DALLAS, Oct. 31 /PRNewswire-FirstCall/ -- Eagle Materials Inc. (NYSE:
EXP) today reported financial results for the second quarter of fiscal 2007
ended September 30, 2006 and issued guidance for the third quarter of its
fiscal year 2007. Eagle produces and distributes Gypsum Wallboard, Cement,
Recycled Paperboard and Concrete and Aggregates. The following are
highlights of our second quarter results:
* Highest quarterly operating earnings in our history
* Highest quarterly wallboard average net sales price in our history -
increased $44 per MSF from last year's second quarter
* Record high quarterly sales volume in cement - 924 Thousand tons
* Highest quarterly Cement average net sales price in our history -
increased $10 per ton from last year's second quarter
For the quarter ended September 30, 2006, revenues and net earnings
were $256 million and $66 million, respectively. Revenues increased 16%
over the prior year second quarter and net earnings increased 53% over the
same period. Diluted earnings per share for the second quarter of fiscal
2007 were $1.32 compared with $0.80 in the same period a year ago, a 65%
increase.
The Company expects to report net earnings ranging from $0.75 to $0.85
per diluted share for the third quarter of its fiscal 2007 ending December
31, 2006 and maintained its fiscal 2007 annual guidance of $3.80 to $4.20
per diluted share.
Eagle remains well positioned to continue to produce strong financial
results because of our balanced mix of construction products
(Cement/Concrete/Aggregates) and building materials (Gypsum
Wallboard/Paperboard) combined with our geographical focus in the Sunbelt
regions of the U.S. While total U.S. construction spending remains strong,
the severe slowdown in residential construction is beginning to affect
sales prices and volumes in the wallboard industry. The Gypsum Association
reported approximately 27.4 billion square feet of wallboard was shipped by
U.S. manufacturers during the first nine months of calendar 2006, a 1%
increase over the same period in the prior record year because of record
shipments during the first six months of 2006; however, monthly industry
shipments of wallboard have declined recently (down 11% in August and down
18% in September compared to the prior year periods) creating industry-wide
downward pricing pressure. For the remainder of the year, we expect
wallboard industry capacity utilization to continue to decline associated
with typical slower demand during the winter months.
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. Due to the strength in road and bridge construction along
with growing demand from commercial construction, shipments of Portland
cement in the U.S. have increased 4% through July 2006 versus the same
period in the prior record year. Regionally, with the exception of Northern
California, demand in Eagle Materials' cement markets remains at high
levels. High cost imports and strong demand continue to put upward pressure
on cement pricing. Our second quarter pricing was the highest in Eagle's
history and price increases of $10 to $12 per ton have been announced by
each of our cement facilities for early 2007.
GYPSUM WALLBOARD
Gypsum Wallboard revenues for the second quarter totaled $138 million,
an 18% increase over the $117 million for the same quarter a year ago.
Gypsum Wallboard's second quarter operating earnings were $59 million, up
59% from the $37 million for the same quarter last year. The revenue and
earnings gain for the quarter resulted primarily from higher sales prices.
The average net sales price for this fiscal year's second quarter was a
record $176 per MSF, 33% greater than the $132 per MSF for the same quarter
last year. Gypsum Wallboard sales volume of 657 million square feet (MMSF)
for the quarter declined 8% from the prior year's second quarter.
CEMENT
Operating earnings from Cement increased 54% to $35 million for the
second quarter this year from $23 million for the same quarter last year.
The earnings gain was due primarily to a record high average net sales
price and record high sales volumes. Also included in our cement operating
earnings is approximately $2 million of cash distributions received as a
result of the industry settlement of the dispute regarding the antidumping
duties on cement from Mexico. Cement revenues, including joint venture and
intersegment revenues, for the second quarter totaled $92 million, 17%
greater than the $78 million for the same quarter a year ago. Cement sales
volume for the second quarter totaled 924,000 tons, 4% above the 887,000
tons for the same quarter last year. To meet these strong market
requirements, Eagle supplemented approximately 20% of its cement sales
volume with lower margin purchased cement. The average net sales price for
this fiscal year's second quarter was $93 per ton, 12% greater than the $83
per ton for the same quarter last year.
PAPERBOARD
Eagle's Paperboard operation reported second quarter revenues,
including sales to Eagle's Wallboard operations, of $33 million which was
1% less than last year's second quarter. Paperboard operating earnings of
$4 million for the second quarter this year were down 41% from last year's
second quarter operating earnings due primarily to a larger percentage of
sales of low margin containerboard grade paper and higher costs of recycled
fiber. For this year's second quarter, Paperboard sales volume was 70,000
tons, up 1% from last year's second quarter. This year's second quarter
average net sales price of $458 per ton was 3% below last year's second
quarter average net sales price of $471 per ton.
CONCRETE AND AGGREGATES
Revenues from Concrete and Aggregates were $28 million for this year's
second quarter, 14% greater than the $25 million for the second quarter a
year ago. Concrete and Aggregates reported a $5 million operating profit
for this year's second quarter, up 55% from the $3 million operating profit
for the same quarter last year, due to increased pricing in both of our
markets and increased concrete volumes.
Concrete sales volume increased 3% for the second quarter this year to
248,000 cubic yards from 240,000 cubic yards for the same quarter last
year. Our Concrete quarterly average net sales price of $71 per cubic yard
for the second quarter of fiscal 2007 was a record and was 15% higher than
the $62 per cubic yard for the second quarter a year ago. Our Aggregates
operation reported sales volume of 1.5 million tons for the current
quarter, 9% less than the 1.6 million tons reported in the second quarter
last year. Our Aggregates quarterly average net sales price was a record
high $6.98 during the second quarter and was 19% above last year's second
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.
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.
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 Wednesday, November 1, 2006.
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 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;
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 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, 2006 and in its
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006.
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.
(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,
2006 2005 Change
Revenues $256,468 $221,784 16%
Earnings Before Income Taxes $99,192 $65,729 51%
Net Earnings $66,095 $43,322 53%
Earnings Per Share:
- Basic $1.33 $0.81 64%
- Diluted $1.32 $0.80 65%
Average Shares Outstanding:
- Basic 49,583,882 53,247,195 -7%
- Diluted 50,221,791 54,005,829 -7%
Six Months Ended September 30,
2006 2005 Change
Revenues $516,442 $426,583 21%
Earnings Before Income Taxes $188,948 $115,911 63%
Net Earnings $125,187 $78,230 60%
Earnings Per Share:
- Basic $2.51 $1.45 73%
- Diluted $2.47 $1.44 72%
Average Shares Outstanding:
- Basic 49,957,401 53,778,648 -7%
- Diluted 50,684,030 54,485,853 -7%
Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Quarter Ended September 30,
2006 2005 Change
Revenues*
Gypsum Wallboard $137,587 $117,105 18%
54% 53%
Cement (Wholly Owned) 70,085 60,459 16%
27% 27%
Paperboard 18,825 18,908 0%
7% 9%
Concrete & Aggregates 27,517 24,157 14%
11% 10%
Other, net 2,454 1,155 113%
1% 1%
Total $256,468 $221,784 16%
100% 100%
Operating Earnings
Gypsum Wallboard $58,818 $37,075 59%
56% 52%
Cement:
Wholly Owned 23,967 15,759 52%
Joint Venture 11,001 6,883 60%
34,968 22,642 54%
33% 32%
Paperboard 4,190 7,088 -41%
4% 10%
Concrete & Aggregates 5,011 3,226 55%
5% 4%
Other, net 2,454 1,155 113%
2% 2%
Total Operating Earnings 105,441 71,186 48%
100% 100%
Corporate General Expenses (5,133) (3,963)
Interest Expense, net (1,116) (1,494)
Earnings Before
Income Taxes $99,192 $65,729 51%
* 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,
2006 2005 Change
Revenues*
Gypsum Wallboard $285,274 $221,944 29%
55% 52%
Cement (Wholly Owned) 138,385 117,794 18%
27% 27%
Paperboard 38,316 37,997 1%
7% 9%
Concrete & Aggregates 51,188 46,569 10%
10% 11%
Other, net 3,279 2,279 44%
1% 1%
Total $516,442 $426,583 21%
100% 100%
Operating Earnings
Gypsum Wallboard $122,793 $64,926 89%
61% 51%
Cement:
Wholly Owned 39,926 26,261 52%
Joint Venture 16,998 12,410 37%
56,924 38,671 47%
28% 31%
Paperboard 9,457 13,252 -29%
5% 11%
Concrete & Aggregates 8,786 6,678 32%
4% 5%
Other, net 3,279 2,279 44%
2% 2%
Total Operating Earnings 201,239 125,806 60%
100% 100%
Corporate General Expenses (9,412) (7,065)
Interest Expense, net (2,879) (2,830)
Earnings Before
Income Taxes $188,948 $115,911 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,
2006 2005 Change 2006 2005 Change
Gypsum Wallboard (MMSF's) 657 712 -8% 1,392 1,409 -1%
Cement (M Tons):
Wholly Owned 715 681 5% 1,422 1,352 5%
Joint Venture 209 206 1% 412 433 -5%
924 887 4% 1,834 1,785 3%
Paperboard (M Tons):
Internal 27 29 -7% 58 58 0%
External 43 40 8% 89 84 6%
70 69 1% 147 142 4%
Concrete (M Cubic Yards) 248 240 3% 471 473 0%
Aggregates (M Tons) 1,469 1,616 -9% 2,768 3,188 -13%
Average Net Sales Price*
Quarter Ended Six Months Ended
September 30, September 30,
2006 2005 Change 2006 2005 Change
Gypsum Wallboard (MSF) $175.69 $132.35 33% $171.55 $125.83 36%
Cement (Ton) $ 92.68 $ 82.55 12% $ 91.86 $ 80.54 14%
Paperboard (Ton) $457.64 $471.39 -3% $448.46 $464.39 -3%
Concrete (Cubic Yard) $ 70.80 $ 61.58 15% $ 69.83 $ 60.00 16%
Aggregates (Ton) $ 6.98 $ 5.89 19% $ 6.79 $ 5.79 17%
*Net of freight and delivery costs billed to customers.
Intersegment and Cement Revenues
Quarter Ended Six Months Ended
September 30, September 30,
2006 2005 2006 2005
Intersegment Revenues:
Cement $ 2,581 $ 1,679 $ 4,837 $ 3,277
Paperboard 14,156 14,538 29,383 29,400
Concrete and Aggregates 442 411 759 858
$17,179 $16,628 $34,979 $33,535
Cement Revenues:
Wholly Owned $70,085 $60,459 $ 138,385 $ 117,794
Joint Venture 18,868 15,970 37,080 32,826
$88,953 $76,429 $ 175,465 $ 150,620
Eagle Materials Inc.
Attachment 5
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
September 30, March 31,
2006 2005 2006*
ASSETS
Current Assets -
Cash and Cash Equivalents $76,317 $11,045 $54,766
Accounts and Notes Receivable, net 97,563 92,053 94,061
Inventories 67,641 60,927 67,799
Total Current Assets 241,521 164,025 216,626
Property, Plant and Equipment - 919,170 825,708 856,227
Less: Accumulated Depreciation
(316,488) (282,004) (298,665)
Property, Plant
and Equipment, net 602,682 543,704 557,562
Investment in Joint Venture 35,096 26,340 27,847
Goodwill 67,536 68,552 67,854
Other Assets 17,930 16,191 19,027
$964,765 $818,812 $888,916
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities -
Note Payable $--- $48,200 $---
Accounts Payable
and Accrued Liabilities 121,590 98,721 104,699
Total Current Liabilities 121,590 146,921 104,699
Long-term Debt 200,000 45,000 200,000
Deferred Income Taxes 115,288 115,468 119,479
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 49,058,188;
53,230,629 and 50,318,797 Shares,
respectively. 491 503 503
Accumulated Other Comprehensive
Losses (1,404) (1,842) (1,404)
Retained Earnings 528,800 512,762 465,639
Total Stockholders' Equity 527,887 511,423 464,738
$964,765 $818,812 $888,916
*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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