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 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 2007 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 in the 2007 Form 10-K. We assume no obligation to update our forward-looking statements, 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 its nine 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 that 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. 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 in other months of the year because of inclement weather. Also, sustained periods of inclement weather and other weather conditions could postpone or delay projects in our markets during other times of the year.

For the first nine months of 2008, our overall average sales prices were higher than in the corresponding period of last year. However, pricing trends varied by region in our ready-mixed concrete markets. We experienced pricing improvements in our northern California and our north and west Texas markets, and pricing declines in our New Jersey, Michigan and Washington, D.C. markets, as compared to the first nine months of 2007. Sustaining or improving our operating margins in the future will depend on market conditions, including the impact of continued softening in the residential and commercial construction sectors. During the third quarter of 2008, we experienced marked declines in the demand for our products, primarily in residential and commercial end-use markets. We have announced price increases in several of our markets, generally effective October 1, 2008 and early 2009. The extent to which we realize benefits from these announced price increases will depend on market conditions and whether such increases exceed our raw material and other cost increases.

Ready-mixed concrete sales volumes generally declined beginning in 2006 and has continued to decline in the first nine months of 2008, as compared to the first nine months of 2007. This decline reflects a sustained downward trend in residential construction activity and commercial projects in many of our markets. We expect the overall construction downturn, in both residential and commercial end-use markets, to continue in the remainder of 2008, resulting in ready-mixed concrete sales volumes being down on a same-plant-sales basis in 2008 in most of our markets as compared to 2007. We expect ready-mixed concrete sales volumes related to public works construction to be higher in 2008, as compared to 2007. 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 en-use construction markets.

Demand for our products in our precast concrete products segment decreased in the first nine months of 2008, as compared to the first nine months of 2007. 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. We are in the process of refocusing our product lines and streamlining our operations in these markets to better serve existing demand and penetrate additional end-use markets. Such streamlining may result in the closure of certain facilities.

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 represents 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 for cement and aggregates. We anticipate that the residential construction downturn that began in the second half of 2006 will continue through the remainder of 2008 and 2009 and, therefore, commercial construction and other building segments will comprise a larger percentage of overall product demand. Due to the slowdown in residential housing starts and other construction activity combined with increased U.S. cement capacity, we have not experienced and do not expect to experience cement shortages during 2008 or 2009. We expect that demand for cement consumption nationally will be down in 2009 as compared to 2008. Announced cement price increases for January 1, 2008 have been delayed or withdrawn, in many of our markets and price increases in certain markets realized by our cement suppliers have been significantly lower than in 2007. Several cement suppliers have announced price increases effective January 1, 2009 in several of our markets. The extent such price increases will be realized is uncertain.

Aggregates pricing in 2008 has increased moderately over 2007 levels. Today, 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. We have been experiencing higher diesel fuel surcharges from our cement and aggregates suppliers, including third-party freighters, due to increases in costs of diesel fuel experienced in the first nine months of 2008. The price of diesel fuel has declined moderately in the third quarter of 2008 as compared to the first half of 2008. The majority of our aggregates suppliers have announced modest price increases effective January 1, 2009. We expect certain announced price increases in certain markets to be realized.

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. Our recent acquisitions are discussed briefly below.

Ready-Mixed Concrete and Concrete-Related Products Segment

New York Acquisitions. In January 2008, we acquired a single plant ready-mixed concrete operation in Staten Island, New York. The purchase price was approximately $1.8 million in cash. In August 2008, we paid $1.9 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.

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.

West Texas Acquisition. 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 joint venture (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, while the Edw. C. Levy Co. contributed 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 Precast. 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 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 contingency payment based on the future earnings of API. For the quarter ended September 30, 2008, API attained 50% of its established earnings target, and we expect to pay out $750,000 in the first quarter of 2009.

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, on January 31, 2008 (See Note 3 to our condensed consolidated financial statements included in this report). These operations have been aggregated and presented in our accompanying condensed consolidated financial statements as "discontinued operations."

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 2007 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 anticipates a phased implementation across our regions during the course of 2008 and into early 2009. The plan of implementation is on schedule. Delays or system problems or failures related to the implementation could adversely affect our financial reporting.

Accounting Rules and Regulations. We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). A change in these policies can have a significant effect on our reported results and may even retroactively affect previously reported transactions. Our accounting policies that recently have been or may be affected by changes in the accounting rules are as follows:

• accounting for income taxes; and

• accounting for business combinations and related goodwill.

Tax Liabilities. We are subject to federal, state and local income taxes, applicable to corporations generally, as well as nonincome-based taxes. 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 2007 Form 10-K. Our critical accounting policies involve the use of estimates in the recording of allowance for doubtful accounts, realization of goodwill, accruals for self-insurance, accruals for income taxes and the valuation and useful lives of property, plant and equipment. During the nine months ended September 30, 2008, we made no changes in the application of our critical accounting policies presented in the 2007 Form 10-K. See Note 1 to our consolidated financial statements included in Item 8 of Part II of the 2007 Form 10-K for a discussion of these accounting policies. See Note 13 to the condensed consolidated financial statements in Part I of this report for a discussion of recent accounting pronouncements and accounting changes.

Goodwill. We test goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. We generally test for goodwill impairment in the fourth quarter of each year, because this period gives us the best visibility of the reporting units' operating performances for the current year (seasonally, April through October are highest revenue and production months) and outlook for the upcoming year, since much of our customer base is finalizing operating and capital budgets. The October 2008 cement consumption forecast for 2009 through 2013 has indicated likely further deterioration in cement consumption. In light of this, coupled with the slowdown in construction activity, persistently challenging interest rates and credit environments and our depressed stock price in October 2008, there is an increased likelihood that we will record an impairment charge in the fourth quarter of 2008. We will record such a charge to the extent that the book equity value of each of our reporting units (including goodwill) exceeds the estimated fair value of that reporting unit. The estimated fair values of our reporting units were based on discounted cash flow models derived from internal earnings forecasts and other market-based valuation techniques. See Note 2 to our consolidated financial statements, included in Item 8 of Part II of the 2007 Form 10-K. We will continue to monitor and evaluate the carrying value of our goodwill, particularly with respect to the northern and southern California and Phoenix, Arizona precast operations and our South Central region ready-mixed concrete operations, in which the book equity value, including goodwill, approximated the estimated fair value of these reporting units.

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 September 30,               Nine Months Ended September 30,
                                2008                   2007                   2008                    2007
                                        (unaudited)                                    (unaudited)
Sales:
Ready-mixed concrete
and concrete-related
products                 $ 198,434      93.2 %  $ 223,523      93.9 %  $ 540,224      93.0 %   $ 561,627      92.8 %
Precast concrete
products                    19,231       9.0       18,548       7.8       53,145       9.1        54,492       9.0
Inter-segment sales         (4,846 )    (2.2 )     (3,986 )    (1.7 )    (12,396 )    (2.1 )     (11,032 )    (1.8 )
Total sales              $ 212,819     100.0    $ 238,085     100.0    $ 580,973     100.0     $ 605,087     100.0

Cost of goods sold
before depreciation,
depletion and
amortization:
Ready-mixed concrete
and concrete-related
products                 $ 161,925      76.1    $ 178,508      75.0    $ 448,286      77.2     $ 456,486      75.4
Precast concrete
products                    14,399       6.8       13,992       5.9       39,739       6.8        41,029       6.8
Selling, general and
administrative
expenses                    19,322       9.1       17,164       7.2       55,095       9.5        49,783       8.2
Depreciation,
depletion and
amortization                 7,850       3.7        7,547       3.1       21,763       3.7        21,489       3.6
Income from operations       9,323       4.4       20,874       8.8       16,090       2.8        36,300       6.0
Interest expense, net        6,747       3.2        7,036       3.0       20,121       3.5        21,091       3.5
Other income, net              578       0.3          566       0.2        1,628       0.3         2,950       0.5
Income (loss) before
income taxes and
minority interest            3,154       1.5       14,404       6.1       (2,403 )    (0.4 )      18,159       3.0
Income tax provision         1,248       0.6        4,563       1.9          346       0.1         6,139       1.0
Minority interest in
consolidated
subsidiary                     184       0.0         (287 )    (0.1 )     (2,645 )    (0.5 )          72       0.0
Income (loss) from
continuing operations        1,722       0.8       10,128       4.2         (104 )    (0.0 )      11,948       2.0
Loss from discontinued
operations, net of tax           -       0.0          (84 )     0.0         (149 )    (0.0 )        (809 )    (0.1 )
Net income (loss)        $   1,722       0.8 %  $  10,044       4.2 %  $    (253 )    (0.0 )%  $  11,139       1.8 %

Ready-mixed Concrete
Data:
Average selling price
per cubic yard           $   93.74              $   91.70              $   94.28               $   91.27
Sales volume in cubic
yards                        1,845                  2,159                  5,002                   5,421

Precast Concrete Data:
Average selling price
per cubic yard of
concrete used in
production1              $  904.19              $  652.11              $  771.91               $  600.52
Ready-mixed concrete
used in production in
cubic yards                     20                     29                     69                      91

1 Compared to the three and nine months ended September 30, 2007, average selling price per cubic yard of concrete used in production was $845.56 and $713.05, respectively, on a same-plant-sales basis.

Sales

Ready-mixed concrete and concrete-related products. Sales of our ready-mixed concrete and concrete-related products from continuing operations were $198.4 million for the three months ended September 30, 2008, down $25.1 million, or 11.2%, compared to the corresponding period in 2007. Our ready-mixed sales volumes for the third quarter of 2008 totaled approximately 1.8 million cubic yards, down 14.5% from the 2.2 million cubic yards of ready-mixed concrete we sold in the third quarter of 2007. The decline reflects the continued downturn in construction activity in many of our markets. On a same-plant-sales basis, ready-mixed concrete sales volumes were down 17.7% in the third quarter of 2008, as compared to the third quarter of 2007. Offsetting the effects of lower sales volumes was the approximate 2.2% rise in the average sales price per cubic yard of ready-mixed concrete during the third quarter of 2008, as compared to the third quarter of 2007.

For the nine months ending September 30, 2008, sales were $540.2 million, a decrease of $21.4 million, or 3.8%, over the same period in 2007. The decrease in the nine months ending September 30, 2008 was primarily related to a 7.7% decrease in ready-mixed concrete sales volumes, partially offset by a 3.3% increase in the average selling price of ready-mixed concrete in the nine months ended September 30, 2008, as compared to the same period in 2007.

Precast concrete products. Sales in our precast concrete products segment were $19.2 million for the three months ended September 30, 2008, an increase of $0.7 million, or 3.7%, from the corresponding period in 2007. Excluding sales associated with acquired operations, on a same-plant-sales basis, our third quarter 2008 precast concrete products sales were down approximately 19.4% from the third quarter of 2007, a result of the continued downturn in residential construction in our northern California and Phoenix, Arizona markets. Sales for the nine months ended September 30, 2008 were down by $1.3 million, or 2.5%, to $53.1 million, as compared to the same period of last year. Excluding sales associated with acquired operations, on a same-plant-sales basis, precast concrete products sales in the first nine months of 2008 were down approximately 25.4% from the corresponding period last year. The decline was attributable primarily to the downturn in residential construction in our Phoenix, Arizona and northern California markets.

Cost of goods sold before depreciation, depletion and amortization.

Ready-mixed concrete and concrete-related products. The decrease in cost of goods sold, before depreciation, depletion and amortization, of $16.6 million, or 9.3%, to $161.9 million for the three months ended September 30, 2008 was primarily associated with lower ready-mixed concrete sales volumes, partially offset by higher aggregates costs and increased diesel fuel costs, as compared to the three months ended September 30, 2007. As a percentage of ready-mixed concrete and concrete-related products sales, cost of goods sold before depreciation, depletion and amortization increased from 79.9% for the three months ended September 30, 2007, to 81.6% for the three months ended September 30, 2008. The increase in cost of goods sold as a percentage of ready-mixed concrete and concrete-related products sales was primarily attributable to higher aggregates and increased diesel fuel costs, partially offset by higher average selling prices, as compared to the third quarter of 2007. Cost of goods sold before depreciation, depletion and amortization in the nine months ended September 30, 2008 decreased $8.2 million, or 1.8%, to $448.3 million on lower sales volumes, partially offset by higher aggregates costs and increased diesel fuel costs. Cost of goods sold before depreciation, depletion and amortization was favorably impacted in the first quarter of 2007 by the $1.4 million workers' compensation settlement gain. Cost of goods sold before depreciation, depletion and amortization in the nine months ended September 30 of 2008 was negatively impacted by a $1.3 million expense related to a multi-employer plan funding deficiency accrual at one of our locations. As a percentage of ready-mixed concrete and concrete-related products sales, these costs increased from 81.3% to 83.0% for the nine months ended September 30, 2008, as compared to the same period in 2007. The increase in cost of goods sold as a percentage of revenue was primarily attributable to increased aggregates costs and diesel fuel costs rising faster than price increases for our ready-mixed concrete and concrete-related products.

Precast concrete products. The cost of goods sold before depreciation, depletion and amortization in our precast concrete products segment increased $0.4 million, or 2.9%, for the three months ended September 30, 2008, as compared to the corresponding period in 2007. This increase reflected increased cost of goods sold associated with our Architectural Precast business in 2008, which we did not own in the third quarter of 2007, partially offset by the reduced costs of goods sold primarily related to volume reductions in our northern California and Phoenix, Arizona precast markets. As a percentage of precast concrete products sales, cost of goods sold before depreciation, depletion and amortization decreased in the three months ended September 30, 2008, as compared to the corresponding period in 2007, from 75.4% to 74.9%. The decrease in cost of goods sold as a percentage of precast concrete product sales for the three months ended September 30, 2008 reflected lower average selling prices associated with product mix changes, lower sales volumes and the comparative impact of certain fixed costs in both periods. Cost of goods sold before depreciation, depletion and amortization for the nine months ended September 30, 2008 declined $1.3 million, or 3.1%, on lower sales volumes in our northern California and Phoenix, Arizona markets, partially offset by API volumes not reflected in the nine-month period ended September 30, 2007. As a percentage of precast product sales, cost of goods sold declined slightly from 75.3% to 74.8%.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended September 30, 2008 were $19.3 million, or 12.6% higher than in the corresponding 2007 period. For the nine . . .