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
Eagle Materials Reports Record First Quarter Revenues and Strong Earnings Improvement
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