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Press release from Business Wire

Eagle Materials Inc. Reports Third Quarter Results

Tuesday, February 01, 2011

Eagle Materials Inc. Reports Third Quarter Results08:30 EST Tuesday, February 01, 2011 DALLAS (Business Wire) -- Eagle Materials Inc. (NYSE: EXP) today reported financial results for the third quarter of fiscal 2011 ended December 31, 2010. Notable items for the quarter include: Revenues of $103.9 million Net earnings of $5.5 million Diluted earnings per share of $0.12 Cement, Concrete and Aggregates Operating earnings from Cement for the third quarter were $15.3 million, a 14% increase from the same quarter a year ago. The earnings increase reflects improved sales volumes and lower operating costs. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $54.9 million, 3% higher than the same quarter last year. Cement sales volumes for the quarter were 619,000 tons, 6% above the same quarter a year ago. The average net sales price this quarter was $80.11, 5% less than the same quarter last year. Concrete and Aggregates reported operating earnings of $0.2 million for the third quarter, up $0.3 million from the same quarter a year ago, primarily due to improved sales volumes. Revenues from Concrete and Aggregates were $10.3 million for the quarter, 13% higher than the same quarter a year ago. Concrete sales volume increased 19% from the same quarter a year ago to 113,000 cubic yards. Concrete average net sales price for the quarter of $62.72 per cubic yard was 6% less than the same quarter a year ago. Aggregates sales volume of 677,000 tons for this quarter was 45% higher than the sales volume for the same quarter a year ago. Aggregates average net sales price for the quarter was $5.02, down 20% compared to last year's third quarter. Gypsum Wallboard and Paperboard Gypsum Wallboard and Paperboard had a third quarter operating loss of $0.4 million compared to operating earnings of $0.9 million in the same quarter last year. Lower wallboard net sales prices and higher recycled fiber costs were the primary drivers of the quarterly earnings decline. Gypsum Wallboard and Paperboard revenues for the third quarter totaled $59.3 million, a 2% increase from the same quarter a year ago. The revenue increase reflects increased Paperboard sales prices offset by lower wallboard net sales prices. The average Gypsum Wallboard net sales price this quarter was $86.65 per MSF, 3% less than the same quarter a year ago. Gypsum Wallboard sales volumes for the quarter of 386 million square feet (MMSF) were essentially flat with the same quarter last year. The average Paperboard net sales price this quarter was $477.75 per ton, 15% higher than the same quarter a year ago. Paperboard sales volumes for the quarter were 47,000 tons, 6% less than the same quarter a year ago. Details of Financial Results Texas Lehigh Cement Company LP, one of our cement plant operations, is conducted through a 50/50 joint venture (the “Joint Venture”). We utilize the equity method of accounting for our 50% interest in the Joint Venture. For segment reporting purposes we proportionately consolidate our 50% share of the Joint Venture's revenues and operating earnings, which is consistent with the way management organizes the segments in the Company for making operating decisions and assessing performance. In addition, for segment reporting purposes, we report intersegment revenues as a part of a segment's total revenues. Intersegment sales are eliminated on the income statement. Refer to Attachment 4 for a reconciliation of the amounts referred to above. About Eagle Materials Inc. Eagle Materials Inc. manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates from 25 facilities across the US. The Company is headquartered in Dallas, Texas. EXP's senior management will conduct a conference call to discuss the financial results, forward looking information and other matters at 2:00 p.m. Eastern Time (1:00 p.m. Central Time) on Tuesday, February 1, 2011.The conference call will be webcast simultaneously on the EXP Web site http://www.eaglematerials.com.A replay of the webcast and the presentation will be archived on that site for one year.For more information, contact EXP at 214-432-2000.Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only the Company's belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors many of which are outside the Company's control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company's actual performance include the following: the cyclical and seasonal nature of the Company's business; public infrastructure expenditures; adverse weather conditions; availability of raw materials; changes in energy costs including, without limitation, natural gas and oil; changes in the cost and availability of transportation; unexpected operational difficulties; inability to timely execute announced capacity expansions; governmental regulation and changes in governmental and public policy (including, without limitation, climate change regulation); changes in economic conditions specific to any one or more of the Company's markets; competition; announced increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction; general economic conditions; and interest rates.For example, increases in interest rates, decreases in demand for construction materials or increases in the cost of energy (including, without limitation, natural gas and oil) could affect the revenues and operating earnings of our operations.In addition, changes in national or regional economic conditions and levels of infrastructure and construction spending could also adversely affect the Company's result of operations. These and other factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010.These reports are filed with the Securities and Exchange Commission. All forward-looking statements made herein are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time.The Company undertakes no duty to update any forward-looking statement to reflect future events or changes in the Company's expectations.   (1) Summary of Consolidated Earnings (2) Revenues and Earnings by Lines of Business (Quarter) (3) Revenues and Earnings by Lines of Business (Nine Months) (4) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues (5) Consolidated Balance Sheets     Eagle Materials Inc. Attachment 1           Eagle Materials Inc.Summary of Consolidated Earnings(dollars in thousands, except per share data)(unaudited)       Quarter Ended December 31,20102009Change   Revenues $ 103,870 $ 104,529 -1 % Earnings Before Income Taxes $ 6,620 $ 5,467 +21 % Net Earnings $ 5,496 $ 4,684 +17 % Earnings Per Share: -- Basic $ 0.13 $ 0.11 +18 % -- Diluted $ 0.12 $ 0.11 +9 % Average Shares Outstanding: -- Basic 43,887,833 43,752,952 0 % -- Diluted 44,199,121 44,092,803 0 %       Nine Months Ended December 31,20102009Change   Revenues $ 366,799 $ 370,519 -1 % Earnings Before Income Taxes $ 31,608 $ 37,602 -16 % Net Earnings $ 25,653 $ 27,026 -5 % Earnings Per Share: -- Basic $ 0.58 $ 0.62 -6 % -- Diluted $ 0.58 $ 0.61 -5 % Average Shares Outstanding:   -- Basic 43,858,606 43,655,146 0 % -- Diluted 44,200,558 44,033,928 0 %     Eagle Materials Inc. Attachment 2         Eagle Materials Inc.Revenues and Earnings by Lines of Business(dollars in thousands)(unaudited)       Quarter Ended December 31,20102009ChangeRevenues*   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 45,389 $ 45,374 0 % Gypsum Paperboard   13,890   12,900 +8 % 59,279 58,274 +2 % 57 % 56 %   Cement (Wholly Owned) 34,301 37,171 -8 % 33 % 35 %   Concrete and Aggregates 10,290 9,084 +13 %   10 %   11 % Total $ 103,870 $ 104,529 -1 %   100 %   100 % Operating Earnings   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ (2,535 ) $ (2,287 ) -11 % Gypsum Paperboard   2,160   3,216 -33 % (375 ) 929 -140 % -2 % 7 % Cement: Wholly Owned 8,061 7,481 +8 % Joint Venture   7,196   5,910 +22 % 15,257 13,391 +14 % 100 % 93 %   Concrete and Aggregates 154 (98 ) n/a   1 %   -1 %   Other, net 192 110 +75 % 1 % 1 % Total Operating Earnings 15,228 14,332 +6 % 100 % 100 %   Corporate General Expenses (3,942 ) (3,170 ) +24 % Interest Expense, net   (4,666 )   (5,695 ) -18 %   Earnings Before Income Taxes $ 6,620 $ 5,467 +21 %   * Net of Intersegment and Joint Venture Revenues listed on Attachment 4.     Eagle Materials Inc. Attachment 3         Eagle Materials Inc.Revenues and Earnings by Lines of Business(dollars in thousands)(unaudited)     Nine Months Ended December 31,20102009ChangeRevenues*   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 153,903 $ 159,016 -3 % Gypsum Paperboard   52,998   38,298 +38 % 206,901 197,314 +5 % 57 % 53 %   Cement (Wholly Owned) 125,652 135,886 -8 % 34 % 37 %   Concrete and Aggregates 34,246 37,319 -8 %   9 %   10 % Total $ 366,799 $ 370,519 -1 %   100 %   100 % Operating Earnings   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 3,961 $ 2,453 +61 % Gypsum Paperboard 9,787 12,618 -22 % 13,748 15,071 -9 % 24 % 23 % Cement: Wholly Owned 23,149 31,693 -27 % Joint Venture   17,868   18,276 -2 % 41,017 49,969 -18 % 72 % 75 %   Concrete and Aggregates 923 1,692 -45 % 2 % 2 %   Other, net 1,084 113 +859 %   2 %   0 % Total Operating Earnings 56,772 66,845 -15 % 100 % 100 %   Corporate General Expenses (12,060 ) (12,314 ) -2 % Interest Expense, net   (13,104 )   (16,929 ) -23 % Earnings Before Income Taxes $ 31,608 $ 37,602 -16 %   * Net of Intersegment and Joint Venture Revenues listed on Attachment 4.     Eagle Materials Inc. Attachment 4     Eagle Materials Inc.Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues(unaudited)     Sales Volume Quarter Ended   Nine Months Ended December 31, December 31, 2010   2009   Change 2010   2009   Change   Gypsum Wallboard (MMSF's) 386 388 0 % 1,237 1,302 -5 %   Cement (M Tons): Wholly Owned 408 418 -2 % 1,482 1,497 -1 % Joint Venture 211 166 +27 % 614 529 +16 % 619 584 +6 % 2,096 2,026 +3 % Paperboard (M Tons): Internal 17 15 +13 % 53 53 0 % External 30 35 -14 % 115 105 +9 % 47 50 -6 % 168 158 +6 %   Concrete (M Cubic Yards) 113 95 +19 % 353 380 -7 %   Aggregates (M Tons) 677 468 +45 % 2,098 1,928 +9 %     Average Net Sales Price* Quarter Ended   Nine Months Ended December 31, December 31, 2010   2009   Change 2010   2009   Change   Gypsum Wallboard (MSF) $ 86.65 $ 89.00 -3 % $ 93.90 $ 94.01 0 % Cement (Ton) $ 80.11 $ 84.01 -5 % $ 80.51 $ 86.34 -7 % Paperboard (Ton) $ 477.75 $ 415.62 +15 % $ 477.80 $ 410.16 +16 % Concrete (Cubic Yard) $ 62.72 $ 66.53 -6 % $ 64.64 $ 67.75 -5 % Aggregates (Ton) $ 5.02 $ 6.25 -20 % $ 5.66 $ 6.36 -11 %   *Net of freight and delivery costs billed to customers.     Intersegment and Cement Revenues Quarter Ended   Nine Months Ended December 31, December 31, 2010   2009 2010   2009 Intersegment Revenues: Cement $ 1,394 $ 915 $ 3,550 $ 3,748 Paperboard 8,491 8,124 27,311 26,753 Concrete and Aggregates   153   167   460   672 $ 10,038 $ 9,206 $ 31,321 $ 31,173   Cement Revenues: Wholly Owned $ 34,301 $ 37,171 $ 125,652 $ 135,886 Joint Venture   19,181   15,327   55,949   48,736 $ 53,482 $ 52,498 $ 181,601 $ 184,622         Eagle Materials Inc. Attachment 5   Eagle Materials Inc.Consolidated Balance Sheets(dollars in thousands)(unaudited)   December 31,March 31,201020092010*ASSETS Current Assets – Cash and Cash Equivalents $ 4,053 $ 22,442 $ 1,416 Accounts and Notes Receivable, net 42,254 38,262 49,721 Inventories 111,012 99,515 105,871 Prepaid and Other Assets   2,464 4,553   4,266 Total Current Assets   159,783 164,772   161,274 Property, Plant and Equipment – 1,110,787 1,100,534 1,100,590 Less: Accumulated Depreciation   (503,063 )   (455,960 )   (468,121 ) Property, Plant and Equipment, net 607,724 644,574 632,469 Notes Receivable 13,150 7,024 10,586 Investments in Joint Venture 31,546 33,797 33,928 Goodwill and Intangibles 151,698 152,335 152,175 Other Assets   26,542   21,517   23,344 $ 990,443 $ 1,024,019 $ 1,013,776   LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities – Accounts Payable $ 30,464 $ 16,460 $ 27,840 Federal Income Taxes Payable 18 3,817 - Accrued Liabilities   35,901   38,086   44,044 Total Current Liabilities   66,383   58,363   71,884 Senior Notes 285,000 300,000 300,000 Bank Credit Facility 5,000 - 3,000 Long-Term Liabilities 40,778 100,090 67,946 Deferred Income Taxes 124,503 118,114 119,299 Stockholders' Equity – Preferred Stock, Par Value $0.01; Authorized 5,000,000 Shares; None Issued - - - Common Stock, Par Value $0.01; Authorized 100,000,000 Shares; Issued and Outstanding 44,196,759; 43,809,874 and   43,830,794 Shares, respectively. 442 438 438   Capital in Excess of Par Value 19,450 16,878 14,723 Accumulated Other Comprehensive Losses (3,518 ) (6,040 ) (3,518 ) Retained Earnings   452,405   436,176   440,004 Total Stockholders' Equity   468,779   447,452   451,647 $ 990,443 $ 1,024,019 $ 1,013,776 *From audited financial statements. Eagle Materials Inc.Steven R. Rowley, 214-432-2000President & CEOorD. Craig Kesler, 214-432-2000Executive Vice President & CFOorRobert S. Stewart, 214-432-2000Executive Vice President