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Eagle Materials reports strong volume and earnings

Aug, 03 2012

(DALLAS,Texas)  -- Eagle Materials Inc. has reported financial results for the first quarter of fiscal 2013 ended June 30, 2012. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year's first quarter):

-- Revenues of $154.0 million, up 29%

-- Segment operating earnings of $29.1 million, up 198%

-- Net earnings per diluted share of $0.31 versus $0.02

Construction activity continued to improve during the quarter and Eagle's low cost operations continued to execute well during the first quarter of fiscal 2013.

First quarter sales volumes improved across all business lines and wallboard net sales prices increased 32% as compared to the prior year's first quarter. Eagle's first quarter of fiscal 2013 cement operating earnings were negatively impacted by approximately $8 million, or $0.12 per diluted share, in increased maintenance costs associated with planned major maintenance at all of our cement facilities. Improved first 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 healthy net debt-to-capitalization ratio of 34%.

Cement, Concrete and Aggregates

Cement revenues for the first quarter, including joint venture and intersegment revenues, totaled $76.0 million, 26% greater than the same quarter last year. The revenue improvement reflects a 26% increase in our first quarter Cement sales volume. The average net sales price for this quarter was $81.06 per ton, comparable with the same quarter last year. Cement price increases were achieved in both the Texas and Mountain regions during the quarter but were offset by the increased pace of high-volume, lower-priced bid work in our other markets.

Operating earnings from Cement for the first quarter were $9.9 million, a 12% increase from the same quarter a year ago. The earnings impact from increased cement sales volumes was mostly offset by higher maintenance costs associated with scheduled maintenance at all of our cement facilities.

Concrete and Aggregates reported operating earnings of $0.2 million for the first quarter, up from the $0.2 million operating loss for the same quarter a year ago, primarily due to improved sales volumes and net sales prices in each business.

Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard's first quarter operating earnings of $19.3 million increased 1,421% from $1.3 million in same quarter last year. Improved Gypsum Wallboard net sales prices were the primary driver of the quarterly earnings increase. Additional contribution came from improved sales volumes in both wallboard and paperboard.

Gypsum Wallboard and Paperboard revenues for the first quarter totaled $89.6 million, a 27% 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 slightly offset by lower Paperboard net sales prices. The average Gypsum Wallboard net sales price this quarter was $118.70 per MSF, 32% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 457 million square feet (MMSF) represents an 11% increase from the same quarter last year. The average Paperboard net sales price this quarter was $502.89 per ton, 1% lower than the same quarter a year ago. Paperboard sales volume for the quarter was 60,000 tons, 5% higher than the same quarter a year ago.

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 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 from 25 facilities across the US. The Company 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 2:00 p.m. Eastern Daylight Time (1:00 p.m. Central Daylight Time) on Thursday, August 2, 2012. 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.

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