Attached files

file filename
8-K - FORM 8-K - EAGLE MATERIALS INCd480199d8k.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 CONTINUED

GROWTH IN SALES VOLUMES AND EARNINGS

IN THE THIRD QUARTER

DALLAS, TX (February 6, 2013) - Eagle Materials Inc. (NYSE: EXP) today reported financial results for the third quarter of fiscal 2013 which ended December 31, 2012. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year’s third quarter):

 

  Revenues of $164.7 million, up 33%

 

  Segment operating earnings of $39.9 million, up 91%

 

  Adjusted earnings per diluted share of $0.43, up 115%

 

  Adjusted earnings per share is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 5

 

  Total after-tax impact of non-routine items, including costs related to the closing of our acquisition of the Lafarge Target Business, was $2.8 million, or $0.06 per diluted share. See Attachment 5.

 

  Earnings per diluted share of $0.37, up 429%

Third quarter sales volumes improved across all business lines. In addition, sales prices improved in all business lines other than Paperboard. Gypsum Wallboard experienced the most significant improvement, with an increase in average net sales prices of 27% as compared with the prior year’s third quarter.

On November 30, 2012, Eagle completed its previously announced acquisition of Lafarge North America’s Sugar Creek, Missouri and Tulsa, Oklahoma cement plants, as well as related assets, which included six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business (the “Lafarge Target Business”). Eagle used cash proceeds from an equity offering completed on October 3, 2012, along with borrowings under its bank credit facility to fund the purchase. The results of operations of the Lafarge Target Business are included in the results disclosed in this press release for the period from November 30 through December 31, 2012. For information regarding the results of operations of the Lafarge Target Business for certain periods prior to November 30, 2012, including pro forma financial information that combines the results of operations of the Company and the Lafarge Target Business, please see our Form 8-K/A filed on January 23, 2013.


Cement, Concrete and Aggregates

Operating earnings from Cement for the third quarter were $16.6 million, a 7% increase from the same quarter a year ago. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $74.9 million, 22% greater than the same quarter last year. Cement sales volumes for the quarter were 818,000 tons, 17% above the same quarter a year ago. The average net sales price this quarter was $82.68 per ton, 3% higher than the same quarter last year.

Concrete and Aggregates reported a $1.3 million operating loss for the third quarter versus the $0.6 million operating loss for the same quarter a year ago, reflecting increased maintenance costs and a litigation settlement of approximately $0.4 million, pre-tax.

Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard’s third quarter operating earnings of $24.8 million were up 362% compared to the same quarter last year. Higher wallboard average net sales prices, higher gypsum wallboard and gypsum paperboard sales volumes and lower recycled paper input costs were the primary driver of the quarterly earnings increase.

Gypsum Wallboard and Paperboard revenues for the third quarter totaled $100.3 million, a 37% increase from the same quarter a year ago. The revenue increase reflects primarily higher wallboard average net sales prices and sales volumes.

The average gypsum wallboard net sales price for the third quarter was $120.55 per MSF, 27% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 519 million square feet (MMSF) represents a 23% increase from the same quarter last year. The average Paperboard net sales price for this quarter was $480.51 per ton, 9% lower than the same quarter a year ago. Paperboard sales volumes for the quarter were 65,000 tons, 14% higher than the same quarter a year ago.

Details of Financial Results

Current quarter Acquisition and Litigation Expense of $2.5 million consists of costs related to our acquisition of the Lafarge Target Business and legal fees related to our lawsuit against the IRS. In the prior year, we received an adverse ruling in an arbitration proceeding involving a contract dispute between one of our subsidiaries and another mining company. The award, along with our legal expenses, was approximately $9.1 million.

Texas Lehigh Cement Company LP, one of our cement plant operations, is conducted through a 50/50 joint venture (the “Joint Venture”). We utilize the equity method of accounting for our 50% interest in the Joint Venture. For segment reporting purposes 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 in the Company for making operating decisions and assessing performance.

 

2


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.

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, February 7, 2013. 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.

 

3


###

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 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 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2012. These reports are filed with the Securities and Exchange Commission. With respect to our acquisition of the Lafarge Target Business 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 Lafarge Target Business 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, 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. 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.

For additional information, contact at 214/432-2000.

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

 

(1) Statement of Consolidated Earnings

 

(2) Revenues and Earnings by Lines of Business (Quarter and Nine Months)

 

(3) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues

 

(4) Consolidated Balance Sheets

 

(5) Non-GAAP Financial Measures

 

4


Eagle Materials Inc.

Attachment 1

Eagle Materials Inc.

Statement of Consolidated Earnings

(dollars in thousands, except per share data)

(unaudited)

 

     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
     2012     2011     2012     2011  

Revenues

   $ 164,743      $ 123,596      $ 483,444      $ 378,222   

Cost of Goods Sold

     133,482        111,125        396,797        352,661   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

     31,261        12,471        86,647        25,561   

Equity in Earnings of Unconsolidated JV

     8,852        7,776        24,070        21,160   

Other Operating (Expense) Income

     (223     591        (427     627   

Acquisition and Litigation Expense

     (2,485     (9,117     (8,859     (9,117

Corporate General and Administrative Expense

     (6,268     (4,928     (16,942     (13,518
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Interest and Income Taxes

     31,137        6,793        84,489        24,713   

Interest Expense, Net

     (3,836     (4,210     (11,149     (13,352

Loss on Debt Retirement

     —          (2,094     —          (2,094
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Income Taxes

     27,301        489        73,340        9,267   

Income Tax (Expense) Benefit

     (9,321     2,408        (23,429     462   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Earnings

   $ 17,980      $ 2,897      $ 49,911      $ 9,729   
  

 

 

   

 

 

   

 

 

   

 

 

 

EARNINGS PER SHARE

        

Basic

   $ 0.37      $ 0.07      $ 1.09      $ 0.22   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.37      $ 0.07      $ 1.07      $ 0.22   
  

 

 

   

 

 

   

 

 

   

 

 

 

AVERAGE SHARES OUTSTANDING

        

Basic

     48,331,185        44,212,098        45,920,452        44,197,540   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     49,249,547        44,395,982        46,574,724        44,423,467   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5


Eagle Materials Inc.

Attachment 2

Eagle Materials Inc.

Revenues and Segment Operating Earnings by Lines of Business

(dollars in thousands)

(unaudited)

 

     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
     2012     2011     2012     2011  

Revenues*

        

Gypsum Wallboard and Paperboard:

        

Gypsum Wallboard

   $ 80,737      $ 54,063      $ 228,284      $ 156,386   

Gypsum Paperboard

     19,551        19,407        58,173        59,686   
  

 

 

   

 

 

   

 

 

   

 

 

 
     100,288        73,470        286,457        216,072   

Cement (Wholly Owned)

     50,400        40,074        156,255        126,677   

Concrete and Aggregates

     14,055        10,052        40,732        35,473   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 164,743      $ 123,596      $ 483,444      $ 378,222   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Earnings

        

Gypsum Wallboard and Paperboard:

        

Gypsum Wallboard

   $ 16,870      $ 228      $ 47,356      $ (4,074

Gypsum Paperboard

     7,963        5,146        20,934        12,214   
  

 

 

   

 

 

   

 

 

   

 

 

 
     24,833        5,374        68,290        8,140   

Cement:

        

Wholly Owned

     7,763        7,717        19,853        18,232   

Joint Venture

     8,852        7,776        24,070        21,160   
  

 

 

   

 

 

   

 

 

   

 

 

 
     16,615        15,493        43,923        39,392   

Concrete and Aggregates

     (1,335     (620     (1,496     (811

Other Operating (Expense) Income

     (223     591        (427     627   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     39,890        20,838        110,290        47,348   

Acquisition and Litigation Expense

     (2,485     (9,117     (8,859     (9,117

Corporate General and Administrative Expense

     (6,268     (4,928     (16,942     (13,518
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Before Interest and Income Taxes

   $ 31,137      $ 6,793      $ 84,489      $ 24,713   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

6


Eagle Materials Inc.

Attachment 3

Eagle Materials Inc.

Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues

(unaudited)

 

     Sales Volume  
     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
     2012      2011      Change     2012      2011      Change  

Gypsum Wallboard (MMSF’s)

     519         421         +23     1,476         1,236         +19

Cement (M Tons):

                

Wholly Owned

     592         497         +19     1,852         1,534         +21

Joint Venture

     226         203         +11     678         657         +3
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
     818         700         +17     2,530         2,191         +15

Paperboard (M Tons):

                

Internal

     23         19         +21     66         54         +22

External

     42         38         +11     121         120         +1
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
     65         57         +14     187         174         +7

Concrete (M Cubic Yards)

     143         112         +28     421         391         +8

Aggregates (M Tons)

     639         463         +38     2,101         1,846         +14

 

     Average Net Sales Price*  
     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
     2012      2011      Change     2012      2011      Change  

Gypsum Wallboard (MSF)

   $ 120.55       $ 94.86         +27   $ 119.60       $ 92.35         +30

Cement (Ton)

   $ 82.68       $ 80.02         +3   $ 82.17       $ 80.77         +2

Paperboard (Ton)

   $ 480.51       $ 527.42         -9   $ 498.16       $ 519.20         -4

Concrete (Cubic Yard)

   $ 71.55       $ 67.11         +7   $ 67.94       $ 63.98         +6

Aggregates (Ton)

   $ 6.13       $ 5.99         +2   $ 6.04       $ 5.95         +2

 

* Net of freight and delivery costs billed to customers.

 

     Intersegment and Cement Revenues  
     Quarter Ended
December 31,
     Nine Months Ended
December 31,
 
     2012      2011      2012      2011  

Intersegment Revenues:

           

Cement

   $ 535       $ 803       $ 1,614       $ 3,044   

Paperboard

     11,780         10,594         35,217         30,728   

Concrete and Aggregates

     146         198         603         559   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 12,461       $ 11,595       $ 37,434       $ 34,331   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cement Revenues:

           

Wholly Owned

   $ 50,400       $ 40,074       $ 156,255       $ 126,677   

Joint Venture

     24,000         20,633         71,623         64,487   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 74,400       $ 60,707       $ 227,878       $ 191,164   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

7


Eagle Materials Inc.

Attachment 4

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 

     December 31,     March 31,  
     2012     2011     2012*  

ASSETS

      

Current Assets –

      

Cash and Cash Equivalents

   $ 9,247      $ 3,679      $ 6,481   

Accounts and Notes Receivable, net

     86,588        54,491        56,197   

Inventories

     134,473        113,613        123,606   

Federal Income Tax Receivable

     —          9,109        1,133   

Prepaid and Other Assets

     13,015        3,045        4,424   
  

 

 

   

 

 

   

 

 

 

Total Current Assets

     243,323        183,937        191,841   
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment –

     1,581,468        1,138,261        1,140,744   

Less: Accumulated Depreciation

     (598,396     (548,284     (560,236
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, net

     983,072        589,977        580,508   

Investments in Joint Venture

     41,760        37,571        38,939   

Notes Receivable

     3,273        3,448        3,436   

Goodwill and Intangibles

     163,802        151,061        150,902   

Other Assets

     21,590        19,155        19,519   
  

 

 

   

 

 

   

 

 

 
   $ 1,456,820      $ 985,149      $ 985,145   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current Liabilities –

      

Accounts Payable

   $ 47,460      $ 33,344      $ 38,747   

Accrued Liabilities

     57,460        42,456        33,619   

Federal Income Tax Payable

     5,532        3,392        —     

Current Portion of Long-term Debt

     —          4,677        4,677   
  

 

 

   

 

 

   

 

 

 

Total Current Liabilities

     110,452        83,869        77,043   
  

 

 

   

 

 

   

 

 

 

Long-term Liabilities

     41,104        35,268        39,467   

Bank Credit Facility

     291,000        84,000        70,000   

Senior Notes

     192,259        192,259        192,259   

Deferred Income Taxes

     134,458        127,562        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 49,351,952; 44,944,310 and 45,269,493 Shares, respectively.

     494        449        453   

Capital in Excess of Par Value

     216,440        29,235        37,692   

Accumulated Other Comprehensive Losses

     (5,168     (2,893     (5,516

Retained Earnings

     475,781        435,400        439,882   
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

     687,547        462,191        472,511   
  

 

 

   

 

 

   

 

 

 
   $ 1,456,820      $ 985,149      $ 985,145   
  

 

 

   

 

 

   

 

 

 

 

* From audited financial statements.

 

8


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 with closing the Lafarge acquisition, litigation costs related to our lawsuit against the IRS, loss on debt retirements, discrete tax benefits and losses on arbitration or litigation rulings (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. 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.

The following shows the calculation of Adjusted EPS and reconciles Adjusted EPS to earnings per diluted share in accordance with GAAP for the three months ended December 31, 2012 and 2011. The amounts presented below are presented after-tax and were determined using our effective tax rate, before discrete items, for the three months ended December 31, 2012 and 2011 of 34% and 22%, respectively:

 

     Three Months Ended
December  31,
 
     2012     2011  

After tax impact of costs associated with closing the Lafarge acquisition and initial purchase accounting

   $ (1.9   $ —     

After tax impact of costs associated with our lawsuit against the IRS

     (0.6     —     

After tax impact of loss on debt retirement

     —          (1.6

After tax impact of tax and related interest benefits

     —          2.8   

After tax impact of loss on arbitration and litigation

     (0.3     (7.0
  

 

 

   

 

 

 

Total Non-routine Items impact, net

   $ (2.8   $ (5.8

Diluted average shares outstanding for the three months ended December 31, 2012

     49.2        44.4   

Diluted earnings per share impact from Non-routine Items

   $ (0.06   $ (0.13

 

     Three Months Ended
December  31,
 
     2012      2011  

Earnings per diluted share in accordance with generally accepted accounting principles

   $ 0.37       $ 0.07   

Add back: Earnings per diluted share impact from Non-routine Items

     0.06         0.13   
  

 

 

    

 

 

 

Adjusted EPS

   $ 0.43       $ 0.20   

 

9