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

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 Tuesday, October 30, 2012. 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. For more information, contact EXP at 214-432-2000.

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 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; availability of raw materials; changes in energy costs including, without limitation, natural gas and oil; changes in the cost and availability of transportation; unexpected operational difficulties; inability to timely execute announced capacity expansions; governmental regulation and changes in governmental and public policy (including, without limitation, climate change regulation); 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 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 March 31, 2012 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012. These reports are filed with the Securities and Exchange Commission. With respect to our proposed acquisition of certain assets from Lafarge 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, our ability to complete the acquisition within the expected timeframe or at all, failure to realize the expected benefits of the transaction, possible negative effects of announcement or consummation of the transaction, significant transaction costs or unknown liabilities, and general economic and business conditions that may affect us following acquisition. 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 Six Months)(3) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues(4) Consolidated Balance Sheets(5) Non-GAAP Financial Measures

   

Eagle Materials Inc.

Attachment 1

 
Eagle Materials Inc.
Statement of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
 
Quarter Ended

September 30,

Six Months Ended

September 30,

  2012       2011     2012       2011  
 
Revenues $ 164,659 $ 134,819 $ 318,701 $ 254,626
 
Cost of Goods Sold   132,170     126,102     263,315     241,536  
 
Gross Profit 32,489 8,717 55,386 13,090
 
Equity in Earnings of Unconsolidated JV 8,750 7,936 15,218 13,384
Other Operating Income (Expense) 66 115 (204 ) 36
Acquisition and Litigation Expense (5,713 ) - (6,374 ) -
Corporate General and Administrative Expense   (5,919 )   (4,472 )   (10,674 )   (8,590 )
 
Earnings before Interest and Income Taxes 29,673 12,296 53,352 17,920
Interest Expense, Net  

(3,548

)

  (4,557 )  

(7,313

)

 

(9,142

)

 
Earnings before Income Taxes 26,125 7,739 46,039 8,778
Income Tax Expense   (8,172 )   (1,714 )   (14,108 )   (1,946 )
 
Net Earnings $ 17,953   $ 6,025   $ 31,931   $ 6,832  
 
EARNINGS PER SHARE
Basic $ 0.40   $ 0.14   $ 0.71   $ 0.15  
Diluted $ 0.40   $ 0.14   $ 0.71   $ 0.15  
 
AVERAGE SHARES OUTSTANDING
Basic   44,746,225     44,200,291     44,708,499     44,190,220  
Diluted   45,353,778     44,325,277     45,219,224     44,433,809  
   

Eagle Materials Inc .

Attachment 2

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

September 30,

Six Months Ended

September 30,

  2012       2011   2012     2011  
Revenues*
 
Gypsum Wallboard and Paperboard:
Gypsum Wallboard $ 77,327 $ 50,981 $ 147,547 $ 102,323
Gypsum Paperboard   19,215     21,285   38,622     40,279  
96,542 72,266 186,169 142,602
 
Cement (Wholly Owned) 54,105 48,892 105,855 86,603
 
Concrete and Aggregates   14,012     13,661   26,677     25,421  
 
Total $ 164,659   $ 134,819   $ 318,701   $ 254,626  

 

Segment Operating Earnings
 
Gypsum Wallboard and Paperboard:
Gypsum Wallboard $ 16,464 $ (2,540 ) $ 30,486 $ (4,302 )
Gypsum Paperboard   7,695     4,038   12,971     7,068  
24,159 1,498 43,457 2,766
 
Cement:
Wholly Owned 8,692 7,175 12,090 10,515
Joint Venture   8,750     7,936   15,218     13,384  
17,442 15,111 27,308 23,899
 
Concrete and Aggregates (362 ) 44 (161 ) (191 )
 
Other, net   66     115   (204 )   36  
 
Sub-total 41,305 16,768 70,400 26,510
Acquisition and Litigation Expense (5,713 ) - (6,374 ) -
Corporate General and Administrative Expense   (5,919 )   (4,472 ) (10,674 )   (8,590 )
 
Earnings Before Interest and Income Taxes $ 29,673   $ 12,296   $ 53,352   $ 17,920  

 

 
* 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

September 30,

  Six Months Ended

September 30,

2012   2011   Change 2012   2011   Change
 
Gypsum Wallboard (MMSF’s) 500 403 +24 % 957 815 +17 %
 
Cement (M Tons):
Wholly Owned 639 588 +9 % 1,260 1,037 +22 %
Joint Venture 225 229 -2 % 452 454 0 %
864 817 +6 % 1,712 1,491 +15 %
Paperboard (M Tons):
Internal 23 18 +28 % 43 35 +23 %
External 39 42 -7 % 79 82 -4 %
62 60 +3 % 122 117 +4 %
 
Concrete (M Cubic Yards) 141 144 -2 % 278 280 -1 %
 
Aggregates (M Tons) 810 771 +5 % 1,462 1,383 +6 %
   
Average Net Sales Price*
Quarter Ended

September 30,

    Six Months Ended

September 30,

  2012       2011     Change   2012       2011     Change
 
Gypsum Wallboard (MSF) $ 119.44 $ 92.09 +30 % $ 119.09 $ 91.05 +31 %
Cement (Ton) $ 82.77 $ 81.23 +2 % $ 81.92 $ 81.24 +1 %
Paperboard (Ton) $ 512.12 $ 524.20 -2 % $ 507.57 $ 515.21 -1 %
Concrete (Cubic Yard) $ 66.83 $ 64.33 +4 % $ 66.07 $ 62.73 +5 %
Aggregates (Ton) $ 6.01 $ 5.98 +1 % $ 6.00 $ 5.94 +1 %

*Net of freight and delivery costs billed to customers.

   
Intersegment and Cement Revenues
Quarter Ended

September 30,

    Six Months Ended

September 30,

  2012       2011   2012       2011
Intersegment Revenues:
Cement $ 512 $ 1,202 $ 1,079 $ 2,241
Paperboard 12,515 10,452 23,437 20,134
Concrete and Aggregates   245   221   457   361
$ 13,272 $ 11,875 $ 24,973 $ 22,736
 
Cement Revenues:
Wholly Owned $ 54,105 $ 48,892 $ 105,855 $ 86,603
Joint Venture   23,916   22,460   47,623   43,854
$ 78,021 $ 71,352 $ 153,478 $ 130,457
Eagle Materials Inc.      
Attachment 4
 

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 

September 30,

March 31,

 

2012

   

2011

 

2012*

ASSETS

Current Assets –
Cash and Cash Equivalents $ 8,149 $ 10,692 $ 6,481
Accounts and Notes Receivable, net 74,066 64,447 56,197
Inventories 109,004 108,156 123,606
Federal Income Tax Receivable - 6,688 1,133
Prepaid and Other Assets   2,588     2,856     4,424  
 
Total Current Assets   193,807     192,839     191,841  
Property, Plant and Equipment – 1,149,075 1,122,895 1,140,744
Less: Accumulated Depreciation   (584,773 )   (536,057 )   (560,236 )
 
Property, Plant and Equipment, net 564,302 586,838 580,508
Investments in Joint Venture 39,908 35,545 38,939
Notes Receivable 3,316 5,005 3,436
Goodwill and Intangibles 150,584 151,221 150,902
Other Assets   22,971     18,685     19,519  
$ 974,888   $ 990,133   $ 985,145  
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities –
Accounts Payable $ 34,730 $

35,285

$

38,747
Accrued Liabilities 42,602 42,189 33,619
Federal Income Tax Payable 11,455 - -
Current Portion of Long-term Debt   4,677     -     4,677  
Total Current Liabilities   93,464     77,474     77,043  
Long-term Liabilities 39,747 38,097 39,467
Bank Credit Facility 20,000 - 70,000
Senior Notes 192,259 285,000 192,259
Deferred Income Taxes 127,307 128,127 133,865
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 45,438,711; 44,899,310 and

45,269,493 Shares, respectively. 454 449 453
 
Capital in Excess of Par Value 44,208 26,882 37,692
Accumulated Other Comprehensive Losses (5,284 ) (2,893 ) (5,516 )
Retained Earnings   462,733     436,997     439,882  
Total Stockholders’ Equity   502,111     461,435     472,511  
$ 974,888   $ 990,133   $ 985,145  
*From audited financial statements.
 

Eagle Materials Inc.Attachment 5

Eagle Materials Inc. Non-GAAP Financial Measures (unaudited) (Dollars, other than earnings per share amounts, and number of shares in millions)

Adjusted earnings per diluted share (Adjusted EPS) is a non-GAAP financial measure and represents earnings per diluted share excluding the impacts from non-routine items, including costs related to our pending acquisition of the Lafarge Target Business and litigation costs related to our lawsuit against the IRS (Non-routine Items). Management uses measures of earnings excluding the impact of Non-routine Items as a basis for comparing operating results of the Company from period to period and for purposes of its budgeting and planning processes. Management believes Adjusted EPS represents the most comparable operating performance measure to compare the three months ended September 30, 2012 to the same period during the prior year. Although management believes that Adjusted EPS is useful in evaluating the Company’s business, this information should be considered as supplemental in nature and is not meant to be considered in isolation, or as a substitute for earnings per diluted share and the related financial information prepared in accordance with GAAP. In addition, our presentation of Adjusted EPS may not be the same as similarly titled measures reported by other companies, limiting its usefulness as a comparative measure.

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