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Press release from Business Wire

Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results

Wednesday, May 16, 2012

Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results08:30 EDT Wednesday, May 16, 2012 DALLAS (Business Wire) -- Eagle Materials Inc. (NYSE: EXP) today reported financial results for fiscal year 2012 and the fiscal fourth quarter ended March 31, 2012. Notable items for the fiscal year and quarter include: Fiscal year 2012 revenues of $495.0 million, up 7% Fiscal year 2012 cash flow from operations of $60.2 million, up 37% Fiscal year 2012 net earnings per diluted share of $0.42, up 24% Fourth quarter revenues of $116.8 million, up 22% Fourth quarter net earnings per diluted share of $0.20 compared to a loss of $0.25 Eagle's low cost operations continued to execute well during fiscal 2012 and we are beginning to see improving construction activity across most of our markets. Eagle's earnings began to improve during the second half of fiscal 2012 and accelerated during the fourth quarter. Fiscal 2012 segment operating earnings increased 14% reflecting improved sales volumes in our cement and paperboard businesses and higher cement, wallboard and paperboard net sales prices as compared to the prior year. Improved fiscal 2012 operating cash flow was used to fund capital expenditures, primarily cost reduction projects, pay dividends and reduce debt which further strengthened our financial position. Eagle ended the year with a healthy net debt-to-capitalization ratio of 35%. Cement, Concrete and Aggregates Fiscal 2012 operating earnings from Cement were $46.9 million, an increase of 3% compared to fiscal 2011. Revenues from Cement, including joint venture and intersegment sales, were $244.0 million for fiscal 2012, 8% higher than last year. Operating earnings from Cement during the fourth quarter were $7.5 million, a 60% increase from the same quarter a year ago. The earnings increase primarily reflects improved sales volumes and sales prices offset by $2.0 million of additional maintenance costs incurred this quarter versus the prior year quarter. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $49.8 million, 23% greater than the same quarter last year. Cement sales volumes for the quarter were 532,000 tons, 20% higher than the same quarter a year ago. The average net sales price for this quarter was $84.08 per ton, 2% higher than the same quarter last year. Concrete and Aggregates reported a fiscal 2012 operating loss of $1.1 million versus operating earnings of $0.8 million one year earlier. Revenues from Concrete and Aggregates were $44.8 million for fiscal 2012, 3% higher than last year. Gypsum Wallboard and Paperboard Fiscal 2012 operating earnings from Gypsum Wallboard and Paperboard were $23.3 million, an increase of 74% compared to fiscal 2011. Revenues from Gypsum Wallboard and Paperboard were $295.9 million for fiscal 2012, 9% higher than last year's revenues. Gypsum Wallboard and Paperboard reported fourth quarter operating earnings of $15.1 million compared to an operating loss of $0.4 million in the same quarter last year. The increase in operating earnings was primarily due to higher net wallboard sales prices and increased paperboard sales volumes offset by lower wallboard sales volumes. Gypsum Wallboard and Paperboard revenues for the fourth quarter totaled $79.9 million, a 23% increase from the same quarter a year ago. The average Gypsum Wallboard net sales price for this quarter was $118.86 per MSF, 39% greater than the same quarter a year ago. Gypsum Wallboard sales volumes of 397 million square feet (MMSF) were down approximately 7% from the prior year's fourth quarter. The average Paperboard net sales price this quarter was $505.93 per ton, 1% greater than the same quarter a year ago. Paperboard sales volumes for the quarter were 56,000 tons, 17% greater than the same quarter a year ago. Details of Financial Results We conduct one of our cement plant operations through a 50/50 joint venture, Texas Lehigh Cement Company LP (the “Joint Venture”). We utilize the equity method of accounting for our 50% interest in the Joint Venture. For segment reporting purposes only, 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 within 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 U.S. 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 Wednesday, May 16, 2012.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); possible outcomes of pending or future litigation or arbitration proceedings; 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, 2011 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2011.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) Statement of Consolidated Earnings(2) Revenues and Earnings by Lines of Business (Quarter and Fiscal Year)(3) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues(4) Consolidated Balance Sheets   Eagle Materials Inc. Attachment 1     Eagle Materials Inc.Statement of Consolidated Earnings(dollars in thousands, except per share data)(unaudited)     Quarter EndedMarch 31,Fiscal Year EndedMarch 31,2012   20112012   2011   Revenues $ 116,801 $ 95,381 $ 495,023 $ 462,180   Cost of Goods Sold   101,885     97,624     454,546     426,603     Gross Profit (Loss) 14,916 (2,243 ) 40,477 35,577   Equity in Earnings of Unconsolidated JV 7,368 6,365 28,528 24,233 Corporate General and Administrative Expense (6,099 ) (4,607 ) (19,617 ) (16,667 ) Other Operating (Expense) Income (271 ) (244 ) 356 840 Other Non-Operating Expense   -     (10,701 )   (9,117 )   (10,701 )   Earnings (Loss) before Interest and Income Taxes 15,914 (11,430 ) 40,627 33,282   Interest Expense, Net (3,269 ) (3,416 ) (16,621 ) (16,520 ) Loss on Debt Retirement   -     -     (2,094 )   -     Earnings (Loss) before Income Taxes 12,645 (14,846 ) 21,912 16,762   Income Tax (Expense) Benefit   (3,642 )   4,041     (3,180 )   (1,913 )   Net Earnings (Loss) $ 9,003   $ (10,805 ) $ 18,732   $ 14,849     NET EARNINGS (LOSS) PER SHARE Basic $ 0.20   $ (0.25 ) $ 0.42   $ 0.34   Diluted $ 0.20   $ (0.25 ) $ 0.42   $ 0.34     AVERAGE SHARES OUTSTANDING Basic   44,307,678     43,993,297     44,224,924     43,891,817   Diluted   44,761,812     43,993,297     44,515,981     44,251,276       Eagle Materials Inc. Attachment 2     Eagle Materials Inc.Revenues and Earnings by Lines of Business(dollars in thousands)(unaudited)         Quarter EndedMarch 31,Fiscal Year EndedMarch 31,2012   20112012   2011Revenues*   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 61,247 $ 50,657 $ 217,633 $ 204,560 Gypsum Paperboard   18,623     14,155     78,309     67,153   79,870 64,812 295,942 271,713   Cement (Wholly Owned) 27,556 21,134 154,233 146,786   Concrete and Aggregates   9,375     9,435     44,848     43,681     Total Revenues $ 116,801   $ 95,381   $ 495,023   $ 462,180     Segment Operating Earnings   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 10,338 $ (2,719 ) $ 6,264 $ 1,242 Gypsum Paperboard   4,774     2,299     16,988     12,086   15,112 (420 ) 23,252 13,328   Cement: Wholly Owned 90 (1,694 ) 18,322 21,455 Joint Venture   7,368     6,365     28,528     24,233   7,458 4,671 46,850 45,688   Concrete and Aggregates (286 ) (129 ) (1,097 ) 794   Other, net   (271 )   (244 )   356     840     Sub-total 22,013 3,878 69,361 60,650   Corporate General and Administrative Expense (6,099 ) (4,607 ) (19,617 ) (16,667 ) Other Non-Operating Expense   -     (10,701 )   (9,117 )   (10,701 )   Earnings before Interest and Income Taxes   15,914     (11,430 )   40,627     33,282         * Net of Intersegment and Joint Venture Revenues listed on Attachment 3.     Eagle Materials Inc. Attachment 3     Eagle Materials Inc.Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues(unaudited)     Sales Volume Quarter Ended March 31,   Fiscal Year Ended March 31, 2012   2011 2012   2011   Gypsum Wallboard (MMSF's) 397 428 1,633 1,665   Cement (M Tons): Wholly Owned 323 236 1,857 1,718 Joint Venture 209 209 866 823 532 445 2,723 2,541 Paperboard (M Tons): Internal 17 19 71 72 External 39 29 159 144 56 48 230 216   Concrete (M Cubic Yards) 116 122 507 475   Aggregates (M Tons) 375 466 2,221 2,564     Average Net Sales Price* Quarter Ended March 31,   Fiscal Year Ended March 31, 2012     2011 2012     2011   Gypsum Wallboard (MSF) $ 118.86 $ 85.68 $ 98.79 $ 91.79 Cement (Ton) $ 84.08 $ 82.32 $ 81.42 $ 80.83 Paperboard (Ton) $ 505.93 $ 501.00 $ 515.97 $ 483.03 Concrete (Cubic Yard) $ 63.30 $ 57.36 $ 63.83 $ 62.77 Aggregates (Ton) $ 5.62 $ 5.40 $ 5.89 $ 5.61   *Net of freight and delivery costs billed to customers.       Intersegment and Cement Revenues Quarter Ended March 31,   Fiscal Year Ended March 31, 2012     2011 2012     2011 Intersegment Revenues: Cement $ 561 $ 536 $ 3,605 $ 4,086 Paperboard 9,757 10,311 40,485 37,622 Concrete and Aggregates   108   95   667   555 $ 10,426 $ 10,942 $ 44,757 $ 42,263   Cement Revenues: Wholly Owned $ 27,556 $ 21,134 $ 154,233 $ 146,786 Joint Venture   21,653   18,963   86,140   74,912 $ 49,209 $ 40,097 $ 240,373 $ 221,698     Eagle Materials Inc. Attachment 4     Eagle Materials Inc.Consolidated Balance Sheets(dollars in thousands)(unaudited)   March 31, 2012     2011 ASSETS Current Assets – Cash and Cash Equivalents $ 6,481 $ 1,874 Accounts and Notes Receivable, net 56,197 43,855 Inventories 123,606 115,237 Federal Income Tax Receivable 1,133 9,088 Prepaid and Other Assets   4,424     4,572   Total Current Assets   191,841     174,626   Property, Plant and Equipment – 1,140,744 1,115,058 Less: Accumulated Depreciation   (560,236 )   (512,228 ) Property, Plant and Equipment, net 580,508 602,830 Investments in Joint Venture 38,939 33,661 Notes Receivable 3,436 5,326 Goodwill and Intangibles 150,902 151,539 Other Assets   19,519     17,828   $ 985,145   $ 985,810   LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities – Accounts Payable $ 38,747 $ 30,339 Accrued Liabilities 33,619 39,187 Current Portion of Senior Notes   4,677     -   Total Current Liabilities   77,043     69,526   Long-term Liabilities 39,467 38,631 Bank Credit Facility 70,000 2,000 Senior Notes 192,259 285,000 Deferred Income Taxes 133,865 129,139 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 45,269,493 and 44,447,428 Shares, respectively. 453 444 Capital in Excess of Par Value 37,692 24,859 Accumulated Other Comprehensive Losses (5,516 ) (2,893 ) Retained Earnings   439,882     439,104   Total Stockholders' Equity   472,511     461,514   $ 985,145   $ 985,810   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