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Press release from Business Wire

Eagle Materials Inc. Reports Strong Volume and Earnings Improvement in the First Quarter

Thursday, August 02, 2012

Eagle Materials Inc. Reports Strong Volume and Earnings Improvement in the First Quarter08:30 EDT Thursday, August 02, 2012 DALLAS (Business Wire) -- Eagle Materials Inc. (NYSE: EXP) today reported financial results for the first quarter of fiscal 2013 ended June 30, 2012. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year's first quarter): Revenues of $154.0 million, up 29% Segment operating earnings of $29.1 million, up 198% Net earnings per diluted share of $0.31 versus $0.02 Construction activity continued to improve during the quarter and Eagle's low cost operations continued to execute well during the first quarter of fiscal 2013. First quarter sales volumes improved across all business lines and wallboard net sales prices increased 32% as compared to the prior year's first quarter. Eagle's first quarter of fiscal 2013 cement operating earnings were negatively impacted by approximately $8 million, or $0.12 per diluted share, in increased maintenance costs associated with planned major maintenance at all of our cement facilities. Improved first quarter operating cash flow was used to fund capital expenditures, pay dividends and reduce debt which further strengthened our financial position. Eagle ended the quarter with a healthy net debt-to-capitalization ratio of 34%. Cement, Concrete and Aggregates Cement revenues for the first quarter, including joint venture and intersegment revenues, totaled $76.0 million, 26% greater than the same quarter last year. The revenue improvement reflects a 26% increase in our first quarter Cement sales volume. The average net sales price for this quarter was $81.06 per ton, comparable with the same quarter last year. Cement price increases were achieved in both the Texas and Mountain regions during the quarter but were offset by the increased pace of high-volume, lower-priced bid work in our other markets. Operating earnings from Cement for the first quarter were $9.9 million, a 12% increase from the same quarter a year ago. The earnings impact from increased cement sales volumes was mostly offset by higher maintenance costs associated with scheduled maintenance at all of our cement facilities. Concrete and Aggregates reported operating earnings of $0.2 million for the first quarter, up from the $0.2 million operating loss for the same quarter a year ago, primarily due to improved sales volumes and net sales prices in each business. Gypsum Wallboard and Paperboard Gypsum Wallboard and Paperboard's first quarter operating earnings of $19.3 million increased 1,421% from $1.3 million in same quarter last year. Improved Gypsum Wallboard net sales prices were the primary driver of the quarterly earnings increase. Additional contribution came from improved sales volumes in both wallboard and paperboard. Gypsum Wallboard and Paperboard revenues for the first quarter totaled $89.6 million, a 27% increase from the same quarter a year ago. The revenue increase reflects higher average Gypsum Wallboard net sales prices and higher Gypsum Wallboard and Paperboard sales volumes slightly offset by lower Paperboard net sales prices. The average Gypsum Wallboard net sales price this quarter was $118.70 per MSF, 32% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 457 million square feet (MMSF) represents an 11% increase from the same quarter last year. The average Paperboard net sales price this quarter was $502.89 per ton, 1% lower than the same quarter a year ago. Paperboard sales volume for the quarter was 60,000 tons, 5% higher 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 3 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. Eagle'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 Daylight Time (1:00 p.m. Central Daylight Time) on Thursday, August 2, 2012.The conference call will be webcast simultaneously on the Eagle Web site replay of the webcast and the presentation will be archived on that site for one year.For more information, contact Eagle 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, 2012.This report is 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.Steven R. RowleyPresident and Chief Executive OfficerD. Craig KeslerExecutive Vice President and Chief Financial OfficerRobert S. StewartExecutive Vice President, Strategy, Corporate Development and Communications Attachment 1 Statement of Consolidated EarningsAttachment 2 Revenues and Earnings by Lines of Business (Quarter)Attachment 3 Sales Volume, Net Sales Prices and Intersegment and Cement RevenuesAttachment 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 EndedJune 30,20122011   Revenues $ 154,042 $ 119,807   Cost of Goods Sold   131,145     115,434     Gross Profit 22,897 4,373   Equity in Earnings of Unconsolidated Joint Venture 6,468 5,448   Corporate General and Administrative Expenses (5,416 ) (4,118 )   Other Operating Expense, net   (270 )   (79 )   Earnings before Interest and Income Taxes 23,679 5,624   Interest Expense, Net   (3,765 )   (4,585 )   Earnings before Income Taxes 19,914 1,039   Income Tax Expense   (5,936 )   (232 )   Net Earnings $ 13,978   $ 807         EARNINGS PER SHARE Basic $ 0.31   $ 0.02   Diluted $ 0.31   $ 0.02     AVERAGE SHARES OUTSTANDING Basic   44,670,359     44,180,039   Diluted   45,078,734     44,709,262         Eagle Materials Inc. Attachment 2   Eagle Materials Inc.Revenues and Earnings by Lines of Business(dollars in thousands)(unaudited)     Quarter EndedJune 30,20122011Revenues*   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 70,220 $ 51,342 Gypsum Paperboard   19,407     18,994   89,627 70,336   Cement (Wholly Owned) 51,750 37,711   Concrete and Aggregates   12,665     11,760     Total $ 154,042   $ 119,807     Segment Operating Earnings   Gypsum Wallboard and Paperboard: Gypsum Wallboard $ 14,022 $ (1,762 ) Gypsum Paperboard   5,276     3,030   19,298 1,268   Cement: Wholly Owned 3,398 3,340 Joint Venture   6,468     5,448   9,866 8,788   Concrete and Aggregates 201 (235 )   Other Operating Expense, net   (270 )   (79 )   Total Segment Operating Earnings $ 29,095   $ 9,742     * 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 Cement Revenues(unaudited)       Sales Volume Quarter Ended June 30, 2012 2011 Change   Gypsum Wallboard (MMSF's) 457 412 +11 %   Paperboard (M Tons): Internal 20 17 +18 % External 40 40 0 % 60 57 +5 %   Cement (M Tons): Wholly Owned 621 449 +38 % Joint Venture 227 225 +1 % 848 674 +26 %   Concrete (M Cubic Yards) 137 136 +1 %   Aggregates (M Tons) 652 612 +7 %       Average Net Sales Price * Quarter Ended June 30, 2012   2011   Change   Gypsum Wallboard (MSF) $ 118.70 $ 90.03 +32 % Paperboard (Ton) $ 502.89 $ 505.61 -1 % Cement (Ton) $ 81.06 $ 81.25 0 % Concrete (Cubic Yard) $ 65.29 $ 61.04 +7 % Aggregates (Ton) $ 5.98 $ 5.88 +2 %   *Net of freight and delivery costs billed to customers.     Intersegment and CementRevenues ($ in thousands) Quarter Ended June 30, 2012   2011 Intersegment Revenues: Cement $ 567 $ 1,039 Paperboard 10,922 9,682 Concrete and Aggregates   212   140 $ 11,701 $ 10,861   Cement Revenues: Wholly Owned $ 51,750 $ 37,711 Joint Venture   23,707   21,394 $ 75,457 $ 59,105       Eagle Materials Inc. Attachment 4   Eagle Materials Inc.Consolidated Balance Sheets(dollars in thousands)(unaudited)     June 30,March 31,2012   20112012*ASSETS Current Assets – Cash and Cash Equivalents $ 3,707 $ 3,478 $ 6,481 Accounts and Notes Receivable, net 73,304 54,192 56,197 Inventories 114,441 114,124 123,606 Federal Income Tax Receivable - 5,374 1,133 Prepaid and Other Assets   3,366     3,836     4,424   Total Current Assets   194,818     181,004     191,841   Property, Plant and Equipment – 1,145,195 1,119,346 1,140,744 Less: Accumulated Depreciation   (572,351 )   (524,143 )   (560,236 ) Property, Plant and Equipment, net 572,844 595,203 580,508 Investments in Joint Venture 39,407 34,109 38,939 Notes Receivable 3,360 5,139 3,436 Goodwill and Intangibles 150,743 151,380 150,902 Other Assets   19,224     18,376     19,519   $ 980,396   $ 985,211   $ 985,145     LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities – Accounts Payable $ 34,517 $ 31,472 $ 38,747 Accrued Liabilities 30,275 31,808 33,619 Federal Income Tax Payable 8,192 - - Current Portion of Long-term Debt   4,677     -     4,677   Total Current Liabilities   77,661     63,280     77,043   Long-term Liabilities 39,774 38,735 39,467 Bank Credit Facility 57,000 11,000 70,000 Senior Notes 192,259 285,000 192,259 Deferred Income Taxes 129,760 128,739 133,865 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 45,362,170; 44,906,232 and 45,269,493 Shares, respectively. 454 449 453 Capital in Excess of Par Value 39,564 25,439 37,692 Accumulated Other Comprehensive Losses (5,400 ) (2,893 ) (5,516 ) Retained Earnings   449,324     435,462     439,882   Total Stockholders' Equity   483,942     458,457     472,511   $ 980,396   $ 985,211   $ 985,145     *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