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Eagle Materials Inc. Reports Continued Growth In Sales Volumes And Earnings In The Second Quarter

Eagle Materials Inc. (NYSE: EXP) today reported financial results for the second quarter of fiscal 2013 which ended September 30, 2012. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year’s second quarter):

  • Revenues of $164.7 million, up 22%
  • Segment operating earnings of $41.3 million, up 146%
  • Adjusted earnings per diluted share of $0.49, up 250%
    • Adjusted earnings per share is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 5
    • Total impact of non-routine items, including costs related to the pending acquisition of the Lafarge Target Business and litigation costs related to our lawsuit against the IRS, was $3.9 million, or $0.09 per diluted share
  • Earnings per diluted share of $0.40, up 186%

Second quarter sales volumes improved across all major business lines and wallboard net sales prices increased 30% as compared to the prior year’s second quarter. Improved second quarter operating cash flow was used to fund capital expenditures, pay dividends and reduce debt which further strengthened our financial position. Eagle ended the quarter with a net debt-to-capitalization ratio of 29%.

As previously announced on September 26, 2012, Eagle entered into a definitive agreement with Lafarge North America to purchase Lafarge’s Sugar Creek, Missouri and Tulsa, Oklahoma cement plants, as well as related assets, which include six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business (the “Lafarge Target Business”).

The purchase price is $446 million, subject to customary post-closing adjustments. Eagle expects that the acquisition will increase its U.S. annual cement capacity by approximately 60% to nearly 5 million tons. The acquisition is expected to close in November or December 2012, and is subject to receipt of required regulatory approvals, certain third-party consents and other customary conditions.

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