Record High Annual and Quarter Diluted EPS (Up 58% and Up 76%)
DALLAS, May 2 /PRNewswire-FirstCall/ -- Eagle Materials Inc. (NYSE:
EXP) today reported financial results for the fourth quarter ended March
31, 2006 and for fiscal year 2006. Eagle also issued guidance for the first
quarter of its fiscal year 2007. Eagle produces and distributes Gypsum
Wallboard, Cement, Recycled Paperboard and Concrete and Aggregates.
* HIGHEST ANNUAL AND QUARTERLY OPERATING EARNINGS IN OUR HISTORY
(UP 54% AND UP 73%)
* RECORD HIGH ANNUAL SALES VOLUME IN WALLBOARD -- 2.83 BILLION SQUARE
FEET
* WALLBOARD AVERAGE NET SALES PRICE INCREASED $40 PER MSF FROM LAST
YEAR'S FOURTH QUARTER
* OUR CEMENT COMPANIES COMPLETED THEIR 20TH CONSECUTIVE "SOLD OUT" YEAR
AND SET A RECORD FOR FISCAL YEAR SALES VOLUME -- 3.2 MILLION TONS
* HIGHEST QUARTERLY CEMENT AVERAGE NET SALES PRICE IN OUR HISTORY --
INCREASED $16 PER TON FROM LAST YEAR'S FOURTH QUARTER
For the quarter ended March 31, 2006, revenues and net earnings were
$221.6 million and $43.8 million, respectively. Revenues increased 45% over
the prior year fourth quarter and net earnings increased 59% over the same
period last year. Diluted earnings per share for the fourth quarter of
fiscal 2006 were $0.86 compared with $0.49 in the same period a year ago, a
76% increase.
For the fiscal year ended March 31, 2006, Eagle's net earnings
increased 51% to $161.0 million, or $3.02 per diluted share, from $106.7
million, or $1.91 per diluted share, for the previous fiscal year. Revenues
for fiscal 2006 of $859.7 million were a record high, and were 39% greater
than the $616.5 million for the previous fiscal year.
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 March 2006 was estimated at a
seasonally adjusted annual rate of $1.20 trillion, 8% above the March 2005
estimate. The Gypsum Association reported approximately 9.5 billion square
feet of wallboard was shipped by U.S. manufacturers in the first three
months of calendar 2006, a 10.9% increase over the same period in 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 $15 per thousand square
feet (MSF) price increase was implemented in late March 2006 in all of our
wallboard markets. Also, national demand for cement remains at a record
high level with imports projected to fulfill approximately 30% 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 $5 to $10 per ton on April 1st in our Illinois,
Nevada and California cement markets.
Based on the above factors, the Company expects to report earnings
ranging from $1.00 to $1.10 per diluted share for the first quarter of
fiscal year 2007 ending June 30, 2006. (These figures have been adjusted
for the 3-for-1 stock split on February 24, 2006.)
The Company made several announcements during the fourth quarter
concerning future growth initiatives. On January 26, 2006, we announced
plans to expand and modernize our Mountain Cement plant located in Laramie,
Wyoming and our Nevada Cement plant located in Fernley, Nevada. The plans
will expand the production capacity of Mountain Cement by 60% and double
the production of Nevada Cement (bringing both plants up to 1.1 million
tons of cement production) while at the same time dramatically reducing
their fuel and electricity consumption. Both projects are expected to be
operational in fall 2008. The total capital investment in these two
projects is expected to be approximately $320 million.
During the quarter we also completed several corporate initiatives.
Reflecting the confidence in Eagle's ability to generate substantial
operating cash flow, the Board of Directors of Eagle approved a 75%
increase in Eagle's annual cash dividend beginning with the cash dividend
paid in April 2006. On February 24, 2006, Eagle executed a 3-for-1 stock
split in the form of a 200% stock dividend on its Common Stock and Class B
Common Stock. In addition, on April 11, 2006 Eagle's stockholders approved
a proposal to eliminate Eagle's dual class stock structure through an
amendment to Eagle's charter. As a result of the favorable vote, after the
close of trading on the New York Stock Exchange on that day, each share of
Eagle's Common Stock and each share of Eagle's Class B Common Stock were
reclassified on a one-for-one basis into a single share of new Common
Stock.
GYPSUM WALLBOARD
Gypsum Wallboard revenues for the fourth quarter totaled $134.7
million, a 52% increase over the $88.8 million for the same quarter a year
ago. Gypsum Wallboard's fourth quarter operating earnings were $50.4
million, up 133% from the $21.6 million for the same quarter last year. The
revenue and earnings gain for the quarter resulted from higher sales prices
and record fourth quarter sales volume. The average net sales price for
this fiscal year's fourth quarter was $155 per MSF, 34% greater than the
$115 per MSF for the same quarter last year. Gypsum Wallboard sales volume
of 724 million square feet (MMSF) for the quarter increased 18% from the
prior year's fourth quarter.
Fiscal 2006 operating earnings from Gypsum Wallboard were $154.2
million, an increase of 89% compared to $81.6 million for fiscal 2005.
Revenues from Gypsum Wallboard were $479.1 million for fiscal 2006, 37%
higher than last year's revenues of $350.1 million.
CEMENT
Operating earnings from Cement increased 47% to $19.6 million for the
fourth quarter this year from $13.3 million for the same quarter last year.
The earnings gain was due primarily to a record high average net sales
price and record fourth quarter sales volumes. Cement revenues, including
joint venture and intersegment sales, for the fourth quarter totaled $64.8
million, 31% greater than the $49.6 million for the same quarter a year
ago. Cement sales volume for the fourth quarter totaled 669,000 tons, 7%
above the 626,000 tons for the same quarter last year. The average net
sales price for this fiscal year's fourth quarter was $90 per ton, 22%
greater than the $74 per ton for the same quarter last year.
Fiscal 2006 operating earnings from Cement were $78.3 million, an
increase of 36% compared to $57.6 million for fiscal 2005. Revenues from
Cement, including joint venture and intersegment sales, were $285.3 million
for fiscal 2006, 35% higher than last year's revenues of $211.3 million.
PAPERBOARD
Eagle's Paperboard operation reported fourth quarter revenues,
including sales to Eagle's Wallboard operations, of $34.6 million which was
21% greater than last year's fourth quarter. Paperboard operating earnings
of $2.6 million for the fourth quarter this year were down 53% from last
year's fourth quarter operating earnings due primarily to increased energy
costs and a larger percentage of sales of low margin containerboard grade
paper. For this year's fourth quarter, Paperboard sales volume was 80,000
tons, up 36% from last year's fourth quarter sales volume of 59,000 tons.
This year's fourth quarter average net sales price of $423 per ton was 9%
below last year's fourth quarter average net sales price of $467 per ton.
Fiscal 2006 operating earnings from Paperboard were $20.1 million, a
decrease of 21% compared to $25.4 million for fiscal 2005. Revenues from
Paperboard, including sales to Eagle's Wallboard operations, were $133.5
million for fiscal 2006, 7% higher than last year's revenues of $125.2
million.
CONCRETE AND AGGREGATES
Revenues from Concrete and Aggregates were $20.4 million for this
year's fourth quarter, 26% greater than the $16.2 million for the fourth
quarter a year ago. Concrete and Aggregates reported a $1.6 million
operating profit for this year's fourth quarter, down 26% from the $2.2
million operating profit for the same quarter last year, due to increased
costs at both of our aggregate operations. Our Northern California
operation was severely impacted by a significant amount of rainfall during
the quarter.
Concrete sales volume increased 12% for the fourth quarter this year to
200,000 cubic yards from 179,000 cubic yards for the same quarter last
year. Our Concrete quarterly average net sales price of $67 per cubic yard
for the fourth quarter of fiscal 2006 was a record and was 17% higher than
the $57 per cubic yard for the fourth quarter a year ago. Our Aggregates
operation reported sales volume of 1.13 million tons for the current
quarter, 4% greater than the 1.08 million tons reported in the fourth
quarter last year. Our Aggregates quarterly average net sales price was a
record high $6.17 per ton during the fourth quarter and was 16% above last
year's fourth quarter Aggregates average net sales price.
Fiscal 2006 operating earnings from Concrete and Aggregates were $9.6
million, an increase of 24% compared to $7.7 million for fiscal 2005.
Revenues from Concrete and Aggregates were $89.8 million for fiscal 2006,
27% higher than last year's revenues of $70.8 million.
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 4 for a
reconciliation of the amounts referred to above.
Eagle's senior management will conduct a conference call to discuss the
financial results, forward looking information and other matters at 3:00
pm. Eastern Time (2:00 p.m. Central Time) on Wednesday, May 3, 2006. 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; 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; 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) 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, 2005 and in its Quarterly
Report on Form 10-Q for the fiscal quarter ended December 31, 2005. 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) Summary of Consolidated Earnings
(2) Revenues and Earnings by Lines of Business (Quarter)
(3) Revenues and Earnings by Lines of Business (Fiscal Year)
(4) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(5) Consolidated Balance Sheets
Eagle Materials Inc.
Attachment 1
Eagle Materials Inc.
Summary of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
Quarter Ended March 31,
2006 2005 Change
Revenues $221,605 $153,336 45%
Earnings Before Income Taxes $66,289 $38,743 71%
Net Earnings $43,767 $27,488 59%
Earnings Per Share:
- Basic $0.87 $0.50 74%
- Diluted $0.86 $0.49 76%
Average Shares Outstanding:
- Basic 50,243,883 54,906,165 -8%
- Diluted 51,070,874 55,571,913 -8%
Fiscal Year Ended March 31,
2006 2005 Change
Revenues $859,702 $616,541 39%
Earnings Before Income Taxes $241,066 $158,089 52%
Net Earnings $160,984 $106,687 51%
Earnings Per Share:
- Basic $3.06 $1.93 59%
- Diluted $3.02 $1.91 58%
Average Shares Outstanding:
- Basic 52,599,080 55,241,025 -5%
- Diluted 53,330,304 55,883,274 -5%
Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Quarter Ended March 31,
2006 2005 Change
Revenues*
Gypsum Wallboard $134,740 $88,806 52%
61% 58%
Cement (Wholly Owned) 45,876 33,233 38%
21% 22%
Paperboard 20,782 15,323 36%
9% 10%
Concrete & Aggregates 20,207 15,974 26%
9% 10%
Other, net --- --- 0%
0% 0%
Total $221,605 $153,336 45%
100% 100%
Operating Earnings
Gypsum Wallboard $50,445 $21,633 133%
68% 51%
Cement:
Wholly Owned 11,128 7,809 43%
Joint Venture 8,456 5,501 54%
19,584 13,310 47%
27% 31%
Paperboard 2,640 5,561 -53%
4% 13%
Concrete & Aggregates 1,614 2,192 -26%
2% 5%
Other, net (393) 55 -815%
-1% 0%
Total Operating Earnings 73,890 42,751 73%
100% 100%
Corporate General Expenses (5,470) (2,872)
Interest Expense, net (2,131) (1,136)
Earnings Before
Income Taxes $66,289 $38,743 71%
* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.
Eagle Materials Inc.
Attachment 3
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Fiscal Year Ended March 31,
2006 2005 Change
Revenues*
Gypsum Wallboard $479,134 $350,101 37%
56% 57%
Cement (Wholly Owned) 213,980 125,480 71%
25% 20%
Paperboard 75,935 71,076 7%
9% 12%
Concrete & Aggregates 88,374 69,691 27%
10% 11%
Other, net 2,279 193 1,081%
0% -2%
Total $859,702 $616,541 39%
100% 100%
Operating Earnings
Gypsum Wallboard $154,227 $81,616 89%
58% 48%
Cement:
Wholly Owned 51,394 30,694 67%
Joint Venture 26,917 26,922 0%
78,311 57,616 36%
30% 34%
Paperboard 20,087 25,406 -21%
7% 15%
Concrete & Aggregates 9,613 7,742 24%
4% 5%
Other, net 1,539 (721) 313%
1% 0%
Total Operating Earnings 263,777 171,659 54%
100% 100%
Corporate General Expenses (16,370) (10,280)
Interest Expense, net (6,341) (3,290)
Earnings Before
Income Taxes $241,066 $158,089 52%
* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.
Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues
(unaudited)
Sales Volume
Quarter Ended Fiscal Year Ended
March 31, March 31,
2006 2005 Change 2006 2005 Change
Gypsum Wallboard 724 614 18% 2,832 2,547 11%
(MMSF's)
Cement (M Tons):
Wholly Owned 473 415 14% 2,381 1,566 52%
Joint Venture 196 211 -7% 819 1,187 -31%
669 626 7% 3,200 2,753 16%
Paperboard (M Tons):
Internal 28 26 8% 114 109 5%
External 52 33 58% 175 159 10%
80 59 36% 289 268 8%
Concrete (M Cubic Yards) 200 179 12% 883 769 15%
Aggregates (M Tons) 1,130 1,082 4% 5,714 5,196 10%
Average Net Sales Price*
Quarter Ended Fiscal Year Ended
March 31, March 31,
2006 2005 Change 2006 2005 Change
Gypsum $154.52 $115.24 34% $137.65 $108.74 27%
Wallboard (MSF)
Cement (Ton) $90.03 $73.59 22% $83.15 $70.77 17%
Paperboard (Ton) $423.29 $466.59 -9% $452.63 $455.73 -1%
Concrete (Cubic Yard) $67.01 $57.35 17% $62.61 $54.92 14%
Aggregates (Ton) $6.17 $5.32 16% $5.89 $5.29 11%
* Net of freight and delivery costs billed to customers.
Intersegment and Cement Revenues
Quarter Ended Fiscal Year Ended
March 31, March 31,
2006 2005 2006 2005
Intersegment Revenues:
Cement $1,524 $1,040 $6,146 $3,609
Paperboard 13,824 13,289 57,546 54,108
Concrete and Aggregates 240 263 1,404 1,095
$15,588 $14,592 $65,096 $58,812
Cement Revenues:
Wholly Owned $45,876 $33,233 $213,980 $125,480
Joint Venture 17,445 15,327 65,164 82,254
$63,321 $48,560 $279,144 $207,734
Eagle Materials Inc.
Attachment 5
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
March 31,
2006 2005
ASSETS
Current Assets -
Cash and Cash Equivalents $54,766 $7,221
Accounts and Notes Receivable, net 94,061 70,952
Inventories 67,799 63,482
Total Current Assets 216,626 141,655
Property, Plant and Equipment, net 557,562 524,359
Investments in Joint Ventures 27,847 28,181
Goodwill 67,854 66,960
Other Assets 19,027 18,846
$888,916 $780,001
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities -
Note Payable $--- $30,800
Accounts Payable and Accrued Liabilities 104,699 91,069
Total Current Liabilities 104,699 121,869
Long-term Debt 200,000 54,000
Deferred Income Taxes 119,479 118,764
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
50,318,797 and 54,675,834 Shares; respectively 503 547
Capital in Excess of Par Value --- ---
Accumulated Other Comprehensive Losses (1,404) (1,842)
Retained Earnings 465,639 486,663
Total Stockholders' Equity 464,738 485,368
$888,916 $780,001
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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