- Net Earnings of $30.1 million and Diluted EPS of $1.62 second highest
quarterly results in Company history
- Gypsum Wallboard sales volume all-time Company record for the quarter
- Gypsum Wallboard average net sales price increased 31%
- Cement average net sales price increased 5%
DALLAS, Oct. 28 /PRNewswire-FirstCall/ -- Eagle Materials Inc.
(NYSE: EXP and EXP.B) today reported financial results for the second quarter
of Fiscal Year (FY) 2005 ended September 30, 2004. EXP produces and
distributes Cement, Gypsum Wallboard, Recycled Paperboard and Concrete and
Aggregates.
For the quarter ended September 30, 2004, revenues and net earnings were
$163.1 million and $30.1 million, respectively. Revenues increased 21% year-
over-year and net earnings increased 62% year-over-year. Diluted earnings per
share for the second quarter of FY 2005 were $1.62 compared with $1.00 in the
same period a year ago, a 62% increase.
EXP is well positioned to continue to achieve superior results given its
strong financial position and the growing construction industry. During the
first eight months of the year, construction industry spending amounted to
$646.8 billion, 9.4% above the $591.2 billion for the same period in 2003.
Continued strong residential construction activity led to record industry
gypsum wallboard shipments in the second quarter and gypsum wallboard sales
prices continued to strengthen through the second quarter. Demand for cement
is also at record levels outpacing last year's consumption by over 8%.
The general outlook for our businesses remains very favorable. For the
upcoming year, we expect demand to remain high in the Gypsum Wallboard market
and supply to be tight (with greater than 90% of industry capacity utilized)
as a result of favorable levels of activity in residential construction,
repair/remodel construction, and increasing commercial construction activity.
Additionally, the price of imported cement continues to be impacted by higher
freight rates and increasing consumption in world markets. Collectively,
strong demand and higher import costs continue to put upward pressure on
cement pricing with price increases of $5.00 to $8.00 per ton announced in all
of EXP's markets to take effect during the next several months.
Based on the above factors, the Company expects to report earnings ranging
from $1.30 per diluted share to $1.50 per diluted share for the quarter ending
December 31, 2004, and $5.25 per diluted share to $5.65 per diluted share for
Fiscal 2005.
DETAILS OF FINANCIAL RESULTS
We conduct two out of four of our cement plant operations through joint
ventures, Texas Lehigh Cement Company and Illinois Cement Company
(collectively, the "Joint Ventures"). For segment reporting purposes only, we
proportionately consolidate our 50% share of the Joint Ventures' 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 the segments' total revenues. Intersegment
sales are eliminated on the income statement. Refer to Attachment 4 for a
reconciliation of amounts referred to above.
GYPSUM WALLBOARD
Gypsum Wallboard revenues for the second quarter totaled $91.8 million, a
36% increase over $67.4 million for the same quarter a year ago. Gypsum
Wallboard's second quarter operating earnings were $22.9 million, up 227% from
$7.0 million for the same quarter last year. The revenue and earnings gain
for the quarter resulted from record sales volume at higher sales prices. The
average net sales price for this fiscal year's second quarter was $109.65 per
thousand square feet (MSF), 31% greater than $83.67 per MSF for the same
quarter last year. Gypsum Wallboard sales volume of 664 million square feet
(MMSF) for this year's second quarter was 7% above the 621 MMSF sold during
the second quarter last year.
CEMENT
Operating earnings from Cement increased 1% to $16.8 million for the
second quarter this year from $16.7 million for the same quarter last year.
The earnings gain was due primarily to higher net sales prices and record
sales volume partially offset by higher purchased cement and increased fuel
costs. Cement revenues for the second quarter totaled $56.4 million, 6%
greater than $53.1 million for the same quarter a year ago.
Cement sales volume for the second quarter totaled 742,000 tons, 2% above
727,000 tons for the same quarter last year. Purchased cement sales volume of
197,000 tons for the second quarter was 81,000 tons, 70% greater than
purchased cement sales volume for the second quarter a year ago. Prices have
increased since the beginning of the calendar year in each of our markets
resulting in a 5% increase in our second quarter average Cement net sales
price to $70.05 per ton from $66.64 per ton for the same quarter a year ago.
PAPERBOARD
EXP's Paperboard operation reported second quarter revenues of
$32.8 million, up 15% from revenues of $28.4 million for last year's second
quarter. Paperboard operating earnings of $7.2 million for the second quarter
this year were 44% above $5.0 million for last year's second quarter. The
earnings gain resulted primarily from higher sales prices.
For this year's second quarter, Paperboard sales volume was 70,000 tons,
up 3% from last year's sales volume of 68,000 tons. This year's second
quarter average net sales price of $458.88 per ton was 13% above last year's
second quarter net sales price of $407.69 per ton.
CONCRETE AND AGGREGATES
Revenues from Concrete and Aggregates were $21.3 million for the quarter,
15% greater than $18.6 million for the second quarter a year ago. Concrete
and Aggregates reported a $2.5 million operating profit for this year's second
quarter, down 5% from $2.6 million for the same quarter last year due to
increased cement costs.
Concrete sales volume increased slightly for the second quarter this year
to 229,000 cubic yards, 2% above 224,000 cubic yards for the same quarter last
year. EXP's Concrete average net sales price of $53.51 per cubic yard for the
current quarter was 3% higher than $51.95 per cubic yard for the second
quarter a year ago.
Aggregates operations reported sales volume of 1,673,000 tons for the
current quarter, 31% above sales volume of 1,275,000 tons for the second
quarter last year. Aggregates average net sales price of $5.14 per ton for
the second quarter was 2% lower than $5.27 per ton for the second quarter last
year due primarily to a higher volume of lower priced road base sales in the
product mix, offset partially by increased sales pricing in the Northern
California market.
CONSOLIDATED YEAR-TO-DATE RESULTS
For the six months ended September 30, 2004, EXP's net earnings increased
63% to $53,332,000 or $2.85 per diluted share from $32,787,000 or $1.77 per
diluted share for the same period a year ago. Revenues for this year's
six-month period of $313,403,000 were 21% greater than $259,039,000 for the
same period a year ago.
EXP's senior management will conduct a conference call to discuss the
financial results, forward looking information and other matters at 3:00 p.m.
Eastern Time (2:00 p.m. Central Time) on Thursday, October 28, 2004. 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.
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; 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 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, 2004. 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 (Six months)
(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 September 30,
2004 2003 Change
Revenues $163,112 $134,636 +21%
Earnings Before Income Taxes $45,977 $28,664 +60%
Net Earnings $30,119 $18,564 +62%
Earnings Per Share:
- Basic $1.64 $1.01 +62%
- Diluted $1.62 $1.00 +62%
Average Shares Outstanding:
- Basic 18,406,628 18,462,107 ---%
- Diluted 18,615,388 18,609,206 ---%
Six Months Ended September 30,
2004 2003 Change
Revenues $313,403 $259,039 +21%
Earnings Before Income Taxes $81,411 $50,049 +63%
Net Earnings $53,332 $32,787 +63%
Earnings Per Share:
- Basic $2.88 $1.78 +62%
- Diluted $2.85 $1.77 +61%
Average Shares Outstanding:
- Basic 18,518,556 18,434,560 +1%
- Diluted 18,726,654 18,559,000 +1%
Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Quarter Ended September 30,
2004 2003 Change
Revenues*
Cement (Wholly Owned) $31,400 $32,035 -2%
19% 24%
Gypsum Wallboard 91,840 67,362 +36%
56% 50%
Paperboard 18,743 16,166 +16%
12% 12%
Concrete & Aggregates 20,936 18,303 +14%
13% 13%
Other, net 193 770 -75%
---% 1%
Total $163,112 $134,636 +21%
100% 100%
Operating Earnings
Cement:
Wholly Owned $8,025 $9,486 -15%
Joint Venture 8,789 7,220 +22%
16,814 16,706 +1%
34% 52%
Gypsum Wallboard 22,862 6,987 +227%
46% 22%
Paperboard 7,216 4,998 +44%
15% 16%
Concrete & Aggregates 2,482 2,626 -5%
5% 8%
Other, net 193 770 -75%
---% 2%
Total Operating Earnings 49,567 32,087 +54%
100% 100%
Corporate General Expenses (2,719) (2,468)
Interest Expense, net (871) (955)
Earnings Before
Income Taxes $45,977 $28,664 +60%
*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)
Six Months Ended September 30,
2004 2003 Change
Revenues*
Cement (Wholly Owned) $64,356 $59,958 +7%
20% 23%
Gypsum Wallboard 174,096 130,351 +34%
56% 50%
Paperboard 36,868 32,851 +12%
12% 13%
Concrete & Aggregates 37,890 34,850 +9%
12% 13%
Other, net 193 1,029 -81%
---% 1%
Total $313,403 $259,039 +21%
100% 100%
Operating Earnings
Cement:
Wholly Owned $16,097 $16,164 ---%
Joint Venture 13,713 11,696 +17%
29,810 27,860 +7%
34% 49%
Gypsum Wallboard 39,862 12,818 +211%
46% 23%
Paperboard 13,942 10,673 +31%
16% 19%
Concrete & Aggregates 4,613 4,052 14%
5% 7%
Other, net (639) 1,029 -162%
-1% 2%
Total Operating Earnings 87,588 56,432 +55%
100% 100%
Corporate General Expenses (4,598) (3,936)
Interest Expense, net (1,579) (2,447)
Earnings Before
Income Taxes $81,411 $50,049 +63%
*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 Six Months Ended
September 30, September 30,
2004 2003 Change 2004 2003 Change
Cement (M Tons):
Wholly Owned 393 417 -6% 811 780 4%
Joint Venture 349 310 13% 689 613 12%
742 727 2% 1,500 1,393 8%
Gypsum Wallboard
(MMSF's) 664 621 7% 1,305 1,207 8%
Paperboard (M Tons):
Internal 28 27 4% 56 52 8%
External 42 41 2% 84 83 1%
70 68 3% 140 135 4%
Concrete (M Cubic
Yards) 229 224 2% 417 433 -4%
Aggregates
(M Tons) 1,673 1,275 31% 2,884 2,334 24%
Average Net Sales Price*
Quarter Ended Six Months Ended
September 30, September 30,
2004 2003 Change 2004 2003 Change
Cement (Ton) $70.05 $66.64 5% $69.18 $66.60 4%
Gypsum Wallboard
(MSF) $109.65 $83.67 31% $105.60 $83.21 27%
Paperboard (Ton) $458.88 $407.69 13% $452.20 $408.91 11%
Concrete (Cubic
Yard) $53.51 $51.95 3% $54.12 $52.38 3%
Aggregates (Ton) $5.14 $5.27 -2% $5.32 $5.25 1%
*Net of freight and delivery costs billed to customers.
Intersegment and Cement Revenues
Quarter Ended Six Months Ended
September 30, September 30,
2004 2003 2004 2003
Intersegment Revenues:
Cement $997 $970 $1,778 $1,947
Paperboard 14,018 12,282 27,686 23,686
Concrete and Aggregates 323 330 622 596
$15,338 $13,582 $30,086 $26,229
Cement Revenues:
Wholly Owned $31,400 $32,035 $64,356 $59,958
Joint Venture 24,050 20,127 46,780 39,848
$55,450 $52,162 $111,136 $99,806
Eagle Materials Inc.
Attachment 5
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
September 30, March 30,
2004 2003 2004*
ASSETS
Current Assets -
Cash and Cash Equivalents $6,383 $10,463 $3,536
Accounts and Notes
Receivable, net 62,321 55,599 54,352
Inventories 44,388 43,444 48,890
Total Current Assets 113,092 109,506 106,778
Property, Plant and
Equipment - 723,670 712,398 715,734
Less: Accumulated
Depreciation (250,031) (221,617) (234,929)
Property, Plant and
Equipment, net 473,639 490,781 480,805
Investments in Joint Ventures 49,265 51,737 51,503
Goodwill 40,290 40,290 40,290
Other Assets 14,914 11,312 13,599
$691,200 $703,626 $692,975
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities -
Note Payable $30,800 $--- $24,100
Accounts Payable and
Accrued Liabilities 83,443 66,440 69,991
Current Portion of
Long-term Debt 80 80 80
Total Current Liabilities 114,323 66,520 94,171
Long-term Debt 19,000 31,080 58,700
Deferred Income Taxes 105,199 90,392 101,082
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
9,667,907, 18,520,103 and
9,607,029 Shares, respectively.
Class B Common Stock, Par
Value $0.01; Authorized
50,000,000 Shares; Issued
and Outstanding, 8,665,769,
None and 9,161,459 Shares,
respectively. 183 185 188
Capital in Excess of Par Value --- 19,439 28,223
Accumulated Other Comprehensive
Losses (1,877) (1,703) (1,877)
Unamortized Restricted Stock (573) (709) (591)
Retained Earnings 454,945 498,422 413,079
Total Stockholders' Equity 452,678 515,634 439,022
$691,200 $703,626 $692,975
*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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