Highest Quarterly Net Earnings ($43.3 Million) and Diluted EPS ($2.41) in
Company History and Raises Annual Earnings Guidance
DALLAS, Nov. 1 /PRNewswire-FirstCall/ -- Eagle Materials Inc.
(NYSE: EXP and EXP.B) today reported financial results for the second quarter
of fiscal 2006 ended September 30, 2005 and raised its annual earnings
guidance. 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 WALLBOARD AND CEMENT IN
COMPANY HISTORY
* RECORD HIGH QUARTERLY SALES VOLUME IN WALLBOARD
* GYPSUM WALLBOARD AVERAGE NET SALES PRICE INCREASED 21% FROM LAST
YEAR'S SECOND QUARTER
* RECORD HIGH SECOND QUARTER SALES VOLUME IN CEMENT
* HIGHEST QUARTERLY CEMENT AVERAGE NET SALES PRICE IN OUR HISTORY --
INCREASED 18% FROM LAST YEAR'S SECOND QUARTER
For the quarter ended September 30, 2005, revenues and net earnings were
$222 million and $43 million, respectively. Revenues increased 36% over the
prior year second quarter and net earnings increased 44% over the same period
last year. Diluted earnings per share for the second quarter of fiscal 2006
were $2.41 compared with $1.62 in the same period a year ago, a 49% increase.
The Company also raised its earnings guidance for fiscal 2006 to a range
of $7.60 to $7.90 per diluted share, and expects to report earnings ranging
from $1.80 to $2.00 per diluted share for the third quarter of fiscal 2006
ending December 31, 2005.
Eagle remains well positioned to continue to achieve outstanding results
given our strong operations, which enable us to supply building materials to a
vibrant construction industry. According to the U.S. Census Bureau, total
construction spending during August 2005 was estimated at a seasonally
adjusted annual rate of $1.11 trillion, 6% above the August 2004 estimate.
The Gypsum Association reported approximately 27.1 billion square feet of
wallboard were shipped in the first nine months of calendar 2005, a 5.5%
increase over the same period in the prior record year. For calendar year
2005, we expect Wallboard demand to remain strong and supply to be tight (with
95%+ industry capacity utilization) as a result of continued high levels of
activity in residential construction and increasing repair/remodel and
commercial construction activity. Wallboard pricing remains strong and a $12
per thousand square feet (MSF) price increase was implemented on
September 19, 2005 in all of our wallboard markets. Also, national demand for
cement remains at record levels outpacing last year's consumption by
approximately 5.8% through August 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 $3 to
$5 per ton between July 1st and October 1st, in most of our cement markets.
GYPSUM WALLBOARD
Gypsum Wallboard revenues for the second quarter totaled $117 million, a
28% increase over the $92 million for the same quarter a year ago. Gypsum
Wallboard's second quarter operating earnings were $37 million, up 62% from
the $23 million for the same quarter last year. The revenue and earnings gain
for the quarter resulted from higher sales prices and record sales volume.
The average net sales price for this fiscal year's second quarter was $132 per
MSF, 21% greater than the $110 per MSF for the same quarter last year. Gypsum
Wallboard sales volume of 712 million square feet (MMSF) for the quarter
increased 7% from the prior year's second quarter.
CEMENT
Operating earnings from Cement increased 35% to $23 million for the second
quarter this year from $17 million for the same quarter last year. The
earnings gain was due primarily to a record high average net sales price,
record high sales volumes and the positive impact of the Illinois Cement
acquisition. Cement revenues for the second quarter totaled $78 million, 38%
greater than the $56 million for the same quarter a year ago. $9 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 second quarter totaled 887,000 tons,
20% above the 742,000 tons for the same quarter last year. To meet these
strong market requirements, Eagle increased its lower margin purchased cement
sales volumes to approximately 260,000 tons for the quarter.
PAPERBOARD
EXP's Paperboard operation reported second quarter revenues (including
sales to EXP's Wallboard operations -- see Attachment 4 for a detail of
intersegment revenues) of $33 million which is even with last year's second
quarter. Paperboard operating earnings of $7 million for the second quarter
this year were nearly flat with last year's second quarter operating earnings.
For this year's second quarter, Paperboard sales volume was 69,000 tons, down
1% from last year's sales volume of 70,000 tons. This year's second quarter
average net sales price of $471 per ton was a quarterly record and was 3%
above last year's second quarter average net sales price of $459 per ton.
CONCRETE AND AGGREGATES
Revenues from Concrete and Aggregates were $25 million for this year's
second quarter, 16% greater than the $21 million for the second quarter a year
ago. Concrete and Aggregates reported a $3.2 million operating profit for
this year's second quarter, up 30% from the $2.5 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 5% for the second quarter this year to
240,000 cubic yards from 229,000 cubic yards for the same quarter last year.
Our Concrete quarterly average net sales price of $62 per cubic yard for the
second quarter of fiscal 2006 was a record and was 15% higher than the $54 per
cubic yard for the second quarter a year ago. Our Aggregates operation
reported sales volume of 1.6 million tons for the current quarter, 3% less
than the 1.7 million tons reported in the second quarter last year. Our
Aggregates quarterly average net sales price was a record high $5.89 during
the second quarter and was 15% 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.
Our results for the second quarter of fiscal 2006 include 100% of Illinois
Cement Company. During the second 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.
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 Wednesday, November 2, 2005. 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 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 (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,
2005 2004 Change
Revenues $221,784 $163,112 36%
Earnings Before Income Taxes $65,729 $45,977 43%
Net Earnings $43,322 $30,119 44%
Earnings Per Share:
- Basic $2.44 $1.64 49%
- Diluted $2.41 $1.62 49%
Average Shares Outstanding:
- Basic 17,749,065 18,406,628 -4%
- Diluted 18,001,934 18,615,388 -3%
Six Months Ended September 30,
2005 2004 Change
Revenues $426,583 $313,403 36%
Earnings Before Income Taxes $115,911 $81,411 42%
Net Earnings $78,230 $53,332 47%
Earnings Per Share:
- Basic $4.36 $2.88 51%
- Diluted $4.31 $2.85 51%
Average Shares Outstanding:
- Basic 17,926,216 18,518,556 -3%
- Diluted 18,161,900 18,726,654 -3%
Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Quarter Ended September 30,
2005 2004 Change
Revenues*
Gypsum Wallboard $117,105 $91,840 28%
53% 56%
Cement (Wholly Owned) ** 60,459 31,400 93%
27% 19%
Paperboard 18,908 18,743 1%
9% 12%
Concrete & Aggregates 24,157 20,936 15%
10% 13%
Other, net 1,155 193 498%
1% ---%
Total $221,784 $163,112 36%
100% 100%
Operating Earnings
Gypsum Wallboard $37,075 $22,862 62%
52% 46%
Cement:
Wholly Owned ** 15,759 8,025 96%
Joint Venture ** 6,883 8,789 -22%
22,642 16,814 35%
32% 34%
Paperboard 7,088 7,216 -2%
10% 15%
Concrete & Aggregates 3,226 2,482 30%
4% 5%
Other, net 1,155 193 498%
2% ---%
Total Operating Earnings 71,186 49,567 44%
100% 100%
Corporate General Expenses (3,963) (2,719)
Interest Expense, net (1,494) (871)
Earnings Before Income
Taxes $65,729 $45,977 43%
* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.
** Reflects purchase of the other 50% interest in Illinois Cement
Company.
Eagle Materials Inc.
Attachment 3
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Six Months Ended September 30,
2005 2004 Change
Revenues*
Gypsum Wallboard $221,944 $174,096 27%
52% 56%
Cement (Wholly Owned) ** 117,794 64,356 83%
27% 20%
Paperboard 37,997 36,868 3%
9% 12%
Concrete & Aggregates 46,569 37,890 23%
11% 12%
Other, net 2,279 193 1,081%
1% ---%
Total $426,583 $313,403 36%
100% 100%
Operating Earnings
Gypsum Wallboard $64,926 $39,862 63%
51% 46%
Cement:
Wholly Owned ** 26,261 16,097 63%
Joint Venture ** 12,410 13,713 -10%
38,671 29,810 30%
31% 34%
Paperboard 13,252 13,942 -5%
11% 16%
Concrete & Aggregates 6,678 4,613 45%
5% 5%
Other, net 2,279 (639) 457%
2% -1%
Total Operating Earnings 125,806 87,588 44%
100% 100%
Corporate General Expenses (7,065) (4,598)
Interest Expense, net (2,830) (1,579)
Earnings Before Income
Taxes $115,911 $81,411 42%
* Net of Intersegment and Joint Venture Revenues listed on Attachment 4.
** Reflects purchase of the other 50% interest in Illinois Cement
Company.
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,
2005 2004 Change 2005 2004 Change
Gypsum Wallboard
(MMSF's) 712 664 7% 1,409 1,305 8%
Cement (M Tons):
Wholly Owned 681 393 73% 1,352 811 67%
Joint Venture 206 349 -41% 433 689 -37%
887 742 20% 1,785 1,500 19%
Paperboard (M Tons):
Internal 29 28 4% 58 56 4%
External 40 42 -5% 84 84 ---%
69 70 -1% 142 140 1%
Concrete (M Cubic
Yards) 240 229 5% 473 417 13%
Aggregates (M Tons) 1,616 1,673 -3% 3,188 2,884 11%
Average Net Sales Price*
Quarter Ended Six Months Ended
September 30, September 30,
2005 2004 Change 2005 2004 Change
Gypsum Wallboard
(MSF) $132.35 $109.65 21% $125.83 $105.60 19%
Cement (Ton) $82.55 $70.05 18% $80.54 $69.18 16%
Paperboard (Ton) $471.39 $458.88 3% $464.39 $452.20 3%
Concrete (Cubic Yard) $61.58 $53.51 15% $60.00 $54.12 11%
Aggregates (Ton) $5.89 $5.14 15% $5.79 $5.32 9%
*Net of freight and delivery costs billed to customers.
Intersegment and Cement Revenues
Quarter Ended Six Months Ended
September 30, September 30,
2005 2004 2005 2004
Intersegment Revenues:
Cement $1,679 $997 $3,277 $1,778
Paperboard 14,538 14,018 29,400 27,686
Concrete and Aggregates 411 323 858 622
$16,628 $15,338 $33,535 $30,086
Cement Revenues:
Wholly Owned $60,459 $31,400 $117,794 $64,356
Joint Venture 15,970 24,050 32,826 46,780
$76,429 $55,450 $150,620 $111,136
Eagle Materials Inc.
Attachment 5
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
September 30, March 31,
2005 2004 2005*
ASSETS
Current Assets -
Cash and Cash Equivalents $11,045 $6,383 $7,221
Accounts and Notes Receivable,
net 92,053 62,321 70,952
Inventories 60,927 44,388 63,482
Total Current Assets 164,025 113,092 141,655
Property, Plant and Equipment - 825,708 723,670 788,447
Less: Accumulated Depreciation (282,004) (250,031) (264,088)
Property, Plant and
Equipment, net 543,704 473,639 524,359
Investments in Joint Ventures 26,340 49,265 28,181
Goodwill 68,552 40,290 66,960
Other Assets 16,191 14,914 18,846
$818,812 $691,200 $780,001
LIABILITIES AND STOCKHOLDER'S
EQUITY
Current Liabilities -
Note Payable $48,200 $30,800 $30,800
Accounts Payable and Accrued
Liabilities 98,721 83,443 91,069
Current Portion of Long-term
Debt --- 80 ---
Total Current Liabilities 146,921 114,323 121,869
Long-term Debt 45,000 19,000 54,000
Deferred Income Taxes 115,468 105,199 118,764
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
9,517,959, 9,667,907 and
9,726,009 Shares, respectively.
Class B Common Stock, Par Value
$0.01; Authorized 50,000,000
Shares; Issued and Outstanding,
8,225,584, 8,655,769 and
8,499,269 Shares, respectively. 177 183 182
Capital in Excess of Par Value --- --- ---
Accumulated Other Comprehensive
Losses (1,842) (1,877) (1,842)
Unamortized Restricted Stock (506) (573) (557)
Retained Earnings 513,594 454,945 487,585
Total Stockholders' Equity 511,423 452,678 485,368
$818,812 $691,200 $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 and Chief
Executive Officer, or Arthur R. Zunker, Jr., Senior Vice
President and Chief Financial Officer, both of Eagle Materials
Inc., +1-214-432-2000
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