(B) Acquisition

On November 30, 2012, the Company completed the acquisition (the “Acquisition”) of certain assets of Lafarge North America Inc. (“Lafarge North America” or “the Sellers”). The Acquisition expanded the scope of our cement business in a geographic area that is complementary to, but does not overlap with, our existing cement business. The Acquisition also further positions the Company near energy growth markets where there is growing demand for our specialty oil well cement and other related products.

The assets acquired by us in the Acquisition were used by the Sellers in connection with the business (the “Acquired Assets”) of producing, marketing and selling portland cement and concrete in Kansas, Missouri and Oklahoma, and include the following:

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two cement plants located in Sugar Creek, Missouri and Tulsa, Oklahoma;

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the related cement distribution terminals located in Sugar Creek and Springfield, Missouri; Omaha, Nebraska; Iola and Wichita, Kansas; and Oklahoma City, Oklahoma;

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two aggregates quarries near Sugar Creek, Missouri;

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eight ready-mix plants located in or near Kansas City, Missouri;

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certain fly ash operations conducted in the Kansas City, Missouri area; and

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certain related assets such as equipment, accounts receivable and inventory.

In most cases, we acquired ownership of these assets from the Sellers. However, the cement plant located in Sugar Creek, Missouri was leased by the Sellers pursuant to a long-term lease containing a purchase option exercisable by payment of a nominal fee. This lease, including the purchase option, was transferred to us at the closing of the Acquisition. In addition, we assumed certain liabilities in the Acquisition, including accounts payable, contractual obligations, reclamation obligations and other liabilities related to the Acquired Assets.

Purchase Price: The final purchase price (the “Purchase Price”) of the Acquisition was $450.7 million, which reflects a $2.7 million reduction from the preliminary purchase price to reflect actual working capital acquired at the closing. The reduction in purchase price was primarily related to adjustments to the final value of inventory and prepaid assets acquired. We funded the payment of the Purchase Price at closing and expenses incurred in connection with the Acquisition through a combination of borrowings under our bank credit facility and the proceeds from our issuance of common stock, which was completed on October 3, 2012.

Recording of assets acquired and liabilities assumed: The transaction has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. We engaged a third-party to perform a valuation to support our estimate of the fair value of certain assets acquired in the Acquisition. The working capital amounts paid at the closing were adjusted by approximately $2.7 million to reflect actual working capital acquired.

The preparation of the valuation of the assets acquired and liabilities assumed in the Acquisition requires the use of significant assumptions and estimates. Critical estimates include, but are not limited to, future expected cash flows, including projected revenues and expenses, and applicable discount rates. These estimates are based on assumptions that we believe to be reasonable. However, actual results may differ from these estimates.

Under the acquisition method of accounting, the total purchase price was allocated to the net tangible and intangible assets and assumed liabilities based on their estimated fair values at the acquisition date. Based on the fair value of tangible and intangible assets acquired and liabilities assumed the purchase price is allocated as follows:


Purchase Price Allocation (in thousands)
Cash and cash equivalents	$	—
Accounts Receivable		23,432
Inventories		20,361
Prepaid and Other Assets		3,511
Property and Equipment		407,260
Intangible Assets		12,500
Accounts Payable		(9,070	)
Accrued Liabilities		(3,501	)
Other Long-term Liabilities		(1,060	)

Total Net Assets		453,433
Goodwill		—

Initial Purchase Price	$	453,433
Final Working Capital Adjustment		(2,734	)

Final Purchase Price	$	450,699

Intangible Assets: The following table is a summary of the fair value estimates of the identifiable intangible assets (in thousands) and their weighted-average useful lives:


	Weighted Average Life		Fair Value
Customer Relationships		15	$	4,760
Sales Contracts		4		2,500
Permits		40		5,240

Total Intangible Assets			$	12,500

Actual and pro forma impact of the Acquisition: The following table presents the net sales and operating income of the Acquired Assets that have been included in our consolidated statement of earnings from April 1, 2013 through September 30, 2013:


	Three Month Period Ended September 30, 2013		Six Month Period Ended September 30, 2013
	(dollars in thousands)
Net Sales	$	52,603	$	93,683
Operating Income	$	12,288	$	18,713

The unaudited pro forma results presented below include the effects of the Acquisition as if it had been consummated as of April 1, 2012. The pro forma results include the amortization associated with an estimate for acquired intangible assets and interest expense associated with debt used to fund the Acquisition, depreciation from the fair value adjustments for property and equipment, and the impact on earnings per share of the issuance of common stock in connection with the Acquisition. To better reflect the combined operating results, material nonrecurring charges directly related to the Acquisition of $6.1 million have been excluded from pro forma net income for the three and six month periods ended September 30, 2012.


	Three Month Period Ended September 30, 2012		Six Month Period Ended September 30, 2012
	(dollars in thousands)
Revenues	$	222,665	$	431,124
Net Income	$	22,286	$	37,193
Earnings per share - basic	$	0.46	$	0.77
Earnings per share - diluted	$	0.46	$	0.76
Weighted Average Shares Outstanding:
Basic		48,196,225		48,158,499
Diluted		48,803,778		48,669,224

The pro forma results do not include any anticipated synergies or other expected benefits of the Acquisition. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the Acquisition been consummated as of April 1, 2012.