DALLAS, Jan. 25 /PRNewswire-FirstCall/ -- Eagle Materials Inc.
(NYSE: EXP and EXP.B) today reported financial results for the third quarter
of fiscal 2006 ended December 31, 2005 and raised its fiscal 2006 earnings
guidance. Eagle produces and distributes Gypsum Wallboard, Cement, Recycled
Paperboard and Concrete and Aggregates. The following are highlights of our
third quarter results:
* HIGHEST THIRD QUARTER OPERATING EARNINGS IN WALLBOARD AND CEMENT IN OUR
HISTORY
* RECORD HIGH THIRD QUARTER SALES VOLUME IN WALLBOARD
* WALLBOARD AVERAGE NET SALES PRICE INCREASED 32% FROM LAST YEAR'S THIRD
QUARTER
* RECORD HIGH THIRD QUARTER SALES VOLUME IN CEMENT
* HIGHEST QUARTERLY CEMENT AVERAGE NET SALES PRICE IN OUR HISTORY --
INCREASED 16% FROM LAST YEAR'S THIRD QUARTER
* REPURCHASED NEARLY 1.0 MILLION SHARES OF OUR STOCK (5%) IN THE THIRD
QUARTER
For the quarter ended December 31, 2005, revenues and net earnings were
$211.5 million and $39.0 million, respectively. Revenues increased 41% over
the prior year third quarter and net earnings increased 51% over the same
period last year. Diluted earnings per share for the third quarter of fiscal
2006 were $2.20 compared with $1.40 in the same period a year ago, a 57%
increase.
The Company also raised its earnings guidance for fiscal 2006 to a range
of $8.50 to $8.70 per diluted share, and expects to report earnings ranging
from $2.00 to $2.20 per diluted share for the fourth quarter of fiscal 2006
ending March 31, 2006.
Eagle remains well positioned to continue to achieve outstanding financial
results given our low cost operations, which supply building materials to a
strong construction industry. According to the U.S. Census Bureau, total
construction spending during November 2005 was estimated at a seasonally
adjusted annual rate of $1.1 trillion, 8% above the November 2004 estimate.
The Gypsum Association reported approximately 36.2 billion square feet of
wallboard was shipped by U.S. manufacturers in calendar 2005, a 5.4% increase
over the prior record year. For calendar year 2006, we expect Wallboard
demand to remain strong and supply to be tight (with 95%+ industry capacity
utilization). Wallboard pricing remains strong and an average $20 per
thousand square feet (MSF) price increase was implemented in mid-December 2005
in all of our wallboard markets. Also, national demand for cement remains at
record levels outpacing last year's consumption by approximately 5.7% through
October 2005 according to the U.S. Geological Survey with imports projected to
fulfill over 25% of the U.S. construction industry demand this year. Low
inventories and strong demand continue to put upward pressure on cement
pricing. We implemented price increases ranging from $8 to $10 per ton on
January 1st, in our Wyoming, Utah, Colorado and Texas cement markets. Price
increases ranging from $5 to $10 per ton have been announced for our Illinois,
Nevada and California cement markets for early Spring.
GYPSUM WALLBOARD
Gypsum Wallboard revenues for the third quarter totaled $122 million, a
40% increase over the $87 million for the same quarter a year ago. Gypsum
Wallboard's third quarter operating earnings were $39 million, up 93% from the
$20 million for the same quarter last year. The revenue and earnings gain for
the quarter resulted from higher sales prices and record third quarter sales
volume. The average net sales price for this fiscal year's third quarter was
$144 per MSF, 32% greater than the $109 per MSF for the same quarter last
year. Gypsum Wallboard sales volume of 699 million square feet (MMSF) for the
quarter increased 11% from the prior year's third quarter.
CEMENT
Operating earnings from Cement increased 38% to $20 million for the third
quarter this year from $14 million for the same quarter last year. The
earnings gain was due primarily to a record high average net sales price,
record third quarter sales volumes and the positive impact of the Illinois
Cement acquisition. Cement revenues, including joint venture and intersegment
sales, for the third quarter totaled $67 million, 36% greater than the $49
million for the same quarter a year ago. Nearly $8 million of the revenue
gain is attributable to the acquisition of our partner's 50% interest in
Illinois Cement Company, which closed in the fourth quarter of fiscal 2005.
Cement sales volume for the third quarter totaled 746,000 tons, 19% above the
627,000 tons for the same quarter last year. To meet these strong market
requirements, Eagle increased its lower margin purchased cement sales volumes
for the quarter to approximately 165,000 tons, up 69% over last year's
quarter.
PAPERBOARD
Eagle's Paperboard operation reported third quarter revenues (including
sales to Eagle's Wallboard operations -- see Attachment 4 for a detail of
intersegment revenues) of $31 million which is nearly even with last year's
third quarter. Paperboard operating earnings of $4 million for the third
quarter this year were down 29% from last year's third quarter operating
earnings due primarily to increased energy costs and sales of lower margin
containerboard grade paper. For this year's third quarter, Paperboard sales
volume was 67,000 tons, down 3% from last year's sales volume of 69,000 tons.
This year's third quarter average net sales price of $463 per ton was a third
quarter record and was 2% above last year's third quarter average net sales
price of $454 per ton.
CONCRETE AND AGGREGATES
Revenues from Concrete and Aggregates were $22 million for this year's
third quarter, 36% greater than the $16 million for the third quarter a year
ago. Concrete and Aggregates reported a $1.3 million operating profit for
this year's third quarter, up 41% from the $0.9 million operating profit for
the same quarter last year, due to increased pricing and volume in both of our
markets.
Concrete sales volume increased 21% for the third quarter this year to
210,000 cubic yards from 173,000 cubic yards for the same quarter last year.
Our Concrete quarterly average net sales price of $64.32 per cubic yard for
the third quarter of fiscal 2006 was a record and was 18% higher than the
$54.36 per cubic yard for the third quarter a year ago. Our Aggregates
operation reported sales volume of 1.4 million tons for the current quarter,
13% greater than the 1.2 million tons reported in the third quarter last year.
Our Aggregates quarterly average net sales price was a record high $5.91 per
ton during the third quarter and was 14% above last year's third quarter
Aggregates average net sales price.
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.
Our results for the third quarter of fiscal 2006 include 100% of Illinois
Cement Company. During the third quarter of fiscal 2005, Illinois Cement
Company was a 50% owned joint venture and was accounted for utilizing the
equity method of accounting.
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 4 for a
reconciliation of the amounts referred to above.
Eagle is holding an investor conference on January 26, 2006 at 8:30 a.m.
Eastern Time (7:30 a.m. Central Time). During that investor conference,
Eagle's senior management will discuss the financial results, forward looking
information and other matters. The investor conference 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 beliefs at the time the statements were made regarding
future events which are subject to significant 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 increases in the cost of
natural gas; changes in the cost and availability of transportation;
unexpected operational difficulties; governmental regulation and changes in
governmental and public policy; 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; 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 natural gas) or transportation could affect the revenues or
operating earnings of our operations. In addition, changes in national and
regional economic conditions and levels of infrastructure and construction
spending could also adversely affect the Company's results of operations.
These and other factors are described in the Annual Report on Form 10-K for
the Company for the fiscal year ended March 31, 2005. This report is filed
with the Securities and Exchange Commission and may be obtained free of charge
through the website maintained by the SEC at http://www.sec.gov . All
forward-looking statements made in this press release are made as of the date
hereof, and the risk that actual results will differ materially from
expectations expressed in this press release 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) Summary of Consolidated Earnings
(2) Revenues and Earnings by Lines of Business (Quarter)
(3) Revenues and Earnings by Lines of Business (Nine Months)
(4) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(5) Consolidated Balance Sheets
Attachment 1
Eagle Materials Inc.
Summary of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
Quarter Ended December 31,
2005 2004 Change
Revenues $211,515 $149,802 41%
Earnings Before Income Taxes $58,866 $37,935 55%
Net Earnings $38,987 $25,867 51%
Earnings Per Share:
- Basic $2.23 $1.41 58%
- Diluted $2.20 $1.40 57%
Average Shares Outstanding:
- Basic 17,518,921 18,314,248 -4%
- Diluted 17,746,156 18,529,155 -4%
Nine Months Ended December 31,
2005 2004 Change
Revenues $638,098 $463,205 38%
Earnings Before Income Taxes $174,777 $119,346 46%
Net Earnings $117,217 $79,199 48%
Earnings Per Share:
- Basic $6.59 $4.29 54%
- Diluted $6.50 $4.24 53%
Average Shares Outstanding:
- Basic 17,789,951 18,450,206 -4%
- Diluted 18,022,828 18,660,612 -3%
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Quarter Ended December 31,
2005 2004 Change
Revenues*
Gypsum Wallboard $122,450 $87,199 40%
58% 58%
Cement (Wholly Owned) ** 50,311 27,891 80%
24% 19%
Paperboard 17,156 18,885 -9%
8% 13%
Concrete & Aggregates 21,598 15,827 36%
10% 10%
Other, net --- --- ---%
0% 0%
Total $211,515 $149,802 41%
100% 100%
Operating Earnings
Gypsum Wallboard $38,856 $20,121 93%
61% 49%
Cement:
Wholly Owned ** 14,005 6,788 106%
Joint Venture ** 6,052 7,708 -21%
20,057 14,496 38%
31% 35%
Paperboard 4,195 5,903 -29%
7% 14%
Concrete & Aggregates 1,321 937 41%
2% 2%
Other, net (348) (137) -154%
-1% 0%
Total Operating Earnings 64,081 41,320 55%
100% 100%
Corporate General Expenses (3,835) (2,810)
Interest Expense, net (1,380) (575)
Earnings Before
Income Taxes $58,866 $37,935 55%
* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.
** Reflects purchase of the other 50% interest in Illinois Cement
Company.
Attachment 3
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Nine Months Ended December 31,
2005 2004 Change
Revenues*
Gypsum Wallboard $344,394 $261,295 32%
54% 56%
Cement (Wholly Owned) ** 168,105 92,247 82%
26% 20%
Paperboard 55,153 55,753 -1%
9% 12%
Concrete & Aggregates 68,167 53,717 27%
11% 12%
Other, net 2,279 193 1,081%
0% 0%
Total $638,098 $463,205 38%
100% 100%
Operating Earnings
Gypsum Wallboard $103,782 $59,983 73%
55% 47%
Cement:
Wholly Owned ** 40,266 22,885 76%
Joint Venture ** 18,461 21,421 -14%
58,727 44,306 33%
31% 34%
Paperboard 17,447 19,845 -12%
9% 16%
Concrete & Aggregates 7,999 5,550 44%
4% 4%
Other, net 1,932 (776) 349%
1% -1%
Total Operating Earnings 189,887 128,908 47%
100% 100%
Corporate General Expenses (10,900) (7,408)
Interest Expense, net (4,210) (2,154)
Earnings Before
Income Taxes $174,777 $119,346 46%
* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.
** Reflects purchase of the other 50% interest in Illinois Cement
Company.
Attachment 4
Eagle Materials Inc.
Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues
(unaudited)
Sales Volume
Quarter Ended Nine Months Ended
December 31, December 31,
2005 2004 Change 2005 2004 Change
Gypsum Wallboard 699 628 11% 2,108 1,933 9%
(MMSF's)
Cement (M Tons):
Wholly Owned 556 340 64% 1,908 1,151 66%
Joint Venture 190 287 -34% 623 976 -36%
746 627 19% 2,531 2,127 19%
Paperboard (M Tons):
Internal 28 27 4% 86 83 4%
External 39 42 -7% 123 126 -2%
67 69 -3% 209 209 0%
Concrete
(M Cubic Yards) 210 173 21% 683 590 16%
Aggregates (M Tons) 1,396 1,230 13% 4,584 4,114 11%
Average Net Sales Price*
Quarter Ended Nine Months Ended
December 31, December 31,
2005 2004 Change 2005 2004 Change
Gypsum $143.98 $108.95 32% $131.85 $106.68 24%
Wallboard (MSF)
Cement (Ton) $83.24 $71.75 16% $81.34 $69.94 16%
Paperboard (Ton) $462.95 $453.50 2% $463.93 $452.64 2%
Concrete
(Cubic Yard) $64.32 $54.36 18% $61.32 $54.19 13%
Aggregates (Ton) $5.91 $5.19 14% $5.83 $5.28 10%
* Net of freight and delivery costs billed to customers.
Intersegment and Cement Revenues
Quarter Ended Nine Months Ended
December 31, December 31,
2005 2004 2005 2004
Intersegment Revenues:
Cement $1,345 $791 $4,622 $2,569
Paperboard 14,322 13,133 43,722 40,819
Concrete and Aggregates 306 210 1,164 832
$15,973 $14,134 $49,508 $44,220
Cement Revenues:
Wholly Owned $50,311 $27,891 $168,105 $92,247
Joint Venture 14,893 20,147 47,719 66,927
$65,204 $48,038 $215,824 $159,174
Attachment 5
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
December 31, March 31,
2005 2004 2005*
ASSETS
Current Assets -
Cash and Cash Equivalents $60,174 $18,539 $7,221
Accounts and Notes
Receivable, net 80,231 59,164 70,952
Inventories 67,111 46,609 63,482
Total Current Assets 207,516 124,312 141,655
Property, Plant and Equipment - 837,423 725,694 788,447
Less: Accumulated Depreciation (290,902) (255,555) (264,088)
Property, Plant and
Equipment, net 546,521 470,139 524,359
Investments in Joint Ventures 25,642 47,323 28,181
Goodwill 68,013 40,290 66,960
Other Assets 15,992 15,599 18,846
$863,684 $697,663 $780,001
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities -
Note Payable $--- $30,100 $30,800
Accounts Payable and
Accrued Liabilities 114,773 86,654 91,069
Current Portion of
Long-term Debt --- 80 ---
Total Current Liabilities 114,773 116,834 121,869
Long-term Debt 200,000 --- 54,000
Deferred Income Taxes 115,828 107,228 118,764
Stockholders' Equity -
Preferred Stock, Par Value
$0.01; Authorized 5,000,000
Shares None Issued --- --- ---
Common Stock, Par Value $0.01;
Authorized 50,000,000 Shares;
Issued and Outstanding
8,686,786, 9,680,124 and
9,726,009 Shares, respectively.
Class B Common Stock, Par Value
$0.01; Authorized 50,000,000
Shares; Issued and Outstanding,
8,111,884, 8,655,769 and 8,499,269
Shares, respectively. 168 183 182
Capital in Excess of Par Value --- 143 ---
Accumulated Other Comprehensive
Losses (1,842) (1,877) (1,842)
Unamortized Restricted Stock (481) (565) (557)
Retained Earnings 435,238 475,717 487,585
Total Stockholders' Equity 433,083 473,601 485,368
$863,684 $697,663 $780,001
* From audited financial statements.
SOURCE Eagle Materials Inc.
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Related links:
http://www.eaglematerials.com
CONTACT:
Steven R. Rowley, President & CEO, or Arthur
R. Zunker, Jr., Senior Vice President & CFO, both of Eagle
Materials Inc., +1-214-432-2000
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