Energy Costs Outlook
Garik Shmois – Longbow Research: First question is just on energy costs. You mentioned that you are relying on greater coal use to furnace the Hunter 2 kiln. And I’m just wondering if you could quantify how much that added to unit costs during the quarter and provide a timeline of when you think you’ll get to more of a blended or lower cost energy use.
Mel G. Brekhus – President and CEO: Garik, that’s – with all the different changes and adjustments we made during the quarter with the commissioning versus looking at the older kiln, it’s really difficult to do an apples-to-apples comparison, but for unit cost, we’re up. As we’ve shown in the press release, that’s going to move the needle probably around $1 return, it’s something like that for all the kilns we had at TXI.
Garik Shmois – Longbow Research: So the majority of the cost inflation that you saw this quarter would be attributable to the higher DD&A as well as the unplanned maintenance, is that kind of a fair way to think about it?
Mel G. Brekhus – President and CEO: I really do. Again, $3 million spread among all three plants for the unexpected downtime and then almost $2 million for the depreciation. It covers most of it and that’s a good point…
Garik Shmois – Longbow Research: Are you expecting any maintenance to bleed into the second quarter – or sorry, into the first quarter?
Kenneth R. Allen – VP, Finance, Treasurer and CFO: Yes. Good question. We don’t have any major maintenance scheduled in the first quarter. Remember, a year ago in the August quarter we had about $3.5 million worth of major maintenance expense.
Garik Shmois – Longbow Research: And I guess just lastly on volumes in Southern California, highlight of the housing market has been strong. Is that the real significant driver of the really strong volume growth in Southern California, or are you starting to see a pick-up, whether it’s on the infrastructure side or on the non-res side as well?
James (Jamie) B. Rogers – VP and COO: It’s Jamie. I think that, as you know, the housing starts are really a good proxy and correlator to the other segments as well that you alluded to. And I guess what I would also say, when you see big numbers like 40% or double-digit, we are in no – we are not in a boom time in any of our markets and we still feel like we’ve got a lot of runway ahead of us. We’re just coming off really low lows especially in California.
Cement Pricing In California
Kathryn Thompson – Thompson Research Group: Just wanted to follow-up from last quarter’s discussion of cement pricing in California in particular. You took a two-tier approach, $2 increase in January and a $3 in April. When will the benefit of these combined increases reasonably flow through numbers?
James (Jamie) B. Rogers – VP and COO: Kathryn, it’s a little bit hard to model that with the specificity that I think you’re looking for. Given the mix of business, given the mix of the geography, what I can say with some confidence is that we were successful with both of those. And as Ken alluded to, it’s a start, and we’ve got – we expect a lot more progress, but it’s a start…
Kathryn Thompson – Thompson Research Group: We’ve just been able to see some pricing realized already in other markets, not just Texas, but we do checks on other markets in the U.S. where they have price increases and I just want to make sure that there isn’t any other thing that we should take into consideration like mix or any other factor that could skew, how we think about year-over-year comps or even sequential comps with pricing?
Kenneth R. Allen – VP, Finance, Treasurer and CFO: Kathryn, this is Ken. That’s a good point. We have seen some price movement up, but as the market’s expanding, we’re also shipping to a little further destinations and that geographic mix seems to offset pricing improvement a little bit too. It’s all real good. We’ll take those extra tons, we sure will, but that is a factor, when you’ve got relatively small increases weighing against the mix shift that we’re looking at in California as well.
Kathryn Thompson – Thompson Research Group: Could you give a little bit more color on how the Hunter plant is running since commissioning and how we should think about cost over the next several months, because typically there will be just overall cost of – there is inevitably hiccups that happen over a several month period after commissioning of a new plant…
Kenneth R. Allen – VP, Finance, Treasurer and CFO: Kathryn, you took the words right out of our mouth, a lot of times, it takes a year or two years to feel like you’ve really hit the sweet spot on some of these things. I think you’ll see good improvement in cost in all of our cement operations, being primarily driven by the new Hunter kiln. If you take the depreciation out now, okay, over the next year, it’s very difficult to give you some idea what that number’s going to be in the first quarter versus the second quarter, right now, but the plant continues to run very well. We’ve got June behind us and we’re in mid-July and the runtime on the new kiln has just been exceptional.
Kathryn Thompson – Thompson Research Group: So, in the prepared comments you talked a little bit about how May was doing and we know on our checks that there could be some pretty big swings and particularly some areas that have higher levels of precipitation. What were you seeing in terms of June, once you go from May to June and also if you can maybe comment on just much farther looking out at bid activity, and so in other words, bid activity that could impact your numbers 12 to 18 months from now?
Kenneth R. Allen – VP, Finance, Treasurer and CFO: I think we had a little bit wetter weather in June in Texas than we expected and we saw that in our daily shipments, but I think your second point or question is more on target in terms of how we think about it, because looking forward – looking at our backlog, the mix of potential business that’s available to us, looking forward, all those indicators are very positive.
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