Eagle Materials Inc. Reports Fiscal Year and Fourth Quarter Results

DALLAS--(BUSINESS WIRE)--

Eagle Materials Inc. EXP today reported financial results for fiscal year 2014 and the fiscal fourth quarter ended March 31, 2014. Notable items for the fiscal year and quarter in relation to the prior year include:

• Fiscal year 2014 revenues of $898.4 million, up 40%
• Fiscal year 2014 net earnings per diluted share of $2.49, up 104%
• Fourth quarter revenues of $189.9 million, up 19%
• Fourth quarter earnings per diluted share of $0.45, up 181%
• Repaid $108 million, or 22%, of outstanding debt during fiscal year 2014

Fiscal 2014 earnings before interest and income taxes doubled from the prior year to $200 million, reflecting improved sales volumes across all business lines, with cement sales volumes setting an annual record of nearly 4.6 million tons. Net sales prices also strengthened across all businesses, with annual wallboard net sales prices increasing 18% over the prior year. Annual revenue and earnings improvement also reflects the acquisition of assets, primarily two cement plants in Missouri and Oklahoma (the Acquired Assets) on November 30, 2012. Eagle ended the year with a net debt-to-capitalization ratio of 31%.

Fourth quarter earnings before interest and income taxes increased 119% to $33.8 million, as fourth quarter sales volumes also improved across all businesses, reflecting improving construction fundamentals in the US despite unusually severe winter weather. In addition, sales prices improved in all businesses. Gypsum Wallboard experienced the most significant improvement, with an increase in average net sales prices of 12% as compared with the prior year's fourth quarter.

Cement, Concrete and Aggregates

Fiscal 2014 operating earnings from Cement were $89.5 million, an increase of 94% compared to fiscal 2013. Revenues from Cement, including joint venture and intersegment sales, were $438.2 million for fiscal 2014, 44% higher than last year.

Operating earnings from Cement during the fourth quarter were $12.0 million, a 422% increase from the same quarter a year ago. This year's fourth quarter cement earnings were impacted by approximately $4.5 million associated with the annual maintenance outage at our Illinois Cement facility, whereas the prior year's fourth quarter cement earnings were impacted by approximately $14 million associated with maintenance costs at the Acquired Assets. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $81.7 million, 10% greater than the same quarter last year. Cement sales volumes for the quarter were 803,000 tons, 4% higher than the same quarter a year ago. The average net sales price for this quarter was $93.01 per ton, 6% higher than the same quarter last year.

Concrete and Aggregates reported a fiscal 2014 operating loss of $4.7 million versus an operating loss of $5.4 million one year earlier. Our fiscal 2014 results include an operating loss of $4.9 million associated with the start-up of our new frac sand operation. Revenues from Concrete and Aggregates were $115.4 million for fiscal 2014, 108% higher than last year, reflecting the impact from our recently acquired concrete and aggregates business in Kansas City and the start-up of our frac sand operation.

Gypsum Wallboard and Paperboard

Fiscal 2014 operating earnings from Gypsum Wallboard and Paperboard were $138.5 million, an increase of 46% compared to fiscal 2013. Revenues from Gypsum Wallboard and Paperboard were $465.1 million for fiscal 2014, 22% higher than last year's revenues.

Gypsum Wallboard and Paperboard reported fourth quarter operating earnings of $29.0 million, up 9% from the same quarter last year. The increase in operating earnings was primarily due to higher net wallboard sales prices and sales volumes offset by higher costs for maintenance ($1.5 million), legal ($1.3 million) and natural gas ($0.9 million).

Gypsum Wallboard and Paperboard revenues for the fourth quarter totaled $106.3 million, an 11% increase from the same quarter a year ago. The average Gypsum Wallboard net sales price for this quarter was $162.67 per MSF, 12% greater than the same quarter a year ago. Gypsum Wallboard sales volumes of 442 million square feet (MMSF) were up approximately 2% from the prior year's fourth quarter. The average Paperboard net sales price this quarter was $503.62 per ton, 2% greater than the same quarter a year ago. Paperboard sales volumes for the quarter were 59,000 tons, 4% greater than the same quarter a year ago.

Details of Financial Results

For information regarding the results of operations for the Acquired Assets for certain periods prior to November 30, 2012, including pro forma financial information that combines the results of operations for Eagle and the Acquired Assets, please see our Form 8-K/A filed on April 26, 2013.

The prior year's fourth quarter results include Acquisition and Litigation Expenses related primarily to the acquisition of the Acquired Assets and litigation costs related to our lawsuit against the IRS. The total impact from these non-routine items was $2.4 million (pre-tax), or $0.04 per diluted share (after-tax).

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 Eagle 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 3 for a reconciliation of these amounts.

About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Aggregates, Concrete, Gypsum Wallboard, Recycled Paperboard and Frac Sand from 40 facilities across the U.S. Eagle is headquartered in Dallas, Texas.

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 Thursday, May 15, 2014. 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.

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; the fact that our products are commodities and that prices for our products are subject to material fluctuation due to market conditions and other factors beyond our control; availability of raw materials; changes in energy costs including, without limitation, natural gas, coal and oil; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; inability to timely execute announced capacity expansions; difficulties and delays in the development of new business lines; governmental regulation and changes in governmental and public policy (including, without limitation, climate change regulation); possible outcomes of pending or future litigation or arbitration proceedings; 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, without limitation, natural gas, coal and oil) 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. With respect to our acquisition of the Acquired Assets as described in this press release, factors, risks and uncertainties that may cause actual events and developments to vary materially from those anticipated in forward-looking statements include, but are not limited to, the risk that we may not be able to integrate the Acquired Assets in an efficient and cost-effective manner with our other assets and operations, the possible inability to realize synergies or other expected benefits of the transaction, the possibility that we may incur significant costs relating to transition or integration activities or repair and maintenance of the Acquired Assets, the discovery of undisclosed liabilities associated with the business, the need to repay the indebtedness incurred to fund the acquisition and the fact that increased debt may limit our ability to respond to any changes in general economic and business conditions that occur after the acquisition. These and other factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2013 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013. 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)		Statement of Consolidated Earnings
(2)		Revenues and Earnings by Lines of Business (Quarter and Fiscal Year)
(3)		Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(4)		Consolidated Balance Sheets

Eagle Materials Inc.
Attachment 1
Eagle Materials Inc.
Statement of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
				Quarter Ended March 31,										Fiscal Year Ended March 31,
				2014					2013					2014					2013
Revenues				$	189,894				$	159,118				$	898,396				$	642,562
Cost of Goods Sold					160,366					142,520					712,937					539,317
Gross Profit					29,528					16,598					185,459					103,245
Equity in Earnings of Unconsolidated JV					10,330					8,437					37,811					32,507
Corporate General and Administrative Expense					(6,102	)				(6,976	)				(24,552	)				(23,918	)
Other Operating Income (Expense)					68					(805	)				1,368					(1,232	)
Acquisition and Litigation Expense					-					(1,824	)				-					(10,683	)
Earnings before Interest and Income Taxes					33,824					15,430					200,086					99,919
Interest Expense, Net					(4,057	)				(4,674	)				(18,282	)				(15,823	)
Earnings before Income Taxes					29,767					10,756					181,804					84,096
Income Tax Expense					7,149					2,923					57,561					26,352
Net Earnings				$	22,618				$	7,833				$	124,243				$	57,744
NET EARNINGS PER SHARE
Basic				$	0.46				$	0.16				$	2.53				$	1.24
Diluted				$	0.45				$	0.16				$	2.49				$	1.22
AVERAGE SHARES OUTSTANDING
Basic					49,365,344					48,768,236					49,090,750					46,622,646
Diluted					50,187,433					49,643,918					49,939,165					47,340,450

Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Segment Operating Earnings by Lines of Business
(dollars in thousands)
(unaudited)
				Quarter Ended March 31,										Fiscal Year Ended March 31,
				2014					2013					2014					2013
Revenues*
Gypsum Wallboard and Paperboard:
Gypsum Wallboard				$	87,917				$	78,245				$	387,016				$	306,529
Gypsum Paperboard					18,413					17,364					78,059					75,537
					106,330					95,609					465,075					382,066
Cement (Wholly Owned)					50,872					48,698					317,879					204,953
Concrete and Aggregates					32,692					14,811					115,442					55,543
Total Revenues				$	189,894				$	159,118				$	898,396				$	642,562
Segment Operating Earnings
Gypsum Wallboard and Paperboard:
Gypsum Wallboard				$	24,618				$	22,356				$	114,852				$	69,712
Gypsum Paperboard					4,333					4,266					23,610					25,200
					28,951					26,622					138,462					94,912
Cement:
Wholly Owned					1,705					(6,132	)				51,675					13,721
Joint Venture					10,330					8,437					37,811					32,507
					12,035					2,305					89,486					46,228
Concrete and Aggregates					(1,128	)				(3,892	)				(4,678	)				(5,388	)
Other, net					68					(805	)				1,368					(1,232	)
Sub-total					39,926					24,230					224,638					134,520
Corporate General and Administrative Expense					(6,102	)				(6,976	)				(24,552	)				(23,918	)
Acquisition and Litigation Expense					-					(1,824	)				-					(10,683	)
Earnings before Interest and Income Taxes					33,824					15,430					200,086					99,919
* Net of Intersegment and Joint Venture Revenues listed on Attachment 3.

Eagle Materials Inc.
Attachment 3
Eagle Materials Inc.
Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues
(unaudited)
				Sales Volume
				Quarter Ended March 31,										Fiscal Year Ended March 31,
				2014			2013			Change				2014			2013			Change
Gypsum Wallboard (MMSF's)				442			433			+2	%			2,112			1,909			+11	%
Cement (M Tons):
Wholly Owned				543			539			+1	%			3,580			2,391			+50	%
Joint Venture				260			234			+11	%			1,013			912			+11	%
				803			773			+4	%			4,593			3,303			+39	%
Paperboard (M Tons):
Internal				22			22			0	%			101			88			+15	%
External				37			35			+6	%			155			156			-1	%
				59			57			+4	%			256			244			+5	%
Concrete (M Cubic Yards)				176			156			+13	%			899			577			+56	%
Aggregates * (M Tons)				623			530			+18	%			3,228			2,631			+23	%

* Aggregates sales volumes excludes sales of frac sand

				Average Net Sales Price*
				Quarter Ended March 31,												Fiscal Year Ended March 31,
				2014				2013				Change				2014				2013				Change
Gypsum Wallboard (MSF)				$	162.67			$	145.72			+12	%			$	148.33			$	125.53			+18	%
Cement (Ton)				$	93.01			$	87.81			+6	%			$	87.31			$	83.49			+5	%
Paperboard (Ton)				$	503.62			$	492.54			+2	%			$	504.41			$	496.84			+2	%
Concrete (Cubic Yard)				$	84.72			$	74.57			+14	%			$	82.55			$	69.74			+18	%
Aggregates (Ton)**				$	7.03			$	6.17			+14	%			$	6.76			$	6.06			+12	%

*Net of freight and delivery costs billed to customers.
**Aggregates net sales price is presented for traditional construction aggregates only, excluding sales of frac sand

				Intersegment and Cement Revenues
				Quarter Ended March 31,								Fiscal Year Ended March 31,
				2014				2013				2014				2013
Intersegment Revenues:
Cement				$	1,449			$	1,236			$	8,952			$	2,850
Paperboard					11,264				11,176				52,119				46,393
Concrete and Aggregates					134				141				1,023				744
				$	12,847			$	12,553			$	62,094			$	49,987
Cement Revenues:
Wholly Owned				$	50,872			$	48,698			$	317,879			$	204,953
Joint Venture					29,421				24,699				111,393				96,322
				$	80,293			$	73,397			$	429,272			$	301,275

Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
				March 31,
				2014					2013
ASSETS
Current Assets –
Cash and Cash Equivalents				$	6,482				$	3,897
Accounts and Notes Receivable, net					102,917					87,543
Inventories					187,096					156,380
Federal Income Tax Receivable					-					2,443
Prepaid and Other Assets					10,465					11,008
Total Current Assets					306,960					261,271
Property, Plant and Equipment –					1,660,975					1,599,992
Less: Accumulated Depreciation					(676,924	)				(614,268	)
Property, Plant and Equipment, net					984,051					985,724
Investments in Joint Venture					43,008					42,946
Notes Receivable					3,063					3,893
Goodwill and Intangibles					160,690					162,400
Other Assets					13,757					19,999
				$	1,511,529				$	1,476,233
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities –
Accounts Payable				$	57,098				$	58,880
Accrued Liabilities					42,222					41,349
Current Portion of Senior Notes					9,500					-
Total Current Liabilities					108,820					100,229
Long-term Liabilities					53,678					51,547
Bank Credit Facility					189,000					297,000
Senior Notes					182,759					192,259
Deferred Income Taxes					145,773					139,028
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 50,053,738 and 49,503,496 Shares, respectively.					501					495
Capital in Excess of Par Value					253,524					224,053
Accumulated Other Comprehensive Losses					(5,483	)				(7,042	)
Retained Earnings					582,957					478,664
Total Stockholders' Equity					831,499					696,170
				$	1,511,529				$	1,476,233