Before we get started, I'd like to remind you that certain statements made during this call including statements relating to our expected future business and financial performance may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the SEC Act of 1934.Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These uncertainties which are described in more detail in Headwaters' annual and quarterly report filed with the SEC may cause our actual future results to be materially different than those expressed in our forward-looking statements, and could be a result of new information, further events or otherwise, except as what may be required by law. You can find Headwaters' annual report on Form 10-K, quarterly report on Form 10-Q and other SEC filings readily available from the SEC's website, from Headwaters' website or directly from the company. I'll now turn the call over to Kirk Benson. Kirk? Kirk Benson Thank you, Sharon. Good morning, everyone. Thank you for joining us on our quarterly conference call. All of us on the call this morning would like to express appreciation for your interest in Headwaters. The same for the quarter in construction materials was the April cold weather that pushed back the start of the construction season by at least 30 days. Examining the consolidated adjusted EBITDA of our heavy and light construction unit, we had a negative variance compared to last year's adjusted EBITDA in the month of April by $5 million. But by June, we had a combined positive adjusted EBITDA variance, which was very small but nevertheless positive. Although there are multiple variables in the quarter impacting adjusted EBITDA, most, if not all, of our decline in light and heavy construction materials combined adjusted EBITDA to be attributed to the slow start of the construction season.
The other notable performance issue was the lack of revenue from our coal cleaning operations. Multiple advance contributed to the overall decline including operational issues at the Cleveland Cliff's mine, changing facilities at Walter's [ph] site and a shortage of feedstock at the Utah facility. We anticipate some improvement in the fourth quarter revenue from coal cleaning.We did not believe the decline in coal cleaning will have an impact on our efforts to sell 11 of our [ph] coal cleaning facilities. There were no new issues with the operating model and the perspective purchases continue to do their work. Reviewing Slide 2, we have repaid $6.9 million of our 14.75% convertible debt. A portion of the purchase was in the quarter and $2.4 million was repurchased in July. These repurchases will reduce future cash interest expense by over $1 million per year. Our efforts last quarter to reduce cost are starting to show through lower SG&A in the current quarter. There are also savings in cost of goods sold, but the savings were offset by increased materials and manufacturing costs. But even with the increase in cost, we had an improvement in June's light building products' EBITDA margins compared to last year by 180 basis points. The lack of imminent recovery in our end markets has caused us to reexamine our manufacturing capacity and SG&A support cost. We commenced in the quarter to create a plan for 2012 that should improve our free cash flow and accelerate the repayment of debt. We will begin implementing the plan in August and September. After Don is finished a review of the financials, Dave Ulmer, our President of Tapco, will talk about light building products and Bill Gehrmann will talk about coal combustion products and coal cleaning. Don? Donald Newman Thank you, Kirk. Good morning and thank you for joining us. Before discussing Slide 3, I wanted to mention that we'll be filing our Form 10-Q later this week. My comments will be directed to the slides that were sent out this morning and to a lesser extent the condensed consolidated balance sheet and statement of operations that were attached to the press release. Read the rest of this transcript for free on seekingalpha.com