Eagle Materials Reports Record First Quarter Revenues and Strong Earnings Improvement

  Eagle Materials Reports Record First Quarter Revenues and Strong Earnings   Improvement  Business Wire  DALLAS -- July 22, 2014  Eagle Materials Inc. (NYSE:EXP) today reported financial results for the first quarter of fiscal 2015 ended June 30, 2014. Notable items for the quarter include (all comparisons, unless otherwise noted, are with the prior year’s first quarter):    *Record first quarter revenues of $266.3 million, up 17%   *Record first quarter cement sales volumes of 1.3 million tons   *Net earnings per diluted share of $0.75, up 25%   *Receipt of the final permit enabling operation of our frac-sand mine in     northern Illinois  First quarter earnings before interest and income taxes increased 21% to $59.8 million, as first quarter sales volumes improved across nearly all businesses. In addition, sales prices improved in all businesses. These results reflect improving, early-cycle construction fundamentals in the US.  We also received the final permit necessary for us to begin operating our frac-sand mine in Utica, Illinois during the first quarter. The first shipments of raw sand from our mine to our 1.5 million ton processing facility at Corpus Christi, Texas are expected to occur no later than our fiscal third quarter.  Cement, Concrete and Aggregates  Operating earnings from cement for the first quarter were $20.5 million, an 8% increase from the same quarter a year ago. The earnings increase was driven by record first quarter cement sales volumes and a 5% increase in average net cement sales prices, partially offset by $5.2 million of costs associated with a shift to the first quarter of the annual maintenance outages at our Kansas City and Tulsa cement plants, which had last occurred in the fourth quarter of fiscal 2013. While underlying demand for our cement continues to recover, extraordinary rail congestion associated with the harsh winter weather adversely impacted the timing of cement shipments during the first quarter.  Cement revenues for the first quarter, including joint venture and intersegment revenues, totaled $127.9 million, 9% greater than the same quarter last year. Cement sales volumes for the quarter were 1.3 million tons, 4% higher than the same quarter a year ago. The average net sales price for this quarter was $90.66 per ton, 5% higher than the same quarter last year.  Concrete and Aggregates reported operating earnings of $1.4 million for the first quarter, a 34% improvement from the same quarter a year ago, reflecting improved concrete and aggregates pricing along with improved concrete sales volumes.  Gypsum Wallboard and Paperboard  Gypsum Wallboard and Paperboard reported first quarter operating earnings of $45.0 million, up 27% from the same quarter last year. Improved Gypsum Wallboard net sales prices and increased Gypsum Wallboard and Paperboard sales volumes were the primary drivers of the quarterly earnings increase.  Gypsum Wallboard and Paperboard revenues for the first quarter totaled $136.1 million, an 18% 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. The average Gypsum Wallboard net sales price this quarter was $161.74 per MSF, 11% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 569 million square feet (MMSF) represents a 7% increase from the same quarter last year. The average Paperboard net sales price this quarter was $509.62 per ton, 1% higher than the same quarter a year ago. Paperboard sales volumes for the quarter were 72,000 tons, 13% higher than the same quarter a year ago.  Oil and Gas Proppants  Oil and Gas Proppants reported first quarter revenues of $11.2 million and an operating loss of $0.6 million. During this year’s first quarter, we continued to process and sell purchased sand in Corpus Christi awaiting the opening of our mine in Illinois. With the receipt of the final permit necessary to start-up our mine, we expect to be able to sell our owned sand through our Corpus Christi facility no later than our fiscal third quarter, primarily into Eagle Ford shale-drilling applications.  Details of Financial Results  Beginning in our fiscal 2015, we have begun reporting our frac-sand business as a separately reportable segment -- Oil and Gas Proppants. The results of this business were previously included in our Concrete and Aggregates segment during the initialization phase at start-up and have been reclassified to conform to the current year presentation.  We conduct one of our cement plant operations, Texas Lehigh Cement Company LP, through a 50/50 joint venture (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, and Oil and Gas Proppants from 40 facilities across the US. Eagle 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 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Wednesday, July 23, 2014. The conference call will be webcast simultaneously on the Eagle 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 Eagle at (214) 432-2000.  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. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March31, 2014. 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. Rowley President and Chief Executive Officer  D. Craig Kesler Executive Vice President and Chief Financial Officer  Robert S. Stewart Executive Vice President, Strategy, Corporate Development and Communications                 Attachment 1     Statement of Consolidated Earnings Attachment 2     Revenues and Earnings by Lines of Business (Quarter) Attachment 3     Sales Volume, Net Sales Prices and Intersegment and Cement                  Revenues Attachment 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                                              June 30,                                              2014               2013                                                                  Revenues                                     $ 266,251          $ 227,044                                                                  Cost of Goods Sold                            209,850          180,440                                                                      Gross Profit                                   56,401             46,604                                                                  Equity in Earnings of Unconsolidated           9,800              7,878 Joint Venture                                                                               Corporate General and Administrative           (7,042     )       (5,594     ) Expenses                                                                               Other, net                                    679              583                                                                          Earnings before Interest and Income            59,838             49,471 Taxes                                                                  Interest Expense, net                         (4,052     )      (4,955     )                                                                  Earnings before Income Taxes                   55,786             44,516                                                                  Income Tax Expense                            (18,076    )      (14,415    )                                                                  Net Earnings                                 $ 37,710          $ 30,101                                                                                                                                         NET EARNINGS PER SHARE Basic                                        $ 0.76            $ 0.61        Diluted                                      $ 0.75            $ 0.60                                                                         AVERAGE SHARES OUTSTANDING Basic                                         49,501,847       48,955,724  Diluted                                       50,287,452       49,810,170                                                                                                                                 Eagle Materials Inc. Attachment 2                                                                   Eagle Materials Inc.  Revenues and Segment Operating Earnings by Lines of Business  (dollars in thousands)  (unaudited)                                                                                                                    Quarter Ended                                                  June 30,                                                  2014            2013 Revenues*                                                                   Gypsum Wallboard and Paperboard: Gypsum Wallboard                                 $ 112,677       $ 95,981 Gypsum Paperboard                                23,463          18,951                                                    136,140           114,932                                                                   Cement (Wholly Owned)                            92,998            87,304                                                                   Oil and Gas Proppants                            11,180            942                                                                   Concrete and Aggregates                          25,933          23,866                                                                     Total                                            $ 266,251      $ 227,044   Segment Operating Earnings                                                                   Gypsum Wallboard and Paperboard: Gypsum Wallboard                                 $ 37,428        $ 29,636 Gypsum Paperboard                                7,547           5,679                                                     44,975            35,315                                                                   Cement: Wholly Owned                                     10,707            11,132 Joint Venture                                    9,800           7,878                                                     20,507            19,010                                                                   Oil and Gas Proppants                            (637      )       (855    )                                                                   Concrete and Aggregates                          1,356             1,012                                                                   Other, net                                       679             583                                                                        Sub-total                                        $ 66,880        $ 55,065                                                                             Corporate General and Administrative Expense     (7,042    )      (5,594  )                                                                             Earnings before Interest and Income Taxes        $ 59,838       $ 49,471                                                                                                                                       * 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,                                   2014       2013       Change                                                              Gypsum Wallboard (MMSF’s)         569          532          +7%                                                              Paperboard (M Tons): Internal                          27           26           +4% External                          45           38           +18%                                   72           64           +13%                                                              Cement (M Tons): Wholly Owned                      1,007        979          +3% Joint Venture                     284          262          +8%                                   1,291        1,241        +4%                                                              Concrete (M Cubic Yards)          235          227          +4%                                                              Aggregates * (M Tons)             818          902          -9%                                                                * Aggregates sales volumes excludes sales of frac sand                                                          Average Net Sales Price *                              Quarter Ended                              June 30,                              2014        2013        Change                                                             Gypsum Wallboard (MSF)       $ 161.74       $ 146.30       +11  % Paperboard (Ton)             $ 509.62       $ 502.42       +1   % Cement (Ton)                 $ 90.66        $ 86.15        +5   % Concrete (Cubic Yard)        $ 84.50        $ 78.97        +7   % Aggregates ** (Ton)          $ 7.40         $ 6.88         +8   %                                                              *    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                                                       ($ in thousands)                             Quarter Ended                             June 30,                             2014               2013 Intersegment Revenues: Cement                      $   2,360            $  1,992 Paperboard                      14,016              13,212 Concrete and Aggregates        229                398                             $   16,605           $  15,602                                                   Cement Revenues: Wholly Owned                $   92,998           $  87,304 Joint Venture                  32,578             28,404                             $   125,576          $  115,708                                                                                                                 Eagle Materials Inc. Attachment 4                                                                   Eagle Materials Inc.  Consolidated Balance Sheets  (dollars in thousands)  (unaudited)                                                                                                 June 30,                         March 31,                                2014              2013          2014* ASSETS Current Assets – Cash and Cash Equivalents     $ 6,541          $ 6,744        $ 6,482 Accounts and Notes               134,108           117,834         102,917 Receivable, net Inventories                      182,470           164,197         187,096 Federal Income Tax              -                -              - Receivable Prepaid and Other Assets        8,290           9,606         10,465     Total Current Assets            331,409         298,381       306,960    Property, Plant and              1,682,543         1,620,208       1,660,975 Equipment – Less: Accumulated               (691,946  )      (630,317  )    (676,924  ) Depreciation Property, Plant and              990,597           989,891         984,051 Equipment, net Investments in Joint Venture     44,434            41,074          43,008 Notes Receivable                 3,197             3,843           3,063 Goodwill and Intangibles         160,262           161,916         160,690 Other Assets                    14,468          20,278        13,757                                   $ 1,544,367     $ 1,515,217   $ 1,511,529                                                                    LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities – Accounts Payable              $ 57,803         $ 54,983       $ 57,098 Accrued Liabilities              34,894            36,320          42,222 Federal Income Tax Payable       19,956            10,904         - Current Portion of Long-term    9,500          -             9,500      Debt Total Current Liabilities       122,153         102,207       108,820    Long-term Liabilities            53,177            52,079          53,678 Bank Credit Facility             176,000           305,000         189,000 Senior Notes                     182,759           192,259         182,759 Deferred Income Taxes            142,094           138,220         145,773 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 50,153,937; 49,552,819 and 50,053,738 Shares,               502               496             501 respectively.                                                                   Capital in Excess of Par         257,407           228,034         253,524 Value Accumulated Other                (5,377    )       (6,887    )     (5,483    ) Comprehensive Losses Retained Earnings               615,652         503,809       582,957    Total Stockholders’ Equity      868,184         725,452       831,499                                  $ 1,544,367     $ 1,515,217   $ 1,511,529  *From audited financial statements.                                                                    Contact:  Eagle Materials Inc. Steven R. Rowley, 214-432-2000 President & CEO or D. Craig Kesler, 214-432-2000 Executive Vice President & CFO or Robert S. Stewart, 214-432-2000 Executive Vice President  
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