EXP Eagle Materials Inc

Eagle Materials Inc. (NYSE: EXP) today reported financial results for the first quarter of fiscal 2025 ended June 30, 2024. Notable items for the quarter are highlighted below. (Unless otherwise noted, all comparisons are with the prior year’s fiscal first quarter):

First Quarter Fiscal 2025 Highlights

• Record Revenue of $608.7 million, up 1%
• Record Net Earnings of $133.8 million, up 11%
• Record Net Earnings per diluted share of $3.94, up 16%
• Adjusted EBITDA of $224.5 million, up 5%
  • Adjusted EBITDA is a non-GAAP financial measure calculated by excluding non-routine items (including certain non-cash expenses) in the manner described in Attachment 6
• Repurchased approximately 348,000 shares of Eagle common stock for $85.5 million

Commenting on the first quarter results, Michael Haack, President and CEO, said, “Fiscal 2025 is off to a solid start for Eagle, with record revenue of $608.7 million, EPS of $3.94, and gross margins of 30.7%, an increase of 140 bps. Our portfolio of businesses continued to perform well despite adverse weather conditions during the quarter across many of our core markets, which affected sales volumes for our Cement and Concrete and Aggregates businesses. We repurchased approximately 348,000 shares of our common stock for $85.5 million and ended the quarter with debt of $1.1 billion and a net leverage ratio (net debt to Adjusted EBITDA) of 1.3x, giving us substantial financial flexibility that supports disciplined capital allocation and long-term growth.” (Net debt is a non-GAAP financial measure calculated by subtracting cash and cash equivalents from debt as described in Attachment 6).

Mr. Haack continued, “Underlying fundamentals in our markets continue to be favorable, and we expect demand for our products to remain steady for the balance of the year. Construction spending on infrastructure and heavy industrial projects continues to drive cement demand. In addition, despite some interest-rate sensitivity, residential construction activity remains resilient, given chronic housing-supply shortages and continued underlying demand strength. Our well-positioned balance sheet, significant cashflow generation and consistent, disciplined operational and strategic execution through shifting economic cycles positions Eagle for another strong fiscal year.”

Segment Financial Results

Heavy Materials: Cement, Concrete and Aggregates

Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, Joint Venture and intersegment Cement revenue, was $400.2 million, a 1% improvement. Heavy Materials operating earnings increased 14% to $92.1 million primarily because of higher Cement sales prices partially offset by lower Cement sales volume.

Cement revenue, including Joint Venture and intersegment revenue, was up 3% to $339.2 million. Operating earnings increased 20% to $89.1 million reflecting higher Cement sales prices partially offset by lower Cement sales volume. Additionally, Cement operating costs benefitted from lower fuel costs, and cost control initiatives in our preventative maintenance programs, and because the prior year’s first quarter included approximately $2.8 million of costs associated with the step-up in inventory values related to the Stockton Terminal Acquisition. The average net Cement sales price for the quarter increased 6% to $156.10 per ton. Cement sales volume for the quarter declined 3% to 1.9 million tons, as adverse weather conditions in many of our markets, most notably in Texas and the Midwest, delayed several construction projects and affected shipments.

Concrete and Aggregates revenue was down 9% to $61.0 million, and operating earnings declined 58% to $3.0 million, reflecting lower Concrete and Aggregates sales volume partially offset by increased Concrete and Aggregates prices.

Light Materials: Gypsum Wallboard and Paperboard

Revenue in the Light Materials sector, which includes Gypsum Wallboard and Paperboard, increased 2% to $248.1 million, primarily because of higher Gypsum Wallboard sales prices partially offset by lower Gypsum Wallboard sales volume. Gypsum Wallboard sales volume declined 1% to 757 million square feet (MMSF), while the average net sales price increased 1% to $239.43 per MSF.

Paperboard sales volume was up 10% to a record 91,000 tons. The average Paperboard net sales price in the quarter was $597.41 per ton, up 11%, consistent with the pricing provisions in our long-term sales agreements that factor in changes to input costs.

Operating earnings in the Light Materials sector were $102.5 million, an increase of 5%, reflecting higher Gypsum Wallboard sales prices and lower operating costs, most notably energy and maintenance costs.

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 use 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 revenue 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 revenue as a part of a segment’s total revenue. 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. is a leading U.S. manufacturer of heavy construction products and light building materials. Eagle’s primary products, Portland Cement and Gypsum Wallboard, are essential for building, expanding and repairing roads and highways and for building and renovating residential, commercial and industrial structures across America. Eagle manufactures and sells its products through a network of more than 70 facilities spanning 21 states and is headquartered in Dallas, Texas. Visit eaglematerials.com for more information.

Eagle’s senior management will conduct a conference call to discuss the financial results, forward-looking information and other matters at 8:30 a.m. Eastern Time (7:30 a.m. Central Time) on Tuesday, July 30, 2024. The conference call will be webcast simultaneously on the Eagle website, eaglematerials.com. A replay of the webcast and the presentation will be archived on the site for one year.

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 statements and generally arise when the Company is discussing its beliefs, estimates or expectations as to future events. 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 businesses; fluctuations in public infrastructure expenditures; adverse weather conditions and their effects on infrastructure and other construction projects; 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; the availability and fluctuations in the cost of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil (including diesel), and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (for example, spot market prices), governmental orders and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; material nonpayment or non-performance by any of our key customers; consolidation of our customers; inability to timely execute announced capacity expansions; difficulties and delays in the development of new business lines; governmental regulation and changes in governmental and public policy (including, without limitation, climate change and other environmental regulation); possible outcomes of pending or future litigation or arbitration proceedings; changes in economic conditions or the nature or level of activity in any one or more of the markets or industries in which the Company or its customers are engaged; severe weather conditions (such as winter storms, tornados and hurricanes) and their effects on our facilities, operations and contractual arrangements with third parties; competition; cyber-attacks or data security breaches; increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects undertaken by state or local governments; the availability of acquisitions or other growth opportunities that meet our financial return standards and fit our strategic focus; risks related to pursuit of acquisitions, joint ventures and other transactions or the execution or implementation of such transactions, including the integration of operations acquired by the Company; general economic conditions, including inflation and recessionary conditions; and changes in interest rates and the resulting effects on the Company and demand for our products. For example, increases in interest rates, decreases in demand for construction materials or increases in the cost of energy (including, without limitation, natural gas, coal and oil) or the cost of our raw materials can be expected to adversely affect the revenue 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 results of operations. Finally, any forward-looking statements made by the Company are subject to the risks and impacts associated with natural disasters, the outbreak, escalation or resurgence of health emergencies, pandemics or other unforeseen events, including, without limitation, the COVID-19 pandemic and responses thereto designed to contain its spread and mitigate its public health effects, as well as their impact on our operations and on economic conditions, capital and financial markets. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and subsequent quarterly and annual reports upon filing. 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.

Attachment 1 Consolidated Statement of Earnings Attachment 2 Revenue and Earnings by Lines of Business Attachment 3 Sales Volume, Net Sales Prices and Intersegment and Cement Revenue Attachment 4 Consolidated Balance Sheets Attachment 5 Depreciation, Depletion and Amortization by Lines of Business Attachment 6 Reconciliation of Non-GAAP Financial Measures

 

Attachment 1

Eagle Materials Inc.

Consolidated Statement of Earnings

(dollars in thousands, except per share data)

(unaudited)

 

 

Quarter Ended

June 30,

 

2024

 

2023

 

 

 

 

Revenue

$

608,689

 

 

$

601,521

 

 

 

 

 

Cost of Goods Sold

 

421,821

 

 

 

425,526

 

 

 

 

 

Gross Profit

 

186,868

 

 

 

175,995

 

 

 

 

 

Equity in Earnings of Unconsolidated JV

 

7,716

 

 

 

3,159

 

Corporate General and Administrative Expenses

 

(15,649

)

 

 

(11,679

)

Other Non-Operating Income

 

2,683

 

 

 

213

 

 

 

 

 

Earnings before Interest and Income Taxes

 

181,618

 

 

 

167,688

 

 

 

 

 

Interest Expense, net

 

(10,684

)

 

 

(12,239

)

 

 

 

 

Earnings before Income Taxes

 

170,934

 

 

 

155,449

 

 

 

 

 

Income Tax Expense

 

(37,092

)

 

 

(34,600

)

 

 

 

 

Net Earnings

$

133,842

 

 

$

120,849

 

 

 

 

 

 

 

 

NET EARNINGS PER SHARE

 

 

 

Basic

$

3.97

 

 

$

3.43

 

Diluted

$

3.94

 

 

$

3.40

 

 

 

 

 

AVERAGE SHARES OUTSTANDING

 

 

 

Basic

 

33,734,280

 

 

 

35,274,753

 

Diluted

 

33,993,023

 

 

 

35,532,284

 

 

 

 

 

 

Attachment 2

Eagle Materials Inc.

Revenue and Earnings by Lines of Business

(dollars in thousands)

(unaudited)

 

 

Quarter Ended

June 30,

 

2024

 

2023

Revenue*

 

 

 

 

 

 

 

Heavy Materials:

 

 

 

Cement (Wholly Owned)

$

299,572

 

 

$

291,772

 

Concrete and Aggregates

 

61,038

 

 

 

67,415

 

 

 

360,610

 

 

 

359,187

 

 

 

 

 

Light Materials:

 

 

 

Gypsum Wallboard

$

217,826

 

 

$

219,097

 

Recycled Paperboard

 

30,253

 

 

 

23,237

 

 

 

248,079

 

 

 

242,334

 

 

 

 

 

Total Revenue

$

608,689

 

 

$

601,521

 

 

 

 

 

 

Segment Operating Earnings

 

 

 

 

 

 

 

Heavy Materials:

 

 

 

Cement (Wholly Owned)

$

81,409

 

 

$

70,902

 

Cement (Joint Venture)

 

7,716

 

 

 

3,159

 

Concrete and Aggregates

 

2,980

 

 

 

7,034

 

 

 

92,105

 

 

 

81,095

 

 

 

 

 

Light Materials:

 

 

 

Gypsum Wallboard

$

93,976

 

 

$

90,857

 

Recycled Paperboard

 

8,503

 

 

 

7,202

 

 

 

102,479

 

 

 

98,059

 

 

 

 

 

Sub-total

 

194,584

 

 

 

179,154

 

 

 

 

 

Corporate General and Administrative Expense

 

(15,649

)

 

 

(11,679

)

Other Non-Operating Income

 

2,683

 

 

 

213

 

 

 

 

 

Earnings before Interest and Income Taxes

$

181,618

 

 

$

167,688

 

 

 

 

* Excluding Intersegment and Joint Venture Revenue listed on Attachment 3

 

Attachment 3

Eagle Materials Inc.

Sales Volume, Net Sales Prices and Intersegment and Cement Revenue

(dollars in thousands, except per unit data)

(unaudited)

 

 

Sales Volume

 

Quarter Ended

June 30,

 

2024

 

2023

 

Change

Cement (M Tons):

 

 

 

 

 

Wholly Owned

1,767

 

1,848

 

-4%

Joint Venture

180

 

165

 

+9%

 

1,947

 

2,013

 

-3%

 

 

 

 

 

 

Concrete (M Cubic Yards)

343

 

385

 

-11%

 

 

 

 

 

 

Aggregates (M Tons)

799

 

1,157

 

-31%

 

 

 

 

 

 

Gypsum Wallboard (MMSFs)

757

 

763

 

-1%

 

 

 

 

 

 

Recycled Paperboard (M Tons):

 

 

 

 

 

Internal

39

 

40

 

-3%

External

52

 

43

 

+21%

 

91

 

83

 

+10%

 

 

 

 

 

 

 

Average Net Sales Price*

 

Quarter Ended

June 30,

 

2024

 

2023

 

Change

Cement (Ton)

$

156.10

 

$

147.27

 

+6%

Concrete (Cubic Yard)

$

148.56

 

$

141.80

 

+5%

Aggregates (Ton)

$

12.61

 

$

11.30

 

+12%

Gypsum Wallboard (MSF)

$

239.43

 

$

236.66

 

+1%

Recycled Paperboard (Ton)

$

597.41

 

$

536.56

 

+11%

 

*Net of freight and delivery costs billed to customers

 

Intersegment and Cement Revenue

 

Quarter Ended

June 30,

 

2024

 

2023

Intersegment Revenue:

 

 

 

Cement

$

10,280

 

$

10,137

Concrete and Aggregates

 

3,777

 

 

3,038

Recycled Paperboard

 

23,987

 

 

22,091

 

$

38,044

 

$

35,266

 

 

 

 

Cement Revenue:

 

 

 

Wholly Owned

$

299,572

 

$

291,772

Joint Venture

 

29,310

 

 

27,123

 

$

328,882

 

$

318,895

 

Attachment 4

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 

 

June 30,

 

March 31,

 

2024

 

2023

 

2024*

ASSETS

 

 

 

 

 

 

Current Assets –

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

46,540

 

 

$

53,149

 

 

$

34,925

 

Accounts and Notes Receivable, net

 

 

278,428

 

 

 

248,647

 

 

 

202,985

 

Inventories

 

 

371,619

 

 

 

302,525

 

 

 

373,923

 

Federal Income Tax Receivable

 

 

2,605

 

 

 

1,410

 

 

 

9,910

 

Prepaid and Other Assets

 

 

13,797

 

 

 

10,310

 

 

 

5,950

 

Total Current Assets

 

 

712,989

 

 

 

616,041

 

 

 

627,693

 

 

 

 

 

 

 

 

Property, Plant and Equipment, net

 

 

1,676,041

 

 

 

1,679,919

 

 

 

1,676,217

 

Investments in Joint Venture

 

 

121,409

 

 

 

89,770

 

 

 

113,478

 

Operating Lease Right-of-Use Asset

 

 

17,970

 

 

 

25,155

 

 

 

19,373

 

Goodwill and Intangibles

 

 

484,298

 

 

 

490,828

 

 

 

486,117

 

Other Assets

 

 

30,160

 

 

 

14,533

 

 

 

24,141

 

 

 

$

3,042,867

 

 

$

2,916,246

 

 

$

2,947,019

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities –

 

 

 

 

 

 

Accounts Payable

 

$

148,231

 

 

$

118,026

 

 

$

127,183

 

Accrued Liabilities

 

 

89,537

 

 

 

75,186

 

 

 

94,327

 

Income Taxes Payable

 

 

35,774

 

 

 

18,304

 

 

 

-

 

Current Portion of Long-Term Debt

 

 

10,000

 

 

 

10,000

 

 

 

10,000

 

Operating Lease Liabilities

 

 

7,008

 

 

 

8,181

 

 

 

7,899

 

Total Current Liabilities

 

 

290,550

 

 

 

229,697

 

 

 

239,409

 

Long-term Liabilities

 

 

67,818

 

 

 

67,134

 

 

 

70,979

 

Bank Credit Facility

 

 

180,000

 

 

 

222,000

 

 

 

170,000

 

Bank Term Loan

 

 

170,000

 

 

 

180,000

 

 

 

172,500

 

2.500% Senior Unsecured Notes due 2031

 

 

741,116

 

 

 

739,848

 

 

 

740,799

 

Deferred Income Taxes

 

 

242,585

 

 

 

239,156

 

 

 

244,797

 

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 33,761,968; 35,446,312 and

34,143,945 Shares, respectively

 

 

338

 

 

 

354

 

 

 

341

 

Capital in Excess of Par Value

 

 

-

 

 

 

-

 

 

 

-

 

Accumulated Other Comprehensive Losses

 

 

(3,328

)

 

 

(3,499

)

 

 

(3,373

)

Retained Earnings

 

 

1,353,788

 

 

 

1,241,556

 

 

 

1,311,567

 

Total Stockholders’ Equity

 

 

1,350,798

 

 

 

1,238,411

 

 

 

1,308,535

 

 

 

$

3,042,867

 

 

$

2,916,246

 

 

$

2,947,019

 

 

*From audited financial statements

 

Attachment 5

Eagle Materials Inc.

Depreciation, Depletion and Amortization by Lines of Business

(dollars in thousands)

(unaudited)

 

The following table presents Depreciation, Depletion and Amortization by lines of business for the quarters ended June 30, 2024 and 2023:

 

 

Depreciation, Depletion and Amortization

 

Quarter Ended

June 30,

 

2024

 

2023

 

 

 

 

Cement

$

22,917

 

$

21,679

Concrete and Aggregates

 

4,530

 

 

5,031

Gypsum Wallboard

 

6,473

 

 

5,461

Recycled Paperboard

 

3,690

 

 

3,719

Corporate and Other

 

740

 

 

792

 

$

38,350

 

$

36,682

 

 

 

 

 

Attachment 6

 

Eagle Materials Inc.

Reconciliation of Non-GAAP Financial Measures

(dollars in thousands)

(unaudited)

 

EBITDA and Adjusted EBITDA

We present Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA to provide additional measures of operating performance and allow for more consistent comparison of operating performance from period to period. EBITDA is a non-GAAP financial measure that provides supplemental information regarding the operating performance of our business without regard to financing methods, capital structures or historical cost basis. Adjusted EBITDA is also a non-GAAP financial measure that further excludes the impact from non-routine items and stock-based compensation. Management uses EBITDA and Adjusted EBITDA as alternative bases for comparing the operating performance of Eagle from period to period and for purposes of its budgeting and planning processes. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as an alternative to net income, cash flow from operations or any other measure of financial performance or liquidity in accordance with GAAP. The following shows the calculation of EBITDA and Adjusted EBITDA and reconciles them to net earnings in accordance with GAAP for the quarters ended June 30, 2024 and 2023, and the trailing twelve months ended June 30, 2024, and March 31, 2024:

 

 

 

Quarter Ended

 

 

Twelve Months Ended

 

June 30,

 

June 30,

 

March 31,

 

2024

 

2023

 

2024

 

2024

 

 

 

 

 

 

Net Earnings, as reported

$

133,842

$

120,849

 

$

490,632

$

477,639

Income Tax Expense

 

37,092

 

34,600

 

 

142,790

 

140,298

Interest Expense

 

10,684

 

12,239

 

 

40,702

 

42,257

Depreciation, Depletion and Amortization

 

38,350

 

36,682

 

 

151,500

 

149,832

EBITDA

$

219,968

$

204,370

 

$

825,624

$

810,026

Purchase accounting 1

 

-

 

3,461

 

 

1,107

 

4,568

Stock-based Compensation

 

4,539

 

6,457

 

 

17,982

 

19,900

Adjusted EBITDA

$

224,507

$

214,288

 

$

844,713

$

834,494

 

1 Represents the impact of purchase accounting on inventory costs and related business development costs

 

Attachment 6, continued

 

Reconciliation of Net Debt to Adjusted EBITDA

GAAP does not define “Net Debt” and it should not be considered as an alternative to debt as defined by GAAP. We define Net Debt as total debt minus cash and cash equivalents to indicate the amount of total debt that would remain if the Company applied the cash and cash equivalents held by it to the payment of outstanding debt. The Company also uses “Net Debt to Adjusted EBITDA,” which it defines as Net Debt divided by Adjusted EBITDA for the trailing twelve months, as an alternative metric to assist it in understanding its leverage position. We present this metric for the convenience of the investment community and rating agencies who use such metrics in their analysis, and for investors who need to understand the metrics we use to assess performance and monitor our cash and liquidity positions.

 

 

As of

As of

 

June 30, 2024

March 31, 2024

 

 

 

Total debt, excluding debt issuance costs

$

1,110,000

$

1,102,500

Cash and cash equivalents

 

46,540

 

34,925

Net Debt

$

1,063,460

$

1,067,575

 

 

 

Trailing Twelve Months Adjusted EBITDA

$

844,713

 

834,494

Net Debt to Adjusted EBITDA

1.3x

1.3x

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730122421/en/

For additional information, contact at 214-432-2000

Michael R. Haack President and Chief Executive Officer

D. Craig Kesler Executive Vice President and Chief Financial Officer

Alex Haddock Senior Vice President, Investor Relations, Strategy and Corporate Development