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Press release from Business Wire

Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results

Tuesday, May 14, 2013

Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results

16:15 EDT Tuesday, May 14, 2013

DALLAS (Business Wire) -- Eagle Materials Inc. (NYSE: EXP) today reported financial results for fiscal year 2013 and the fiscal fourth quarter ended March 31, 2013. Notable items for the fiscal year and quarter include:

  • Fiscal year 2013 revenues of $642.6 million, up 30%
  • Fiscal year 2013 net earnings per diluted share of $1.22, up 190%
  • Fourth quarter revenues of $159.1 million, up 36%
  • Fourth quarter earnings per diluted share of $0.16, down 20%
  • Completed construction and start-up of our greenfield frac sand facility in Corpus Christi, Texas on-time and under-budget.

Fiscal 2013 earnings before interest and income taxes increased 146%, reflecting improved sales volumes across all heritage businesses and higher net sales prices across all businesses, excluding Paperboard, as compared to the prior year. Eagle ended the year with a net debt-to-capitalization ratio of 41%. The results of operations for the recently acquired assets in Oklahoma and Missouri (the “Recently Acquired Assets”) for the period from November 30, 2012 through March 31, 2013, are included in the annual results disclosed in this press release. For information regarding the results of operations for the Recently Acquired Assets for certain periods prior to November 30, 2012, including pro forma financial information that combines the results of operations for Eagle and the Recently Acquired Assets, please see our Form 8-K/A filed on April 26, 2013. The increase in our average shares outstanding at March 31, 2013 is primarily due to the impact of our follow-on equity offering, which was completed on October 3, 2012.

Our fourth quarter results were impacted by non-routine items of approximately $2.4 million, or $0.04 per share, which included the remaining costs associated with finalizing the acquisition of the Recently Acquired Assets and litigation costs related to our lawsuit against the IRS. Additionally, our fourth quarter cement earnings were impacted by approximately $14 million, or $0.21 per share, associated with annual maintenance costs at the Recently Acquired Assets. Start-up costs associated with our recently completed frac sand facility in Corpus Christi were $1 million, or $0.01 per share.

Fourth quarter sales volumes improved across all businesses, reflecting improving construction fundamentals in the US and the addition of the Recently Acquired Assets. In addition, sales prices improved in all businesses other than Paperboard. Gypsum Wallboard experienced the most significant improvement, with an increase in average net sales prices of 23% as compared with the prior year's fourth quarter.

Cement, Concrete and Aggregates

Fiscal 2013 operating earnings from Cement were $46.2 million, a decline of 1% compared to fiscal 2012. Revenues from Cement, including joint venture and intersegment sales, were $304.1 million for fiscal 2013, 25% higher than last year.

Operating earnings from Cement during the fourth quarter were $2.3 million, a 69% decrease from the same quarter a year ago. Fourth quarter cement earnings were impacted by approximately $14 million associated with maintenance costs at the Recently Acquired Assets, partially offset by improved cement sales volumes and sales prices during the quarter. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $74.6 million, 50% greater than the same quarter last year. Cement sales volumes for the quarter were 773,000 tons, 45% higher than the same quarter a year ago. The average net sales price for this quarter was $87.81 per ton, 4% higher than the same quarter last year. Like-for-like cement sales volumes and net sales prices increased 10% and 5%, respectively, versus the fourth quarter of fiscal 2012 (comparison relates to sales from heritage cement plants operated by Eagle during both quarterly periods).

Concrete and Aggregates reported a fiscal 2013 operating loss of $5.4 million versus an operating loss of $1.1 million one year earlier reflecting particularly adverse weather during our fourth quarter this year, primarily in the Kansas City area. Revenues from Concrete and Aggregates were $55.5 million for fiscal 2013, 24% higher than last year, reflecting the impact from our recently acquired concrete and aggregates business in Kansas City.

Gypsum Wallboard and Paperboard

Fiscal 2013 operating earnings from Gypsum Wallboard and Paperboard were $94.9 million, an increase of 308% compared to fiscal 2012. Revenues from Gypsum Wallboard and Paperboard were $382.1 million for fiscal 2013, 29% higher than last year's revenues.

Gypsum Wallboard and Paperboard reported fourth quarter operating earnings of $26.6 million, up 76% from the same quarter last year. The increase in operating earnings was primarily due to higher net wallboard sales prices and sales volumes along with improved paperboard sales volumes offset by lower paperboard sales prices. In addition, our papermill performed its major annual maintenance during the fourth quarter which contributed to the increased operating costs during the fourth quarter.

Gypsum Wallboard and Paperboard revenues for the fourth quarter totaled $95.6 million, a 20% increase from the same quarter a year ago. The average Gypsum Wallboard net sales price for this quarter was $145.72 per MSF, 23% greater than the same quarter a year ago. Gypsum Wallboard sales volumes of 433 million square feet (MMSF) were up approximately 9% from the prior year's fourth quarter. The average Paperboard net sales price this quarter was $492.54 per ton, 3% less than the same quarter a year ago. Paperboard sales volumes for the quarter were 57,000 tons, 1% greater than the same quarter a year ago.

Details of Financial Results

Current quarter Acquisition and Litigation Expense of $1.8 million consists of costs related to our acquisition of the Recently Acquired Assets and legal fees related to our lawsuit against the IRS.

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 Eagle 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 these amounts.

About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates from 40 facilities across the U.S. Eagle 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 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Wednesday, May 15, 2013. 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; the fact that our products are commodities and that prices for our products are subject to material fluctuation due to market conditions and other factors beyond our control; 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. With respect to our acquisition of the Lafarge Target Business as described in this press release, factors, risks and uncertainties that may cause actual events and developments to vary materially from those anticipated in forward-looking statements include, but are not limited to, the risk that we may not be able to integrate the Lafarge Target Business in an efficient and cost-effective manner with our other assets and operations, the possible inability to realize synergies or other expected benefits of the transaction, the possibility that we may incur significant costs relating to transition or integration activities, the discovery of undisclosed liabilities associated with the business, the need to repay the indebtedness incurred to fund the acquisition and the fact that increased debt may limit our ability to respond to any changes in general economic and business conditions that occur after the acquisition. These and other factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2012 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2012. 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 Ended

March 31,

Fiscal Year Ended

March 31,

  2013       2012     2013       2012  
 
Revenues $ 159,118 $ 116,801 $ 642,562 $ 495,023
 
Cost of Goods Sold   142,520     101,885     539,317     454,546  
 
Gross Profit 16,598 14,916 103,245 40,477
 
Equity in Earnings of Unconsolidated JV 8,437 7,368 32,507 28,528
Corporate General and Administrative Expense (6,976 ) (6,099 ) (23,918 ) (19,617 )
Other Operating (Expense) Income (805 ) (271 ) (1,232 ) 356
Acquisition and Litigation Expense   (1,824 )   -     (10,683 )   (9,117 )
 
Earnings before Interest and Income Taxes 15,430 15,914 99,919 40,627
 
Interest Expense, Net

(4,674

)

(3,269

)

(15,823

)

(16,621

)

Loss on Debt Retirement   -     -     -     (2,094 )
 
Earnings before Income Taxes 10,756 12,645 84,096 21,912
 
Income Tax Expense   2,923     3,642     26,352     3,180  
 
Net Earnings $ 7,833   $ 9,003   $ 57,744   $ 18,732  

 

NET EARNINGS PER SHARE
Basic $ 0.16   $ 0.20   $ 1.24   $ 0.42  
Diluted $ 0.16   $ 0.20   $ 1.22   $ 0.42  
 
AVERAGE SHARES OUTSTANDING
Basic   48,768,236     44,307,678     46,622,646     44,224,924  
Diluted   49,643,918     44,761,812     47,340,450     44,515,981  
     

Eagle Materials Inc.

Attachment 2

Eagle Materials Inc.

Revenues and Segment Operating Earnings by Lines of Business

(dollars in thousands)

(unaudited)

 
Quarter Ended

March 31,

Fiscal Year Ended

March 31,

  2013       2012     2013       2012  
Revenues*
 
Gypsum Wallboard and Paperboard:
Gypsum Wallboard $ 78,245 $ 61,247 $ 306,529 $ 217,633
Gypsum Paperboard   17,364     18,623     75,537     78,309  
95,609 79,870 382,066 295,942
 
Cement (Wholly Owned) 48,698 27,556 204,953 154,233
 
Concrete and Aggregates   14,811     9,375     55,543     44,848  
 
Total Revenues $ 159,118   $ 116,801   $ 642,562   $ 495,023  

 

Segment Operating Earnings
 
Gypsum Wallboard and Paperboard:
Gypsum Wallboard $ 22,356 $ 10,338 $ 69,712 $ 6,264
Gypsum Paperboard   4,266     4,774     25,200     16,988  
26,622 15,112 94,912 23,252
 
Cement:
Wholly Owned (6,132 ) 90 13,721 18,322
Joint Venture   8,437     7,368     32,507     28,528  
2,305 7,458 46,228 46,850
 
Concrete and Aggregates (3,892 ) (286 ) (5,388 ) (1,097 )
 
Other, net   (805 )   (271 )   (1,232 )   356  
 
Sub-total 24,230 22,013 134,520 69,361
 
Corporate General and Administrative Expense (6,976 ) (6,099 ) (23,918 ) (19,617 )
Acquisition and Litigation Expense   (1,824 )   -     (10,683 )   (9,117 )
 
Earnings before Interest and Income Taxes   15,430     15,914     99,919     40,627  
 
 

* 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

March 31,

  Fiscal Year Ended

March 31,

2013   2012 2013   2012
 
Gypsum Wallboard (MMSF's) 433 397 1,909 1,633
 
Cement (M Tons):
Wholly Owned 539 323 2,391 1,857
Joint Venture 234 209 912 866
773 532 3,303 2,723
Paperboard (M Tons):
Internal 22 17 88 71
External 35 39 156 159
57 56 244 230
 
Concrete (M Cubic Yards) 156 116 577 507
 
Aggregates (M Tons) 530 375 2,631 2,221
   
Average Net Sales Price*
Quarter Ended

March 31,

      Fiscal Year Ended

March 31,

  2013         2012   2013         2012
 
Gypsum Wallboard (MSF) $ 145.72 $ 118.86 $ 125.53 $ 98.79
Cement (Ton) $ 87.81 $ 84.08 $ 83.49 $ 81.42
Paperboard (Ton) $ 492.54 $ 505.93 $ 496.84 $ 515.97
Concrete (Cubic Yard) $ 74.57 $ 63.30 $ 69.74 $ 63.83
Aggregates (Ton) $ 6.17 $ 5.62 $ 6.06 $ 5.89

*Net of freight and delivery costs billed to customers.

   
Intersegment and Cement Revenues
Quarter Ended

March 31,

      Fiscal Year Ended

March 31,

  2013         2012   2013         2012
Intersegment Revenues:
Cement $ 1,236 $ 561 $ 2,850 $ 3,605
Paperboard 11,176 9,757 46,393 40,485
Concrete and Aggregates   141   108   744   667
$ 12,553 $ 10,426 $ 49,987 $ 44,757
 
Cement Revenues:
Wholly Owned $ 48,698 $ 27,556 $ 204,953 $ 154,233
Joint Venture   24,699   21,653   96,322   86,140
$ 73,397 $ 49,209 $ 301,275 $ 240,373
   

Eagle Materials Inc.

Attachment 4

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 
March 31,
2013   2012

ASSETS

Current Assets –
Cash and Cash Equivalents $ 3,897 $ 6,481
Accounts and Notes Receivable, net 87,543 56,197
Inventories 156,380 123,606
Federal Income Tax Receivable 2,443 1,133
Prepaid and Other Assets   11,008   4,424
Total Current Assets   261,271   191,841
Property, Plant and Equipment – 1,599,992 1,140,744
Less: Accumulated Depreciation   (614,268)   (560,236)
Property, Plant and Equipment, net 985,724 580,508
Investments in Joint Venture 42,946 38,939
Notes Receivable 3,893 3,436
Goodwill and Intangibles 162,400 150,902
Other Assets   19,999   19,519
$ 1,476,233 $ 985,145

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities –
Accounts Payable $ 58,880 $ 38,747
Accrued Liabilities 41,349 33,619
Current Portion of Senior Notes   -   4,677
Total Current Liabilities   100,229   77,043
Long-term Liabilities 51,547 39,467
Bank Credit Facility 297,000 70,000
Senior Notes 192,259 192,259
Deferred Income Taxes 139,028 133,865
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 49,503,496 and 45,269,493 Shares, respectively.

495 453
Capital in Excess of Par Value 224,053 37,692
Accumulated Other Comprehensive Losses (7,042) (5,516)
Retained Earnings   478,664   439,882
Total Stockholders' Equity   696,170   472,511
$ 1,476,233 $ 985,145

Eagle Materials Inc.
Steven R. Rowley, 214-432-2000
President and Chief Executive Officer
or
D. Craig Kesler, 214-432-2000
Executive Vice President and Chief Financial Officer
or
Robert S. Stewart, 214-432-2000
Executive Vice President, Strategy, Corporate Development and Communications

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