This summary is based on the second quarter fiscal 2007 earnings call conducted by Florida Rock Industries, Inc. (FRK: chart) on May 1, 2007.

President, Chief Executive Officer and Director: John D. Baker
Executive Vice President and Chief Financial Officer: John Milton
Vice President and Chief Accounting Officer: Wally Patzke

Key Investors Issues

- Earnings were 39 cents per diluted share, down 55 cents from a year ago.
- Sales declined 31.5% from a year ago to $249.387 million, driven by volume decreases in all three businesses.
- Selling, general and administrative costs declined $6 million in the quarter.

First Quarter Highlights

- Ready-mix concrete volumes were down 34% from a year ago.
- The cement segment volumes declined 34.7%.
- Lost production cost is from $4 million to $5 million after the company idled its Newberry cement plant twice for a total of 39 days because of slow sales in the quarter.

Aggregate tons sold from the company’s quarries declined 28% and concrete block declined 50%.

The sudden and steep fall off in sales is driven by the decline in the housing market. Just above 30% of the company’s current business is driven by home building, versus over 50% at one point in the past. However, housing permits in Florida, where 66% of the company’s sales have traditionally come from, have stabilized for the last three months and even upticked in March.

- Non-residential permits were up 18% this quarter versus last year and highway and infrastructure spending is strong, especially in Florida.
- Aggregate prices went up in January by 8% to 12% and stand 18% above last year.
- Ready-mix concrete prices are 5.7% ahead of last year and sequentially flat.

Pricing in the Florida market is deteriorating but previously backlogged work is keeping the averages up.

Cement prices are down as the company ships further and absorbs freight to keep the Newberry plant running. It has entered into a much smaller import contract than last year and intends to replace those imports with Newberry production. Cement prices are also negatively affected as the high priced bag masonry and stucco cements are hard hit by the housing slow down.

Selling, general and administrative costs were down $6 million in the quarter, due to lower incentive compensation and profit sharing.

These numbers would have been lower, but for $3 million of expenses related to the proposed merger with Vulcan Materials.

The company is on track with the merger, having filed for anti-trust approvals under the Hart-Scott-Rodino Act.

The Department of Justice has issued a second request for information under that law and the company is complying with it. It has filed its preliminary S-4 with the Securities and Exchange Commission and awaits comment on that. A closing is expected late this summer.

Key questions and answers from the first quarter earnings call conducted by Florida Rock Industries, Inc. (FRK: chart) on May 1, 2007.

Barry Vogel: Could you explain the upward trend in homebuilding?

John Baker: The housing permits were trending down until three months ago in Florida, and then they flattened out for three months and in March went up a little. Still below last year but an uptick which is the first sign we have seen of anything optimistic.

Barry Vogel: Do you expect any change in aggregate pricing in the summer time when in the past you have been able to get multiple year pricing increases?

John Baker: We do not think so. We hope the pricing stays the way it is.