NEW ENTERPRISE, Pa.--()--New Enterprise Stone & Lime Co., Inc. today announced financial results for the first quarter ended May 31, 2012, and filed its first quarter 2013 results on Form 10-Q with the Securities and Exchange Commission.
Paul I. Detwiler, III, President of New Enterprise Stone & Lime Co., Inc., commented, “Our first quarter performance reflected improved operational execution as demand conditions benefitted from a warmer-than-expected spring season. Nevertheless, current market conditions remain challenging as our local municipalities continue to deal with significant budgetary constraints combined with a competitive contract bidding environment. Additionally, our profitability was affected by higher costs related to addressing issues from our enterprise resource program, increased interest expense and a write-off of unamortized deferred financing fees. While we remain focused on effectively managing our cost structure, we will continue to invest in our growth initiatives to maximize the long-term potential of the Company while solidifying our liquidity position. However, we expect that the challenges to our business environment will persist throughout the remainder of fiscal year 2013.”
Net sales increased for the 2013 first quarter as compared to the prior year due to better weather conditions partially offset by the slow pace of the economic recovery and continued pressure on state budgets. Segment sales in construction materials were higher for the 2013 first quarter compared to the prior year due to higher sales of aggregates, hot mix asphalt, and ready mixed concrete. Segment sales in heavy/highway construction increased in the 2013 first quarter compared to the prior year period due to the favorable weather conditions that allowed for projects to begin earlier than in the prior year. Segment sales in traffic safety services and equipment were improved for the 2013 first quarter compared to the prior year as result of higher highway safety equipment sales, which were partially offset by a decrease in rental service activity.
Liquidity and Debt Position
As of May 31, 2012, the Company had $4.5 million in cash and cash equivalents and working capital of $186.3 million as compared to $15.0 million in cash and cash equivalents and working capital of $171.5 million as of February 29, 2012.
As of October 31, 2012 (the most recent date for which the Borrowing Base has been calculated pursuant to the Credit Agreement), the available borrowings calculated in accordance with the amended Borrowing Base definition was $142.5 million. As of December 26, 2012, the outstanding balance of our borrowings under the ABL Facility was $28.7 million.
New Enterprise Stone & Lime Co., Inc. will host a conference call on Friday, January 4, 2013 at 10:00 a.m. ET to review the Company’s first quarter financial results and discuss market drivers and outlook. As previously announced, the conference call will be webcast live on the Internet and can be accessed through the Investor Relations page of the Company’s website at www.nesl.com. A replay of the webcast will be available on the Company’s website.
About New Enterprise Stone & Lime Co., Inc.
New Enterprise Stone & Lime Co., Inc. is 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. Our core businesses include: (i) construction materials (aggregate production (crushed stone and construction sand and gravel), hot mix asphalt production, ready mixed concrete production and concrete products (precast/prestressed structural concrete components and masonry block manufacturing)), (ii) heavy/highway construction (heavy construction, blacktop paving and other site preparation services) and (iii) traffic safety services and equipment. For more information, please visit the company’s website at www.nesl.com.
Certain statements contained in this release are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such forward looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward looking statements as a result of various factors. Among the factors that significantly impact our business and could impact our business in the future are: the demand for non-residential and residential construction; the consequences of the continued U.S. and global financial crisis and the accompanying worldwide recession and the impact on the markets we serve; governmental funding in public sector construction; volatility in the credit markets and the impact on the markets we serve and our results of operations; our ability to accurately estimate risks, requirements or costs when bidding on or negotiating contracts; the consequences of seasonal changes and other weather related conditions on our business; our ability to compete within the industry; our ability to secure, obtain or maintain permits for aggregate reserves in strategically located areas; our ability to successfully integrate newly acquired businesses into our operations; our ability to generate sufficient cash to operate our business; changes in legal requirements and governmental policies concerning areas of law that impact our business; our ability to retain or recruit key management personnel; our ability to maintain good relations with our employees and avoid labor disputes; special hazards associated with our operations; unexpected factors affecting self-insurance claims and reserve estimates; our ability to maintain an effective system of internal controls; compliance with environmental, health and safety laws; cancellation of significant contracts or disqualification from bidding for new contracts; our ability to generate a sufficient amount of cash to service our existing indebtedness and fund our operations and the risks and uncertainties described in the Company’s audited consolidated financial statements included in the Company’s financial statements for the fiscal year ended February 29, 2012. These forward looking statements speak only as of the date of this release, and we do not undertake any obligation to publicly release any revisions to these forward looking statements to reflect events or circumstances after the date of this release.