Statements we make in the following discussion which express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements that are subject to various risks, uncertainties and assumptions. Our actual results, performance or achievements, or market conditions or industry results, could differ materially from the forward-looking statements in the following discussion as a result of a variety of factors, including the risks and uncertainties we have referred to under the headings "Risk Factors" in Item 1A of Part I in the 2008 Form 10-K, and "-Risks and Uncertainties" below. For a discussion of our commitments not discussed below, related-party transactions, and our critical accounting policies, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part I in the 2008 Form 10-K. We assume no obligation to update these forward-looking statement,; except as required by applicable law.

Our Business

We operate our business in two business segments: ready-mixed concrete and concrete-related products; and precast concrete products.

Ready-Mixed Concrete and Concrete-Related Products. Our ready-mixed concrete and concrete-related products segment is engaged primarily in the production, sale and delivery of ready-mixed concrete to our customers' job sites. To a lesser extent, this segment is engaged in the mining and sale of aggregates, and the resale of building materials, primarily to our ready-mixed concrete customers. We provide these products and services from our operations in north and west Texas, northern California, New Jersey, New York, Washington, D.C., Michigan and Oklahoma.

Precast Concrete Products. Our precast concrete products segment engages principally in the production, distribution and sale of precast concrete products from our seven plants located in California, Arizona and Pennsylvania. From these facilities, we produce precast concrete structures such as utility vaults, manholes and other wastewater management products, specialty engineered structures, pre-stressed bridge girders, concrete piles, curb-inlets, catch basins, retaining and other wall systems, custom designed architectural products and other precast concrete products.

Our Markets: Pricing and Demand Trends

The markets for our products are generally local, and our operating results are subject to fluctuations in the level and mix of construction activity that occur in our markets. The level of activity affects the demand for our products, while the product mix of activity among the various segments of the construction industry affects both our relative competitive strengths and our operating margins. Commercial and industrial projects generally provide more opportunities to sell value-added products which are designed to meet the high-performance requirements of these types of projects.

Our customers are generally involved in the construction industry, which is a cyclical business and is subject to general and more localized economic conditions, including the ongoing credit and U.S. recessionary conditions impacting all our markets. In addition, our business is impacted by seasonal variations in weather conditions, which vary by regional market. Accordingly, demand for our products and services during the winter months is typically lower than other months of the year because of inclement weather. Also, sustained periods of inclement weather could cause the delay of construction projects during other times of the year.

For the first three months of 2009, our average sales price increased 2.5% compared to the same time period in 2008. We experienced notable pricing improvements in our north Texas, west Texas, Michigan and Washington, D.C. markets, and a pricing decline in our New Jersey market, as compared to the first quarter of 2008. Pricing in our northern California market was flat compared to the three months ended March 31, 2008. Certain price increases we previously announced were realized in the first quarter of 2009; however, the sustainability of the benefits from these or any future increases will depend on market conditions and whether such increases exceed any raw material and other cost increases.

We continued to experience declines in the demand for our products during the first quarter of 2009, primarily in our residential and commercial end-use markets. Ready-mixed concrete sales volumes generally began to decline during the early summer of 2006 and continued to decline throughout 2007 and 2008. This decline reflects a sustained downward trend in residential construction activity and commercial projects in many of our markets. The overall construction downturn, in both residential and commercial end-use markets, resulted in ready-mixed concrete sales volumes being down on a same-plant-sales basis in our major markets, as compared to the first quarter of 2008. We expect ready-mixed concrete sales volumes in 2009 to be lower than sales volumes achieved in 2008 because of continued sluggishness in the residential and commercial end-use construction markets, which continues to be exacerbated by the financial crisis and U.S. recession.

Demand for our products in our precast concrete products segment also decreased in the first quarter of 2009 as compared to the first quarter of 2008. This decline is reflective of the decline in residential construction starts in our northern California and Phoenix, Arizona markets, where our precast business has been heavily weighted toward products used in new residential construction projects. Additionally, lower commercial construction spending in the mid-Atlantic market has affected this segment.

Sustaining or improving our operating margins in the future will depend on market conditions, including the impact of continued weakness in the residential and commercial construction sectors and the uncertainty of public works projects in light of state budgetary shortfalls and the U.S. economic recession. The impact of the American Recovery and Reinvestment Act passed by the U.S. government in 2009 on our sales volumes, operating margins and liquidity remains uncertain.

Cement and Other Raw Materials

We obtain most of the raw materials necessary to manufacture ready-mixed concrete and precast concrete products on a daily basis. These materials include cement, other cementitious materials (generally, fly ash and blast furnace slag) and aggregates (stone, gravel and sand), in addition to certain chemical admixtures. With the exception of chemical admixtures, each plant typically maintains an inventory level of these materials sufficient to satisfy its operating needs for a few days. Typically, cement, other cementitious materials and aggregates represent the highest-cost materials used in manufacturing a cubic yard of ready-mixed concrete. In each of our markets, we purchase each of these materials from several suppliers. Admixtures are generally purchased from suppliers under national purchasing agreements.

We negotiate cement and aggregates pricing with suppliers both on a company-wide basis and at the local market level in an effort to obtain the most competitive pricing available. Due to the severe slowdown in residential housing starts and decreased demand in other construction activity, combined with increased U.S. cement capacity, we did not experience cement shortages during the first quarter of 2009 and we do not expect to experience cement shortages for the remainder of the year. Cement price increases for 2009 that our suppliers announced in late 2008 have not occurred in many of our markets, and price increases in certain markets realized by our cement suppliers have been significantly lower than previous changes. We have realized cement cost decreases in certain markets in the first quarter of 2009 and expect cement prices to be flat or lower throughout 2009.

Overall, aggregates pricing in the first quarter of 2009 remained relatively flat with the first quarter of 2008. However, prices by market and for specific types of aggregates varied. Currently, in most of our markets, we believe there is an adequate supply of aggregates. Should demand for aggregates increase significantly, we could experience escalating prices or shortages of aggregates. On average, we expect our aggregates costs to be flat or up modestly over 2008 aggregates costs. Fuel charges have declined substantially for the first three months of 2009, compared to the first three months of 2008, due to lower diesel fuel prices.

Acquisitions

Since our inception in 1999, our growth strategy has contemplated acquisitions. The rate and extent to which appropriate further acquisition opportunities are available, and the extent to which acquired businesses are integrated and anticipated synergies and cost savings are achieved, can affect our operations and results. We expect the rate of our acquisitions in 2009 to be significantly lower than in prior years due to the global credit crisis, our limited available capital and ongoing recessionary conditions in the United States. Our recent acquisitions are discussed briefly below.

Ready-Mixed Concrete and Concrete-Related Products Segment

New York Acquisitions. In November 2008, we paid $2.5 million to acquire a ready-mixed concrete operation in Brooklyn, New York. We used borrowings under our existing credit facility to fund the payment of the purchase price. In August 2008, we paid $2.0 million to acquire a ready-mixed concrete operation in Mount Vernon, New York. We used borrowings under our existing credit facility to fund the purchase price. In January 2008, we acquired a ready-mixed concrete operation in Staten Island, New York. The purchase price was approximately $1.8 million in cash.

West Texas Acquisition. In June 2008, we acquired nine ready-mixed concrete plants, together with related real property, rolling stock and working capital, in our west Texas market for approximately $13.5 million. In June 2007, we acquired two ready-mixed concrete plants, including real property and certain raw material inventories, in our west Texas market for approximately $3.6 million.

Superior Materials Joint Venture. In April 2007, we formed a jointly owned company (Superior Materials Holdings, LLC) with the Edw. C. Levy Co., which operates in Michigan. Under the contribution agreement, we contributed substantially all of our ready-mixed concrete and concrete-related products assets, except our quarry assets and working capital, in Michigan, in exchange for a 60% ownership interest. The Edw. C. Levy Co. contributed all of its Michigan ready-mixed concrete and related concrete products assets, its 24,000-ton cement terminal and $1.0 million for a 40% ownership interest.

Precast Concrete Products Segment

Pomeroy. In August 2008, we paid $2.5 million to acquire a precast operation to augment our existing precast operations in San Diego, California. We used borrowings under our existing credit facility to fund the payment of the purchase price.

Architectural Precast, LLC ("API"). In October 2007, we acquired the operating assets, including working capital and real property, of API, a leading designer and manufacturer of premium quality architectural and structural precast concrete products serving the mid-Atlantic region, for approximately $14.5 million plus a $1.5 million contingent payment based on the future earnings of API. For the twelve-month period ended September 30, 2008, API attained 50% of its established earnings target, and we made a $750,000 payment, reduced for certain uncollected pre-acquisition accounts receivable, to the sellers in the first quarter of 2009 in partial satisfaction of our contingent payment obligation.

Divestitures

In the fourth quarter of 2007, we began to implement our strategy of exiting markets that do not meet our performance and return criteria or fit our long-term strategic objectives. We sold our Knoxville, Tennessee and Wyoming, Delaware operations in November 2007 for $16.5 million, plus certain adjustments for working capital. In addition, we sold our Memphis, Tennessee operations for $7.2 million, plus the payment for certain inventory-on-hand at closing in January 2008 (See Note 3 to our condensed consolidated financial statements included in this report).

Risks and Uncertainties

Numerous factors could affect our future operating results, including those discussed under the heading "Risk Factors" in Item 1A of Part I of the 2008 Form 10-K and the following factors:

Internal Computer Network and Applications. We rely on our network infrastructure, enterprise applications and internal technology systems for our operational, support and sales activities. The hardware and software systems related to such activities are subject to damage from earthquakes, floods, fires, power loss, telecommunication failures and other similar events. They are also subject to computer viruses, physical or electronic vandalism or other similar disruptions that could cause system interruptions, delays and loss of critical data and could prevent us from fulfilling our customers' orders. We have developed disaster recovery plans and backup systems to reduce the potentially adverse effects of such events. Any event that causes failures or interruption in our hardware or software systems could result in disruption in our business operations, loss of revenues or damage to our reputation.

During the second half of 2007, we began a process to select a new enterprise resource planning solution to provide for enhanced control, business efficiency and effectiveness, more timely and consistent reporting of both operational and financial data, and provide a platform to more adequately support our long-term growth plans. In the fourth quarter of 2007, a plan of implementation was approved which included a phased implementation across our regions during the course of 2008 and into early 2009. This implementation was substantially completed during the first quarter of 2009. System problems or failures related to the finalization of this implementation could adversely affect our financial reporting.

Tax Liabilities. We are subject to federal, state and local income taxes, applicable to corporations generally, as well as other taxes not based on income. Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of business, we make calculations in which the ultimate tax determination is uncertain. We are also, from time to time, under audit by state and local tax authorities. Although we can provide no assurance that the final determination of our tax liabilities will not differ from what our historical income tax provisions and accruals reflect, we believe our tax estimates are reasonable.

Critical Accounting Policies

We have outlined our critical accounting policies in Item 7 of Part II of the 2008 Form 10-K. Our critical accounting policies involve the use of estimates in the recording of the allowance for doubtful accounts, realization of goodwill, accruals for self-insurance, accruals for income taxes, inventory obsolescence reserves and the valuation and useful lives of property, plant and equipment. See Note 1 to our consolidated financial statements included in Item 8 of Part II of the 2008 Form 10-K for a discussion of these accounting policies. See Note 12 to the condensed consolidated financial statements in Part I of this report for a discussion of recent accounting pronouncements and accounting changes.

Results of Operations

The following table sets forth selected historical statement of operations
information (in thousands, except for selling prices) and that information as a
percentage of sales for each of the periods indicated.

                                                       Three Months Ended March 31,
                                                    2009                         2008
                                                               (unaudited)
Revenue:
Ready-mixed concrete and
concrete-related products                  $ 106,997          91.2 %    $ 148,826          91.8 %
Precast concrete products                     13,508          11.5         16,561          10.2
Inter-segment revenue                         (3,205 )        (2.7 )       (3,280 )        (2.0 )
Total revenue                              $ 117,300         100.0 %    $ 162,107         100.0 %

Cost of goods sold before depreciation,
depletion and
amortization:
Ready-mixed concrete
and concrete-related products              $  92,852          79.2      $ 129,041          79.6
Precast concrete products                     10,670           9.1         12,250           7.6
Selling, general and administrative
expenses                                      16,078          13.7         18,131          11.2
Depreciation, depletion and amortization       7,456           6.3          6,878           4.2
Loss from operations                          (9,756 )        (8.3 )       (4,193 )        (2.6 )
Interest expense, net                          6,768           5.8          6,706           4.1
Gain on purchase of senior subordinated
notes                                          4,493           3.8              -             -
Other income, net                                349           0.3            622           0.4
Loss before income tax benefit               (11,682 )       (10.0 )      (10,277 )        (6.3 )
Income tax benefit                              (637 )        (0.6 )       (3,104 )        (1.9 )
Loss from continuing operations              (11,045 )        (9.4 )       (7,173 )        (4.4 )
Loss from discontinued operations, net
of tax                                             -             -           (149 )        (0.1 )
Net loss                                     (11,045 )        (9.4 )       (7,322 )        (4.5 )
Net loss attributable to non-controlling
interest                                      (1,591 )        (1.4 )       (2,044 )        (1.3 )
Net loss attributable to stockholders      $  (9,454 )        (8.0 )%   $  (5,278 )        (3.2 )%

Ready-mixed Concrete Data:
Average selling price per cubic yard       $   97.99                    $   95.61
Sales volume in cubic yards                      975                        1,370

Precast Concrete Data:

Average selling price per cubic yard of
concrete used in production                $  865.66                    $  663.87
Ready-mixed concrete used in production
in cubic yards                                    16                           25

Revenue

Ready-mixed concrete and concrete-related products. Revenue from our ready-mixed concrete and concrete-related products segment decreased $41.8 million, or 28.1%, to $107.0 million for the three months ended March 31, 2009, from $148.8 million in the corresponding period of 2008. Our ready-mixed sales volumes for the first quarter of 2009 were approximately 1.0 million cubic yards, down 28.8% from the 1.4 million cubic yards of ready-mixed concrete we sold in the first quarter of 2008. Excluding the volumes associated with acquired operations, on a same-plant-sales basis, our ready-mixed volumes in the first quarter of 2009 were down approximately 33.5% compared to the first quarter of 2008. The decline reflected the continuing downturn in residential home construction activity that began in the second half of 2006 in all our markets, and the downturn in commercial construction and public works spending due to the ongoing credit crisis and the economic recession in the United States. Partially offsetting the effects of lower sales volumes was the approximate 2.6% rise in the average sales price per cubic yard of ready-mixed concrete during the first quarter of 2009, as compared to the corresponding period in 2008.

Precast concrete products. Revenue from our precast concrete products segment was down $3.1 million, or 18.4%, to $13.5 million for the first three months of 2009 from $16.6 million during the corresponding period of 2008. This decrease reflected the continued downturn primarily in residential construction in our northern California and Phoenix, Arizona markets and lower commercial construction spending in the mid-Atlantic market. The decrease in revenue was partially offset by higher revenue in 2009 from the acquisition of the assets of Pomeroy in August 2008.

Cost of goods sold before depreciation, depletion and amortization.

Ready-mixed concrete and concrete-related products. Cost of goods sold before depreciation, depletion and amortization for our ready-mixed concrete and concrete-related products segment decreased $36.2 million, or 28.0%, to $92.9 million for the three months ended March 31, 2009 from $129.0 million for the three months ended March 31, 2008. The decrease was primarily associated with lower sales volumes in 2009. As a percentage of ready-mixed concrete and concrete-related product revenue, cost of goods sold before depreciation, depletion and amortization was 86.8% for the three months ended March 31, 2009, as compared to 86.7% for the same period of 2008. While this percentage was relatively flat year-over-year, we experienced slightly higher production costs, per unit delivery costs, and had decreased efficiency from lower volumes. However, this was partially offset by higher average selling prices.

Precast concrete products. Cost of goods sold before depreciation, depletion and amortization for our precast concrete products segment declined $1.6 million, or 12.9%, to $10.7 million for the quarter ended March 31, 2009 from $12.3 million for the corresponding period of 2008. This decrease was primarily related to the declining residential construction market that has been impacting our northern California and Phoenix, Arizona precast markets and lower commercial construction spending in the mid-Atlantic market. As a percentage of precast concrete revenue, cost of goods sold before depreciation, depletion and amortization for precast concrete products rose to 79.0% for the three months ended March 31, 2009 from 74.0% during the three months ended March 31, 2008. This was affected by the decreased efficiency in our plant operations in northern California and Phoenix, Arizona, resulting from lower demand for our primarily residential product offerings in these markets. This increase was also attributable to decreased efficiency in primarily commercial construction projects in the mid-Atlantic market due to project delays and lower overall activity.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended March 31, 2009 decreased $2.0 million, or 11.3%, to $16.1 million from $18.1 million during the corresponding period of 2008. This decrease was primarily due to cost reductions implemented in the fourth quarter of 2008, which included the reduction of our salaried workforce and certain contract cancellations.

Depreciation, depletion and amortization. Depreciation, depletion and amortization expense increased $0.6 million, or 8.4%, to $7.5 million for the three months ended March 31, 2009 from $6.9 million in the corresponding period of 2008. The increase was attributable primarily to higher depreciation expense related to our new information technology system, which was placed in service during the second half of 2008, and acquisitions completed after the first quarter of 2008.

Interest expense, net. Net interest expense was relatively consistent in the first quarter of 2009 compared to the first quarter of 2008. Lower interest rates during the first quarter of 2009 offset increased expense associated with the increased amounts outstanding under our Senior Secured Credit Facility.

Gain on purchases of senior subordinated notes. During the first quarter of 2009, we purchased $7.4 million principal amount of our 8?% Senior Subordinated Notes due April 1, 2014 (the "8?% Notes") in open market transactions for $2.8 million plus accrued interest of $0.3 million through the dates of purchase. We recorded a gain of $4.5 million as a result of these transactions after writing off $0.1 million of previously deferred financing costs and original issue discount associated with the pro-rata amount of the 8?% Notes purchased.

Income tax benefit. We recorded an income tax benefit from continuing operations of $0.6 million for the three months ended March 31, 2009, as compared to $3.1 million for the corresponding period in 2008. At the end of each interim reporting period, we estimate the effective income tax rate expected to be applicable for the full year. We use this estimate in providing for income taxes on a year-to-date basis, and it may vary in subsequent interim periods if our estimate of the full year income or loss changes. Our estimated annualized effective tax benefit rate was 5.5% and 30.2% for the three months ended March 31, 2009 and 2008, respectively. Although we are in a taxable loss position, certain state taxes are calculated on bases different than pre-tax loss (such as gross receipts). This results in us recording income tax expense for these states, which lowered the effective benefit rate for the three months ended March 31, 2009 compared to the statutory rate. The effects of these state taxes are more profound given the small annual tax loss benefits we expect based on our projected level of pre-tax loss for 2009.

Non-controlling interest. The non-controlling interest of $(1.6) million and $(2.0) million reflected in the first quarter of 2009 and 2008, respectively, related to the allocable share of net loss from our Michigan joint venture to the minority interest owner.

Liquidity and Capital Resources

Our primary short-term liquidity needs consist of financing seasonal working capital requirements, purchasing property and equipment, acquiring new businesses under our acquisition program and paying cash interest expense under the 8?% Notes and cash interest expense on borrowings under our senior secured revolving credit facility that is scheduled to expire in March 2011. In addition to cash and cash equivalents of $10.3 million at March 31, 2009 and cash from operations, our senior secured revolving credit facility provides us with a significant source of liquidity. At March 31, 2009, we had $62.8 million of available credit, net of outstanding revolving credit borrowings of $13.0 million and outstanding letters of credit of $11.6 million. Our working capital needs are typically at their lowest level in the first quarter and increase in the second and third quarters to fund the increases in accounts receivable and inventories during those periods and the cash interest payment on the 8?% Notes on April 1 and October 1 of each year. Generally, in the fourth quarter of each year, our working capital borrowings decline and are at their lowest annual levels in the first quarter of the following year. Current market conditions have limited the availability of new sources of financing and capital which will clearly have an impact on our ability to obtain financing for our acquisition program and developmental capital.

The principal factors that could adversely affect the amount of and availability of our internally generated funds include:

† any deterioration of revenue because of weakness in the markets in which we operate;

† any decline in gross margins due to shifts in our project mix or increases in the cost of our raw materials;

† any deterioration in our ability to collect our accounts receivable from customers as a result of further weakening in residential and other construction demand or as a result of payment difficulties experienced by our customers relating to the global financial crisis; and

† the extent to which we are unable to generate internal growth through integration of additional businesses or capital expansions of our existing business.

. . .