CURRENT ECONOMIC CONDITIONS

12 Months Ended

Dec. 31, 2011

CURRENT ECONOMIC CONDITIONS

CURRENT ECONOMIC CONDITIONS

11. CURRENT ECONOMIC CONDITIONS

The protracted decline in construction activity in Southern Colorado continues although sporadic signs of improvement suggest that the bottom may have been reached. Despite these signs, business conditions for the CACS segment are not expected to substantially improve within the next 12 months. Pricing in the CACS segment is expected remain sharply competitive. It is difficult to predict the timing and magnitude of any general recovery of construction in the markets served.

In addition, given these current economic conditions, the values of assets and liabilities of the CACS segment could change rapidly, resulting in material future adjustments in allowances for accounts and notes receivable, net realizable value of inventory, realization of deferred tax assets and valuation of intangibles and goodwill that could negatively impact the Company’s ability to meet debt covenants or maintain sufficient liquidity.