Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results

  Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results

Business Wire

DALLAS -- May 14, 2014

Eagle Materials Inc. (NYSE: EXP) today reported financial results for fiscal
year 2014 and the fiscal fourth quarter ended March 31, 2014. Notable items
for the fiscal year and quarter in relation to the prior year include:

  *Fiscal year 2014 revenues of $898.4 million, up 40%
  *Fiscal year 2014 net earnings per diluted share of $2.49, up 104%
  *Fourth quarter revenues of $189.9 million, up 19%
  *Fourth quarter earnings per diluted share of $0.45, up 181%
  *Repaid $108 million, or 22%, of outstanding debt during fiscal year 2014

Fiscal 2014 earnings before interest and income taxes doubled from the prior
year to $200 million, reflecting improved sales volumes across all business
lines, with cement sales volumes setting an annual record of nearly 4.6
million tons. Net sales prices also strengthened across all businesses, with
annual wallboard net sales prices increasing 18% over the prior year. Annual
revenue and earnings improvement also reflects the acquisition of assets,
primarily two cement plants in Missouri and Oklahoma (the Acquired Assets) on
November 30, 2012. Eagle ended the year with a net debt-to-capitalization
ratio of 31%.

Fourth quarter earnings before interest and income taxes increased 119% to
$33.8 million, as fourth quarter sales volumes also improved across all
businesses, reflecting improving construction fundamentals in the US despite
unusually severe winter weather. In addition, sales prices improved in all
businesses. Gypsum Wallboard experienced the most significant improvement,
with an increase in average net sales prices of 12% as compared with the prior
year’s fourth quarter.

Cement, Concrete and Aggregates

Fiscal 2014 operating earnings from Cement were $89.5 million, an increase of
94% compared to fiscal 2013. Revenues from Cement, including joint venture and
intersegment sales, were $438.2 million for fiscal 2014, 44% higher than last
year.

Operating earnings from Cement during the fourth quarter were $12.0 million, a
422% increase from the same quarter a year ago. This year’s fourth quarter
cement earnings were impacted by approximately $4.5 million associated with
the annual maintenance outage at our Illinois Cement facility, whereas the
prior year’s fourth quarter cement earnings were impacted by approximately $14
million associated with maintenance costs at the Acquired Assets. Cement
revenues for the quarter, including joint venture and intersegment revenues,
totaled $81.7 million, 10% greater than the same quarter last year. Cement
sales volumes for the quarter were 803,000 tons, 4% higher than the same
quarter a year ago. The average net sales price for this quarter was $93.01
per ton, 6% higher than the same quarter last year.

Concrete and Aggregates reported a fiscal 2014 operating loss of $4.7 million
versus an operating loss of $5.4 million one year earlier. Our fiscal 2014
results include an operating loss of $4.9 million associated with the start-up
of our new frac sand operation. Revenues from Concrete and Aggregates were
$115.4 million for fiscal 2014, 108% higher than last year, reflecting the
impact from our recently acquired concrete and aggregates business in Kansas
City and the start-up of our frac sand operation.

Gypsum Wallboard and Paperboard

Fiscal 2014 operating earnings from Gypsum Wallboard and Paperboard were
$138.5 million, an increase of 46% compared to fiscal 2013. Revenues from
Gypsum Wallboard and Paperboard were $465.1 million for fiscal 2014, 22%
higher than last year’s revenues.

Gypsum Wallboard and Paperboard reported fourth quarter operating earnings of
$29.0 million, up 9% from the same quarter last year. The increase in
operating earnings was primarily due to higher net wallboard sales prices and
sales volumes offset by higher costs for maintenance ($1.5 million), legal
($1.3 million) and natural gas ($0.9 million).

Gypsum Wallboard and Paperboard revenues for the fourth quarter totaled $106.3
million, an 11% increase from the same quarter a year ago. The average Gypsum
Wallboard net sales price for this quarter was $162.67 per MSF, 12% greater
than the same quarter a year ago. Gypsum Wallboard sales volumes of 442
million square feet (MMSF) were up approximately 2% from the prior year’s
fourth quarter. The average Paperboard net sales price this quarter was
$503.62 per ton, 2% greater than the same quarter a year ago. Paperboard sales
volumes for the quarter were 59,000 tons, 4% greater than the same quarter a
year ago.

Details of Financial Results

For information regarding the results of operations for the 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 Acquired
Assets, please see our Form 8-K/A filed on April 26, 2013.

The prior year’s fourth quarter results include Acquisition and Litigation
Expenses related primarily to the acquisition of the Acquired Assets and
litigation costs related to our lawsuit against the IRS. The total impact from
these non-routine items was $2.4 million (pre-tax), or $0.04 per diluted share
(after-tax).

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, Aggregates,
Concrete, Gypsum Wallboard, Recycled Paperboard and Frac Sand 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 Thursday, May 15, 2014. 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.

Forward-Looking Statements. This press release contains forward-looking
statements within the meaning of Section27A of the Securities Act of 1933,
Section21E 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, coal and oil; changes in the cost and availability of
transportation; unexpected operational difficulties, including unexpected
maintenance costs, equipment downtime and interruption of production;
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 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, coal 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 Acquired Assets 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 Acquired Assets 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 or repair and maintenance of the Acquired Assets, 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 March31, 2013 and in its Quarterly Report on Form 10-Q
for the fiscal quarter ended December 31, 2013. 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                         Fiscal Year Ended

                     March 31,                             March 31,
                     2014             2013               2014             2013
                                                                              
Revenues             $ 189,894          $ 159,118          $ 898,396          $ 642,562
                                                                              
Cost of Goods         160,366          142,520          712,937          539,317    
Sold
                                                                              
Gross Profit           29,528             16,598             185,459            103,245
                                                                              
Equity in
Earnings of            10,330             8,437              37,811             32,507
Unconsolidated
JV
Corporate
General and            (6,102     )       (6,976     )       (24,552    )       (23,918    )
Administrative
Expense
Other
Operating              68                 (805       )       1,368              (1,232     )
Income
(Expense)
Acquisition
and Litigation        -                (1,824     )      -                (10,683    )
Expense
                                                                              
Earnings
before                 33,824             15,430             200,086            99,919
Interest and
Income Taxes
                                                                              
Interest              (4,057     )      (4,674     )      (18,282    )      (15,823    )
Expense, Net
                                                                              
Earnings
before Income          29,767             10,756             181,804            84,096
Taxes
                                                                              
Income Tax            7,149            2,923            57,561           26,352     
Expense
                                                                              
Net Earnings         $ 22,618          $ 7,833           $ 124,243         $ 57,744     

NET EARNINGS
PER SHARE
Basic                $ 0.46            $ 0.16            $ 2.53            $ 1.24       
Diluted              $ 0.45            $ 0.16            $ 2.49            $ 1.22       
                                                                              
AVERAGE SHARES
OUTSTANDING
Basic                 49,365,344       48,768,236       49,090,750       46,622,646 
Diluted               50,187,433       49,643,918       49,939,165       47,340,450 
                                                                              

                                               
Eagle Materials Inc.
Attachment 2

Eagle Materials Inc.
Revenues and Segment Operating Earnings by Lines of Business
(dollars in thousands)
(unaudited)
                                                     
                     Quarter Ended                   Fiscal Year Ended

                     March 31,                       March 31,
                     2014          2013            2014          2013
Revenues*
                                                                     
Gypsum
Wallboard and
Paperboard:
Gypsum               $ 87,917        $ 78,245        $ 387,016       $ 306,529
Wallboard
Gypsum                18,413        17,364        78,059        75,537  
Paperboard
                       106,330         95,609          465,075         382,066
                                                                     
Cement (Wholly         50,872          48,698          317,879         204,953
Owned)
                                                                     
Concrete and          32,692        14,811        115,442       55,543  
Aggregates
                                                                     
Total Revenues       $ 189,894      $ 159,118      $ 898,396      $ 642,562 

Segment
Operating
Earnings
                                                                     
Gypsum
Wallboard and
Paperboard:
Gypsum               $ 24,618        $ 22,356        $ 114,852       $ 69,712
Wallboard
Gypsum                4,333         4,266         23,610        25,200  
Paperboard
                       28,951          26,622          138,462         94,912
                                                                     
Cement:
Wholly Owned           1,705           (6,132  )       51,675          13,721
Joint Venture         10,330        8,437         37,811        32,507  
                       12,035          2,305           89,486          46,228
                                                                     
Concrete and           (1,128  )       (3,892  )       (4,678  )       (5,388  )
Aggregates
                                                                     
Other, net            68            (805    )      1,368         (1,232  )
                                                                     
Sub-total              39,926          24,230          224,638         134,520
                                                                     
Corporate
General and            (6,102  )       (6,976  )       (24,552 )       (23,918 )
Administrative
Expense
Acquisition
and Litigation        -             (1,824  )      -             (10,683 )
Expense
                                                                     
Earnings
before                33,824        15,430        200,086       99,919  
Interest and
Income Taxes






* 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                Fiscal Year Ended
                                                 
                       March 31,                    March 31,
                       2014   2013   Change     2014    2013    Change
                                                                        
Gypsum Wallboard       442      433      +2   %     2,112     1,909     +11  %
(MMSF’s)
                                                                        
Cement (M Tons):
Wholly Owned           543      539      +1   %     3,580     2,391     +50  %
Joint Venture          260      234      +11  %     1,013     912       +11  %
                       803      773      +4   %     4,593     3,303     +39  %
Paperboard (M
Tons):
Internal               22       22       0    %     101       88        +15  %
External               37       35       +6   %     155       156       -1   %
                       59       57       +4   %     256       244       +5   %
                                                                        
Concrete (M            176      156      +13  %     899       577       +56  %
Cubic Yards)
                                                                        
Aggregates * (M        623      530      +18  %     3,228     2,631     +23  %
Tons)
                                                                        

* Aggregates sales volumes excludes sales of frac sand

             
                 Average Net Sales Price*
                 Quarter Ended                        Fiscal Year Ended
                                                   
                 March 31,                            March 31,
                 2014       2013       Change     2014       2013       Change
                                                                                
Gypsum
Wallboard        $ 162.67     $ 145.72     +12  %     $ 148.33     $ 125.53     +18  %
(MSF)
Cement           $ 93.01      $ 87.81      +6   %     $ 87.31      $ 83.49      +5   %
(Ton)
Paperboard       $ 503.62     $ 492.54     +2   %     $ 504.41     $ 496.84     +2   %
(Ton)
Concrete
(Cubic           $ 84.72      $ 74.57      +14  %     $ 82.55      $ 69.74      +18  %
Yard)
Aggregates       $ 7.03       $ 6.17       +14  %     $ 6.76       $ 6.06       +12  %
(Ton)**
                                                                                

*Net of freight and delivery costs billed to customers.
**Aggregates net sales price is presented for traditional construction
aggregates only, excluding sales of frac sand

                         
                             Intersegment and Cement Revenues
                             Quarter Ended             Fiscal Year Ended
                                                    
                             March 31,                 March 31,
                             2014       2013         2014        2013
Intersegment Revenues:
Cement                       $ 1,449      $ 1,236      $ 8,952       $ 2,850
Paperboard                     11,264       11,176       52,119        46,393
Concrete and                  134         141         1,023        744
Aggregates
                             $ 12,847     $ 12,553     $ 62,094      $ 49,987
                                                                     
Cement Revenues:
Wholly Owned                 $ 50,872     $ 48,698     $ 317,879     $ 204,953
Joint Venture                 29,421      24,699      111,393      96,322
                             $ 80,293     $ 73,397     $ 429,272     $ 301,275
                                                                     

                                           
Eagle Materials Inc.
Attachment 4

Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
                                               
                                               March 31,
                                               2014            2013
ASSETS
Current Assets –
Cash and Cash Equivalents                      $ 6,482           $ 3,897
Accounts and Notes Receivable, net               102,917           87,543
Inventories                                      187,096           156,380
Federal Income Tax Receivable                    -                 2,443
Prepaid and Other Assets                        10,465          11,008    
Total Current Assets                            306,960         261,271   
Property, Plant and Equipment –                  1,660,975         1,599,992
Less: Accumulated Depreciation                  (676,924  )      (614,268  )
Property, Plant and Equipment, net               984,051           985,724
Investments in Joint Venture                     43,008            42,946
Notes Receivable                                 3,063             3,893
Goodwill and Intangibles                         160,690           162,400
Other Assets                                    13,757          19,999    
                                               $ 1,511,529      $ 1,476,233 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities –
Accounts Payable                               $ 57,098          $ 58,880
Accrued Liabilities                              42,222            41,349
Current Portion of Senior Notes                 9,500           -         
Total Current Liabilities                       108,820         100,229   
Long-term Liabilities                            53,678            51,547
Bank Credit Facility                             189,000           297,000
Senior Notes                                     182,759           192,259
Deferred Income Taxes                            145,773           139,028
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 50,053,738 and
49,503,496 Shares,                               501               495

respectively.
Capital in Excess of Par Value                   253,524           224,053
Accumulated Other Comprehensive Losses           (5,483    )       (7,042    )
Retained Earnings                               582,957         478,664   
Total Stockholders’ Equity                      831,499         696,170   
                                               $ 1,511,529      $ 1,476,233 

Contact:

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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