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8-K - FORM 8-K - EAGLE MATERIALS INCd389187d8k.htm

Exhibit 99.1

 

LOGO   

Contact at 214/432-2000

Steven R. Rowley

President & CEO

D. Craig Kesler

Executive Vice President & CFO

Robert S. Stewart

Executive Vice President

News For Immediate Release

EAGLE MATERIALS INC. REPORTS

STRONG VOLUME AND EARNINGS IMPROVEMENT

IN THE FIRST QUARTER

DALLAS, TX (August 2, 2012) – Eagle Materials Inc. (NYSE: EXP) today 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.

 

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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 Standard Time (1:00 p.m. Central Standard 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.

###

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); 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 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. This report is 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.

Steven R. Rowley

President and Chief Executive Officer

D. Craig Kesler

Executive Vice President and Chief Financial Officer

Robert S. Stewart

Executive Vice President, Strategy, Corporate Development and Communications

Attachment 1 Summary of Consolidated Earnings

Attachment 2 Revenues and Earnings by Lines of Business (Quarter)

Attachment 3 Sales Volume, Net Sales Prices and Intersegment and Cement Revenues

Attachment 4 Consolidated Balance Sheets

 

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Eagle Materials Inc.

Attachment 1

Eagle Materials Inc.

Statement of Consolidated Earnings

(dollars in thousands, except per share data)

(unaudited)

 

     Quarter Ended
June 30,
 
     2012     2011  

Revenues

   $ 154,042      $ 119,807   

Cost of Goods Sold

     131,145        115,434   
  

 

 

   

 

 

 

Gross Profit

     22,897        4,373   

Equity in Earnings of Unconsolidated Joint Venture

     6,468        5,448   

Corporate General and Administrative Expenses

     (5,416     (4,118

Other Operating Expense, net

     (270     (79
  

 

 

   

 

 

 

Earnings before Interest and Income Taxes

     23,679        5,624   

Interest Expense, Net

     (3,765     (4,585
  

 

 

   

 

 

 

Earnings before Income Taxes

     19,914        1,039   

Income Tax Expense

     (5,936     (232
  

 

 

   

 

 

 

Net Earnings

   $ 13,978      $ 807   
  

 

 

   

 

 

 

EARNINGS PER SHARE

    

Basic

   $ 0.31      $ 0.02   
  

 

 

   

 

 

 

Diluted

   $ 0.31      $ 0.02   
  

 

 

   

 

 

 

AVERAGE SHARES OUTSTANDING

    

Basic

     44,670,359        44,180,039   
  

 

 

   

 

 

 

Diluted

     45,078,734        44,709,262   
  

 

 

   

 

 

 

 

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Eagle Materials Inc.

Attachment 2

Eagle Materials Inc.

Revenues and Earnings by Lines of Business

(dollars in thousands)

(unaudited)

 

     Quarter Ended
June 30,
 
     2012     2011  

Revenues*

    

Gypsum Wallboard and Paperboard:

    

Gypsum Wallboard

   $ 70,220      $ 51,342   

Gypsum Paperboard

     19,407        18,994   
  

 

 

   

 

 

 
     89,627        70,336   

Cement (Wholly Owned)

     51,750        37,711   

Concrete and Aggregates

     12,665        11,760   
  

 

 

   

 

 

 

Total

   $ 154,042      $ 119,807   
  

 

 

   

 

 

 

Segment Operating Earnings

    

Gypsum Wallboard and Paperboard:

    

Gypsum Wallboard

   $ 14,022      $ (1,762

Gypsum Paperboard

     5,276        3,030   
  

 

 

   

 

 

 
     19,298        1,268   

Cement:

    

Wholly Owned

     3,398        3,340   

Joint Venture

     6,468        5,448   
  

 

 

   

 

 

 
     9,866        8,788   

Concrete and Aggregates

     201        (235

Other Operating Expense, net

     (270     (79
  

 

 

   

 

 

 

Total Segment Operating Earnings

   $ 29,095      $ 9,742   
  

 

 

   

 

 

 

 

*       Net of Intersegment and Joint Venture Revenues listed on Attachment 3.

    

Eagle Materials Inc.

Attachment 3

 

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Eagle Materials Inc.

Sales Volume, Net Sales Prices and Intersegment and Cement Revenues

(unaudited)

 

     Sales Volume  
     Quarter Ended
June 30,
 
     2012      2011      Change  

Gypsum Wallboard (MMSF’s)

     457         412         +11

Paperboard (M Tons):

        

Internal

     20         17         +18

External

     40         40         0
  

 

 

    

 

 

    
     60         57         +5

Cement (M Tons):

        

Wholly Owned

     621         449         +38

Joint Venture

     227         225         +1
  

 

 

    

 

 

    
     848         674         +26

Concrete (M Cubic Yards)

     137         136         +1

Aggregates (M Tons)

     652         612         +7

 

     Average Net Sales Price *  
     Quarter Ended
June 30,
 
     2012      2011      Change  

Gypsum Wallboard (MSF)

   $ 118.70       $ 90.03         +32

Paperboard (Ton)

   $ 502.89       $ 505.61         -1

Cement (Ton)

   $ 81.06       $ 81.25         0

Concrete (Cubic Yard)

   $ 65.29       $ 61.04         +7

Aggregates (Ton)

   $ 5.98       $ 5.88         +2

 

* Net of freight and delivery costs billed to customers.

 

     Intersegment and  Cement
Revenues

($ in thousands)
 
     Quarter Ended
June 30,
 
     2012      2011  

Intersegment Revenues:

     

Cement

   $ 567       $ 1,039   

Paperboard

     10,922         9,682   

Concrete and Aggregates

     212         140   
  

 

 

    

 

 

 
   $ 11,701       $ 10,861   
  

 

 

    

 

 

 

Cement Revenues:

     

Wholly Owned

   $ 51,750       $ 37,711   

Joint Venture

     23,707         21,394   
  

 

 

    

 

 

 
   $ 75,457       $ 59,105   
  

 

 

    

 

 

 

 

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Eagle Materials Inc.

Attachment 4

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

     June 30,     March 31,  
     2012     2011     2012*  

ASSETS

      

Current Assets –

      

Cash and Cash Equivalents

   $ 3,707      $ 3,478      $ 6,481   

Accounts and Notes Receivable, net

     73,304        54,192        56,197   

Inventories

     114,441        114,124        123,606   

Federal Income Tax Receivable

     —          5,374        1,133   

Prepaid and Other Assets

     3,366        3,836        4,424   
  

 

 

   

 

 

   

 

 

 

Total Current Assets

     194,818        181,004        191,841   
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment –

     1,145,195        1,119,346        1,140,744   

Less: Accumulated Depreciation

     (572,351     (524,143     (560,236
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, net

     572,844        595,203        580,508   

Investments in Joint Venture

     39,407        34,109        38,939   

Notes Receivable

     3,360        5,139        3,436   

Goodwill and Intangibles

     150,743        151,380        150,902   

Other Assets

     19,224        18,376        19,519   
  

 

 

   

 

 

   

 

 

 
   $ 980,396      $ 985,211      $ 985,145   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current Liabilities –

      

Accounts Payable

   $ 34,517      $ 31,472      $ 38,747   

Accrued Liabilities

     30,275        31,808        33,619   

Federal Income Tax Payable

     8,192        —          —     

Current Portion of Long-term Debt

     4,677        —          4,677   
  

 

 

   

 

 

   

 

 

 

Total Current Liabilities

     77,661        63,280        77,043   
  

 

 

   

 

 

   

 

 

 

Long-term Liabilities

     39,774        38,735        39,467   

Bank Credit Facility

     57,000        11,000        70,000   

Senior Notes

     192,259        285,000        192,259   

Deferred Income Taxes

     129,760        128,739        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 45,362,170; 44,906,232 and 45,269,493 Shares, respectively.

     454        449        453   

Capital in Excess of Par Value

     39,564        25,439        37,692   

Accumulated Other Comprehensive Losses

     (5,400     (2,893     (5,516

Retained Earnings

     449,324        435,462        439,882   
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

     483,942        458,457        472,511   
  

 

 

   

 

 

   

 

 

 
   $ 980,396      $ 985,211      $ 985,145   
  

 

 

   

 

 

   

 

 

 

 

* From audited financial statements.

 

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