—			—		1,177
Change in cash value of life insurance	(75		)	—			—			—		(75		)
Change in restricted cash	12,191			4			(1		)	—		12,194
Net cash (used in) provided by investing activities	2,279			(811		)	(1		)	—		1,467
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	24,675			—			—			—		24,675
Repayments of other debt	(4,097		)	—			(348		)	—		(4,445		)
Payments on capital leases	(1,594		)	—			—			—		(1,594		)
Debt issuance costs	(756		)	—			—			—		(756		)
Net cash provided by (used in) financing activities	18,228			—			(348		)	—		17,880
Net increase in cash and cash equivalents	1,404			181			1,569			—		3,154
Cash and cash equivalents
Beginning of period	21,344			—			2,548			—		23,892
End of period	$	22,748		$	181		$	4,117		$	—	$	27,046

28

12. Subsequent Events

On September 24, 2015, the Board of Directors of New Enterprise Stone & Lime Co., Inc. (the “Company”) amended and restated the Executive Benefit Plan (the “Plan”) to, among other things, terminate the death and disability benefits under the Plan effective December 31, 2015. The amended Plan also reflects the prior freeze of Plan contributions and cessation of crediting earnings and losses on participant account balances effective December 31, 2015.

29

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 primarily of the production of aggregate (crushed stone and construction sand and gravel), hot mix asphalt, and ready mixed concrete.  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. Accordingly, we favor construction activity that maximizes our ability to utilize our construction materials. 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.

Operating Structure and Executive Leadership

     We have finalized the re-alignment of our organizational structure and continue to implement and enhance our strategic plan (the "Plan"). Through the second quarter of fiscal year 2016, we have monetized certain assets providing up to $6.9 million of cash this fiscal year for additional working capital and fixed asset purchases. We have approximately $9.9 million in additional assets held for sale as of August 31, 2015.

We believe our new cost structure has reduced our fixed cost base while targeting operational efficiencies. Although most non-core operations were wound down during the prior year, our revenues increased after removing $15.9 million in revenues associated with non-core operations. We believe this focus on our core products in conjunction with renewed emphasis on construction activity that favors maximum vertical integration will position us to be successful in our markets. Although the Transportation Act has provided more bidding opportunities in the Commonwealth of Pennsylvania overall, we have continued to experience declines in the markets in which we participate.

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 fiscal quarters and the lowest are in the first and fourth fiscal 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.

30

Reclassifications

Certain items previously reported in prior period financial statement captions have been conformed to agree with the current presentation. The expenses associated with certain benefit programs previously disclosed within the Pension and profit sharing caption have been reclassified to the Cost of revenue and to the Selling, administrative and general captions in the Condensed Consolidated Statements of Comprehensive Income (Loss) in the amounts of $1.7 million and $0.2 million, respectively for the three months ended August 31, 2014 and $3.0 million and $0.3 million, respectively, for the six months endedAugust 31, 2014. The reclassification had no effect on Operating income, Comprehensive income (loss) within the Condensed Consolidated Statements of Comprehensive Income (Loss), the Condensed Consolidated Statement of Cash Flows, or the Condensed Consolidated Balance Sheets.

Executive Summary

The following are key statistics for the six months ended August 31, 2015 as compared to the six months ended August 31, 2014.

• Cost of revenue decreased by $15.7 million (5.1%);

• Operating income increased by $28.9 million (127.3%); and

• Selling, administrative and general expenses decreased by $3.5 million or 11.7%.

RESULTS OF OPERATIONS

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

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Revenue	$	246,555		$	247,569		$	387,271		$	387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	177,700			186,551			292,650			308,422
Depreciation, depletion and amortization	10,344			11,157			20,299			22,247
Asset impairment	—			3,343			183			5,023
Selling, administrative and general expenses	11,697			14,649			26,401			29,936
Gain on disposals of property, equipment and software	(3,733		)	(161		)	(3,833		)	(310		)
Operating income	50,547			32,030			51,571			22,679
Interest expense, net	(21,146		)	(20,380		)	(42,216		)	(40,706		)
Income (loss) before income taxes	29,401			11,650			9,355			(18,027		)
Income tax expense (benefit)	1,331			900			423			(1,342		)
Net income (loss)	$	28,070		$	10,750		$	8,932		$	(16,685	)

The tables below disclose revenue and operating data for our reportable segments before certain intra- and intercompany 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.  We also operate ancillary port operations and certain rental operations, which are included in our other non-core business operations line items presented below. All non-allocated operating costs are reflected in the corporate and unallocated line item presented below.

31

The following table summarizes our segment revenue:

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Segment Revenue
Construction materials	$	178,280		$	178,408		$	270,146		$	277,521
Heavy/highway construction	107,799			101,624			158,480			145,722
Traffic safety services and equipment	27,336			27,155			51,498			50,821
Segment totals	313,415			307,187			480,124			474,064
Inter-segment eliminations	(66,860		)	(59,618		)	(92,853		)	(86,067		)
Total revenue	$	246,555		$	247,569		$	387,271		$	387,997

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

	Three Months Ended   August 31,				Six Months Ended   August 31,
	2015		2014		2015		2014
Segment Revenue:
Construction materials	56.9	%	58.1	%	56.3	%	58.6	%
Heavy/highway construction	34.4	%	33.1	%	33.0	%	30.7	%
Traffic safety services and equipment	8.7	%	8.8	%	10.7	%	10.7	%
Segment totals	100.0	%	100.0	%	100.0	%	100.0	%

The following table summarizes the segment cost of revenue:

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Segment Cost of Revenue
Construction materials	$	125,189		$	133,408		$	196,017		$	217,301
Heavy/highway construction	97,982			91,763			148,223			136,988
Traffic safety services and equipment	21,389			20,998			41,263			40,200
Segment totals	244,560			246,169			385,503			394,489
Eliminations	(66,860		)	(59,618		)	(92,853		)	(86,067		)
Total cost of revenue	$	177,700		$	186,551		$	292,650		$	308,422

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

	Three Months Ended   August 31,				Six Months Ended   August 31,
	2015		2014		2015		2014
Segment Cost of Revenue as Percent of Segment Revenue
Construction materials	70.2	%	74.8	%	72.6	%	78.3	%
Heavy/highway construction	90.9	%	90.3	%	93.5	%	94.0	%
Traffic safety services and equipment	78.2	%	77.3	%	80.1	%	79.1	%

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The following table summarizes the segment operating income:

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Operating Income
Construction materials	$	48,996		$	39,303		$	62,656		$	45,390
Heavy/highway construction	8,203			7,986			6,991			4,889
Traffic safety services and equipment	3,207			2,613			4,816			3,703
Segment totals	60,406			49,902			74,463			53,982
Corporate and unallocated	(9,859		)	(17,872		)	(22,892		)	(31,303		)
Total operating income	$	50,547		$	32,030		$	51,571		$	22,679

Three Months Ended August 31, 2015 Compared to Three Months Ended August 31, 2014

Revenue

Total revenue decreased $1.0 million or 0.4% to $246.6 million for the three months ended August 31, 2015 compared to $247.6 million for the three months ended August 31, 2014.  When considering the impact of reduced revenue of $6.0 million associated with the winding down of certain non-core operations in the prior fiscal year, total revenue increased $5.0 million or 2.0% on a comparable basis.

Segment revenue for our construction materials business decreased$0.1 million, or 0.1% to $178.3 million for the three months ended August 31, 2015 compared to $178.4 million for the three months ended August 31, 2014. The prior fiscal year contained $6.3 million of revenues which did not recur due primarily to the winding down of certain non-core operations. When the exclusion of these revenues associated with non-core business operations are considered, our revenues increased $6.2 million on a comparable basis. Revenues for hot mix asphalt and ready mixed concrete increased$2.9 million and $1.0 million, respectively, for the three months ended August 31, 2015 compared to the three months ended August 31, 2014. The increases in hot mix asphalt and ready mix concrete were primarily due to increases in sales price for the three months ended August 31, 2015 compared to the three months ended August 31, 2014. The remainder of the increase was primarily attributable to aggregates.

Segment revenue for our heavy/highway construction business increased$6.2 million, or 6.1% to $107.8 million for the three months ended August 31, 2015 compared to $101.6 million for the three months ended August 31, 2014.  The increase in revenue was primarily attributable to the timing of available work.

Segment revenue for our traffic safety services and equipment businesses remained flat, changing $0.1 million, or 0.4% to $27.3 million for the three months ended August 31, 2015 compared to $27.2 million for the three months ended August 31, 2014.

Cost of Revenue

Total cost of revenue decreased$8.9 million or 4.8% to $177.7 million for the three months ended August 31, 2015 compared to approximately $186.6 million for the three months ended August 31, 2014.  $6.9 million of this decrease is attributable to the winding down of our non-core operations in the prior fiscal year and increased efficiencies due to our shared services center.

 Segment cost of revenue for our construction materials business as a percentage of its segment revenue decreased4.6% to 70.2% for the three months ended August 31, 2015 compared to 74.8% for the three months ended August 31, 2014. Segment cost of revenue as a percentage of segment revenue improved primarily as a result of improved pricing on a fixed cost base, as well as lower revenues associated with the winding down of non-core operations which generally carried lower margins compared to other products.

Segment cost of revenue for our heavy/highway construction business as a percentage of its segment revenue increased slightly by 0.6% to 90.9% for the three months ended August 31, 2015 compared to 90.3% for the three months ended August 31, 2014. The increase in segment cost of sales as a percentage of sales was primarily attributable the timing of completion of types of work compared to the prior year.

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Segment cost of revenue for our traffic services and equipment business as a percentage of its segment revenue increased0.9% to 78.2% for the three months ended August 31, 2015 compared to 77.3% for the three months ended August 31, 2014. The increase in segment cost of revenue as a percentage of segment revenue was attributable to higher raw material costs.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization decreased$0.9 million, or 8.0% to $10.3 million for the three months ended August 31, 2015 compared to $11.2 million for the three months ended August 31, 2014. The decrease was primarily attributable to less depreciation due to sales of assets within the past year and as a result of lower depreciable assets due to decreased capital expenditures over the last several years.

Selling, Administrative and General Expenses

Selling, administrative and general expenses decreased$2.9 million, or 19.9% to $11.7 million for the three months ended August 31, 2015 compared to $14.6 million for the three months ended August 31, 2014. The decrease was primarily attributable to reduced bad debt expense and professional services.

Operating Income

Operating income increased$18.5 million, or 57.8% to $50.5 million for the three months ended August 31, 2015, as compared to $32.0 million for the three months ended August 31, 2014. This increase was primarily attributable to increased prices and other efficiencies related to our profit enhancement program.

Operating income for our construction materials business increased$9.7 million, or 24.7% to $49.0 million for the three months ended August 31, 2015 compared to $39.3 million for the three months ended August 31, 2014. Operating income for aggregates, hot mix asphalt and ready mixed concrete increased$7.2 million, $2.8 million, and $0.2 million, respectively, to $30.5 million, $14.4 million, and $4.1 million for the three months ended August 31, 2015 compared to $23.3 million, $11.6 million, and $3.9 million for the three months ended August 31, 2014, respectively. These increases were primarily due to price increases for our products in most markets, as well as continued cost controls.

Operating income for our heavy/highway construction business remained flat, increasing by $0.2 million, or 2.5% to $8.2 million for the three months ended August 31, 2015 compared to $8.0 million for the three months ended August 31, 2014. 

Operating income for our traffic safety services and equipment businesses increased by $0.6 million, or 23.1% to $3.2 million for the three months ended August 31, 2015 compared to $2.6 million for the three months ended August 31, 2014.  The increase in profitability is primarily attributable to continued cost controls.

Interest Expense, net

Net interest expense increased$0.7 million, or 3.4% to $21.1 million for the three months ended August 31, 2015 compared to $20.4 million for the three months ended August 31, 2014 due primarily to increased overall indebtedness.

Income Tax Expense

The income tax provision for the three months ended August 31, 2015 and August 31, 2014 consisted of federal and state taxes that are based on the estimated effective tax rates applicable for the full fiscal years ending February 28, 2015 and February 28, 2014, respectively, after giving effect to items specifically related to the interim periods.

Our effective tax rates for the three months ended August 31, 2015 and 2014 were 4.5% and 7.7%, respectively, resulting in tax expense of $1.3 million and $0.9 million, respectively. The principal factor affecting the comparability of the effective income tax rates for the respective periods is our assessment of the realizability of the current period projected pre-tax loss. We recorded a valuation allowance on the portion of the current period federal and state income tax losses that we believe is not more likely than not to be realized. The Company’s determination of its valuation allowance considers the impact of utilization of alternative minimum tax net operating loss and alternative minimum tax credit carryforwards.

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Six Months Ended August 31, 2015 Compared to Six Months Ended August 31, 2014

Revenue

Total revenue decreased$0.7 million or 0.2% to $387.3 million for the six months ended August 31, 2015 compared to $388.0 million for the six months ended August 31, 2014.  When considering the impact of reduced revenue of $15.9 million associated with the winding down of certain non-core operations in the prior fiscal year, total revenue increased $15.2 million or 3.9% on a comparable basis.

Segment revenue for our construction materials business decreased$7.4 million, or 2.7% to $270.1 million for the six months ended August 31, 2015 compared to $277.5 million for the six months ended August 31, 2014. The prior fiscal year contained $16.3 million of revenues which did not recur due primarily to the winding down of certain non-core operations. When the exclusion of these revenues associated with non-core business operations are considered, our revenues increased $8.9 million on a comparable basis. Revenues for aggregates increased$2.8 million or 2.4%, for the six months ended August 31, 2015 compared to the six months ended August 31, 2014. Revenues for hot mix asphalt and ready mixed concrete increased$7.2 million and $3.5 million, respectively, for the six months ended August 31, 2015 compared to the six months ended August 31, 2014. The increase in aggregates was primarily attributable to an increase in sales price of 7.7%, partially offset by a decrease in sales volumes of 4.9%. The increases in hot mix asphalt and ready mixed concrete were due to increases in sales volumes of 5.3% and 4.4%, respectively in the six months ended August 31, 2015 compared to the six months ended August 31, 2014. These increases were partially offset by decreases in other revenues of $4.6 million, which was primarily attributable to decreases in fuel revenues.

Segment revenue for our heavy/highway construction business increased$12.8 million, or 8.8% to $158.5 million for the six months ended August 31, 2015 compared to $145.7 million for the six months ended August 31, 2014.  The increase in revenue was primarily attributable to the timing of available work, as we complete more work on jobs delayed during the first quarter.

Segment revenue for our traffic safety services and equipment businesses remained relatively flat, increasing $0.7 million, or 1.4% to $51.5 million for the six months ended August 31, 2015 compared to $50.8 million for the six months ended August 31, 2014.

Cost of Revenue

Total cost of revenue decreased$15.7 million or 5.1% to $292.7 million for the six months ended August 31, 2015 compared to approximately $308.4 million for the six months ended August 31, 2014.  The majority of this decrease is attributable to the winding down of our non-core operations in the prior fiscal year.

 Segment cost of revenue for our construction materials business as a percentage of its segment revenue decreased5.7% to 72.6% for the six months ended August 31, 2015 compared to 78.3% for the six months ended August 31, 2014. Segment cost of revenue as a percentage of segment revenue improved primarily as a result of improved pricing on a fixed cost base, as well as lower revenues associated with the winding down of non-core operations which generally carried lower margins compared to other products.

Segment cost of revenue for our heavy/highway construction business as a percentage of its segment revenue remained relatively flat, decreasing 0.5% to 93.5% for the six months ended August 31, 2015 compared to 94.0% for the six months ended August 31, 2014. 

Segment cost of revenue for our traffic services and equipment business as a percentage of its segment revenue remained relatively flat, increasing 1.0% to 80.1% for the six months ended August 31, 2015 compared to 79.1% for the six months ended August 31, 2014. 

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization decreased$1.9 million, or 8.6% to $20.3 million for the six months ended August 31, 2015 compared to $22.2 million for the six months ended August 31, 2014. The decrease was primarily attributable to less depreciation due to sales of assets within the past year and as a result of lower depreciable assets due to decreased capital expenditures over the last several years.

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Selling, Administrative and General Expenses

Selling, administrative and general expenses decreased$3.5 million, or 11.7% to $26.4 million for the six months ended August 31, 2015 compared to $29.9 million for the six months ended August 31, 2014. The decrease was primarily attributable to lower bad debt expense and professional services.

Operating Income

Operating income increased $28.9 million to $51.6 million for the six months ended August 31, 2015, as compared to $22.7 million for the six months ended August 31, 2014. This increase was primarily attributable to the increased efficiencies related to our profit enhancement program.

Operating income for our construction materials business increased$17.3 million, or 38.1% to $62.7 million for the six months ended August 31, 2015 compared to $45.4 million for the six months ended August 31, 2014. Operating income for aggregates, hot mix asphalt and ready mixed concrete increased$11.5 million, $3.1 million, and $1.5 million, respectively, to $41.0 million, $15.2 million, and $6.5 million for the six months ended August 31, 2015 as compared to $29.5 million, $12.1 million, and $5.0 million for the six months ended August 31, 2014, respectively. These increases were primarily due to price increases for our products in most markets, as well as continued cost controls.

Operating income for our heavy/highway construction business increased$2.1 million, or 42.9% to $7.0 million for the six months ended August 31, 2015 compared to $4.9 million for the six months ended August 31, 2014.  This improvement was primarily attributable to additional work completed on a consistent fixed cost base.

Operating income for our traffic safety services and equipment businesses increased by $1.1 million, or 29.7% to $4.8 million for the six months ended August 31, 2015 compared to $3.7 million for the six months ended August 31, 2014.  The increase in profitability is primarily attributable to continued cost controls.

Interest Expense, net

Net interest expense increased$1.5 million, or 3.7% to $42.2 million for the six months ended August 31, 2015 compared to $40.7 million for the six months ended August 31, 2014 due primarily to increased overall indebtedness.

Income Tax Expense (Benefit)

The income tax provision for the six months ended August 31, 2015 and six months ended August 31, 2014 consisted of federal and state taxes that are based on the estimated effective tax rates applicable for the full fiscal years ending February 28, 2015 and February 28, 2014, respectively, after giving effect to items specifically related to the interim periods.

Our effective tax rates for the six months ended August 31, 2015 and six months ended August 31, 2014 were 4.5% and 7.4%, respectively, resulting in a tax expense of $0.4 million and a tax benefit of $1.3 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. The Company’s determination of its valuation allowance considers the impact of utilization of alternative minimum tax net operating loss and alternative minimum tax credit carryforwards.

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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 August 31, 2015 we had borrowed $36.0 million under the RCA with $46.8 million available compared to $5.9 million under the RCA, with $27.3 million available as of February 28, 2015. As of August 31, 2015, we had $21.4 million in cash and cash equivalents and working capital of $154.2 million compared to $13.3 million in cash and cash equivalents and working capital of $113.5 million as of February 28, 2015. Cash balances of $17.0 million and $17.2 million as of August 31, 2015 and February 28, 2015, respectively, were restricted in certain consolidated subsidiaries for insurance requirements, as well as collateral on outstanding letters of credit or rentals. 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.

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 covenants, of which the minimum EBITDA covenant and the capital expenditure limitation are the primary financial covenants for the next twelve months. Commencing May 31, 2015, as of the end of each fiscal quarter, we are required to have trailing twelve-month EBITDA in an amount not less than certain amounts specified in the Credit Facilities. Our capital expenditure limitation for fiscal year 2016 is $40.0 million, except as noted below. As of August 31, 2015, we were in compliance with all of our covenant requirements through that date, and expect to remain in compliance for the next twelve months as applicable.

Effective August 31, 2015, we obtained an amendment to the Credit Facility which (1) allowed certain assets to be added to a schedule of permitted asset sales and dispositions, and (ii) permitted us to incur additional capital expenditures equal to the unrestricted net cash proceeds received from the asset sales permitted under the terms of the Credit Agreements, as amended.

We achieved a fixed charge coverage ratio (as defined in the Credit Facilities) of greater than 1:00 to 1:00 as of August 31, 2015; therefore the availability block on subsequent borrowing bases will be reduced by $10.0 million.

In the past, we have failed to meet certain operating performance measures as well as the financial covenant requirements set forth under our previous credit facilities, which resulted in the need to obtain several amendments, and should we fail in the future, we cannot guarantee that we will be able to obtain such amendments. A failure to obtain such amendments could result in an acceleration of our indebtedness under the Credit Facilities and a cross-default under our other indebtedness, including the Notes and Secured Notes. If the lenders were to accelerate the due dates of our indebtedness or if current sources of liquidity prove to be insufficient, there can be no assurance that we would be able to repay or refinance such indebtedness or to obtain sufficient funding. This could require us to restructure or alter our operations and capital structure.

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 six months endedAugust 31, 2015 and August 31, 2014.

	Six Months Ended   August 31,
(In thousands)	2015			2014
Net cash (used in) provided by:
Operating activities	$	(14,132	)	$	(16,193	)
Investing activities	(5,827		)	1,467
Financing activities	28,091			17,880
Cash paid for capital expenditures	(11,830		)	(11,829		)

Operating Activities

Net cash used in operating activities decreased$2.1 million to $14.1 million for the six months endedAugust 31, 2015 compared to net cash used of $16.2 million for the six months endedAugust 31, 2014. Cash used in operating activities decreased as a result of changes in working capital and improved operating income.

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Investing Activities

Net cash from investing activities changed $7.3 million to net cash used of $5.8 million in the six months endedAugust 31, 2015 compared to net cash provided of $1.5 million in the six months endedAugust 31, 2014. Net cash used in investing activities changed primarily due to the monetization of cash collateralized letters of credit in fiscal year 2015 that did not recur in fiscal year 2016, partially offset by proceeds from the sale of property and equipment.

Financing Activities

Net cash provided by financing activities increased$10.2 million to $28.1 million in the six months endedAugust 31, 2015 compared to $17.9 million in the six months endedAugust 31, 2014.  The increase in cash provided by financing activities was primarily due to the increase of $5.4 million in net borrowings under our short-term obligations in the six months endedAugust 31, 2015 of $30.1 million, as compared to net borrowings of $24.7 million in six months endedAugust 31, 2014. This increase was aided by lower repayments of long-term debt of $0.8 million in the six months endedAugust 31, 2015, as compared to $4.4 million in the six months endedAugust 31, 2014.

Capital Expenditures

Cash capital expenditures remained flat at $11.8 million for the six months endedAugust 31, 2015 compared to $11.8 million for the six months endedAugust 31, 2014. In addition to the cash capital expenditures of $11.8 million, the Company also incurred $6.0 million of non-cash capital expenditures, which has resulted in $4.1 million of additional capital expenditures for the six months endedAugust 31, 2015 as compared to the six months endedAugust 31, 2014. Refer to Note 4 "Long Term Debt" to the Condensed Consolidated Financial Statements for further information.

Our Indebtedness

Refer to Note 4 “Long-Term Debt” to the Condensed Consolidated Financial Statements for further information.

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, Nature of Operations and Summary of Significant Accounting Policies as reported in our notes to our financial statements for the fiscal year ended February 28, 2015 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.

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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 control over financial reporting;

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

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

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

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

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

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

• impact of our credit rating on our cost of capital and ability to refinance;

• 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; 

• rising costs of health care;

• 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;

• our ability to permit additional reserves in select locations;

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

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

• our new regional alignment and restructuring of our accounting and certain administrative functions may not yield the anticipated efficiencies and may result in a loss of key personnel; 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, 2015.

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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 August 31, 2015, we had $36.0 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 relating to 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 the filing of this Form 10-Q.

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

Our system of internal control is based on the control criteria framework of the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

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 August 31, 2015. Based upon that evaluation, our CEO and CFO concluded that, as of August 31, 2015, 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.

41

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

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our financial statements for the years ended February 28, 2015, 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.

• 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 year 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 Controllers, Internal Audit Director and Internal Audit resources. In March 2013, we appointed a new Chief Financial Officer. Management continues to evaluate personnel and augment resources where needed to further strengthen competencies. 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. Although we recently hired a Chief Information Officer, we continue to experience turnover of Information Technology resources. We will continue our remediation efforts during fiscal year 2016.

• 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, implemented and communicated policies and procedures, which among other things, emphasize adherence to GAAP, and we have made the policies and procedures available to employees on our intranet site. In addition, the Board of Directors approved a formal Delegation of Authority Policy to bolster and support our policies and procedures. These policies and procedures have been developed, implemented and communicated across the Company.  There are certain processes of the Company, specifically construction accounting, for which the Delegation of Authority Policy continues to be a point of focus. However, we have concluded that this is no longer a material weakness. 

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 enterprise resource planning ("ERP") system 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, we have provided further training and made configuration changes such that our ERP is operating in a more effective manner. Although we recently hired a Chief Information Officer, we continue to experience turnover of Information Technology resources. 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 will continue our remediation efforts during fiscal year 2016.

42

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 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. All locations are now operating on the new ERP. As mentioned previously, we recently hired a Chief Information Officer but continue to experience turnover of Information Technology resources. We will continue our remediation efforts during fiscal year 2016.

• 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 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 to implement. Although we recently hired a Chief Information Officer, we continue to experience turnover of Information Technology resources. We will continue our remediation efforts during fiscal year 2016.

• We did not maintain effective controls over accounting for contracts including those in our Traffic Safety and Services operations. 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. In addition, during fiscal year 2016, there were select instances where the Delegation of Authority was not properly followed. 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 2015, 2014, 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 and we are in the process of implementing project management software. We have implemented a formal review and approval process by appropriate personnel that include contracts, billing costing, job performance and account reconciliation. Despite these efforts, we have made significant accounting adjustments associated with contracts during fiscal year 2015. We will continue our remediation efforts during fiscal year 2016.

• 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 years 2013 and 2012. 

We have implemented 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 related to sales of tangible goods.  We will continue our remediation efforts during fiscal year 2016.

43

• 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 year 2011 resulted in additional procedures performed by management and adjustments identified by management and our independent auditors during the fiscal years 2013, 2012 and 2011 year end and first quarter fiscal year 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 2016.

• 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 years 2013, 2012 and 2011 year-end financial closing and reporting processes.

Working with a third party advisor, we have completed an assessment of our internal control processes and during fiscal year 2014 we began restructuring personnel and duties to address the deficiencies. We will continue our remediation efforts during fiscal year 2016.

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 fiscal year ended August 31, 2015, are fairly stated in all material respects.

Changes in Internal Control Over Financial Reporting

We believe the following material weakness has been addressed as of the second quarter ended August 31, 2015:

We have developed, implemented and communicated policies and procedures, which among other things, emphasize adherence to GAAP, and we have made the policies and procedures available to employees on our intranet site. 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. In addition, the Board of Directors approved a formal Delegation of Authority Policy to bolster and support our policies and procedures. These policies and procedures have been developed, implemented and communicated across the Company.  There are certain processes of the Company, specifically construction accounting, for which the Delegation of Authority Policy continues to be a point of focus.

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.

44

ITEM 1A - RISK FACTORS

You should carefully consider the risks described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2015 filed with the SEC on May 18, 2015, 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.

45

ITEM 6 - EXHIBITS

Exhibit Number	Description
10.1	Amended and Restated Executive Benefit Plan
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.

46

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: October 13, 2015	By:	/s/ Albert L. Stone
		Albert L. Stone
		Executive Vice President and Chief Financial Officer

47

EXHIBIT INDEX

Exhibit Number	Description
10.1	Amended and Restated Executive Benefit Plan
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.

48

EX-10.1

Exhibit 10.1

Amended and Restated Executive Benefit Plan

[TO BE UPDATED]

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: October 13, 2015
	/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: October 13, 2015
	/s/ Albert L. Stone
	Albert L. Stone
	Executive 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 August 31, 2015, 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: October 13, 2015

/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 August 31, 2015 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: October 13, 2015

/s/ Albert L. Stone

Albert L. Stone

Executive 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 August 31, 2015, 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 August 31, 2015.

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)
ALFRED STATION	1	—	—	—	—	—	100	—	No
ASHCOM	1	—	—	—	—	—	—	—	No
BURKHOLDER	1	2	—	—	—	—	162	—	No
CENTRAL CITY	2	—	—	—	—	—	400	—	No
CHAMBERSBURG	1	—	—	—	—	—	308	—	No
DRY RUN	1	—	—	—	—	—	100	—	No
EGYPT	1	1	—	—	—	—	—	—	No
FAIRFIELD	1	—	—	—	—	—	100	—	No
FRANKLINVILLE	—	1	—	—	—	—	1,572	—	No
HONEYBROOK	1	2	—	—	—	—	338	—	No
KURTZ	1	—	—	—	—	—	—	—	No
KUTZTOWN	—	—	—	—	—	—	999	—	No
LEWISBURG	—	—	—	—	—	—	343	—	No
LIMEVILLE	—	—	—	—	—	—	799	—	No
MARTINS CREEK	2	—	—	—	—	—	—	—	No
MT. CYDONIA 1	1	4	—	—	—	—	920	—	No
NARVON	1	—	—	—	—	—	—	—	No
NAZARETH	1	1	—	—	—	—	—	—	No
ORBISONIA	1	2	—	—	—	—	525	—	No
ROARING SPRING	1	8	—	—	—	—	990	—	No
SHESHEQUIN	1	—	—	—	—	—	—	—	No
SHIPPENSBURG	2	1	—	—	—	—	—	—	No
UNION FURNACE	—	—	—	—	—	—	100	—	No
WEAVERLAND	2	4	—	—	—	—	—	—	No
WEHRLE	—	—	—	—	—	—	317	—	No
TOTAL	23	26	—	—	—	—	8,073	—

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

XML

Long-Term Debt (Details 4) - Notes due 2018 - USD ($)		6 Months Ended
	Aug. 31, 2010	Aug. 31, 2015
Debt Instrument [Line Items]
Face amount of debt	$ 250,000,000.0	$ 250,000,000.0
Unamortized debt issuance costs	$ 8,300,000
Redemption price as a percentage of principal amount, as a result of change of control	101.00%
Twelve-month period beginning September 1, 2014
Debt Instrument [Line Items]
Redemption price of debt instrument as a percentage of principal amount		105.50%
Twelve-month period beginning September 1, 2015
Debt Instrument [Line Items]
Redemption price of debt instrument as a percentage of principal amount		102.75%
Twelve-month period beginning September 1, 2016 and thereafter
Debt Instrument [Line Items]
Redemption price of debt instrument as a percentage of principal amount		100.00%

XML

Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 2) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015		Aug. 31, 2014	Feb. 28, 2014
Current assets
Cash and cash equivalents	$ 21,425	$ 13,293	[1]	$ 27,046	$ 23,892
Restricted cash	17,022	17,177	[1]
Accounts receivable, net	160,028	49,901	[1]
Inventories	106,161	102,206	[1]
Net investment in lease	0	0
Deferred income taxes	2,630	2,630	[1]
Other current assets	9,746	8,885	[1]
Assets held for sale	9,888	8,517	[1]
Total current assets	326,900	202,609	[1]
Property, plant and equipment, net	299,322	310,274	[1]
Goodwill	81,492	87,132	[1]
Other intangible assets, net	17,814	18,933	[1]
Investment in subsidiaries	0	0
Intercompany receivables	0	0
Other noncurrent assets	30,732	31,422	[1]
Total assets	756,260	650,370	[1]
Current liabilities
Current maturities of long-term debt	39,349	8,528	[1]
Accounts payable - trade	53,679	15,652	[1]
Accrued liabilities	79,683	64,880	[1]
Total current liabilities	172,711	89,060	[1]
Intercompany payables	0	0
Long-term debt, less current maturities	664,122	650,267	[1]
Obligations under capital leases, less current maturities	0	0
Deferred income taxes	29,206	28,727	[1]
Other noncurrent liabilities	45,461	46,274	[1]
Total liabilities	911,500	814,328	[1]
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(157,032)	(165,770)	[1]
Noncontrolling interest	1,792	1,812	[1]
Total deficit	(155,240)	(163,958)	[1]
Total liabilities and deficit	756,260	650,370	[1]
New Enterprise Stone & Lime Co., Inc.
Current assets
Cash and cash equivalents	14,391	8,633		22,748	21,344
Restricted cash	1,172	1,301
Accounts receivable, net	142,862	39,125
Inventories	89,383	87,995
Net investment in lease	0	0
Deferred income taxes	1,918	1,918
Other current assets	9,730	8,038
Assets held for sale	3,522	8,517
Total current assets	262,978	155,527
Property, plant and equipment, net	284,582	290,137
Goodwill	75,647	81,287
Other intangible assets, net	6,897	7,640
Investment in subsidiaries	91,251	85,531
Intercompany receivables	3,308	3,308
Other noncurrent assets	27,477	28,097
Total assets	752,140	651,527
Current liabilities
Current maturities of long-term debt	39,996	8,955
Accounts payable - trade	45,601	8,510
Accrued liabilities	60,737	47,876
Total current liabilities	146,334	65,341
Intercompany payables	31,527	34,087
Long-term debt, less current maturities	658,817	645,228
Obligations under capital leases, less current maturities	5,961	5,810
Deferred income taxes	23,945	23,466
Other noncurrent liabilities	42,588	43,365
Total liabilities	909,172	817,297
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(157,032)	(165,770)
Noncontrolling interest	0	0
Total deficit	(157,032)	(165,770)
Total liabilities and deficit	752,140	651,527
Guarantor Subsidiaries
Current assets
Cash and cash equivalents	1,197	60		181	0
Restricted cash	61	88
Accounts receivable, net	17,160	10,762
Inventories	16,778	14,211
Net investment in lease	0	0
Deferred income taxes	712	712
Other current assets	0	836
Assets held for sale	6,366	0
Total current assets	42,274	26,669
Property, plant and equipment, net	14,740	20,137
Goodwill	5,845	5,845
Other intangible assets, net	10,917	11,293
Investment in subsidiaries	0	0
Intercompany receivables	29,572	29,169
Other noncurrent assets	907	977
Total assets	104,255	94,090
Current liabilities
Current maturities of long-term debt	0	0
Accounts payable - trade	7,765	6,265
Accrued liabilities	1,942	1,508
Total current liabilities	9,707	7,773
Intercompany payables	1,204	(1,098)
Long-term debt, less current maturities	0	0
Obligations under capital leases, less current maturities	0	0
Deferred income taxes	5,261	5,261
Other noncurrent liabilities	525	561
Total liabilities	16,697	12,497
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	87,558	81,593
Noncontrolling interest	0	0
Total deficit	87,558	81,593
Total liabilities and deficit	104,255	94,090
Non Guarantors
Current assets
Cash and cash equivalents	5,837	4,600		4,117	2,548
Restricted cash	15,789	15,788
Accounts receivable, net	6	14
Inventories	0	0
Net investment in lease	647	1,198
Deferred income taxes	0	0
Other current assets	16	11
Assets held for sale	0	0
Total current assets	22,295	21,611
Property, plant and equipment, net	5,961	5,810
Goodwill	0	0
Other intangible assets, net	0	0
Investment in subsidiaries	0	0
Intercompany receivables	(149)	(34)
Other noncurrent assets	2,348	2,348
Total assets	30,455	29,735
Current liabilities
Current maturities of long-term debt	0	771
Accounts payable - trade	313	331
Accrued liabilities	17,004	15,496
Total current liabilities	17,317	16,598
Intercompany payables	0	0
Long-term debt, less current maturities	5,305	5,039
Obligations under capital leases, less current maturities	0	0
Deferred income taxes	0	0
Other noncurrent liabilities	2,348	2,348
Total liabilities	24,970	23,985
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	3,693	3,938
Noncontrolling interest	1,792	1,812
Total deficit	5,485	5,750
Total liabilities and deficit	30,455	29,735
Eliminations
Current assets
Cash and cash equivalents	0	0		$ 0	$ 0
Restricted cash	0	0
Accounts receivable, net	0	0
Inventories	0	0
Net investment in lease	(647)	(1,198)
Deferred income taxes	0	0
Other current assets	0	0
Assets held for sale	0	0
Total current assets	(647)	(1,198)
Property, plant and equipment, net	(5,961)	(5,810)
Goodwill	0	0
Other intangible assets, net	0	0
Investment in subsidiaries	(91,251)	(85,531)
Intercompany receivables	(32,731)	(32,443)
Other noncurrent assets	0	0
Total assets	(130,590)	(124,982)
Current liabilities
Current maturities of long-term debt	(647)	(1,198)
Accounts payable - trade	0	546
Accrued liabilities	0	0
Total current liabilities	(647)	(652)
Intercompany payables	(32,731)	(32,989)
Long-term debt, less current maturities	0	0
Obligations under capital leases, less current maturities	(5,961)	(5,810)
Deferred income taxes	0	0
Other noncurrent liabilities	0	0
Total liabilities	(39,339)	(39,451)
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(91,251)	(85,531)
Noncontrolling interest	0	0
Total deficit	(91,251)	(85,531)
Total liabilities and deficit	$ (130,590)	$ (124,982)

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2015	Aug. 31, 2014
Supplemental Cash Flow Elements [Abstract]
Capital lease and other non-cash obligations incurred	$ 5,000	$ 5,974	$ 1,837
Cash paid for interest, net of amounts capitalized		$ 27,898	$ 25,488

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Nature of Operations and Summary of Significant Accounting Policies (Details 7) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Accounting Policies [Abstract]
Deferred financing fees (less current portion of $2,648 and $2,905, respectively)	$ 8,662	$ 10,314
Capitalized software (net of accumulated amortization of $3,368 and $3,364, respectively)	7,247	7,553
Cash surrender value of life insurance (net of loans of $3,035 and $3,035, respectively)	1,250	1,249
Deferred stripping costs	4,967	4,514
Other	8,606	7,792
Other noncurrent assets	30,732	31,422	[1]
Current portion of deferred finance fee	2,394	2,905
Capitalized software - accumulated amortization	3,909	3,364
Loans outstanding on cash surrender value of life insurance	$ 3,035	$ 3,035

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Supplemental Disclosures of Cash Flow Information (Tables)

6 Months Ended

Aug. 31, 2015

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Information Related to Cash Flows

The following table shows the supplemental information related to our cash flows for the six months ended August 31, 2015 and August 31, 2014:

(In thousands)	August 31, 2015		August 31, 2014
Capital lease and other non-cash obligations incurred	$	5,974	$	1,837
Cash paid for interest, net of amounts capitalized	27,898		25,488

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 4) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2015		Aug. 31, 2014
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	$ (14,132)		$ (16,193)
Cash flows from investing activities
Capital expenditures	(11,830)		(11,829)
Proceeds from sale of property, equipment and assets held for sale	5,849		1,177
Change in cash value of life insurance	0		(75)
Change in restricted cash	154		12,194
Net cash (used in) provided by investing activities	(5,827)		1,467
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091		24,675
Repayments of other debt	(813)		(4,445)
Payments on capital leases	(896)		(1,594)
Debt issuance costs	0		(756)
Distribution to noncontrolling interest	(291)		0
Net cash provided by financing activities	28,091		17,880
Net increase in cash and cash equivalents	8,132		3,154
Cash and cash equivalents
Beginning of period	13,293	[1]	23,892
End of period	21,425		27,046
New Enterprise Stone & Lime Co., Inc.
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	(17,276)		(19,103)
Cash flows from investing activities
Capital expenditures	(11,830)		(11,014)
Proceeds from sale of property, equipment and assets held for sale	5,849		1,177
Change in cash value of life insurance	0		(75)
Change in restricted cash	128		12,191
Net cash (used in) provided by investing activities	(5,853)		2,279
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091		24,675
Repayments of other debt	(308)		(4,097)
Payments on capital leases	(896)		(1,594)
Debt issuance costs			(756)
Distribution to noncontrolling interest	0
Net cash provided by financing activities	28,887		18,228
Net increase in cash and cash equivalents	5,758		1,404
Cash and cash equivalents
Beginning of period	8,633		21,344
End of period	14,391		22,748
Guarantor Subsidiaries
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	1,110		992
Cash flows from investing activities
Capital expenditures	0		(815)
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	27		4
Net cash (used in) provided by investing activities	27		(811)
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	0		0
Repayments of other debt	0		0
Payments on capital leases	0		0
Debt issuance costs			0
Distribution to noncontrolling interest	0
Net cash provided by financing activities	0		0
Net increase in cash and cash equivalents	1,137		181
Cash and cash equivalents
Beginning of period	60		0
End of period	1,197		181
Non Guarantors
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	2,034		1,918
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)		(1)
Net cash (used in) provided by investing activities	(1)		(1)
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	0		0
Repayments of other debt	(505)		(348)
Payments on capital leases	0		0
Debt issuance costs			0
Distribution to noncontrolling interest	(291)
Net cash provided by financing activities	(796)		(348)
Net increase in cash and cash equivalents	1,237		1,569
Cash and cash equivalents
Beginning of period	4,600		2,548
End of period	5,837		4,117
Eliminations
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Cash flows from operating activities	0		0
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 (used in) provided by investing activities	0		0
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	0		0
Repayments of other debt	0		0
Payments on capital leases	0		0
Debt issuance costs			0
Distribution to noncontrolling interest	0
Net cash provided by financing activities	0		0
Net increase 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, 2015.

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Retirement and Benefit Programs (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2015 USD ($)	Aug. 31, 2014 USD ($)	Aug. 31, 2015 USD ($) plan	Aug. 31, 2014 USD ($)
Compensation and Retirement Disclosure [Abstract]
Defined Benefit Plan, Other Costs	$ 1,400	$ 1,700	$ 2,900	$ 3,000
Defined Benefit Plan, Other Costs	100	200	$ 200	300
Number of defined benefit plans | plan			2
Net periodic benefit cost
Service cost	78	86	$ 156	172
Interest cost	93	105	186	210
Expected return on plan assets	(155)	(150)	(310)	(300)
Amortization of prior service cost	13	14	26	28
Recognized net actuarial loss	54	50	108	101
Total pension expense	$ 83	$ 105	166	$ 211
Employer contributions to defined benefit pension plans			200
Expected additional contribution in the remainder of fiscal year 2014			$ 200

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Long-Term Debt (Details 2)			6 Months Ended
	Feb. 28, 2014 USD ($)	Feb. 12, 2014 USD ($) availability_block_reduction	Aug. 31, 2015 USD ($)	Aug. 31, 2014 USD ($)
Debt Instrument [Line Items]
Non-cash payment-in-kind interest accretion			$ 10,165,000	$ 11,045,000
Credit Facilities
Debt Instrument [Line Items]
Fixed charge coverage ratio		1.00
RCA
Debt Instrument [Line Items]
Commitment fee		0.50%
Weighted average interest rate			6.58%
Fixed charge coverage ratio		1.00
Maximum number off reductions to availability block | availability_block_reduction		2
RCA | Letter of credit sub-facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 20,000,000.0
Letters of credit outstanding			$ 16,700,000
RCA | Swing line sub-facility
Debt Instrument [Line Items]
Maximum borrowing capacity		10,500,000.0
RCA | FCCR Requirement Not Achieved
Debt Instrument [Line Items]
Availability block		20,000,000.0
RCA | FCCR Requirement Achieved Once in Rolling Four Quarter Period
Debt Instrument [Line Items]
Availability block		10,000,000.0
Debt Instrument, Covenant Compliance, Borrowing Capacity, Restriction, Change in Amount			$ 10,000,000
RCA | FCCR Requirement Achieved Twice Or More in Rolling Four Quarter Period
Debt Instrument [Line Items]
Availability block		$ 0
RCA | LIBOR
Debt Instrument [Line Items]
Margin added to variable interest rate basis (as a percent)		4.00%
Non-cash payment-in-kind interest accretion	$ 0.010
RCA | Base Rate
Debt Instrument [Line Items]
Margin added to variable interest rate basis (as a percent)		3.00%
Term loan
Debt Instrument [Line Items]
Weighted average interest rate			8.00%
Term loan | Prepayment occurs on or prior to 5/12/2015
Debt Instrument [Line Items]
Prepayment price (as a percentage)			103.00%
Term loan | Prepayment between 5/13/2015 and 2/12/2016
Debt Instrument [Line Items]
Prepayment price (as a percentage)			102.00%
Term loan | Prepayment occurs on 2/13/2016 and thereafter
Debt Instrument [Line Items]
Prepayment price (as a percentage)			100.00%
Term loan | LIBOR
Debt Instrument [Line Items]
Margin added to variable interest rate basis (as a percent)		7.00%
Term loan | Base Rate
Debt Instrument [Line Items]
Margin added to variable interest rate basis (as a percent)		6.00%
Floor [Member] | Term loan | LIBOR
Debt Instrument [Line Items]
Margin added to variable interest rate basis (as a percent)		1.00%

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details)	Aug. 31, 2015
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Ownership interest in subsidiaries (as a percent)	100.00%

XML

Long-Term Debt

6 Months Ended

Aug. 31, 2015

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

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

	August 31,			February 28,
(In thousands)	2015			2015
RCA ($46.8 million and $27.3 million available as of August 31, 2015 and February 28, 2015, respectively)	$	35,963		$	5,873
11% Notes, due 2018	250,000			250,000
13% Secured Notes, due 2018	335,294			323,956
Term Loans, interest rate of 8%	70,000			70,000
Other obligations	12,214			8,966
Total debt	703,471			658,795
Less: Current portion	(39,349		)	(8,528		)
Total long-term debt	$	664,122		$	650,267

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%. At August 31, 2015, the weighted average interest rate on the RCA was 6.58%. 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%. At August 31, 2015 the weighted average interest rate on the Term Loans was 8.0%.

Effective August 31, 2015, the Company obtained an amendment to the Credit Facility which allowed (i) certain assets to be added to a schedule of permitted asset sales and dispositions, and (ii) permitted the Company to incur additional capital expenditures equal to the unrestricted net cash proceeds received from the asset sales permitted under the terms of the Credit Agreements, as amended.

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 2, 2018 unless the Company refinances its Notes by June 1, 2018.

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 Company achieved a fixed charge coverage ratio (as defined in the Credit Facilities) of greater than 1:00 to 1:00 as of August 31, 2015; therefore the availability block will be reduced by $10.0 million.

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. As of August 31, 2015, the Company had $16.7 million of letters of credit outstanding under the sub-facility. 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	%

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 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.

As of August 31, 2015, the Company was in compliance with all of its covenant requirements.

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.

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 or (ii) subject to any Interest Rate Increase (as defined below), initially at the rate of 4% per annum in cash 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. 

On March 4, 2015, the Company notified the trustee of its Secured Notes that it had elected to pay interest on the Secured Notes for the 12-month period commencing March 15, 2015 in the form of 7% cash payment and 6% payment in kind, which represents $23.8 million and $20.4 million of interest, respectively, for the same 12-month period. At August 31, 2015, the inception-to-date PIK interest was $79.5 million ($70.3 million was recorded as an increase to the Secured Notes and $9.2 million was recorded as a long-term obligation in other liabilities).

With respect to any interest payment payable after March 15, 2017, interest will be payable solely in cash. In addition, at the beginning of and with respect to each 12-month period that begins on March 15, 2013, March 15, 2014, and March 15, 2015, the interest rate on the Secured Notes as of such date permanently increased by an additional 1.0% per annum (an "Interest Rate Increase") unless the Company delivered 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 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 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. 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. 

At any time prior to March 15, 2015, the Company was permitted to 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 was also permitted to 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 are redeemable, in whole or in part, at the redemption prices specified as follows:

Date	Percentage
March 15, 2015 to March 14, 2016	106.50	%
March 15, 2016 to March 14, 2017	103.25	%
March 15, 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 on September 15, 2017 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 11, “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 a Registration Statement on Form S-4 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 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.

On or after September 1, 2014, the Company was permitted to 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 12-month period beginning on September 1 of the years indicated below:

Date	Percentage
September 1, 2014 to August 31, 2015	105.50	%
September 1, 2015 to August 31, 2016	102.75	%
September 1, 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 11, “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 a Registration Statement on Form S-4 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.

Other Obligations

The Company has various notes, mortgages, leases and other financing arrangements resulting from the purchase of principally land, machinery and equipment. All loans provide for at least annual payments and are principally secured by the land and equipment acquired. Capital lease 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. The Company incurred $5.0 million of new obligations under various financing arrangements related to equipment, assets and other in the quarter ended August 31, 2015.

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Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Other Noncurrent Liabilities
Reclamation costs	$ 19,222	$ 18,835
Executive deferred compensation liability	5,441	5,512
PIK accrued interest	9,221	10,394
Other	11,577	11,533
Total other noncurrent liabilities	$ 45,461	$ 46,274	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Nature of Operations and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Inventory [Line Items]
Inventories	$ 106,161	$ 102,206	[1]
Crushed stone, agricultural lime and sand
Inventory [Line Items]
Inventories	70,615	70,112
Safety equipment
Inventory [Line Items]
Inventories	16,805	14,187
Parts, tires and supplies
Inventory [Line Items]
Inventories	7,369	7,753
Raw materials
Inventory [Line Items]
Inventories	9,304	7,980
Building materials
Inventory [Line Items]
Inventories	1,141	1,066
Other
Inventory [Line Items]
Inventories	$ 927	$ 1,108

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Nature of Operations and Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Accounting Policies [Abstract]
Costs and estimated earnings in excess of billings	$ 37,000	$ 7,392
Trade	120,467	39,792
Retainages	6,409	7,281
Accounts receivable, gross	163,876	54,465
Allowance for doubtful accounts	(3,848)	(4,564)
Accounts receivable, net	$ 160,028	$ 49,901	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Commitments and Contingencies (Details)	6 Months Ended
	Aug. 31, 2015 USD ($) self-insurance_program	Feb. 28, 2015 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Self insurance retention per occurrence	$ 1,000,000.0
Amount of surety bond to be maintained with the Commonwealth of Pennsylvania	$ 2,400,000.0
Number of self-insurance programs maintained for health coverage | self-insurance_program	4
Maximum losses per employee under self-insurance health coverage programs	$ 300,000.0
Letter of credit provided to guarantee payment of deductible portion of liability coverage which existed prior to January 1, 2008	100,000.0
Other Commitments [Line Items]
Self Insurance Reserve	17,900,000	$ 15,500,000
Insurance Claims | Other Noncurrent Liabilities
Other Commitments [Line Items]
Liability related to insurance settlement receivable	6,700,000
Rock Solid Insurance Company
Other Commitments [Line Items]
Collateral Amount Recorded as Part of Restricted Cash	15,500,000	15,500,000
Exposures for periods prior to captive insurance policy	$ 10,000,000	$ 9,100,000

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Nature of Operations and Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 851,618	$ 850,880
Less: Accumulated depreciation and depletion	(552,296)	(540,606)
Property, Plant and Equipment, Net	299,322	310,274	[1]
Limestone and sand acreage
Property, Plant and Equipment [Line Items]
Property, plant and equipment	145,012	146,293
Land, buildings and building improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment	78,713	87,097
Crushing, prestressing and manufacturing plants
Property, Plant and Equipment [Line Items]
Property, plant and equipment	304,686	305,923
Contracting equipment vehicles and other
Property, Plant and Equipment [Line Items]
Property, plant and equipment	317,218	307,644
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 5,989	$ 3,923

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Nature of Operations and Summary of Significant Accounting Policies (Details 5) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Accounting Policies [Abstract]
Goodwill	$ 81,492	$ 87,132	[1]
Inventory	0	961
PP&E, net of impairment	9,888	7,556
Assets held for sale	$ 9,888	$ 8,517	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Accrued Liabilities

6 Months Ended

Aug. 31, 2015

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consist of the following: 

	August 31,		February 28,
(In thousands)	2015		2015
Insurance	$	27,927	$	24,565
Interest	25,406		23,408
Payroll and vacation	9,107		5,805
Withholding taxes	1,478		858
Billings in excess of costs and estimated earnings on uncompleted contracts	3,138		3,082
Contract expenses *	5,888		2,676
Other	6,739		4,486
Total accrued liabilities	$	79,683	$	64,880

* Included within contract expenses is $1.1 million and $1.5 million of provision for loss contracts as of August 31, 2015 and February 28, 2015, respectively.

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Nature of Operations and Summary of Significant Accounting Policies (Details 6) $ in Thousands	6 Months Ended
	Aug. 31, 2015 USD ($)
Restructuring Reserve [Roll Forward]
Balance at February 28, 2015	$ 1,461
Restructuring charges incurred	0
Payments on or reductions of accrued restructuring charges	1,200
Balance at August 31, 2015	$ 261

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Long-Term Debt (Details 5) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2015	Aug. 31, 2014
Debt Disclosure [Abstract]
Capital lease and other non-cash obligations incurred	$ 5,000	$ 5,974	$ 1,837

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Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015	[1]
Current assets
Cash and cash equivalents	$ 21,425	$ 13,293
Restricted cash	17,022	17,177
Accounts receivable, less reserves of $3,848 and $4,564 respectively	160,028	49,901
Inventories	106,161	102,206
Deferred income taxes	2,630	2,630
Other current assets	9,746	8,885
Assets held for sale	9,888	8,517
Total current assets	326,900	202,609
Property, plant and equipment, net	299,322	310,274
Goodwill	81,492	87,132
Other intangible assets, net	17,814	18,933
Other noncurrent assets	30,732	31,422
Total assets	756,260	650,370
Current liabilities
Current maturities of long-term debt	39,349	8,528
Accounts payable - trade	53,679	15,652
Accrued liabilities	79,683	64,880
Total current liabilities	172,711	89,060
Long-term debt, less current maturities	664,122	650,267
Deferred income taxes	29,206	28,727
Other noncurrent liabilities	45,461	46,274
Total liabilities	911,500	814,328
Commitments and contingencies (Note 2 and Note 8)	0	0
Deficit
Accumulated deficit	(282,227)	(290,887)
Additional paid-in capital	126,962	126,962
Accumulated other comprehensive loss	(2,041)	(2,119)
Total New Enterprise Stone & Lime Co., Inc. deficit	(157,032)	(165,770)
Noncontrolling interest in consolidated subsidiaries	1,792	1,812
Total deficit	(155,240)	(163,958)
Total liabilities and deficit	756,260	650,370
Common Stock, Class A
Deficit
Common stock	1	1
Common Stock, Class B
Deficit
Common stock	$ 273	$ 273

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Business Segments (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2015 USD ($)	Aug. 31, 2014 USD ($)	Aug. 31, 2015 USD ($) segment	Aug. 31, 2014 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment			3
Segment Reporting
Revenue	$ 246,555	$ 247,569	$ 387,271	$ 387,997
Operating income (loss)	50,547	32,030	51,571	22,679
Depreciation, depletion and amortization	10,344	11,157	20,299	22,247
Construction materials
Segment Reporting
Revenue	178,280	178,408	270,146	277,521
Operating income (loss)	48,996	39,303	62,656	45,390
Depreciation, depletion and amortization	6,858	7,531	13,523	14,729
Heavy/highway construction
Segment Reporting
Revenue	107,799	101,624	158,480	145,722
Operating income (loss)	8,203	7,986	6,991	4,889
Depreciation, depletion and amortization	1,880	2,045	3,577	4,338
Traffic Safety Services and Equipment [Member]
Segment Reporting
Revenue	27,336	27,155	51,498	50,821
Operating income (loss)	3,207	2,613	4,816	3,703
Depreciation, depletion and amortization	1,261	1,201	2,496	2,443
Segment totals
Segment Reporting
Revenue	313,415	307,187	480,124	474,064
Eliminations
Segment Reporting
Revenue	(66,860)	(59,618)	(92,853)	(86,067)
Corporate and unallocated
Segment Reporting
Operating income (loss)	(9,859)	(17,872)	(22,892)	(31,303)
Depreciation, depletion and amortization	$ 345	$ 380	$ 703	$ 737

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Nature of Operations and Summary of Significant Accounting Policies

6 Months Ended

Aug. 31, 2015

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.

Construction materials is comprised of aggregate production, including crushed stone and construction sand and gravel, hot mix asphalt production, and ready mixed concrete production.  Heavy/highway construction includes heavy construction, blacktop paving and other site preparation services. The Company's heavy/highway construction operations are primarily supplied with construction materials from our construction materials segment.  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.

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”) and include the accounts of the Company and its wholly owned subsidiary companies, and their wholly owned subsidiary companies, and entities where the Company has a controlling equity interest. 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 year-end condensed balance sheet data at February 28, 2015 was derived from audited financial statements, but does 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, 2015 filed with the Securities and Exchange Commission (“SEC”) on May 18, 2015. The results for interim periods are not necessarily indicative of the results for the full fiscal year ending February 29, 2016 ("fiscal 2016").

Related Party Transactions

The Company has certain related party transactions, including: (i) an arrangement to lease its precast/prestressed structural concrete operations in Roaring Spring, PA to an entity controlled by a member of the Company's Board of Directors and stockholder; (ii) investments in Means to Go., LLC, in which the Company has an ownership interest of 50% or less, and an aircraft lease agreement with Means to Go, LLC; (iii) South Woodbury, L.P. owns an office building in Roaring Spring, PA and an office building that is being used as the Company's corporate headquarters in New Enterprise, PA; and (iv) payments of consulting fees to Larry R. Webber, a director of the Company, per a management consulting agreement.

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. All material intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain items previously reported in prior period financial statement captions have been conformed to agree with the current presentation. The expenses associated with certain benefit programs previously disclosed within the Pension and profit sharing caption have been reclassified to the Cost of revenue and to the Selling, administrative and general captions in the Condensed Consolidated Statements of Comprehensive Income (Loss) in the amounts of $1.7 million and $0.2 million, respectively for the three months ended August 31, 2014 and $3.0 million and $0.3 million, respectively, for the six months endedAugust 31, 2014. The reclassification had no effect on Operating income, Comprehensive income (loss) within the Condensed Consolidated Statements of Comprehensive Income (Loss), the Condensed Consolidated Statement of Cash Flows, or the Condensed Consolidated Balance Sheets.

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 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.  In addition, the Company has agreed to provide cash dominion for all accounts associated with this arrangement. Accordingly, the Company classifies net aggregate cash overdraft positions as other obligations within the current maturities of long-term debt, as applicable.

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 allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable, including service charges.  The Company determines the allowance based on historical write-off experience, specific identification based on a review of individual past due balances and their composition, and the nature of the customer.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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

	August 31,			February 28,
(In thousands)	2015			2015
Costs and estimated earnings in excess of billings	$	37,000		$	7,392
Trade	120,467			39,792
Retainages	6,409			7,281
	163,876			54,465
Allowance for doubtful accounts	(3,848		)	(4,564		)
Accounts receivable, net	$	160,028		$	49,901

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:

	August 31,		February 28,
(In thousands)	2015		2015
Crushed stone, agricultural lime and sand	$	70,615	$	70,112
Safety equipment	16,805		14,187
Parts, tires and supplies	7,369		7,753
Raw materials	9,304		7,980
Building materials	1,141		1,066
Other	927		1,108
Total inventories	$	106,161	$	102,206

Property, Plant and Equipment

Property, plant and equipment are carried at cost.  Assets under capital leases are stated at the lesser of the present value of minimum lease payments or the fair value of the leased item.  Provision for depreciation is generally computed over estimated service lives by the straight-line method.

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

	August 31,			February 28,
(In thousands)	2015			2015
Limestone and sand acreage	$	145,012		$	146,293
Land, buildings and building improvements	78,713			87,097
Crushing, prestressing and manufacturing plants	304,686			305,923
Contracting equipment vehicles and other	317,218			307,644
Construction in progress	5,989			3,923
Property, plant and equipment	851,618			850,880
Less: Accumulated depreciation and depletion	(552,296		)	(540,606		)
Property, plant and equipment, net	$	299,322		$	310,274

For the three months ended August 31, 2015 and 2014, depreciation expense was $9.0 million and $9.9 million, respectively.  For the six months ended August 31, 2015 and 2014, depreciation expense was $18.1 million and $20.1 million, respectively. 

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 quality 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.

During the six months ended August 31, 2015, the Company finalized its sale of certain properties previously recorded in Assets Held for Sale at February 28, 2015 for $7.1 million and the assumption of $1.1 million in liabilities. The Company recorded a gain of approximately $3.1 million and recorded additional impairment of approximately $0.1 million on these sales in the six months ended August 31, 2015.

During the six months ended August 31, 2015, the Company entered into and completed the sale of certain assets for $11.2 million, and the assumption of $0.3 million of liabilities, pending final purchase price adjustments. Goodwill and Other intangibles of $6.3 million were allocated to the sale of these business operations. The sale of these business operations resulted in a gain of $0.6 million. Due to the timing of closing, the Company did not receive the cash proceeds until subsequent to August 31, 2015, as such the Company recorded a receivable and other assets which is included in Accounts receivable and Other noncurrent assets on the Condensed Consolidated Balance Sheet.

During the six months ended August 31, 2015, the Company determined it was going to sell certain assets, which totaled $6.4 million. The assets were classified as part of Assets Held for Sale as of August 31, 2015. No additional impairments were recorded. The remaining Assets Held for Sale at August 31, 2015 are comprised primarily of non-core operations related to excess property at its Wescosville, PA location and excess office buildings.

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

	August 31, 2015		February 28, 2015
Inventory	$	—	$	961
PP&E, net of impairment	9,888		7,556
Total assets held for sale	$	9,888	$	8,517

Restructuring

The Company initiated, during fiscal year 2014, and substantially concluded in fiscal year 2015, a cost savings and operational efficiency plan (the “Plan”).  The Plan focused on headcount reductions, operational efficiencies, administrative savings, and a management realignment. 

The following table presents changes to Accrued restructuring, included in Accrued liabilities on the Condensed Consolidated Financial Statements:

(In thousands)	Accrued restructuring
Balance at February 28, 2015	$	1,461
Additional accruals recorded	—
Payments on or reductions of accrued restructuring charges	1,200
Balance at August 31, 2015	$	261

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.

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 under the first step, step two does not need to be performed.

Our reporting units were determined based on our organizational 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 as of 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 as of February 28, 2015.

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

During the three and six months ended August 31, 2015, the Company allocated $5.6 million of Goodwill to the sale of certain assets.

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.

During the three and six months ended August 31, 2015, the Company allocated $0.7 million of other intangibles to the sale of certain assets.

Other Noncurrent Assets

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

	August 31,		February 28,
(In thousands)	2015		2015
Deferred financing fees (less current portion of $2,394 and $2,905, respectively)	$	8,662	$	10,314
Capitalized software (net of accumulated amortization of $3,909 and $3,364, respectively)	7,247		7,553
Cash surrender value of life insurance (net of loans of $3,035)	1,250		1,249
Deferred stripping costs	4,967		4,514
Other	8,606		7,792
Total other noncurrent assets	$	30,732	$	31,422

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.  Our construction contracts are primarily fixed-price contracts. 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 for the full amount of estimated loss in the period in which evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue and are recorded as an additional cost (rather than as a reduction of revenue). 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 August 31, 2015 and February 28, 2015, 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 Condensed Consolidated Balance Sheets.

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 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 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.

Other revenue consists of sales of miscellaneous materials, scrap and other products that do not fall into our other primary lines of business. The Company generally recognizes revenue when the customer takes title and assumes risk of loss, the price is fixed or determinable and collection is reasonably assured.

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. We have realigned our current regional structure by combining Lancaster, Pennsylvania and Northeastern Pennsylvania into our Eastern Region, Central Pennsylvania, Chambersburg, Shippensburg and Gettysburg Pennsylvania into our Western Region, and Western New York into our North Region. 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 August 2015, the FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting  (SEC Update). ASU 2015-15 is being issued to clarify the SEC staff’s positionon presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on this topic in ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendment is effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. The amendments in all three parts of this Update are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. An entity should apply the amendments in Parts I and II retrospectively for all financial statements presented. An entity should apply the amendments on Part III prospectively. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. Effective for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The amendments in this Update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. Effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services—Insurance (Topic 944): Disclosures about Short-Duration Contracts. Effective for public business entities for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The Company does not expect this standard to impact its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Effective for annual and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption of the amendments in this update are permitted. The Company does not expect this standard to impact its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-04, Compensation - Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. Early adoption of the amendments in this update are permitted. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2015 and for interim periods within fiscal years beginning after December 15, 2016. Early adoption of the amendments in this update are permitted for financial statements that have not been previously issued. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standards requires an entity's management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Public entities are required to apply standards for annual reporting periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

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Accrued Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Aug. 31, 2015	Feb. 28, 2015
Payables and Accruals [Abstract]
Loss on Contracts	$ 1,100	$ 1,500
Accrued Liabilities
Insurance	27,927	24,565
Interest	25,406	23,408
Payroll and vacation	9,107	5,805
Withholding taxes	1,478	858
Billings in excess of costs and estimated earnings on uncompleted contracts	3,138	3,082
Contract expenses	5,888	2,676
Other	6,739	4,486
Total accrued liabilities	$ 79,683	$ 64,880	[1]

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Retirement and Benefit Programs (Tables)

6 Months Ended

Aug. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic pension expense recognized

Net periodic pension expense recognized was as follows:

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Net periodic benefit cost
Service cost	$	78		$	86		$	156		$	172
Interest cost	93			105			186			210
Expected return on plan assets	(155		)	(150		)	(310		)	(300		)
Amortization of prior service cost	13			14			26			28
Recognized net actuarial loss	54			50			108			101
Total pension expense	$	83		$	105		$	166		$	211

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Long-Term Debt (Details) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Debt Instrument [Line Items]
Total debt	$ 703,471	$ 658,795
Less: Current portion	(39,349)	(8,528)	[1]
Total long-term debt	664,122	650,267	[1]
RCA
Debt Instrument [Line Items]
ABL facility, borrowing available	$ 25,800	27,300
Stated interest rate (as a percent)	6.25%
Total debt	$ 35,963	5,873
Notes due 2018
Debt Instrument [Line Items]
Stated interest rate (as a percent)	11.00%
Total debt	$ 250,000	250,000
Secured Notes due 2018
Debt Instrument [Line Items]
Stated interest rate (as a percent)	13.00%
Total debt	$ 335,294	323,956
Term loan
Debt Instrument [Line Items]
Stated interest rate (as a percent)	8.00%
Total debt	$ 70,000	70,000
Land, equipment and other obligations
Debt Instrument [Line Items]
Total debt	$ 12,214	$ 8,966

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Business Segments (Tables)

6 Months Ended

Aug. 31, 2015

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   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Revenue
Construction materials	$	178,280		$	178,408		$	270,146		$	277,521
Heavy/highway construction	107,799			101,624			158,480			145,722
Traffic safety services and equipment	27,336			27,155			51,498			50,821
Segment totals	313,415			307,187			480,124			474,064
Eliminations	(66,860		)	(59,618		)	(92,853		)	(86,067		)
Total revenue	$	246,555		$	247,569		$	387,271		$	387,997
Operating income
Construction materials	$	48,996		$	39,303		$	62,656		$	45,390
Heavy/highway construction	8,203			7,986			6,991			4,889
Traffic safety services and equipment	3,207			2,613			4,816			3,703
Corporate and unallocated	(9,859		)	(17,872		)	(22,892		)	(31,303		)
Total operating income	$	50,547		$	32,030		$	51,571		$	22,679

	Three Months Ended   August 31,				Six Months Ended   August 31,
(In thousands)	2015		2014		2015		2014
Depreciation, depletion and amortization
Construction materials	$	6,858	$	7,531	$	13,523	$	14,729
Heavy/highway construction	1,880		2,045		3,577		4,338
Traffic safety services and equipment	1,261		1,201		2,496		2,443
Corporate and unallocated	345		380		703		737
Total depreciation, depletion and amortization	$	10,344	$	11,157	$	20,299	$	22,247

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Risks and Uncertainties

6 Months Ended

Aug. 31, 2015

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, 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 (ii) term loan credit and guaranty agreement, 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 Loans”, and together with RCA, the “Credit Facilities”). The Credit Facilities contain certain financial maintenance and other covenants (Note 4, "Long-Term Debt"). 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 the $265 million13% senior secured notes due 2018 (the "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 RCA, to fund our business and operations, including capital expenditures and debt service obligations, for at least the next twelve months. At August 31, 2015, the Company was in compliance with all of its financial covenants.

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Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Aug. 31, 2015	Feb. 28, 2015
Accounts receivable, reserves	$ 3,848	$ 4,564
Common Stock, Class A
Redeemable Common stock, par value (in dollars per share)	$ 1	$ 1
Common Stock, Class B
Redeemable Common stock, par value (in dollars per share)	$ 1	$ 1

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Subsequent Events (Notes)

6 Months Ended

Aug. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On September 24, 2015, the Board of Directors of New Enterprise Stone & Lime Co., Inc. (the “Company”) amended and restated the Executive Benefit Plan (the “Plan”) to, among other things, terminate the death and disability benefits under the Plan effective December 31, 2015. The amended Plan also reflects the prior freeze of Plan contributions and cessation of crediting earnings and losses on participant account balances effective December 31, 2015.

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Document and Entity Information - shares	6 Months Ended
	Aug. 31, 2015	Oct. 13, 2015
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	Aug. 31, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Common Stock, Class A
Entity Common Stock, Shares Outstanding		500
Common Stock, Class B
Entity Common Stock, Shares Outstanding		273,285

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

6 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

Basis of Accounting

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”) and include the accounts of the Company and its wholly owned subsidiary companies, and their wholly owned subsidiary companies, and entities where the Company has a controlling equity interest. 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 year-end condensed balance sheet data at February 28, 2015 was derived from audited financial statements, but does 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, 2015 filed with the Securities and Exchange Commission (“SEC”) on May 18, 2015. The results for interim periods are not necessarily indicative of the results for the full fiscal year ending February 29, 2016 ("fiscal 2016").

Related Party Transactions

Related Party Transactions

The Company has certain related party transactions, including: (i) an arrangement to lease its precast/prestressed structural concrete operations in Roaring Spring, PA to an entity controlled by a member of the Company's Board of Directors and stockholder; (ii) investments in Means to Go., LLC, in which the Company has an ownership interest of 50% or less, and an aircraft lease agreement with Means to Go, LLC; (iii) South Woodbury, L.P. owns an office building in Roaring Spring, PA and an office building that is being used as the Company's corporate headquarters in New Enterprise, PA; and (iv) payments of consulting fees to Larry R. Webber, a director of the Company, per a management consulting agreement.

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. All material intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications

Certain items previously reported in prior period financial statement captions have been conformed to agree with the current presentation. The expenses associated with certain benefit programs previously disclosed within the Pension and profit sharing caption have been reclassified to the Cost of revenue and to the Selling, administrative and general captions in the Condensed Consolidated Statements of Comprehensive Income (Loss) in the amounts of $1.7 million and $0.2 million, respectively for the three months ended August 31, 2014 and $3.0 million and $0.3 million, respectively, for the six months endedAugust 31, 2014. The reclassification had no effect on Operating income, Comprehensive income (loss) within the Condensed Consolidated Statements of Comprehensive Income (Loss), the Condensed Consolidated Statement of Cash Flows, or the Condensed Consolidated Balance Sheets.

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 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.  In addition, the Company has agreed to provide cash dominion for all accounts associated with this arrangement. Accordingly, the Company classifies net aggregate cash overdraft positions as other obligations within the current maturities of long-term debt, as applicable.

Accounts Receivable

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 allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable, including service charges.  The Company determines the allowance based on historical write-off experience, specific identification based on a review of individual past due balances and their composition, and the nature of the customer.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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.

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 quality 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.

During the six months ended August 31, 2015, the Company finalized its sale of certain properties previously recorded in Assets Held for Sale at February 28, 2015 for $7.1 million and the assumption of $1.1 million in liabilities. The Company recorded a gain of approximately $3.1 million and recorded additional impairment of approximately $0.1 million on these sales in the six months ended August 31, 2015.

During the six months ended August 31, 2015, the Company entered into and completed the sale of certain assets for $11.2 million, and the assumption of $0.3 million of liabilities, pending final purchase price adjustments. Goodwill and Other intangibles of $6.3 million were allocated to the sale of these business operations. The sale of these business operations resulted in a gain of $0.6 million. Due to the timing of closing, the Company did not receive the cash proceeds until subsequent to August 31, 2015, as such the Company recorded a receivable and other assets which is included in Accounts receivable and Other noncurrent assets on the Condensed Consolidated Balance Sheet.

During the six months ended August 31, 2015, the Company determined it was going to sell certain assets, which totaled $6.4 million. The assets were classified as part of Assets Held for Sale as of August 31, 2015. No additional impairments were recorded. The remaining Assets Held for Sale at August 31, 2015 are comprised primarily of non-core operations related to excess property at its Wescosville, PA location and excess office buildings.

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

	August 31, 2015		February 28, 2015
Inventory	$	—	$	961
PP&E, net of impairment	9,888		7,556
Total assets held for sale	$	9,888	$	8,517

Restructuring

Restructuring

The Company initiated, during fiscal year 2014, and substantially concluded in fiscal year 2015, a cost savings and operational efficiency plan (the “Plan”).  The Plan focused on headcount reductions, operational efficiencies, administrative savings, and a management realignment. 

The following table presents changes to Accrued restructuring, included in Accrued liabilities on the Condensed Consolidated Financial Statements:

(In thousands)	Accrued restructuring
Balance at February 28, 2015	$	1,461
Additional accruals recorded	—
Payments on or reductions of accrued restructuring charges	1,200
Balance at August 31, 2015	$	261

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.

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 under the first step, step two does not need to be performed.

Our reporting units were determined based on our organizational 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 as of 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 as of February 28, 2015.

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

During the three and six months ended August 31, 2015, the Company allocated $5.6 million of Goodwill to the sale of certain assets.

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.

During the three and six months ended August 31, 2015, the Company allocated $0.7 million of other intangibles to the sale of certain assets.

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.  Our construction contracts are primarily fixed-price contracts. 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 for the full amount of estimated loss in the period in which evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue and are recorded as an additional cost (rather than as a reduction of revenue). 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 August 31, 2015 and February 28, 2015, 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 Condensed Consolidated Balance Sheets.

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 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 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.

Other revenue consists of sales of miscellaneous materials, scrap and other products that do not fall into our other primary lines of business. The Company generally recognizes revenue when the customer takes title and assumes risk of loss, the price is fixed or determinable and collection is reasonably assured.

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. We have realigned our current regional structure by combining Lancaster, Pennsylvania and Northeastern Pennsylvania into our Eastern Region, Central Pennsylvania, Chambersburg, Shippensburg and Gettysburg Pennsylvania into our Western Region, and Western New York into our North Region. 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 August 2015, the FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting  (SEC Update). ASU 2015-15 is being issued to clarify the SEC staff’s positionon presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on this topic in ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendment is effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. The amendments in all three parts of this Update are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. An entity should apply the amendments in Parts I and II retrospectively for all financial statements presented. An entity should apply the amendments on Part III prospectively. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. Effective for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The amendments in this Update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. Effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services—Insurance (Topic 944): Disclosures about Short-Duration Contracts. Effective for public business entities for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The Company does not expect this standard to impact its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Effective for annual and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption of the amendments in this update are permitted. The Company does not expect this standard to impact its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-04, Compensation - Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. Early adoption of the amendments in this update are permitted. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2015 and for interim periods within fiscal years beginning after December 15, 2016. Early adoption of the amendments in this update are permitted for financial statements that have not been previously issued. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standards requires an entity's management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Public entities are required to apply standards for annual reporting periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

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Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Revenue
Construction materials	$ 115,853	$ 123,500	$ 185,731	$ 200,145
Heavy/highway construction	107,799	101,624	158,480	145,722
Traffic safety services and equipment	22,903	22,445	43,060	42,130
Total revenue	246,555	247,569	387,271	387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)
Construction materials	62,762	78,500	111,603	139,925
Heavy/highway construction	97,982	91,763	148,223	136,988
Traffic safety services and equipment	16,956	16,288	32,824	31,509
Total cost of revenue	177,700	186,551	292,650	308,422
Depreciation, depletion and amortization	10,344	11,157	20,299	22,247
Asset impairment	0	3,343	183	5,023
Selling, administrative and general expenses	11,697	14,649	26,401	29,936
Gain on disposals of property, equipment and software	(3,733)	(161)	(3,833)	(310)
Operating income (loss)	50,547	32,030	51,571	22,679
Interest expense, net	(21,146)	(20,380)	(42,216)	(40,706)
Income (loss) before income taxes	29,401	11,650	9,355	(18,027)
Income tax expense (benefit)	1,331	900	423	(1,342)
Net income (loss)	28,070	10,750	8,932	(16,685)
Less: Comprehensive income attributable to noncontrolling interest	(137)	(177)	(272)	(352)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933	10,573	8,660	(17,037)
Unrealized actuarial gains and amortization of prior service costs, net of income taxes	39	38	78	77
Comprehensive income (loss)	28,109	10,788	9,010	(16,608)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$ 27,972	$ 10,611	$ 8,738	$ (16,960)

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Other Noncurrent Liabilities

6 Months Ended

Aug. 31, 2015

Other Liabilities Disclosure [Abstract]

Other Noncurrent Liabilities

Other Noncurrent Liabilities

The Company's other noncurrent liabilities consist of:

	August 31,		February 28,
(In thousands)	2015		2015
Reclamation costs	$	19,222	$	18,835
Executive deferred compensation liability	5,441		5,512
PIK accrued interest	9,221		10,394
Other	11,577		11,533
	$	45,461	$	46,274

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Retirement and Benefit Programs

6 Months Ended

Aug. 31, 2015

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 included within Cost of revenue and Selling, administrative and general expenses in the amounts of $1.4 million and $0.1 million, respectively, for the three months ended August 31, 2015, and $1.7 million and $0.2 million, respectively for the three months ended August 31, 2014. The expense associated with these programs is included within Cost of revenue and Selling, administrative and general expenses in the amounts of $2.9 million and $0.2 million, respectively, for the six months ended August 31, 2015, and $3.0 million and $0.3 million, respectively for the six months ended August 31, 2014.

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 was as follows:

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Net periodic benefit cost
Service cost	$	78		$	86		$	156		$	172
Interest cost	93			105			186			210
Expected return on plan assets	(155		)	(150		)	(310		)	(300		)
Amortization of prior service cost	13			14			26			28
Recognized net actuarial loss	54			50			108			101
Total pension expense	$	83		$	105		$	166		$	211

The Company made contributions to the defined benefit pension plans of approximately $0.2 million during the six months ended August 31, 2015 and August 31, 2014, and expects to make additional contributions of approximately $0.2 million in the remainder of fiscal year 2016.

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Other Noncurrent Liabilities (Tables)

6 Months Ended

Aug. 31, 2015

Other Liabilities Disclosure [Abstract]

Schedule of other noncurrent liabilities

The Company's other noncurrent liabilities consist of:

	August 31,		February 28,
(In thousands)	2015		2015
Reclamation costs	$	19,222	$	18,835
Executive deferred compensation liability	5,441		5,512
PIK accrued interest	9,221		10,394
Other	11,577		11,533
	$	45,461	$	46,274

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

6 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

Schedule of Accounts Receivable

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

	August 31,			February 28,
(In thousands)	2015			2015
Costs and estimated earnings in excess of billings	$	37,000		$	7,392
Trade	120,467			39,792
Retainages	6,409			7,281
	163,876			54,465
Allowance for doubtful accounts	(3,848		)	(4,564		)
Accounts receivable, net	$	160,028		$	49,901

Schedule of Inventories

The Company’s total inventories consist of the following:

	August 31,		February 28,
(In thousands)	2015		2015
Crushed stone, agricultural lime and sand	$	70,615	$	70,112
Safety equipment	16,805		14,187
Parts, tires and supplies	7,369		7,753
Raw materials	9,304		7,980
Building materials	1,141		1,066
Other	927		1,108
Total inventories	$	106,161	$	102,206

Schedule of Property Plant and Equipment Components

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

	August 31,			February 28,
(In thousands)	2015			2015
Limestone and sand acreage	$	145,012		$	146,293
Land, buildings and building improvements	78,713			87,097
Crushing, prestressing and manufacturing plants	304,686			305,923
Contracting equipment vehicles and other	317,218			307,644
Construction in progress	5,989			3,923
Property, plant and equipment	851,618			850,880
Less: Accumulated depreciation and depletion	(552,296		)	(540,606		)
Property, plant and equipment, net	$	299,322		$	310,274

Schedule of Assets Held for Sale

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

	August 31, 2015		February 28, 2015
Inventory	$	—	$	961
PP&E, net of impairment	9,888		7,556
Total assets held for sale	$	9,888	$	8,517

Schedule of Changes to Accrued Restructuring Costs

The following table presents changes to Accrued restructuring, included in Accrued liabilities on the Condensed Consolidated Financial Statements:

(In thousands)	Accrued restructuring
Balance at February 28, 2015	$	1,461
Additional accruals recorded	—
Payments on or reductions of accrued restructuring charges	1,200
Balance at August 31, 2015	$	261

Schedule of Other Noncurrent Assets

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

	August 31,		February 28,
(In thousands)	2015		2015
Deferred financing fees (less current portion of $2,394 and $2,905, respectively)	$	8,662	$	10,314
Capitalized software (net of accumulated amortization of $3,909 and $3,364, respectively)	7,247		7,553
Cash surrender value of life insurance (net of loans of $3,035)	1,250		1,249
Deferred stripping costs	4,967		4,514
Other	8,606		7,792
Total other noncurrent assets	$	30,732	$	31,422

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Supplemental Disclosures of Cash Flow Information (Notes)

6 Months Ended

Aug. 31, 2015

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosures of Cash Flow Information

Supplemental Disclosures of Cash Flow Information

The following table shows the supplemental information related to our cash flows for the six months ended August 31, 2015 and August 31, 2014:

(In thousands)	August 31, 2015		August 31, 2014
Capital lease and other non-cash obligations incurred	$	5,974	$	1,837
Cash paid for interest, net of amounts capitalized	27,898		25,488

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Commitments and Contingencies

6 Months Ended

Aug. 31, 2015

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 claim with the excess covered by workers’ compensation excess liability insurance. The Company is required to maintain a $2.4 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 four self-insurance programs for health coverage with losses limited to $0.3 million per member per year.  Additionally, the Company is required to and does provide a letter of credit in the amount of $0.1 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. Rock Solid is required to maintain a Collateral Trust Agreement with an insurer for 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 August 31, 2015 and February 28, 2015 in our Condensed Consolidated Balance Sheets. Reserves for retained losses within this captive, which are recorded in accrued liabilities in our Condensed Consolidated Balance Sheets, were approximately $17.9 million and $15.5 million as of August 31, 2015 and February 28, 2015, respectively. 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 $10.0 million and $9.1 million as of August 31, 2015 and February 28, 2015, respectively. Included in Other noncurrent assets is approximately $6.7 million as of August 31, 2015 for recoverable amounts from insurance companies for claims in excess of deductibility. Liabilities associated with amounts that are payable by insurance companies of approximately $6.7 million were recorded in other noncurrent liabilities in our Condensed Consolidated Balance Sheets as of August 31, 2015 and February 28, 2015.

On December 15, 2014, the Company entered into an arrangement to lease its precast/prestressed structural concrete operations in Roaring Spring, PA for a term of seven years to an entity controlled by a member of the Company's Board of Directors and stockholder, James W. Van Buren, who is the principal of MacInnis Group, LLC ("the Lessee").

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Business Segments

6 Months Ended

Aug. 31, 2015

Segment Reporting [Abstract]

Business Segments

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.  A description of the services and product offerings within each of the Company’s segments is provided below.

The Company reviews earnings of the segments principally at the operating profit level 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 profit consists of revenue less operating 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 profit. These costs include corporate administrative functions, unallocated corporate functions and other business line administrative functions. 

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

	Three Months Ended   August 31,						Six Months Ended   August 31,
(In thousands)	2015			2014			2015			2014
Revenue
Construction materials	$	178,280		$	178,408		$	270,146		$	277,521
Heavy/highway construction	107,799			101,624			158,480			145,722
Traffic safety services and equipment	27,336			27,155			51,498			50,821
Segment totals	313,415			307,187			480,124			474,064
Eliminations	(66,860		)	(59,618		)	(92,853		)	(86,067		)
Total revenue	$	246,555		$	247,569		$	387,271		$	387,997
Operating income
Construction materials	$	48,996		$	39,303		$	62,656		$	45,390
Heavy/highway construction	8,203			7,986			6,991			4,889
Traffic safety services and equipment	3,207			2,613			4,816			3,703
Corporate and unallocated	(9,859		)	(17,872		)	(22,892		)	(31,303		)
Total operating income	$	50,547		$	32,030		$	51,571		$	22,679

	Three Months Ended   August 31,				Six Months Ended   August 31,
(In thousands)	2015		2014		2015		2014
Depreciation, depletion and amortization
Construction materials	$	6,858	$	7,531	$	13,523	$	14,729
Heavy/highway construction	1,880		2,045		3,577		4,338
Traffic safety services and equipment	1,261		1,201		2,496		2,443
Corporate and unallocated	345		380		703		737
Total depreciation, depletion and amortization	$	10,344	$	11,157	$	20,299	$	22,247

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Condensed Issuer, Guarantor and Non Guarantor Financial Information

6 Months Ended

Aug. 31, 2015

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 August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	14,391		$	1,197	$	5,837		$	—		$	21,425
Restricted cash	1,172			61		15,789			—			17,022
Accounts receivable, net	142,862			17,160		6			—			160,028
Inventories	89,383			16,778		—			—			106,161
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	1,918			712		—			—			2,630
Other current assets	9,730			—		16			—			9,746
Assets held for sale	3,522			6,366		—			—			9,888
Total current assets	262,978			42,274		22,295			(647		)	326,900
Property, plant and equipment, net	284,582			14,740		5,961			(5,961		)	299,322
Goodwill	75,647			5,845		—			—			81,492
Other intangible assets, net	6,897			10,917		—			—			17,814
Investment in subsidiaries	91,251			—		—			(91,251		)	—
Intercompany receivables	3,308			29,572		(149		)	(32,731		)	—
Other noncurrent assets	27,477			907		2,348			—			30,732
Total Assets	$	752,140		$	104,255	$	30,455		$	(130,590	)	$	756,260
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	39,996		$	—	$	—		$	(647	)	$	39,349
Accounts payable - trade	45,601			7,765		313			—			53,679
Accrued liabilities	60,737			1,942		17,004			—			79,683
Total current liabilities	146,334			9,707		17,317			(647		)	172,711
Intercompany payables	31,527			1,204		—			(32,731		)	—
Long-term debt, less current maturities	658,817			—		5,305			—			664,122
Obligations under capital leases, less current maturities	5,961			—		—			(5,961		)	—
Deferred income taxes	23,945			5,261		—			—			29,206
Other noncurrent liabilities	42,588			525		2,348			—			45,461
Total liabilities	909,172			16,697		24,970			(39,339		)	911,500
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(157,032		)	87,558		3,693			(91,251		)	(157,032		)
Noncontrolling interest	—			—		1,792			—			1,792
Total (deficit) equity	(157,032		)	87,558		5,485			(91,251		)	(155,240		)
Total liabilities and (deficit) equity	$	752,140		$	104,255	$	30,455		$	(130,590	)	$	756,260

Condensed Consolidating Balance Sheet at February 28, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	8,633		$	60		$	4,600		$	—		$	13,293
Restricted cash	1,301			88			15,788			—			17,177
Accounts receivable, net	39,125			10,762			14			—			49,901
Inventories	87,995			14,211			—			—			102,206
Net investment in lease	—			—			1,198			(1,198		)	—
Deferred income taxes	1,918			712			—			—			2,630
Other current assets	8,038			836			11			—			8,885
Assets held for sale	8,517			—			—			—			8,517
Total current assets	155,527			26,669			21,611			(1,198		)	202,609
Property, plant and equipment, net	290,137			20,137			5,810			(5,810		)	310,274
Goodwill	81,287			5,845			—			—			87,132
Other intangible assets, net	7,640			11,293			—			—			18,933
Investment in subsidiaries	85,531			—			—			(85,531		)	—
Intercompany receivables	3,308			29,169			(34		)	(32,443		)	—
Other noncurrent assets	28,097			977			2,348			—			31,422
Total Assets	$	651,527		$	94,090		$	29,735		$	(124,982	)	$	650,370
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	8,955		$	—		$	771		$	(1,198	)	$	8,528
Accounts payable - trade	8,510			6,265			331			546			15,652
Accrued liabilities	47,876			1,508			15,496			—			64,880
Total current liabilities	65,341			7,773			16,598			(652		)	89,060
Intercompany payables	34,087			(1,098		)	—			(32,989		)	—
Long-term debt, less current maturities	645,228			—			5,039			—			650,267
Obligations under capital leases, less current maturities	5,810			—			—			(5,810		)	—
Deferred income taxes	23,466			5,261			—			—			28,727
Other noncurrent liabilities	43,365			561			2,348			—			46,274
Total liabilities	817,297			12,497			23,985			(39,451		)	814,328
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(165,770		)	81,593			3,938			(85,531		)	(165,770		)
Noncontrolling interest	—			—			1,812			—			1,812
Total (deficit) equity	(165,770		)	81,593			5,750			(85,531		)	(163,958		)
Total liabilities and (deficit) equity	$	651,527		$	94,090		$	29,735		$	(124,982	)	$	650,370

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	222,167		$	24,388		$	229		$	(229	)	$	246,555
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	160,022			17,600			217			(139		)	177,700
Depreciation, depletion and amortization	9,036			1,308			—			—			10,344
Asset impairment	—			—			—			—			—
Selling, administrative and general expenses	10,144			1,513			40			—			11,697
Gain on disposals of property, equipment and software	(3,730		)	(3		)	—			—			(3,733		)
Operating income (loss)	46,695			3,970			(28		)	(90		)	50,547
Interest (expense) income, net	(21,215		)	43			(64		)	90			(21,146		)
Income (loss) before income taxes	25,480			4,013			(92		)	—			29,401
Income tax expense	1,331			—			—			—			1,331
Equity in earnings of subsidiaries	3,784			—			—			(3,784		)	—
Net income (loss)	27,933			4,013			(92		)	(3,784		)	28,070
Less: Net income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933			4,013			(229		)	(3,784		)	27,933
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—			—			—			39
Comprehensive income (loss)	27,972			4,013			(92		)	(3,784		)	28,109
Less: Comprehensive income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	27,972		$	4,013		$	(229	)	$	(3,784	)	$	27,972

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

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	223,377		$	24,192		$	1,724		$	(1,724	)	$	247,569
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	168,423			18,226			1,518			(1,616		)	186,551
Depreciation, depletion and amortization	9,905			1,252			—			—			11,157
Asset impairment	3,343			—			—			—			3,343
Selling, administrative and general expenses	12,924			1,670			55			—			14,649
Gain loss on disposals of property, equipment and software	(142		)	(19		)	—			—			(161		)
Operating income (loss)	28,924			3,063			151			(108		)	32,030
Interest (expense) income, net	(20,427		)	(6		)	(55		)	108			(20,380		)
Income (loss) before income taxes	8,497			3,057			96			—			11,650
Income tax expense	900			—			—			—			900
Equity in earnings of subsidiaries	2,976			—			—			(2,976		)	—
Net income (loss)	10,573			3,057			96			(2,976		)	10,750
Less: Net income attributable to noncontrolling interest	—			—			(177		)	—			(177		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	10,573			3,057			(81		)	(2,976		)	10,573
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	38			—			—			—			38
Comprehensive income (loss)	10,611			3,057			96			(2,976		)	10,788
Less: Comprehensive income attributable to noncontrolling interest	—			—			(177		)	—			(177		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	10,611		$	3,057		$	(81	)	$	(2,976	)	$	10,611

Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	341,691		$	45,775		$	3,420		$	(3,615	)	$	387,271
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	258,673			34,269			3,172			(3,464		)	292,650
Depreciation, depletion and amortization	17,717			2,582			—			—			20,299
Asset impairment	160			23			—			—			183
Selling, administrative and general expenses	23,231			3,047			123			—			26,401
Gain on disposals of property, equipment and software	(3,783		)	(50		)	—			—			(3,833		)
Operating income (loss)	45,693			5,904			125			(151		)	51,571
Interest (expense) income, net	(42,330		)	61			(98		)	151			(42,216		)
Income (loss) before income taxes	3,363			5,965			27			—			9,355
Income tax expense	423			—			—			—			423
Equity in earnings of subsidiaries	5,720			—			—			(5,720		)	—
Net income (loss)	8,660			5,965			27			(5,720		)	8,932
Less: Net income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	8,660			5,965			(245		)	(5,720		)	8,660
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	78			—			—			—			78
Comprehensive income (loss)	8,738			5,965			27			(5,720		)	9,010
Less: Comprehensive income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	8,738		$	5,965		$	(245	)	$	(5,720	)	$	8,738

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

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	342,824		$	46,675		$	3,461		$	(4,963	)	$	387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	274,241			35,973			2,956			(4,748		)	308,422
Depreciation, depletion and amortization	19,711			2,536			—			—			22,247
Asset impairment	5,023			—			—			—			5,023
Selling, administrative and general expenses	25,828			4,008			100			—			29,936
Gain loss on disposals of property, equipment and software	(301		)	(9		)	—			—			(310		)
Operating income (loss)	18,322			4,167			405			(215		)	22,679
Interest (expense) income, net	(40,813		)	3			(111		)	215			(40,706		)
Income (loss) before income taxes	(22,491		)	4,170			294			—			(18,027		)
Income tax benefit	(1,342		)	—			—			—			(1,342		)
Equity in earnings of subsidiaries	4,112			—			—			(4,112		)	—
Net income (loss)	(17,037		)	4,170			294			(4,112		)	(16,685		)
Less: Net income attributable to noncontrolling interest	—			—			(352		)	—			(352		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	(17,037		)	4,170			(58		)	(4,112		)	(17,037		)
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	77			—			—			—			77
Comprehensive income (loss)	(16,960		)	4,170			294			(4,112		)	(16,608		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			(352		)	—			(352		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(16,960	)	$	4,170		$	(58	)	$	(4,112	)	$	(16,960	)

Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(17,276	)	$	1,110	$	2,034		$	—	$	(14,132	)
Cash flows from investing activities
Capital expenditures	(11,830		)	—		—			—		(11,830		)
Proceeds from sale of property, equipment and assets held for sale	5,849			—		—			—		5,849
Change in cash value of life insurance	—			—		—			—		—
Change in restricted cash	128			27		(1		)	—		154
Net cash (used in) provided by investing activities	(5,853		)	27		(1		)	—		(5,827		)
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091			—		—			—		30,091
Repayments of other debt	(308		)	—		(505		)	—		(813		)
Payments on capital leases	(896		)	—		—			—		(896		)
Distribution to noncontrolling interest	—			—		(291		)	—		(291		)
Net cash provided by (used in) financing activities	28,887			—		(796		)	—		28,091
Net increase in cash and cash equivalents	5,758			1,137		1,237			—		8,132
Cash and cash equivalents
Beginning of period	8,633			60		4,600			—		13,293
End of period	$	14,391		$	1,197	$	5,837		$	—	$	21,425

Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(19,103	)	$	992		$	1,918		$	—	$	(16,193	)
Cash flows from investing activities
Capital expenditures	(11,014		)	(815		)	—			—		(11,829		)
Proceeds from sale of property and equipment, and assets held for sale	1,177			—			—			—		1,177
Change in cash value of life insurance	(75		)	—			—			—		(75		)
Change in restricted cash	12,191			4			(1		)	—		12,194
Net cash (used in) provided by investing activities	2,279			(811		)	(1		)	—		1,467
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	24,675			—			—			—		24,675
Repayments of other debt	(4,097		)	—			(348		)	—		(4,445		)
Payments on capital leases	(1,594		)	—			—			—		(1,594		)
Debt issuance costs	(756		)	—			—			—		(756		)
Net cash provided by (used in) financing activities	18,228			—			(348		)	—		17,880
Net increase in cash and cash equivalents	1,404			181			1,569			—		3,154
Cash and cash equivalents
Beginning of period	21,344			—			2,548			—		23,892
End of period	$	22,748		$	181		$	4,117		$	—	$	27,046

XML

Risks and Uncertainties (Details) - USD ($)	Aug. 31, 2015	Aug. 31, 2010
Notes due 2018
Debt Instrument [Line Items]
Debt	$ 250,000,000.0	$ 250,000,000.0
Stated interest rate (as a percent)	11.00%
Secured Notes due 2018
Debt Instrument [Line Items]
Debt	$ 265,000,000
Stated interest rate (as a percent)	13.00%

XML

Long-Term Debt (Tables)

6 Months Ended

Aug. 31, 2015

Debt Instrument [Line Items]

Schedule of long-term debt

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

	August 31,			February 28,
(In thousands)	2015			2015
RCA ($46.8 million and $27.3 million available as of August 31, 2015 and February 28, 2015, respectively)	$	35,963		$	5,873
11% Notes, due 2018	250,000			250,000
13% Secured Notes, due 2018	335,294			323,956
Term Loans, interest rate of 8%	70,000			70,000
Other obligations	12,214			8,966
Total debt	703,471			658,795
Less: Current portion	(39,349		)	(8,528		)
Total long-term debt	$	664,122		$	650,267

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 are redeemable, in whole or in part, at the redemption prices specified as follows:

Date	Percentage
March 15, 2015 to March 14, 2016	106.50	%
March 15, 2016 to March 14, 2017	103.25	%
March 15, 2017 and thereafter	100.00	%

Notes due 2018

Debt Instrument [Line Items]

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

Date	Percentage
September 1, 2014 to August 31, 2015	105.50	%
September 1, 2015 to August 31, 2016	102.75	%
September 1, 2016 and thereafter	100.00	%

XML

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

6 Months Ended

Aug. 31, 2015

Condensed Issuer, Guarantor and Non Guarantor Financial Information

Schedule of condensed consolidating balance sheet

Condensed Consolidating Balance Sheet at August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	14,391		$	1,197	$	5,837		$	—		$	21,425
Restricted cash	1,172			61		15,789			—			17,022
Accounts receivable, net	142,862			17,160		6			—			160,028
Inventories	89,383			16,778		—			—			106,161
Net investment in lease	—			—		647			(647		)	—
Deferred income taxes	1,918			712		—			—			2,630
Other current assets	9,730			—		16			—			9,746
Assets held for sale	3,522			6,366		—			—			9,888
Total current assets	262,978			42,274		22,295			(647		)	326,900
Property, plant and equipment, net	284,582			14,740		5,961			(5,961		)	299,322
Goodwill	75,647			5,845		—			—			81,492
Other intangible assets, net	6,897			10,917		—			—			17,814
Investment in subsidiaries	91,251			—		—			(91,251		)	—
Intercompany receivables	3,308			29,572		(149		)	(32,731		)	—
Other noncurrent assets	27,477			907		2,348			—			30,732
Total Assets	$	752,140		$	104,255	$	30,455		$	(130,590	)	$	756,260
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	39,996		$	—	$	—		$	(647	)	$	39,349
Accounts payable - trade	45,601			7,765		313			—			53,679
Accrued liabilities	60,737			1,942		17,004			—			79,683
Total current liabilities	146,334			9,707		17,317			(647		)	172,711
Intercompany payables	31,527			1,204		—			(32,731		)	—
Long-term debt, less current maturities	658,817			—		5,305			—			664,122
Obligations under capital leases, less current maturities	5,961			—		—			(5,961		)	—
Deferred income taxes	23,945			5,261		—			—			29,206
Other noncurrent liabilities	42,588			525		2,348			—			45,461
Total liabilities	909,172			16,697		24,970			(39,339		)	911,500
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(157,032		)	87,558		3,693			(91,251		)	(157,032		)
Noncontrolling interest	—			—		1,792			—			1,792
Total (deficit) equity	(157,032		)	87,558		5,485			(91,251		)	(155,240		)
Total liabilities and (deficit) equity	$	752,140		$	104,255	$	30,455		$	(130,590	)	$	756,260

Condensed Consolidating Balance Sheet at February 28, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	8,633		$	60		$	4,600		$	—		$	13,293
Restricted cash	1,301			88			15,788			—			17,177
Accounts receivable, net	39,125			10,762			14			—			49,901
Inventories	87,995			14,211			—			—			102,206
Net investment in lease	—			—			1,198			(1,198		)	—
Deferred income taxes	1,918			712			—			—			2,630
Other current assets	8,038			836			11			—			8,885
Assets held for sale	8,517			—			—			—			8,517
Total current assets	155,527			26,669			21,611			(1,198		)	202,609
Property, plant and equipment, net	290,137			20,137			5,810			(5,810		)	310,274
Goodwill	81,287			5,845			—			—			87,132
Other intangible assets, net	7,640			11,293			—			—			18,933
Investment in subsidiaries	85,531			—			—			(85,531		)	—
Intercompany receivables	3,308			29,169			(34		)	(32,443		)	—
Other noncurrent assets	28,097			977			2,348			—			31,422
Total Assets	$	651,527		$	94,090		$	29,735		$	(124,982	)	$	650,370
Liabilities and (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	8,955		$	—		$	771		$	(1,198	)	$	8,528
Accounts payable - trade	8,510			6,265			331			546			15,652
Accrued liabilities	47,876			1,508			15,496			—			64,880
Total current liabilities	65,341			7,773			16,598			(652		)	89,060
Intercompany payables	34,087			(1,098		)	—			(32,989		)	—
Long-term debt, less current maturities	645,228			—			5,039			—			650,267
Obligations under capital leases, less current maturities	5,810			—			—			(5,810		)	—
Deferred income taxes	23,466			5,261			—			—			28,727
Other noncurrent liabilities	43,365			561			2,348			—			46,274
Total liabilities	817,297			12,497			23,985			(39,451		)	814,328
(Deficit) equity
New Enterprise Stone & Lime Co., Inc. (deficit) equity	(165,770		)	81,593			3,938			(85,531		)	(165,770		)
Noncontrolling interest	—			—			1,812			—			1,812
Total (deficit) equity	(165,770		)	81,593			5,750			(85,531		)	(163,958		)
Total liabilities and (deficit) equity	$	651,527		$	94,090		$	29,735		$	(124,982	)	$	650,370

Schedule of condensed consolidating statements of comprehensive income (loss)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	222,167		$	24,388		$	229		$	(229	)	$	246,555
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	160,022			17,600			217			(139		)	177,700
Depreciation, depletion and amortization	9,036			1,308			—			—			10,344
Asset impairment	—			—			—			—			—
Selling, administrative and general expenses	10,144			1,513			40			—			11,697
Gain on disposals of property, equipment and software	(3,730		)	(3		)	—			—			(3,733		)
Operating income (loss)	46,695			3,970			(28		)	(90		)	50,547
Interest (expense) income, net	(21,215		)	43			(64		)	90			(21,146		)
Income (loss) before income taxes	25,480			4,013			(92		)	—			29,401
Income tax expense	1,331			—			—			—			1,331
Equity in earnings of subsidiaries	3,784			—			—			(3,784		)	—
Net income (loss)	27,933			4,013			(92		)	(3,784		)	28,070
Less: Net income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933			4,013			(229		)	(3,784		)	27,933
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—			—			—			39
Comprehensive income (loss)	27,972			4,013			(92		)	(3,784		)	28,109
Less: Comprehensive income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	27,972		$	4,013		$	(229	)	$	(3,784	)	$	27,972

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

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	342,824		$	46,675		$	3,461		$	(4,963	)	$	387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	274,241			35,973			2,956			(4,748		)	308,422
Depreciation, depletion and amortization	19,711			2,536			—			—			22,247
Asset impairment	5,023			—			—			—			5,023
Selling, administrative and general expenses	25,828			4,008			100			—			29,936
Gain loss on disposals of property, equipment and software	(301		)	(9		)	—			—			(310		)
Operating income (loss)	18,322			4,167			405			(215		)	22,679
Interest (expense) income, net	(40,813		)	3			(111		)	215			(40,706		)
Income (loss) before income taxes	(22,491		)	4,170			294			—			(18,027		)
Income tax benefit	(1,342		)	—			—			—			(1,342		)
Equity in earnings of subsidiaries	4,112			—			—			(4,112		)	—
Net income (loss)	(17,037		)	4,170			294			(4,112		)	(16,685		)
Less: Net income attributable to noncontrolling interest	—			—			(352		)	—			(352		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	(17,037		)	4,170			(58		)	(4,112		)	(17,037		)
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	77			—			—			—			77
Comprehensive income (loss)	(16,960		)	4,170			294			(4,112		)	(16,608		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			(352		)	—			(352		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	(16,960	)	$	4,170		$	(58	)	$	(4,112	)	$	(16,960	)

Condensed Consolidating Statement of Comprehensive Income (Loss) for the six months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	341,691		$	45,775		$	3,420		$	(3,615	)	$	387,271
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	258,673			34,269			3,172			(3,464		)	292,650
Depreciation, depletion and amortization	17,717			2,582			—			—			20,299
Asset impairment	160			23			—			—			183
Selling, administrative and general expenses	23,231			3,047			123			—			26,401
Gain on disposals of property, equipment and software	(3,783		)	(50		)	—			—			(3,833		)
Operating income (loss)	45,693			5,904			125			(151		)	51,571
Interest (expense) income, net	(42,330		)	61			(98		)	151			(42,216		)
Income (loss) before income taxes	3,363			5,965			27			—			9,355
Income tax expense	423			—			—			—			423
Equity in earnings of subsidiaries	5,720			—			—			(5,720		)	—
Net income (loss)	8,660			5,965			27			(5,720		)	8,932
Less: Net income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	8,660			5,965			(245		)	(5,720		)	8,660
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	78			—			—			—			78
Comprehensive income (loss)	8,738			5,965			27			(5,720		)	9,010
Less: Comprehensive income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	8,738		$	5,965		$	(245	)	$	(5,720	)	$	8,738

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	222,167		$	24,388		$	229		$	(229	)	$	246,555
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	160,022			17,600			217			(139		)	177,700
Depreciation, depletion and amortization	9,036			1,308			—			—			10,344
Asset impairment	—			—			—			—			—
Selling, administrative and general expenses	10,144			1,513			40			—			11,697
Gain on disposals of property, equipment and software	(3,730		)	(3		)	—			—			(3,733		)
Operating income (loss)	46,695			3,970			(28		)	(90		)	50,547
Interest (expense) income, net	(21,215		)	43			(64		)	90			(21,146		)
Income (loss) before income taxes	25,480			4,013			(92		)	—			29,401
Income tax expense	1,331			—			—			—			1,331
Equity in earnings of subsidiaries	3,784			—			—			(3,784		)	—
Net income (loss)	27,933			4,013			(92		)	(3,784		)	28,070
Less: Net income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933			4,013			(229		)	(3,784		)	27,933
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39			—			—			—			39
Comprehensive income (loss)	27,972			4,013			(92		)	(3,784		)	28,109
Less: Comprehensive income attributable to noncontrolling interest	—			—			(137		)	—			(137		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	27,972		$	4,013		$	(229	)	$	(3,784	)	$	27,972

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

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations			Total
Revenue	$	223,377		$	24,192		$	1,724		$	(1,724	)	$	247,569
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	168,423			18,226			1,518			(1,616		)	186,551
Depreciation, depletion and amortization	9,905			1,252			—			—			11,157
Asset impairment	3,343			—			—			—			3,343
Selling, administrative and general expenses	12,924			1,670			55			—			14,649
Gain loss on disposals of property, equipment and software	(142		)	(19		)	—			—			(161		)
Operating income (loss)	28,924			3,063			151			(108		)	32,030
Interest (expense) income, net	(20,427		)	(6		)	(55		)	108			(20,380		)
Income (loss) before income taxes	8,497			3,057			96			—			11,650
Income tax expense	900			—			—			—			900
Equity in earnings of subsidiaries	2,976			—			—			(2,976		)	—
Net income (loss)	10,573			3,057			96			(2,976		)	10,750
Less: Net income attributable to noncontrolling interest	—			—			(177		)	—			(177		)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	10,573			3,057			(81		)	(2,976		)	10,573
Other comprehensive income (loss)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	38			—			—			—			38
Comprehensive income (loss)	10,611			3,057			96			(2,976		)	10,788
Less: Comprehensive income attributable to noncontrolling interest	—			—			(177		)	—			(177		)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$	10,611		$	3,057		$	(81	)	$	(2,976	)	$	10,611

Schedule of condensed consolidating statements of cash flows

Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2015

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries		Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(17,276	)	$	1,110	$	2,034		$	—	$	(14,132	)
Cash flows from investing activities
Capital expenditures	(11,830		)	—		—			—		(11,830		)
Proceeds from sale of property, equipment and assets held for sale	5,849			—		—			—		5,849
Change in cash value of life insurance	—			—		—			—		—
Change in restricted cash	128			27		(1		)	—		154
Net cash (used in) provided by investing activities	(5,853		)	27		(1		)	—		(5,827		)
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091			—		—			—		30,091
Repayments of other debt	(308		)	—		(505		)	—		(813		)
Payments on capital leases	(896		)	—		—			—		(896		)
Distribution to noncontrolling interest	—			—		(291		)	—		(291		)
Net cash provided by (used in) financing activities	28,887			—		(796		)	—		28,091
Net increase in cash and cash equivalents	5,758			1,137		1,237			—		8,132
Cash and cash equivalents
Beginning of period	8,633			60		4,600			—		13,293
End of period	$	14,391		$	1,197	$	5,837		$	—	$	21,425

Condensed Consolidating Statement of Cash Flows for the six months ended August 31, 2014

(In thousands)	New Enterprise Stone & Lime Co., Inc.			Guarantor Subsidiaries			Non Guarantors			Eliminations		Total
Cash flows from operating activities	$	(19,103	)	$	992		$	1,918		$	—	$	(16,193	)
Cash flows from investing activities
Capital expenditures	(11,014		)	(815		)	—			—		(11,829		)
Proceeds from sale of property and equipment, and assets held for sale	1,177			—			—			—		1,177
Change in cash value of life insurance	(75		)	—			—			—		(75		)
Change in restricted cash	12,191			4			(1		)	—		12,194
Net cash (used in) provided by investing activities	2,279			(811		)	(1		)	—		1,467
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	24,675			—			—			—		24,675
Repayments of other debt	(4,097		)	—			(348		)	—		(4,445		)
Payments on capital leases	(1,594		)	—			—			—		(1,594		)
Debt issuance costs	(756		)	—			—			—		(756		)
Net cash provided by (used in) financing activities	18,228			—			(348		)	—		17,880
Net increase in cash and cash equivalents	1,404			181			1,569			—		3,154
Cash and cash equivalents
Beginning of period	21,344			—			2,548			—		23,892
End of period	$	22,748		$	181		$	4,117		$	—	$	27,046

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Condensed Issuer, Guarantor and Non Guarantor Financial Information (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	$ 246,555	$ 247,569	$ 387,271	$ 387,997
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	177,700	186,551	292,650	308,422
Depreciation, depletion and amortization	10,344	11,157	20,299	22,247
Asset impairment	0	3,343	183	5,023
Selling, administrative and general expenses	11,697	14,649	26,401	29,936
Gain on disposals of property, equipment and software	(3,733)	(161)	(3,833)	(310)
Operating income (loss)	50,547	32,030	51,571	22,679
Interest expense, net	(21,146)	(20,380)	(42,216)	(40,706)
Income (loss) before income taxes	29,401	11,650	9,355	(18,027)
Income tax expense (benefit)	1,331	900	423	(1,342)
Equity in earnings of subsidiaries	0	0	0	0
Net income (loss)	28,070	10,750	8,932	(16,685)
Less: Comprehensive income attributable to noncontrolling interest	(137)	(177)	(272)	(352)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933	10,573	8,660	(17,037)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39	38	78	77
Comprehensive income (loss)	28,109	10,788	9,010	(16,608)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,972	10,611	8,738	(16,960)
New Enterprise Stone & Lime Co., Inc.
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	222,167	223,377	341,691	342,824
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	160,022	168,423	258,673	274,241
Depreciation, depletion and amortization	9,036	9,905	17,717	19,711
Asset impairment	0	3,343	160	5,023
Selling, administrative and general expenses	10,144	12,924	23,231	25,828
Gain on disposals of property, equipment and software	(3,730)	(142)	(3,783)	(301)
Operating income (loss)	46,695	28,924	45,693	18,322
Interest expense, net	(21,215)	(20,427)	(42,330)	(40,813)
Income (loss) before income taxes	25,480	8,497	3,363	(22,491)
Income tax expense (benefit)	1,331	900	423	(1,342)
Equity in earnings of subsidiaries	3,784	2,976	5,720	4,112
Net income (loss)	27,933	10,573	8,660	(17,037)
Less: Comprehensive income attributable to noncontrolling interest	0	0	0	0
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,933	10,573	8,660	(17,037)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	39	38	78	77
Comprehensive income (loss)	27,972	10,611	8,738	(16,960)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	27,972	10,611	8,738	(16,960)
Guarantor Subsidiaries
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	24,388	24,192	45,775	46,675
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	17,600	18,226	34,269	35,973
Depreciation, depletion and amortization	1,308	1,252	2,582	2,536
Asset impairment	0	0	23	0
Selling, administrative and general expenses	1,513	1,670	3,047	4,008
Gain on disposals of property, equipment and software	(3)	(19)	(50)	(9)
Operating income (loss)	3,970	3,063	5,904	4,167
Interest expense, net	43	(6)	61	3
Income (loss) before income taxes	4,013	3,057	5,965	4,170
Income tax expense (benefit)	0	0	0	0
Equity in earnings of subsidiaries	0	0	0	0
Net income (loss)	4,013	3,057	5,965	4,170
Less: Comprehensive income attributable to noncontrolling interest	0	0	0	0
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	4,013	3,057	5,965	4,170
Unrealized actuarial gains and amortization of prior service costs, net of income tax	0	0	0	0
Comprehensive income (loss)	4,013	3,057	5,965	4,170
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	4,013	3,057	5,965	4,170
Non Guarantors
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	229	1,724	3,420	3,461
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	217	1,518	3,172	2,956
Depreciation, depletion and amortization	0	0	0	0
Asset impairment	0	0	0	0
Selling, administrative and general expenses	40	55	123	100
Gain on disposals of property, equipment and software	0	0	0	0
Operating income (loss)	(28)	151	125	405
Interest expense, net	(64)	(55)	(98)	(111)
Income (loss) before income taxes	(92)	96	27	294
Income tax expense (benefit)	0	0	0	0
Equity in earnings of subsidiaries	0	0	0	0
Net income (loss)	(92)	96	27	294
Less: Comprehensive income attributable to noncontrolling interest	(137)	(177)	(272)	(352)
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	(229)	(81)	(245)	(58)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	0	0	0	0
Comprehensive income (loss)	(92)	96	27	294
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	(229)	(81)	(245)	(58)
Eliminations
Condensed Issuer, Guarantor and Non Guarantor Financial Information
Revenue	(229)	(1,724)	(3,615)	(4,963)
Cost of revenue (exclusive of Depreciation, depletion and amortization shown separately below)	(139)	(1,616)	(3,464)	(4,748)
Depreciation, depletion and amortization	0	0	0	0
Asset impairment	0	0	0	0
Selling, administrative and general expenses	0	0	0	0
Gain on disposals of property, equipment and software	0	0	0	0
Operating income (loss)	(90)	(108)	(151)	(215)
Interest expense, net	90	108	151	215
Income (loss) before income taxes	0	0	0	0
Income tax expense (benefit)	0	0	0	0
Equity in earnings of subsidiaries	(3,784)	(2,976)	(5,720)	(4,112)
Net income (loss)	(3,784)	(2,976)	(5,720)	(4,112)
Less: Comprehensive income attributable to noncontrolling interest	0	0	0	0
Net income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	(3,784)	(2,976)	(5,720)	(4,112)
Unrealized actuarial gains and amortization of prior service costs, net of income tax	0	0	0	0
Comprehensive income (loss)	(3,784)	(2,976)	(5,720)	(4,112)
Comprehensive income (loss) attributable to New Enterprise Stone & Lime Co., Inc.	$ (3,784)	$ (2,976)	$ (5,720)	$ (4,112)

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Income Tax Disclosure [Abstract]
Effective income tax rate	4.50%	7.70%	4.50%	7.40%
Income tax expense (benefit)	$ 1,331	$ 900	$ 423	$ (1,342)

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Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2015		Aug. 31, 2014
Reconciliation of net income (loss) to net cash from operating activities
Net income (loss)	$ 8,932		$ (16,685)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion and amortization	20,299		22,247
Asset impairment	183		5,023
Gain on disposals of property, equipment and software	(3,833)		(310)
Non-cash payment-in-kind interest accretion	10,165		11,045
Amortization and write-off of debt issuance costs	2,164		2,164
Deferred income taxes	479		(843)
Bad debt	84		928
Changes in assets and liabilities:
Accounts receivable	(99,981)		(96,504)
Inventories	(4,163)		3,979
Other assets	(1,650)		1,347
Accounts payable	36,924		49,324
Other liabilities	16,265		2,092
Net cash used in operating activities	(14,132)		(16,193)
Cash flows from investing activities
Capital expenditures	(11,830)		(11,829)
Proceeds from sale of property, equipment and assets held for sale	5,849		1,177
Change in cash value of life insurance	0		(75)
Change in restricted cash	154		12,194
Net cash (used in) provided by investing activities	(5,827)		1,467
Cash flows from financing activities
Proceeds from issuance of short-term borrowings	30,091		24,675
Repayments of other debt	(813)		(4,445)
Payments on capital leases	(896)		(1,594)
Debt issuance costs	0		(756)
Distribution to noncontrolling interest	(291)		0
Net cash provided by financing activities	28,091		17,880
Net increase in cash and cash equivalents	8,132		3,154
Cash and cash equivalents
Beginning of period	13,293	[1]	23,892
End of period	$ 21,425		$ 27,046

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Income Taxes

6 Months Ended

Aug. 31, 2015

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 29, 2016 and February 28, 2015, after giving effect to items specifically related to the interim periods.

The effective income tax rates for the three months ended August 31, 2015 and 2014 were 4.5% and 7.7%, respectively, resulting in tax expense of $1.3 million and $0.9 million, respectively. The effective income tax rates for the six months ended August 31, 2015 and 2014 were 4.5% and 7.4%, respectively, resulting in tax expense of $0.4 million and tax benefit of $1.3 million, respectively. The principal factor affecting the comparability of the effective income tax rates for the respective periods is the Company’s assessment of the realizability of the current year projected income tax loss. The Company recorded a valuation allowance on the portion of the current year federal and state income tax losses that it believes are not more likely than not to be realized. The Company’s determination of its valuation allowance considers the impact of utilization of alternative minimum tax net operating loss and alternative minimum tax credit carryforwards.

Cash paid for income taxes was immaterial for the three and six months ended August 31, 2015 and 2014, primarily as a result of net operating losses.

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Nature of Operations and Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2015 USD ($)	Aug. 31, 2014 USD ($)	Aug. 31, 2015 USD ($) segment	Aug. 31, 2014 USD ($)	Feb. 28, 2015 USD ($)	[1]
Long Lived Assets Held-for-sale [Line Items]
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment	$ 0	$ 3,343	$ 183	$ 5,023
Number of reportable segments | segment			3
Defined Benefit Plan, Other Costs	1,400	1,700	$ 2,900	3,000
Defined Contribution Plan, Administrative Expenses	100	200	200	300
Depreciation	9,000	$ 9,900	18,100	$ 20,100
Liabilities	911,500		911,500		$ 814,328
Goodwill	81,492		81,492		$ 87,132
Goodwill allocated to the sale of certain assets	5,600		5,600
Other intangibles allocated to the sale of certain assets	700		700
Sheshequin and Towanda Locations [Member]
Long Lived Assets Held-for-sale [Line Items]
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment			100
Disposal Group, Including Discontinued Operation, Consideration	7,100		7,100
Liabilities	1,100		1,100
Gain (Loss) on Sale of Project			3,100
Naginey [Member]
Long Lived Assets Held-for-sale [Line Items]
Disposal Group, Including Discontinued Operation, Consideration	11,200		11,200
Liabilities	300		300
Goodwill	6,300		6,300
Gain (Loss) on Sale of Project			600
Gateway [Member]
Long Lived Assets Held-for-sale [Line Items]
Disposal Group, Including Discontinued Operation, Consideration	$ 6,400		$ 6,400
Minimum [Member]
Long Lived Assets Held-for-sale [Line Items]
Construction Contracts, Contract Life			2 years
Maximum [Member]
Long Lived Assets Held-for-sale [Line Items]
Construction Contracts, Contract Life			4 years

[1] Data derived from audited consolidated balance sheet as of February 28, 2015.

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Long-Term Debt (Details 3) - Secured Notes due 2018 - USD ($) $ in Millions			5 Months Ended	6 Months Ended	12 Months Ended
	Mar. 15, 2015	Feb. 28, 2014	Oct. 30, 2013	Aug. 31, 2015	Mar. 15, 2015	Feb. 28, 2015
Debt Instrument [Line Items]
Stated interest rate (as a percent)				13.00%
Debt Instrument Cash Interest Rate		4.00%
Debt Instrument Payment in Kind Interest Rate		9.00%
Accrued cash interest						$ 23.8
Increase in PIK interest during year						$ 20.4
Accrued PIK interest				$ 79.5
Debt Instrument Interest form Election Period					12 months
Debt Instrument, Interest Rate, Increase (Decrease)		1.00%
Penalty interest incurred			$ 0.8
Secured Notes
Debt Instrument [Line Items]
Accrued PIK interest				70.3
Other Noncurrent Liabilities
Debt Instrument [Line Items]
Accrued PIK interest				$ 9.2
Twelve-month period beginning March 15, 2014
Debt Instrument [Line Items]
Debt Instrument Cash Interest Rate	7.00%
Debt Instrument Payment in Kind Interest Rate	6.00%
Prior to March 15, 2015
Debt Instrument [Line Items]
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%
Prior to March 15, 2015 | Maximum [Member]
Debt Instrument [Line Items]
Percentage of the principal amount that may be redeemed with proceeds from public equity offerings	35.00%
Twelve-month period beginning March 15, 2015
Debt Instrument [Line Items]
Redemption price of debt instrument as a percentage of principal amount				106.50%
Twelve-month period beginning March 15, 2016
Debt Instrument [Line Items]
Redemption price of debt instrument as a percentage of principal amount				103.25%
Twelve-month period beginning March 15, 2017 and thereafter
Debt Instrument [Line Items]
Redemption price of debt instrument as a percentage of principal amount				100.00%

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Accrued Liabilities (Tables)

6 Months Ended

Aug. 31, 2015

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consist of the following: 

	August 31,		February 28,
(In thousands)	2015		2015
Insurance	$	27,927	$	24,565
Interest	25,406		23,408
Payroll and vacation	9,107		5,805
Withholding taxes	1,478		858
Billings in excess of costs and estimated earnings on uncompleted contracts	3,138		3,082
Contract expenses *	5,888		2,676
Other	6,739		4,486
Total accrued liabilities	$	79,683	$	64,880