DALLAS--(BUSINESS WIRE)-- Eagle Materials Inc. (NYSE: EXP) today reported financial results for the third quarter of fiscal 2012 ended December 31, 2011. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year quarter):

• Revenues of $123.6 million, up 19%
• Cash flow from operations of $16.2 million, up 45%
• Adjusted earnings per diluted share of $0.20 and EPS of $0.07 (which includes Non-routine Items of $0.13) compared with $0.12
  • Adjusted earnings per share is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in attachment 5
  • Total loss from non-routine items (including the after-tax effect of a loss on debt retirement, certain tax and interest benefits and loss on arbitration ruling) was $5.8 million

Eagle's low cost operations continued to execute well during this challenging environment for U.S. construction activity. Segment operating earnings increased 30% reflecting improved sales volumes in our cement, wallboard and paperboard businesses and higher wallboard and paperboard net sales prices as compared to the prior year. Operating cash flow was strong during the quarter, further strengthening our financial position.

Cement, Concrete and Aggregates

Operating earnings from Cement for the third quarter were $15.5 million, a 2% increase from the same quarter a year ago. The earnings increase primarily reflects improved sales volumes offset by $2.5 million of additional maintenance costs incurred this quarter versus the prior year quarter. Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $61.5 million, 12% higher than the same quarter last year. Cement sales volumes for the quarter were 700,000 tons, 13% above the same quarter a year ago. The average net cement sales price this quarter was $80.02, generally flat with the same quarter last year.

Concrete and Aggregates reported an operating loss of $0.6 million for the third quarter compared to operating earnings of $0.2 million from the same quarter a year ago, primarily due to reduced sales volumes.

Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard reported third quarter operating earnings of $5.4 million compared to an operating loss of $0.4 million in the same quarter last year. Gypsum Wallboard and Paperboard revenues for the third quarter totaled $73.5 million, a 24% increase from the same quarter a year ago. Higher wallboard and paperboard net sales prices combined with improved paperboard sales volumes were the primary drivers of the quarterly earnings and revenues increase.

The average Gypsum Wallboard net sales price this quarter was $94.86 per MSF, 9% higher than the same quarter a year ago. Gypsum Wallboard sales volumes for the quarter of 421 million square feet (MMSF) increased 9% from the same quarter last year. The average Paperboard net sales price this quarter was $527.42 per ton, 10% higher than the same quarter a year ago. Paperboard sales volumes for the quarter were 57,000 tons, 21% greater than the same quarter a year ago.

Other Corporate Items

During the third quarter of fiscal 2012, Eagle repurchased approximately $88.1 million of its Series 2007A and Series 2005A Senior Notes at a slight premium. The loss on the debt retirement was approximately $2.1 million, or $0.04 per diluted share, and was expensed during the third quarter. The purchase of the senior notes was funded with cash and lower cost borrowings made under our revolving bank credit facility. As a result of the purchase, Eagle was able to modestly reduce its outstanding debt, reduce interest payments, and improve financial flexibility by replacing a portion of our fixed term debt with variable revolving debt, which can be repaid at any time, while still maintaining a significant amount of readily available liquidity.

Also during the third quarter of fiscal 2012, income taxes and interest expense were positively affected by our participation in state amnesty programs with the states of Arizona, Colorado and California, as well as the expiration of the federal statute of limitations for certain items related to the 2004 through 2006 tax years. These events were treated as discrete items in the tax provision and interest calculation and a benefit totaling approximately $2.8 million, or $0.06 per diluted share, was recognized. Additionally, we received the previously recorded $9.1 million Federal Income Tax Receivable in early January 2012.

On January 19, 2012, we received an adverse ruling in an arbitration proceeding involving a contract dispute between one of our subsidiaries and another mining company. The ruling involved a limited area within our California aggregates deposit and is not expected to have a material adverse impact on our continuing operations in future periods. While the ruling has not been finalized, the award, along with our legal expenses, was approximated to be $9.1 million, or $0.15 per diluted share, and has been classified as Loss on Arbitration Ruling in our Statement of Consolidated Earnings.

Details of Financial Results

The nine-month financial information included in this press release includes a previously disclosed $3 million reversal of an accrual that reduced wallboard costs of goods sold during the first quarter of fiscal 2012. The $3 million relates to a reserve established in fiscal 2001 for expected costs to repair certain manufacturing equipment at one of our wallboard facilities. The equipment was subsequently purchased and fully depreciated without relieving the reserve. The reversal of the reserve represents the correction of a prior year error, which we concluded was immaterial to both current and previously issued financial statements; however, the reversal of the accrual is currently under review by the Securities and Exchange Commission and it is possible it may be adjusted back to beginning retained earnings. In this case, there would be no impact to Eagle's third quarter results or cash flow from operations.

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 2:00 p.m. Eastern Time (1:00 p.m. Central Time) on Thursday, February 2, 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); 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 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, 2011 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011. 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)				Summary of Consolidated Earnings
(2)				Revenues and Earnings by Lines of Business (Quarter and Nine 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 December 31,								Nine Months Ended December 31,
		2011				2010				2011				2010
Revenues		$	123,596			$	103,870			$	378,222			$	366,799
Cost of Goods Sold			111,125				96,030				349,661				328,979
Gross Profit			12,471				7,840				28,561				37,820
Equity in Earnings of Unconsolidated JV			7,776				7,196				21,160				17,868
Corporate General and Administrative Expense			(3,873	)			(3,942	)			(12,463	)			(12,060	)
Other Operating Income			(464	)			192				(428	)			1,084
Loss on Arbitration Ruling			(9,117	)			-				(9,117	)			-
Earnings before Interest and Income Taxes			6,793				11,286				27,713				44,712
Interest Expense, Net			(4,210	)			(4,666	)			(13,352	)			(13,104	)
Loss on Debt Retirement			(2,094	)			-				(2,094	)			-
Earnings before Income Taxes			489				6,620				12,267				31,608
Income Tax Benefit (Expense)			2,408				(1,124	)			(288	)			(5,955	)
Net Earnings		$	2,897			$	5,496			$	11,979			$	25,653
EARNINGS PER SHARE
Basic		$	0.07			$	0.13			$	0.27			$	0.58
Diluted		$	0.07			$	0.12			$	0.27			$	0.58
AVERAGE SHARES OUTSTANDING
Basic			44,212,098				43,887,833				44,197,540				43,858,606
Diluted			44,395,982				44,199,121				44,423,467				44,200,558

Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
		Quarter Ended December 31,								Nine Months Ended December 31,
		2011				2010				2011				2010
Revenues*
Gypsum Wallboard and Paperboard:
Gypsum Wallboard		$	54,063			$	45,389			$	156,386			$	153,903
Gypsum Paperboard			19,407				13,890				59,686				52,998
			73,470				59,279				216,072				206,901
Cement (Wholly Owned)			40,074				34,301				126,677				125,652
Concrete and Aggregates			10,052				10,290				35,473				34,246
Total Revenues		$	123,596			$	103,870			$	378,222			$	366,799
Segment Operating Earnings
Gypsum Wallboard and Paperboard:
Gypsum Wallboard		$	228			$	(2,535	)		$	(1,074	)		$	3,961
Gypsum Paperboard			5,146				2,160				12,214				9,787
			5,374				(375	)			11,140				13,748
Cement:
Wholly Owned			7,717				8,061				18,232				23,149
Joint Venture			7,776				7,196				21,160				17,868
			15,493				15,257				39,392				41,017
Concrete and Aggregates			(620	)			154				(811	)			923
Other, net			(464	)			192				(428	)			1,084
Sub-total			19,783				15,228				49,293				56,772
Corporate General and Administrative Expenses			(3,873	)			(3,942	)			(12,463	)			(12,060	)
Loss on Arbitration Ruling			(9,117	)			-				(9,117	)			-
Earnings before Interest and Income Taxes			6,793				11,286				27,713				44,712
* 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 December 31,							Nine Months Ended December 31,
		2011		2010		Change			2011		2010		Change
Gypsum Wallboard (MMSF's)		421		386		+9	%		1,236		1,237		0	%
Cement (M Tons):
Wholly Owned		497		408		+22	%		1,534		1,482		+4	%
Joint Venture		203		211		-4	%		657		614		+7	%
		700		619		+13	%		2,191		2,096		+5	%
Paperboard (M Tons):
Internal		19		17		+12	%		54		53		+2	%
External		38		30		+27	%		120		115		+4	%
		57		47		+21	%		174		168		+4	%
Concrete (M Cubic Yards)		112		113		-1	%		391		353		+11	%
Aggregates (M Tons)		463		677		-32	%		1,846		2,098		-12	%

		Average Net Sales Price*
		Quarter Ended December 31,									Nine Months Ended December 31,
		2011			2010			Change			2011			2010			Change
Gypsum Wallboard (MSF)		$	94.86		$	86.65		+9	%		$	92.35		$	93.90		-2	%
Cement (Ton)		$	80.02		$	80.11		0	%		$	80.77		$	80.51		0	%
Paperboard (Ton)		$	527.42		$	477.75		+10	%		$	519.20		$	477.80		+9	%
Concrete (Cubic Yard)		$	67.11		$	62.72		+7	%		$	63.98		$	64.64		-1	%
Aggregates (Ton)		$	5.99		$	5.02		+19	%		$	5.95		$	5.66		+5	%
*Net of freight and delivery costs billed to customers.

		Intersegment and Cement Revenues
		Quarter Ended December 31,						Nine Months Ended December 31,
		2011			2010			2011			2010
Intersegment Revenues:
Cement		$	803		$	1,394		$	3,044		$	3,550
Paperboard			10,594			8,491			30,728			27,311
Concrete and Aggregates			198			153			559			460
		$	11,595		$	10,038		$	34,331		$	31,321
Cement Revenues:
Wholly Owned		$	40,074		$	34,301		$	126,677		$	125,652
Joint Venture			20,633			19,181			64,487			55,949
		$	60,707		$	53,482		$	191,164		$	181,601

Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
		December 31,								March 31,
		2011				2010				2011*
ASSETS
Current Assets —
Cash and Cash Equivalents		$	3,679			$	4,053			$	1,874
Accounts and Notes Receivable, net			54,491				42,254				43,855
Inventories			113,613				111,012				115,237
Federal Income Tax Receivable			9,109				-				9,088
Prepaid and Other Assets			3,045				2,464				4,572
Total Current Assets			183,937				159,783				174,626
Property, Plant and Equipment —			1,138,261				1,110,787				1,112,058
Less: Accumulated Depreciation			(548,284	)			(503,063	)			(512,228	)
Property, Plant and Equipment, net			589,977				607,724				599,830
Notes Receivable			3,448				13,150				5,326
Investments in Joint Venture			37,571				31,546				33,661
Goodwill and Intangibles			151,061				151,698				151,539
Other Assets			19,155				26,542				17,828
		$	985,149			$	990,443			$	982,810
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities —
Accounts Payable		$	33,344			$	30,464			$	30,339
Current Portion of Senior Notes			4,677				-				-
Accrued Liabilities			46,598				35,919				40,011
Total Current Liabilities			84,619				66,383				70,350
Senior Notes			192,259				285,000				285,000
Bank Credit Facility			84,000				5,000				2,000
Long-Term Liabilities			35,268				40,778				37,807
Deferred Income Taxes			126,512				124,503				128,089
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 44,944,310; 44,196,759 and 44,447,428 Shares, respectively.			449				442				444
Capital in Excess of Par Value			29,235				19,450				24,859
Accumulated Other Comprehensive Losses			(2,893	)			(3,518	)			(2,893	)
Retained Earnings			435,700				452,405				437,154
Total Stockholders' Equity			462,491				468,779				459,564
		$	985,149			$	990,443			$	982,810
*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), the earnings per diluted share excluding the impacts from non-routine items including the loss on debt retirement, discrete tax benefits and loss on arbitration ruling (Non-routine Items), represents a non-GAAP financial measure.  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.  Although management believes that these financial measures are 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 the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies.  Management presents these measures as it believes Adjusted EPS represents the most comparable operating performance measure to the prior year and analysts' expectations for the three months ended December 31, 2011.  Analysts have not factored the impact of the non-routine items in their estimates for the quarter.
The following shows the calculation of the earnings per share impact of the Non-routine Items and reconciles earnings per diluted share in accordance with generally accepted accounting principles for the three months ended December 31, 2011 to Adjusted EPS:
		Three Months Ended December 31, 2011
After tax impact of loss on debt retirement		$	(1.6	)
After tax impact of tax and interest benefits			2.8
After tax impact of loss on arbitration ruling			(7.0	)
Total Non-routine Items loss, net		$	(5.8	)
Diluted average number of shares outstanding for the three months ended December 31, 2011			44.4
Diluted earnings per share loss from Non-routine Items		$	(0.13	)
		Three Months Ended December 31, 2011
Earnings per diluted share in accordance with generally accepted accounting principles		$	0.07
Add back: Earnings per diluted share loss from Non-routine Items			0.13
Adjusted EPS			0.20

Eagle Materials Inc.
Steven R. Rowley, 214-432-2000
President & CEO
or
D. Craig Kesler, 214-432-2000
Executive Vice President & CFO
or
Robert S. Stewart, 214-432-2000
Executive Vice President

Source: Eagle Materials Inc.

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