Press Releases
Eagle Materials Inc. Reports a 44% Increase in Third Quarter Earnings; Third Quarter FY 2005 vs. Third Quarter FY 2004
Eagle Materials Inc. Reports a 44% Increase in Third Quarter Earnings; Third Quarter FY 2005 vs. Third Quarter FY 2004
Jan 26, 2005
- Net Earnings Increased 44% to $25.9 Million
- Diluted EPS Increased 47% to $1.40
- Gypsum Wallboard Sales Volume Highest Third Quarter Volume in Company History
- Gypsum Wallboard Average Net Sales Price Increased 26%
- Cement Sales Volume Highest Third Quarter Volume in Company History
- Cement Average Net Sales Price Increased 9%
- EXP Closes Purchase of J.V. Partner's Interest in Illinois Cement on January 11, 2005
DALLAS, Jan 26, 2005 /PRNewswire-FirstCall via COMTEX/ -- Eagle Materials Inc. (NYSE: EXP and EXP.B) today reported financial results for the third quarter of Fiscal Year (FY) 2005 ended December 31, 2004. EXP produces and distributes Cement, Gypsum Wallboard, Recycled Paperboard and Concrete and Aggregates. For the third quarter ended December 31, 2004, revenues and net earnings were $149.8 million and $25.9 million, respectively. Revenues increased 23% year-over-year and net earnings increased 44% year-over-year. Diluted earnings per share for the third quarter of FY 2005 were $1.40 compared with $0.95 in the same period a year ago, a 47% increase.
EXP remains well positioned to continue to achieve superior results given its strong operational position supplying construction products to a robust construction industry. According to the U.S. Census Bureau, during the first eleven months of the calendar year, construction industry spending amounted to $920 billion, 9% above the $844 billion for the same period in 2003. The increased spending across the construction industry as a whole led to record industry gypsum wallboard shipments in calendar 2004. Nationally, demand for cement remains at record levels outpacing last year's consumption by over 6% through November 2004 according to the U.S. Geological Survey.
The general outlook for the upcoming calendar year remains very favorable. For calendar year 2005, we expect Wallboard demand to remain strong and supply to be tight (with greater than 90% industry capacity utilization) as a result of continued high levels of activity in residential construction and increasing repair/remodel and commercial construction activity. A wallboard price increase was implemented on January 10, 2005. Additionally, the price of imported cement continues to be impacted by high freight rates and increasing consumption in world markets. Collectively, strong demand and high 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 six months.
Based on the above factors, the Company expects to report earnings ranging from $1.15 per diluted share to $1.40 per diluted share for the fourth quarter ending March 31, 2005, and $5.40 per diluted share to $5.65 per diluted share for FY 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 (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. On January 11, 2005 we completed the acquisition of the other 50% ownership interest in Illinois Cement Company. Beginning January 11, 2005, we will consolidate 100% of the results of Illinois Cement Company; however, through December 31, 2004, the results of Illinois Cement Company continued to be accounted for under 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 amounts referred to above.
GYPSUM WALLBOARD
Gypsum Wallboard revenues for the third quarter totaled $87.2 million, a 30% increase over $66.9 million for the same quarter a year ago. Gypsum Wallboard's third quarter operating earnings were $20.1 million, up 109% from $9.6 million for the same quarter last year. The revenue and earnings gain for the quarter resulted from higher sales volume at higher sales prices partially offset by increased production costs. The average net sales price for this fiscal year's third quarter was $108.95 per thousand square feet (MSF), 26% greater than $86.41 per MSF for the same quarter last year. Gypsum Wallboard sales volume of 628 million square feet (MMSF) for this year's third quarter (record third quarter shipments) was 5% above the 599 MMSF sold during the third quarter last year.
CEMENT
Operating earnings from Cement increased 8% to $14.5 million for the third quarter this year from $13.5 million for the same quarter last year. The earnings gain was due primarily to higher net sales prices and higher sales volume partially offset by higher costs of purchased cement and increased fuel and power costs. Cement revenues for the third quarter totaled $48.8 million, 9% greater than $44.7 million for the same quarter a year ago.
Cement sales volume for the third quarter totaled 627,000 tons, 1% above 620,000 tons for the same quarter last year. Purchased cement sales volume of 187,000 tons for the third quarter was 43,000 tons, or 30%, greater than purchased cement sales volume for the third quarter a year ago. Prices have increased since the beginning of the calendar year in each of our markets resulting in a 9% increase in our third quarter average Cement net sales price to $71.75 per ton from $65.72 per ton for the same quarter a year ago.
PAPERBOARD
EXP's Paperboard operation reported third quarter revenues of $32.0 million, up 20% from revenues of $26.6 million for last year's third quarter. Paperboard operating earnings of $5.9 million for the third quarter this year were 26% above $4.7 million for last year's third quarter. The earnings gain resulted primarily from higher sales volume and sales prices.
For this year's third quarter, Paperboard sales volume was 69,000 tons, up 10% from last year's sales volume of 63,000 tons. This year's third quarter average net sales price of $453.50 per ton was 10% above last year's third quarter net sales price of $410.77 per ton.
CONCRETE AND AGGREGATES
Revenues from Concrete and Aggregates were $16.0 million for the quarter, 5% greater than $15.2 million for the third quarter a year ago. Concrete and Aggregates reported a $0.9 million operating profit for this year's third quarter, down 38% from $1.5 million for the same quarter last year due to increased cement costs and unseasonably wet weather in our western market.
Concrete sales volume decreased slightly for the third quarter this year to 173,000 cubic yards, 2% below 177,000 cubic yards for the same quarter last year. EXP's Concrete average net sales price of $54.36 per cubic yard for the current quarter was 3% higher than $52.96 per cubic yard for the third quarter a year ago.
Aggregates operations reported sales volume of 1,230,000 tons for the current quarter, 13% above sales volume of 1,092,000 tons for the third quarter last year. Aggregates average net sales price remained flat from the prior year due primarily to a higher volume of lower priced road base sales in the product mix, offset by increased sales pricing in the Northern California market.
CONSOLIDATED YEAR-TO-DATE RESULTS
For the nine months ended December 31, 2004, EXP's net earnings increased 56% to $79.2 million or $4.24 per diluted share from $50.8 million or $2.72 per diluted share for the same period a year ago. Revenues for this year's nine-month period of $463.2 million were 22% greater than $380.4 million 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 Wednesday, January 26, 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; 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 (Nine 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 December 31,
2004 2003 Change
Revenues $ 149,802 $ 121,319 +23%
Earnings Before Income Taxes $ 37,935 $ 27,481 +38%
Net Earnings $ 25,867 $ 18,003 +44%
Earnings Per Share:
- Basic $ 1.41 $ 0.96 +47%
- Diluted $ 1.40 $ 0.95 +47%
Average Shares Outstanding:
- Basic 18,314,248 18,670,273 -2%
- Diluted 18,529,155 18,848,490 -2%
Nine Months Ended December 31,
2004 2003 Change
Revenues $ 463,205 $ 380,358 +22%
Earnings Before Income Taxes $ 119,346 $ 77,530 +54%
Net Earnings $ 79,199 $ 50,790 +56%
Earnings Per Share:
- Basic $ 4.29 $ 2.74 +57%
- Diluted $ 4.24 $ 2.72 +56%
Average Shares Outstanding:
- Basic 18,450,206 18,513,417 0%
- Diluted 18,660,612 18,655,265 0%
Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
Quarter Ended December 31,
2004 2003 Change
Revenues*
Cement (Wholly Owned) $ 27,891 $ 24,011 +16%
19% 20%
Gypsum Wallboard 87,199 66,924 +30%
58% 55%
Paperboard 18,885 14,485 +30%
13% 12%
Concrete & Aggregates 15,827 14,962 +6%
10% 12%
Other, net --- 937 -100%
0% 1%
Total $ 149,802 $ 121,319 +23%
100% 100%
Operating Earnings
Cement:
Wholly Owned $ 6,788 $ 6,255 +9%
Joint Venture 7,708 7,213 +7%
14,496 13,468 +8%
35% 45%
Gypsum Wallboard 20,121 9,622 +109%
49% 32%
Paperboard 5,903 4,683 +26%
14% 15%
Concrete & Aggregates 937 1,516 -38%
2% 5%
Other, net (137) 937 -115%
0% 3%
Total Operating Earnings 41,320 30,226 +37%
100% 100%
Corporate General Expenses (2,810) (2,053)
Interest Expense, net (575) (692)
Earnings Before Income Taxes $ 37,935 $ 27,481 +38%
* 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)
Nine Months Ended December 31,
2004 2003 Change
Revenues*
Cement (Wholly Owned) $ 92,247 $ 83,969 +10%
20% 22%
Gypsum Wallboard 261,295 197,275 +32%
56% 52%
Paperboard 55,753 47,336 +18%
12% 12%
Concrete & Aggregates 53,717 49,812 +8%
12% 13%
Other, net 193 1,966 -90%
0% 1%
Total $ 463,205 $ 380,358 +22%
100% 100%
Operating Earnings
Cement:
Wholly Owned $ 22,885 $ 22,419 +2%
Joint Venture 21,421 18,909 +13%
44,306 41,328 +7%
34% 48%
Gypsum Wallboard 59,983 22,441 +167%
47% 26%
Paperboard 19,845 15,355 +29%
16% 18%
Concrete & Aggregates 5,550 5,568 0%
4% 6%
Other, net (776) 1,966 -139%
-1% 2%
Total Operating Earnings 128,908 86,658 +49%
100% 100%
Corporate General Expenses (7,408) (5,989)
Interest Expense, net (2,154) (3,139)
Earnings Before Income Taxes $ 119,346 $ 77,530 +54%
* 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 Cement Revenues
(unaudited)
Sales Volume
Quarter Ended Nine Months Ended
December 31, December 31,
2004 2003 Change 2004 2003 Change
Cement (M Tons):
Wholly Owned 340 314 8% 1,151 1,095 5%
Joint Venture 287 306 -6% 976 919 6%
627 620 1% 2,127 2,014 6%
Gypsum Wallboard (MMSF's) 628 599 5% 1,933 1,805 7%
Paperboard (M Tons):
Internal 27 27 0% 83 79 5%
External 42 36 17% 126 120 5%
69 63 10% 209 199 5%
Concrete (M Cubic Yards) 173 177 -2% 590 610 -3%
Aggregates (M Tons) 1,230 1,092 13% 4,114 3,426 20%
Average Net Sales Price*
Quarter Ended Nine Months Ended
December 31, December 31,
2004 2003 Change 2004 2003 Change
Cement (Ton) $ 71.75 $ 65.72 9% $ 69.94 $ 66.33 5%
Gypsum Wallboard (MSF) $108.95 $ 86.41 26% $106.68 $ 84.27 27%
Paperboard (Ton) $453.50 $410.77 10% $452.64 $409.50 11%
Concrete (Cubic Yard) $ 54.36 $ 52.96 3% $ 54.19 $ 52.59 3%
Aggregates (Ton) $ 5.19 $ 5.18 0% $ 5.28 $ 5.23 1%
* Net of freight and delivery costs billed to customers.
Intersegment and Cement Revenues
(dollars in thousands)
Quarter Ended Nine Months Ended
December 31, December 31,
2004 2003 2004 2003
Intersegment Revenues:
Cement $ 791 $ 705 $ 2,569 $ 2,652
Paperboard 13,133 12,085 40,819 35,771
Concrete and Aggregates 210 246 832 842
$ 14,134 $ 13,036 $ 44,220 $ 39,265
Cement Revenues:
Wholly Owned $ 27,891 $ 24,011 $ 92,247 $ 83,969
Joint Venture 20,147 19,974 66,927 59,822
$ 48,038 $ 43,985 $159,174 $143,791
Eagle Materials Inc.
Attachment 5
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
December 31, March 31,
2004 2003 2004*
ASSETS
Current Assets -
Cash and Cash Equivalents $ 18,539 $ 29,376 $ 3,536
Accounts and Notes
Receivable, net 59,164 42,460 54,352
Inventories 46,609 44,049 48,890
Total Current Assets 124,312 115,885 106,778
Property, Plant and Equipment - 725,694 713,600 715,734
Less: Accumulated Depreciation (255,555) (227,936) (234,929)
Property, Plant
and Equipment, net 470,139 485,664 480,805
Investments in Joint Ventures 47,323 50,150 51,503
Goodwill 40,290 40,290 40,290
Other Assets 15,599 12,810 13,599
$ 697,663 $ 704,799 $ 692,975
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities -
Note Payable $ 30,100 $ --- $ 24,100
Accounts Payable
and Accrued Liabilities 86,654 64,966 69,991
Current Portion of Long-term Debt 80 80 80
Total Current Liabilities 116,834 65,046 94,171
Long-term Debt --- 80 58,700
Deferred Income Taxes 107,228 96,001 101,082
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 9,680,124,
18,798,289 and 9,607,029 Shares,
respectively. Class B Common Stock,
Par Value $0.01; Authorized
50,000,000 Shares; Issued and
Outstanding, 8,655,769, None and
9,161,459 Shares, respectively. 183 188 188
Capital in Excess of Par Value 143 30,351 28,223
Accumulated Other Comprehensive Losses (1,877) (1,703) (1,877)
Unamortized Restricted Stock (565) (650) (591)
Retained Earnings 475,717 515,486 413,079
Total Stockholders' Equity 473,601 543,672 439,022
$ 697,663 $ 704,799 $ 692,975
* From audited financial statements.
SOURCE Eagle Materials Inc.
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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