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
Eagle Materials (NYSE:EXP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Eagle Materials (NYSE:EXP)
Historical Stock Chart
From Jul 2023 to Jul 2024