DALLAS--(BUSINESS WIRE)-- Eagle Materials Inc. (NYSE: EXP) today reported financial results for the second quarter of fiscal 2013 which ended September 30, 2012. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year's second quarter):

• Revenues of $164.7 million, up 22%
• Segment operating earnings of $41.3 million, up 146%
• Adjusted earnings per diluted share of $0.49, up 250%
  • Adjusted earnings per share is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 5
  • Total impact of non-routine items, including costs related to the pending acquisition of the Lafarge Target Business and litigation costs related to our lawsuit against the IRS, was $3.9 million, or $0.09 per diluted share
• Earnings per diluted share of $0.40, up 186%

Second quarter sales volumes improved across all major business lines and wallboard net sales prices increased 30% as compared to the prior year's second quarter. Improved second quarter operating cash flow was used to fund capital expenditures, pay dividends and reduce debt which further strengthened our financial position. Eagle ended the quarter with a net debt-to-capitalization ratio of 29%.

As previously announced on September 26, 2012, Eagle entered into a definitive agreement with Lafarge North America to purchase Lafarge's Sugar Creek, Missouri and Tulsa, Oklahoma cement plants, as well as related assets, which include six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business (the "Lafarge Target Business").

The purchase price is $446 million, subject to customary post-closing adjustments. Eagle expects that the acquisition will increase its U.S. annual cement capacity by approximately 60% to nearly 5 million tons. The acquisition is expected to close in November or December 2012, and is subject to receipt of required regulatory approvals, certain third-party consents and other customary conditions.

On October 3, 2012, Eagle also completed the public offering of 3.45 million shares of its common stock, which includes 450,000 shares issued pursuant to the underwriters' exercise in full of their overallotment option, at a price to the public of $46.50 per share. Total gross proceeds from the equity offering were $160.4 million. Net proceeds from the offering were approximately $154.4 million, after deducting underwriting discounts, commissions and expenses related to the offering. The Company intends to use the net proceeds, together with borrowings under its bank credit facility, to fund the pending acquisition of the Lafarge Target Business.

Cement, Concrete and Aggregates

Operating earnings from Cement for the second quarter were $17.4 million, a 15% increase from the same quarter a year ago. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $78.5 million, 8% greater than the same quarter last year. Cement sales volumes for the quarter were 864,000 tons, 6% above the same quarter a year ago. The average net sales price this quarter was $82.77 per ton, 2% higher than the same quarter last year.

Concrete and Aggregates reported a $0.4 million operating loss for the second quarter, down from a slight operating profit for the same quarter a year ago, primarily due to lower concrete sales volumes and lower aggregates sales volumes in Northern California.

Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard's second quarter operating earnings of $24.2 million were up 1,513% compared to the same quarter last year. Higher wallboard average net sales prices, higher gypsum wallboard and gypsum paperboard sales volumes and lower recycled paper input costs were the primary driver of the quarterly earnings increase.

Gypsum Wallboard and Paperboard revenues for the second quarter totaled $96.5 million, a 33% increase from the same quarter a year ago. The revenue increase reflects primarily higher wallboard average net sales prices and sales volumes.

The average gypsum wallboard net sales price for the second quarter was $119.44 per MSF, 30% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 500 million square feet (MMSF) represents a 24% increase from the same quarter last year. The average Paperboard net sales price for this quarter was $512.12 per ton, 2% lower than the same quarter a year ago. Paperboard sales volumes for the quarter were 62,000 tons, 3% higher than the same quarter a year ago.

Details of Financial Results

Acquisition and Litigation Expense consists of direct costs related to our pending acquisition of the Lafarge Target Business and the write-off of deferred project costs associated with a greenfield cement project that will no longer be pursued due to the pending acquisition and legal fees related to our lawsuit against the IRS. Direct acquisition costs were approximately $3.5 million (pre-tax), greenfield write-off costs were approximately $1.0 million (pre-tax) and legal fees were approximately $1.2 million (pre-tax) during the quarter ended September 30, 2012.

Texas Lehigh Cement Company LP, one of our cement plant operations, is conducted through a 50/50 joint venture (the "Joint Venture"). We utilize the equity method of accounting for our 50% interest in the Joint Venture. For segment reporting purposes 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 in 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 3 for a reconciliation of the amounts referred to above.

About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates from 25 facilities across the US. The company 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 Tuesday, October 30, 2012. 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 and oil; 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 (including, without limitation, climate change regulation); 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 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. These and other factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2012 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012. These reports are filed with the Securities and Exchange Commission. With respect to our proposed acquisition of certain assets from Lafarge 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, our ability to complete the acquisition within the expected timeframe or at all, failure to realize the expected benefits of the transaction, possible negative effects of announcement or consummation of the transaction, significant transaction costs or unknown liabilities, and general economic and business conditions that may affect us following acquisition. 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 Six Months)
(3) Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(4) Consolidated Balance Sheets
(5) Non-GAAP Financial Measures

Eagle Materials Inc.
Attachment 1
Eagle Materials Inc.
Statement of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
		Quarter Ended September 30,								Six Months Ended September 30,
			2012				2011				2012				2011
Revenues		$	164,659			$	134,819			$	318,701			$	254,626
Cost of Goods Sold			132,170				126,102				263,315				241,536
Gross Profit			32,489				8,717				55,386				13,090
Equity in Earnings of Unconsolidated JV			8,750				7,936				15,218				13,384
Other Operating Income (Expense)			66				115				(204	)			36
Acquisition and Litigation Expense			(5,713	)			-				(6,374	)			-
Corporate General and Administrative Expense			(5,919	)			(4,472	)			(10,674	)			(8,590	)
Earnings before Interest and Income Taxes			29,673				12,296				53,352				17,920
Interest Expense, Net			(3,548	)			(4,557	)			(7,313	)			(9,142	)
Earnings before Income Taxes			26,125				7,739				46,039				8,778
Income Tax Expense			(8,172	)			(1,714	)			(14,108	)			(1,946	)
Net Earnings		$	17,953			$	6,025			$	31,931			$	6,832
EARNINGS PER SHARE
Basic		$	0.40			$	0.14			$	0.71			$	0.15
Diluted		$	0.40			$	0.14			$	0.71			$	0.15
AVERAGE SHARES OUTSTANDING
Basic			44,746,225				44,200,291				44,708,499				44,190,220
Diluted			45,353,778				44,325,277				45,219,224				44,433,809

Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Segment Operating Earnings
by Lines of Business
(dollars in thousands)
(unaudited)
		Quarter Ended September 30,								Six Months Ended September 30,
			2012				2011			2012					2011
Revenues*
Gypsum Wallboard and Paperboard:
Gypsum Wallboard		$	77,327			$	50,981			$ 147,547				$	102,323
Gypsum Paperboard			19,215				21,285			38,622					40,279
			96,542				72,266			186,169					142,602
Cement (Wholly Owned)			54,105				48,892			105,855					86,603
Concrete and Aggregates			14,012				13,661			26,677					25,421
Total		$	164,659			$	134,819			$ 318,701				$	254,626
Segment Operating Earnings
Gypsum Wallboard and Paperboard:
Gypsum Wallboard		$	16,464			$	(2,540	)		$ 30,486				$	(4,302	)
Gypsum Paperboard			7,695				4,038			12,971					7,068
			24,159				1,498			43,457					2,766
Cement:
Wholly Owned			8,692				7,175			12,090					10,515
Joint Venture			8,750				7,936			15,218					13,384
			17,442				15,111			27,308					23,899
Concrete and Aggregates			(362	)			44			(161		)			(191	)
Other, net			66				115			(204		)			36
Sub-total			41,305				16,768			70,400					26,510
Acquisition and Litigation Expense			(5,713	)			-			(6,374		)			-
Corporate General and Administrative Expense			(5,919	)			(4,472	)		(10,674		)			(8,590	)
Earnings Before Interest and Income Taxes		$	29,673			$	12,296			$ 53,352				$	17,920
* 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 September 30,							Six Months Ended September 30,
		2012		2011		Change			2012		2011		Change
Gypsum Wallboard (MMSF's)		500		403		+24	%		957		815		+17	%
Cement (M Tons):
Wholly Owned		639		588		+9	%		1,260		1,037		+22	%
Joint Venture		225		229		-2	%		452		454		0	%
		864		817		+6	%		1,712		1,491		+15	%
Paperboard (M Tons):
Internal		23		18		+28	%		43		35		+23	%
External		39		42		-7	%		79		82		-4	%
		62		60		+3	%		122		117		+4	%
Concrete (M Cubic Yards)		141		144		-2	%		278		280		-1	%
Aggregates (M Tons)		810		771		+5	%		1,462		1,383		+6	%

			Average Net Sales Price*
			Quarter Ended September 30,												Six Months Ended September 30,
				2012				2011			Change					2012				2011			Change
Gypsum Wallboard (MSF)			$	119.44			$	92.09			+30	%			$	119.09			$	91.05			+31	%
Cement (Ton)			$	82.77			$	81.23			+2	%			$	81.92			$	81.24			+1	%
Paperboard (Ton)			$	512.12			$	524.20			-2	%			$	507.57			$	515.21			-1	%
Concrete (Cubic Yard)			$	66.83			$	64.33			+4	%			$	66.07			$	62.73			+5	%
Aggregates (Ton)			$	6.01			$	5.98			+1	%			$	6.00			$	5.94			+1	%

*Net of freight and delivery costs billed to customers.

			Intersegment and Cement Revenues
			Quarter Ended September 30,								Six Months Ended September 30,
				2012				2011				2012				2011
Intersegment Revenues:
Cement			$	512			$	1,202			$	1,079			$	2,241
Paperboard				12,515				10,452				23,437				20,134
Concrete and Aggregates				245				221				457				361
			$	13,272			$	11,875			$	24,973			$	22,736
Cement Revenues:
Wholly Owned			$	54,105			$	48,892			$	105,855			$	86,603
Joint Venture				23,916				22,460				47,623				43,854
			$	78,021			$	71,352			$	153,478			$	130,457

Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
		September 30,								March 31,
			2012				2011			2012*
ASSETS
Current Assets —
Cash and Cash Equivalents		$	8,149			$	10,692			$	6,481
Accounts and Notes Receivable, net			74,066				64,447				56,197
Inventories			109,004				108,156				123,606
Federal Income Tax Receivable			-				6,688				1,133
Prepaid and Other Assets			2,588				2,856				4,424
Total Current Assets			193,807				192,839				191,841
Property, Plant and Equipment —			1,149,075				1,122,895				1,140,744
Less: Accumulated Depreciation			(584,773	)			(536,057	)			(560,236	)
Property, Plant and Equipment, net			564,302				586,838				580,508
Investments in Joint Venture			39,908				35,545				38,939
Notes Receivable			3,316				5,005				3,436
Goodwill and Intangibles			150,584				151,221				150,902
Other Assets			22,971				18,685				19,519
		$	974,888			$	990,133			$	985,145
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities —
Accounts Payable		$	34,730			$	35,285			$	38,747
Accrued Liabilities			42,602				42,189				33,619
Federal Income Tax Payable			11,455				-				-
Current Portion of Long-term Debt			4,677				-				4,677
Total Current Liabilities			93,464				77,474				77,043
Long-term Liabilities			39,747				38,097				39,467
Bank Credit Facility			20,000				-				70,000
Senior Notes			192,259				285,000				192,259
Deferred Income Taxes			127,307				128,127				133,865
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 45,438,711; 44,899,310 and
45,269,493 Shares, respectively.			454				449				453
Capital in Excess of Par Value			44,208				26,882				37,692
Accumulated Other Comprehensive Losses			(5,284	)			(2,893	)			(5,516	)
Retained Earnings			462,733				436,997				439,882
Total Stockholders' Equity			502,111				461,435				472,511
		$	974,888			$	990,133			$	985,145
*From audited financial statements.

Eagle Materials Inc.
Attachment 5

Eagle Materials Inc.
Non-GAAP Financial Measures
(unaudited)
(Dollars, other than earnings per share amounts, and number of shares in millions)

Adjusted earnings per diluted share (Adjusted EPS) is a non-GAAP financial measure and represents earnings per diluted share excluding the impacts from non-routine items, including costs related to our pending acquisition of the Lafarge Target Business and litigation costs related to our lawsuit against the IRS (Non-routine Items). Management uses measures of earnings excluding the impact of Non-routine Items as a basis for comparing operating results of the Company from period to period and for purposes of its budgeting and planning processes. Management believes Adjusted EPS represents the most comparable operating performance measure to compare the three months ended September 30, 2012 to the same period during the prior year. Although management believes that Adjusted EPS is useful in evaluating the Company's business, this information should be considered as supplemental in nature and is not meant to be considered in isolation, or as a substitute for earnings per diluted share and the related financial information prepared in accordance with GAAP. In addition, our presentation of Adjusted EPS may not be the same as similarly titled measures reported by other companies, limiting its usefulness as a comparative measure.

The following shows the calculation of Adjusted EPS and reconciles Adjusted EPS to earnings per diluted share in accordance with GAAP for the three months ended September 30, 2012:

		Three Months Ended September 30,
After tax impact of costs associated with the pending Lafarge acquisition		$	(3.1	)
After tax impact of litigation costs associated with our lawsuit against the IRS			(0.8	)
Total Non-routine Items impact, net		$	(3.9	)
Diluted average shares outstanding for the three months ended September 30, 2012			45.4
Diluted earnings per share impact from Non-routine Items		$	(0.09	)
		Three Months Ended September 30,
Earnings per diluted share in accordance with generally accepted accounting principles		$	0.40
Add back: Earnings per diluted share impact from Non-routine Items			0.09
Adjusted EPS		$	0.49

Eagle Materials Inc.
Steven R. Rowley, 214-432-2000
President and Chief Executive Officer
or
D. Craig Kesler, 214-432-2000
Executive Vice President and Chief Financial Officer
or
Robert S. Stewart, 214-432-2000
Executive Vice President, Strategy, Corporate Development and Communications

Source: Eagle Materials Inc.

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