Business Segments

9 Months Ended

Feb. 28, 2013

Business Segments

Business Segments

We have three business segments: cement, aggregates and consumer products. Our business segments are managed separately along product lines. Through the cement segment we produce and sell gray portland cement as our principal product, as well as specialty cements. Through the aggregates segment we produce and sell stone, sand and gravel as our principal products. Previously, the aggregates segment included our expanded shale and clay lightweight aggregates which has been classified as discontinued operations in the current period and all prior periods. Therefore, amounts for these operations are not included in the information presented below. Through the consumer products segment we produce and sell ready-mix concrete as our principal product. We account for intersegment sales at market prices. Segment operating profit consists of net sales less operating costs and expenses. Corporate includes those administrative, financial, legal, human resources, environmental and real estate activities which are not allocated to operations and are excluded from segment operating profit. Identifiable assets by segment are those assets that are used in each segment’s operation. Corporate assets consist primarily of cash and cash equivalents, real estate and other financial assets not identified with a business segment. The following is a summary of operating results and certain other financial data for our business segments.

	Three months ended						Nine months ended
	February 28,			February 29,			February 28,			February 29,
In thousands	2013			2012			2013			2012
Net sales
Cement
Sales to external customers	$	71,288		$	55,020		$	239,406		$	192,717
Intersegment sales	9,277			10,451			29,807			35,625
Aggregates
Sales to external customers	25,439			17,663			94,738			66,168
Intersegment sales	5,378			4,952			17,272			15,613
Consumer products
Sales to external customers	44,632			49,211			149,431			176,811
Intersegment sales	8			668			119			2,213
Eliminations	(14,663		)	(16,071		)	(47,198		)	(53,451		)
Total net sales	$	141,359		$	121,894		$	483,575		$	435,696
Segment operating profit (loss)
Cement	$	9,849		$	(2,384	)	$	24,328		$	(1,222	)
Aggregates	2,111			(1,291		)	9,629			2,494
Consumer products	(4,262		)	(4,258		)	(8,777		)	(10,204		)
Total segment operating profit	7,698			$	(7,933	)	25,180			(8,932		)
Corporate	(10,339		)	(9,880		)	(30,967		)	(22,038		)
Interest	(7,227		)	(8,512		)	(22,462		)	(26,810		)
Loss before income taxes	$	(9,868	)	$	(26,325	)	$	(28,249	)	$	(57,780	)
Depreciation, depletion and amortization
Cement	$	8,395		$	8,723		$	25,288		$	26,547
Aggregates	3,166			3,506			9,840			10,796
Consumer products	2,281			2,194			6,128			7,084
Corporate	254			295			700			903
Total depreciation, depletion and amortization	$	14,096		$	14,718		$	41,956		$	45,330
Capital expenditures
Cement	$	13,803		$	29,911		$	54,588		$	69,800
Aggregates	927			1,352			3,528			20,715
Consumer products	7,290			2,113			9,536			4,155
Corporate	201			573			1,220			1,366
Total capital expenditures	$	22,221		$	33,949		$	68,872		$	96,036
Net sales by product
Cement	$	63,811		$	47,379		$	213,215		$	167,178
Stone, sand and gravel	16,641			11,878			60,638			44,410
Ready-mix concrete	44,821			37,464			149,403			138,265
Other products	2,025			12,080			7,540			40,778
Delivery fees	14,061			13,093			52,779			45,065
Total net sales	$	141,359		$	121,894		$	483,575		$	435,696

All sales were made in the United States during the periods presented with no single customer representing more than ten percent of sales.

Cement segment operating profit includes a gain from the sales of emission credits associated with our Crestmore cement plant in Riverside, California of of $2.5 million in the nine-month periods ended February 28, 2013.

Consumer products operating profit includes a gain of $2.1 million in the nine-month period ended February 29, 2012 from the exchange of certain ready-mix operations in Houston, Texas for ready-mix and aggregates operations that serve the Austin, Texas metropolitan market.

Operating profit includes $2.0 million in restructuring charges in the three-month and nine-month periods ended February 29, 2012, including $1.1 million associated with our cement operations, $0.4 million associated with our aggregate operations, $0.5 million associated with our ready-mix concrete operations. An additional $1.2 million in restructuring charges in the periods is associated with our corporate activities.

Capital expenditures incurred in connection with the expansion of our Hunter, Texas cement plant were $61.3 million and $64.9 million in the nine-month periods ended February 28, 2013 and February 29, 2012, respectively, of which $38.5 million and $32.3 million was capitalized interest paid in the nine-month periods ended February 28, 2013 and February 29, 2012, respectively. Capital expenditures for normal replacement and upgrades of existing equipment and acquisitions to sustain existing operations were $17.8 million and $31.4 million in the nine-month periods ended February 28, 2013 and February 29, 2012, respectively, of which $18.0 million was incurred to acquire aggregate reserves in the nine-month period ended February 29, 2012.

The following is a summary of assets used in each of our business segments.

In thousands	February 28, 2013		May 31, 2012
Identifiable assets
Cement	$	1,166,156	$	1,135,336
Aggregates	168,696		178,730
Consumer products	98,125		90,717
Corporate	76,725		131,801
Total assets	$	1,509,702	$	1,536,584

All of our identifiable assets are located in the United States.