Eagle Materials Inc. Reports Fiscal Year And Fourth Quarter Results

Eagle Materials Inc. (NYSE: EXP) today reported financial results for fiscal year 2014 and the fiscal fourth quarter ended March 31, 2014. Notable items for the fiscal year and quarter in relation to the prior year include:
  • Fiscal year 2014 revenues of $898.4 million, up 40%
  • Fiscal year 2014 net earnings per diluted share of $2.49, up 104%
  • Fourth quarter revenues of $189.9 million, up 19%
  • Fourth quarter earnings per diluted share of $0.45, up 181%
  • Repaid $108 million, or 22%, of outstanding debt during fiscal year 2014

Fiscal 2014 earnings before interest and income taxes doubled from the prior year to $200 million, reflecting improved sales volumes across all business lines, with cement sales volumes setting an annual record of nearly 4.6 million tons. Net sales prices also strengthened across all businesses, with annual wallboard net sales prices increasing 18% over the prior year. Annual revenue and earnings improvement also reflects the acquisition of assets, primarily two cement plants in Missouri and Oklahoma (the Acquired Assets) on November 30, 2012. Eagle ended the year with a net debt-to-capitalization ratio of 31%.

Fourth quarter earnings before interest and income taxes increased 119% to $33.8 million, as fourth quarter sales volumes also improved across all businesses, reflecting improving construction fundamentals in the US despite unusually severe winter weather. In addition, sales prices improved in all businesses. Gypsum Wallboard experienced the most significant improvement, with an increase in average net sales prices of 12% as compared with the prior year’s fourth quarter.

Cement, Concrete and Aggregates

Fiscal 2014 operating earnings from Cement were $89.5 million, an increase of 94% compared to fiscal 2013. Revenues from Cement, including joint venture and intersegment sales, were $438.2 million for fiscal 2014, 44% higher than last year.

Operating earnings from Cement during the fourth quarter were $12.0 million, a 422% increase from the same quarter a year ago. This year’s fourth quarter cement earnings were impacted by approximately $4.5 million associated with the annual maintenance outage at our Illinois Cement facility, whereas the prior year’s fourth quarter cement earnings were impacted by approximately $14 million associated with maintenance costs at the Acquired Assets. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $81.7 million, 10% greater than the same quarter last year. Cement sales volumes for the quarter were 803,000 tons, 4% higher than the same quarter a year ago. The average net sales price for this quarter was $93.01 per ton, 6% higher than the same quarter last year.

Concrete and Aggregates reported a fiscal 2014 operating loss of $4.7 million versus an operating loss of $5.4 million one year earlier. Our fiscal 2014 results include an operating loss of $4.9 million associated with the start-up of our new frac sand operation. Revenues from Concrete and Aggregates were $115.4 million for fiscal 2014, 108% higher than last year, reflecting the impact from our recently acquired concrete and aggregates business in Kansas City and the start-up of our frac sand operation.

Gypsum Wallboard and Paperboard

Fiscal 2014 operating earnings from Gypsum Wallboard and Paperboard were $138.5 million, an increase of 46% compared to fiscal 2013. Revenues from Gypsum Wallboard and Paperboard were $465.1 million for fiscal 2014, 22% higher than last year’s revenues.

Gypsum Wallboard and Paperboard reported fourth quarter operating earnings of $29.0 million, up 9% from the same quarter last year. The increase in operating earnings was primarily due to higher net wallboard sales prices and sales volumes offset by higher costs for maintenance ($1.5 million), legal ($1.3 million) and natural gas ($0.9 million).

Gypsum Wallboard and Paperboard revenues for the fourth quarter totaled $106.3 million, an 11% increase from the same quarter a year ago. The average Gypsum Wallboard net sales price for this quarter was $162.67 per MSF, 12% greater than the same quarter a year ago. Gypsum Wallboard sales volumes of 442 million square feet (MMSF) were up approximately 2% from the prior year’s fourth quarter. The average Paperboard net sales price this quarter was $503.62 per ton, 2% greater than the same quarter a year ago. Paperboard sales volumes for the quarter were 59,000 tons, 4% greater than the same quarter a year ago.

Details of Financial Results

For information regarding the results of operations for the Acquired Assets for certain periods prior to November 30, 2012, including pro forma financial information that combines the results of operations for Eagle and the Acquired Assets, please see our Form 8-K/A filed on April 26, 2013.

The prior year’s fourth quarter results include Acquisition and Litigation Expenses related primarily to the acquisition of the Acquired Assets and litigation costs related to our lawsuit against the IRS. The total impact from these non-routine items was $2.4 million (pre-tax), or $0.04 per diluted share (after-tax).

We conduct one of our cement plant operations through a 50/50 joint venture, Texas Lehigh Cement Company LP (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 Eagle 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 these amounts.

About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Aggregates, Concrete, Gypsum Wallboard, Recycled Paperboard and Frac Sand from 40 facilities across the U.S. Eagle is headquartered in Dallas, Texas.

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 Thursday, May 15, 2014. 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.

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; 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. With respect to our acquisition of the Acquired Assets 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, the risk that we may not be able to integrate the Acquired Assets in an efficient and cost-effective manner with our other assets and operations, the possible inability to realize synergies or other expected benefits of the transaction, the possibility that we may incur significant costs relating to transition or integration activities or repair and maintenance of the Acquired Assets, the discovery of undisclosed liabilities associated with the business, the need to repay the indebtedness incurred to fund the acquisition and the fact that increased debt may limit our ability to respond to any changes in general economic and business conditions that occur after the acquisition. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013. 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.
 
(1) Statement of Consolidated Earnings
(2) Revenues and Earnings by Lines of Business (Quarter and Fiscal Year)
(3) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(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

March 31,
Fiscal Year Ended

March 31,
2014     2013 2014     2013
 
Revenues $ 189,894 $ 159,118 $ 898,396 $ 642,562
 
Cost of Goods Sold   160,366     142,520     712,937     539,317  
 
Gross Profit 29,528 16,598 185,459 103,245
 
Equity in Earnings of Unconsolidated JV 10,330 8,437 37,811 32,507
Corporate General and Administrative Expense (6,102 ) (6,976 ) (24,552 ) (23,918 )
Other Operating Income (Expense) 68 (805 ) 1,368 (1,232 )
Acquisition and Litigation Expense   -     (1,824 )   -     (10,683 )
 
Earnings before Interest and Income Taxes 33,824 15,430 200,086 99,919
 
Interest Expense, Net   (4,057 )   (4,674 )   (18,282 )   (15,823 )
 
Earnings before Income Taxes 29,767 10,756 181,804 84,096
 
Income Tax Expense   7,149     2,923     57,561     26,352  
 
Net Earnings $ 22,618   $ 7,833   $ 124,243   $ 57,744  

 
NET EARNINGS PER SHARE
Basic $ 0.46   $ 0.16   $ 2.53   $ 1.24  
Diluted $ 0.45   $ 0.16   $ 2.49   $ 1.22  
 
AVERAGE SHARES OUTSTANDING
Basic   49,365,344     48,768,236     49,090,750     46,622,646  
Diluted   50,187,433     49,643,918     49,939,165     47,340,450  
 
         

Eagle Materials Inc.

Attachment 2
 
Eagle Materials Inc.
Revenues and Segment Operating Earnings by Lines of Business
(dollars in thousands)
(unaudited)
 
Quarter Ended

March 31,
Fiscal Year Ended

March 31,
2014     2013 2014     2013
Revenues*
 
Gypsum Wallboard and Paperboard:
Gypsum Wallboard $ 87,917 $ 78,245 $ 387,016 $ 306,529
Gypsum Paperboard   18,413     17,364     78,059     75,537  
106,330 95,609 465,075 382,066
 
Cement (Wholly Owned) 50,872 48,698 317,879 204,953
 
Concrete and Aggregates   32,692     14,811     115,442     55,543  
 
Total Revenues $ 189,894   $ 159,118   $ 898,396   $ 642,562  

 
Segment Operating Earnings
 
Gypsum Wallboard and Paperboard:
Gypsum Wallboard $ 24,618 $ 22,356 $ 114,852 $ 69,712
Gypsum Paperboard   4,333     4,266     23,610     25,200  
28,951 26,622 138,462 94,912
 
Cement:
Wholly Owned 1,705 (6,132 ) 51,675 13,721
Joint Venture   10,330     8,437     37,811     32,507  
12,035 2,305 89,486 46,228
 
Concrete and Aggregates (1,128 ) (3,892 ) (4,678 ) (5,388 )
 
Other, net   68     (805 )   1,368     (1,232 )
 
Sub-total 39,926 24,230 224,638 134,520
 
Corporate General and Administrative Expense (6,102 ) (6,976 ) (24,552 ) (23,918 )
Acquisition and Litigation Expense   -     (1,824 )   -     (10,683 )
 
Earnings before Interest and Income Taxes   33,824     15,430     200,086     99,919  

 

 

 

* 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

March 31,
    Fiscal Year Ended

March 31,
2014     2013     Change 2014     2013     Change
 
Gypsum Wallboard (MMSF’s) 442 433 +2 % 2,112 1,909 +11 %
 
Cement (M Tons):
Wholly Owned 543 539 +1 % 3,580 2,391 +50 %
Joint Venture 260 234 +11 % 1,013 912 +11 %
803 773 +4 % 4,593 3,303 +39 %
Paperboard (M Tons):
Internal 22 22 0 % 101 88 +15 %
External 37 35 +6 % 155 156 -1 %
59 57 +4 % 256 244 +5 %
 
Concrete (M Cubic Yards) 176 156 +13 % 899 577 +56 %
 
Aggregates * (M Tons) 623 530 +18 % 3,228 2,631 +23 %
 

* Aggregates sales volumes excludes sales of frac sand
     
Average Net Sales Price*
Quarter Ended

March 31,
    Fiscal Year Ended

March 31,
2014     2013     Change 2014     2013     Change
 
Gypsum Wallboard (MSF) $ 162.67 $ 145.72 +12 % $ 148.33 $ 125.53 +18 %
Cement (Ton) $ 93.01 $ 87.81 +6 % $ 87.31 $ 83.49 +5 %
Paperboard (Ton) $ 503.62 $ 492.54 +2 % $ 504.41 $ 496.84 +2 %
Concrete (Cubic Yard) $ 84.72 $ 74.57 +14 % $ 82.55 $ 69.74 +18 %
Aggregates (Ton)** $ 7.03 $ 6.17 +14 % $ 6.76 $ 6.06 +12 %
 

*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
Quarter Ended

March 31,
    Fiscal Year Ended

March 31,
2014     2013 2014     2013
Intersegment Revenues:
Cement $ 1,449 $ 1,236 $ 8,952 $ 2,850
Paperboard 11,264 11,176 52,119 46,393
Concrete and Aggregates   134   141   1,023   744
$ 12,847 $ 12,553 $ 62,094 $ 49,987
 
Cement Revenues:
Wholly Owned $ 50,872 $ 48,698 $ 317,879 $ 204,953
Joint Venture   29,421   24,699   111,393   96,322
$ 80,293 $ 73,397 $ 429,272 $ 301,275
 
     

Eagle Materials Inc.

Attachment 4
 
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
 
March 31,
2014     2013

ASSETS
Current Assets –
Cash and Cash Equivalents $ 6,482 $ 3,897
Accounts and Notes Receivable, net 102,917 87,543
Inventories 187,096 156,380
Federal Income Tax Receivable - 2,443
Prepaid and Other Assets   10,465     11,008  
Total Current Assets   306,960     261,271  
Property, Plant and Equipment – 1,660,975 1,599,992
Less: Accumulated Depreciation   (676,924 )   (614,268 )
Property, Plant and Equipment, net 984,051 985,724
Investments in Joint Venture 43,008 42,946
Notes Receivable 3,063 3,893
Goodwill and Intangibles 160,690 162,400
Other Assets   13,757     19,999  
$ 1,511,529   $ 1,476,233  

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities –
Accounts Payable $ 57,098 $ 58,880
Accrued Liabilities 42,222 41,349
Current Portion of Senior Notes   9,500     -  
Total Current Liabilities   108,820     100,229  
Long-term Liabilities 53,678 51,547
Bank Credit Facility 189,000 297,000
Senior Notes 182,759 192,259
Deferred Income Taxes 145,773 139,028
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 50,053,738 and 49,503,496 Shares,

respectively.
501 495
Capital in Excess of Par Value 253,524 224,053
Accumulated Other Comprehensive Losses (5,483 ) (7,042 )
Retained Earnings  

582,957
    478,664  
Total Stockholders’ Equity   831,499     696,170  
$ 1,511,529   $ 1,476,233  

Copyright Business Wire 2010

If you liked this article you might like

Jim Cramer on Expedia: I Would Not Write Them Off

Jim Cramer on Expedia: I Would Not Write Them Off

Potential Winners From Trump's Expanded Border Wall

Potential Winners From Trump's Expanded Border Wall

Alphabet, Amazon and Expedia: This Is What You Must Know on Friday

Alphabet, Amazon and Expedia: This Is What You Must Know on Friday

Hurricane Irma Has Sent These Top Storm Stocks Ripping Higher

Hurricane Irma Has Sent These Top Storm Stocks Ripping Higher

14 Stocks That Could Skyrocket From Trump's Border Wall With Mexico

14 Stocks That Could Skyrocket From Trump's Border Wall With Mexico