Form 8-K
EAGLE MATERIALS INC false 0000918646 0000918646 2024-01-25 2024-01-25

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 25, 2024

 

 

Eagle Materials Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   1-12984   75-2520779

(State or Other Jurisdiction

of Incorporation)

  (Commission
File Number)
 

(IRS Employer

Identification No.)

 

5960 Berkshire Ln., Suite 900

Dallas, Texas

  75225
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (214) 432-2000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock, $0.01 par value   EXP   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition

On January 25, 2024, Eagle Materials Inc., a Delaware corporation (“Eagle”), announced its results of operations for the quarter ended December 31, 2023. A copy of Eagle’s earnings press release announcing these results is being furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibit
Number

  

Description

99.1    Earnings Press Release dated January 25, 2024 issued by Eagle Materials Inc. (announcing quarterly operating results)
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

EAGLE MATERIALS INC.
By:  

/s/ D. Craig Kesler

D. Craig Kesler

Executive Vice President – Finance and Administration and Chief Financial Officer

Date: January 25, 2024

EX-99.1

EXHIBIT 99.1

 

LOGO

 

    Contact at 214-432-2000
    Michael R. Haack
           President and CEO
    D. Craig Kesler
    Executive Vice President & CFO
    Alex Haddock
   

Vice President, Investor Relations

 

 

News For Immediate Release

EAGLE MATERIALS REPORTS RECORD THIRD QUARTER RESULTS

WITH 16% EPS GROWTH

DALLAS, TX (January 25, 2024) Eagle Materials Inc. (NYSE: EXP) today reported financial results for the third quarter of fiscal 2024 ended December 31, 2023. Notable items for the quarter are highlighted below (unless otherwise noted, all comparisons are with the prior year’s fiscal third quarter):

Third Quarter Fiscal 2024 Highlights

 

   

Record Revenue of $558.8 million, up 9%

 

   

Record Net Earnings of $129.1 million, up 10%

 

   

Net Earnings per share of $3.72, up 16%

 

   

Adjusted EBITDA of $218.6 million, up 10%

 

   

Adjusted EBITDA is a non-GAAP financial measure calculated by excluding non-routine items and certain non-cash expenses in the manner described in Attachment 6

 

   

Repurchased 558,500 shares of Eagle’s common stock for $98 million

Commenting on the results, Michael Haack, President and CEO of Eagle, said, “We are pleased to announce another exceptional quarter against the backdrop of shifting, albeit constructive, market conditions as interest rates moved materially lower during the latter half of the quarter. In the third quarter, we achieved record revenue of $559 million, produced record EPS of $3.72 and expanded gross margins by 130 bps to 32.3%. We generated strong free cash flow, repurchased 558,500 shares of our common stock and returned $106 million of cash to shareholders, bringing total cash returned to $276 million in the first nine months of the fiscal year.”

“We continued making progress on our environmental stewardship goals, expanding the production and sale of our eco-friendly Portland Limestone Cement and other blended cement products. In December, we announced an agreement with Terra CO2 granting us exclusive rights to use Terra’s technology to build and operate plants that would produce low-carbon supplementary cementitious material in three of our core cement markets. Once fully developed, this technology has the potential to not only reduce the carbon intensity of the cementitious products we sell, but also to fulfill the needs of our customers and meet the expected increase in demand for cement and supplementary cementitious materials.”

Mr. Haack concluded, “Eagle’s heartland geographic footprint remains well-positioned for long-term growth, supported by trends in population growth, well-documented housing production deficits and supply shortages, and a multi-year federal highway bill further enhanced by state-level infrastructure spending. We expect that our portfolio of businesses will continue to deliver leading financial results, and our capital allocation strategies will continue to generate superior shareholder value for the foreseeable future.”


Segment Financial Results

Heavy Materials: Cement, Concrete and Aggregates

Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was up 18% to $366.4 million. Heavy Materials operating earnings increased 43% to $107.3 million, primarily because of higher Cement net sales prices and sales volume.

Cement revenue for the quarter, including Joint Venture and intersegment revenue, was up 20% to $308.7 million, and operating earnings were a record $105.6 million, up 46%. These increases reflect higher Cement sales volume and net sales prices as well as the contribution of approximately $11 million of revenue from the recently acquired Stockton Terminal. The average net sales price for the quarter was up 13% to $151.32 per ton, reflecting Cement price increases implemented in January 2023 and again in July 2023. Cement sales volume increased 7% to 1.8 million tons. Excluding the recently acquired Stockton Terminal, Cement sales volume increased 3%.

Concrete and Aggregates revenue increased 5% to $57.8 million, reflecting higher Aggregates sales volume and record Concrete pricing. Operating earnings for Concrete and Aggregates decreased 35% to $1.8 million, primarily because of higher input costs. 

Light Materials: Gypsum Wallboard and Recycled Paperboard

Revenue in the Light Materials sector, which includes Gypsum Wallboard and Recycled Paperboard, decreased 4% to $226.9 million, reflecting lower Wallboard and Paperboard sales prices and slightly lower Wallboard sales volume, partially offset by increased Paperboard sales volume. Gypsum Wallboard sales volume decreased 1% to 722 million square feet (MMSF), while the average Gypsum Wallboard net sales price declined 4% to $227.78 per MSF.

Paperboard sales volume for the quarter was up 9% to a record 84,000 tons. The average Paperboard net sales price was $559.49 per ton, down 6%, consistent with the pricing provisions in our long-term sales agreements that factor in changes to input costs.

Operating earnings in the sector were $82.6 million, down 13%, primarily related to lower Wallboard sales volume and pricing.

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 use 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 revenue and operating earnings, which is consistent with the way management organizes the segments within the Company for making operating decisions and assessing performance.

 

2


In addition, for segment reporting purposes, we report intersegment revenue as part of a segment’s total revenue. Intersegment sales are eliminated on the consolidated income statement. Refer to Attachment 3 for a reconciliation of these amounts.

About Eagle Materials Inc.

Eagle Materials Inc. is a leading U.S. manufacturer of heavy construction products and light building materials. Eagle’s primary products, Portland Cement and Gypsum Wallboard, are essential for building, expanding and repairing roads and highways and for building and renovating residential, commercial and industrial structures across America. Eagle manufactures and sells its products through a network of more than 70 facilities spanning 21 states and is headquartered in Dallas, Texas. Visit eaglematerials.com for more information.

Eagle’s senior management will conduct a conference call to discuss the financial results, forward looking information and other matters at 8:30 a.m. Eastern Time (7:30 a.m. Central Time) on Thursday, January 25, 2024. The conference call will be webcast on the Eagle website, eaglematerials.com. A replay of the webcast and the presentation will be archived on the website for one year.

###

 

3


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 statements and generally arise when the Company is discussing its beliefs, estimates or expectations as to future events. 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 businesses; fluctuations in 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; the availability and fluctuations in the cost of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil (including diesel), and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (for example, spot market prices), governmental orders and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; material nonpayment or non-performance by any of our key customers; 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 and other environmental regulation); possible outcomes of pending or future litigation or arbitration proceedings; changes in economic conditions or the nature or level of activity in any one or more of the markets or industries in which the Company or its customers are engaged; severe weather conditions (such as winter storms, tornados and hurricanes) and their effects on our facilities, operations and contractual arrangements with third parties; competition; cyber-attacks or data security breaches; increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects undertaken by state or local governments; the availability of acquisitions or other growth opportunities that meet our financial return standards and fit our strategic focus; risks related to pursuit of acquisitions, joint ventures and other transactions or the execution or implementation of such transactions, including the integration of operations acquired by the Company; general economic conditions, including inflation and recessionary conditions; and changes in interest rates and the resulting effects on the Company and demand for our products. 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) or the cost of our raw materials can be expected to adversely affect the revenue 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. Finally, any forward-looking statements made by the Company are subject to the risks and impacts associated with natural disasters, the outbreak, escalation or resurgence of health emergencies, pandemics or other unforeseen events, including, without limitation, the COVID-19 pandemic and responses thereto designed to contain its spread and mitigate its public health effects, as well as their impact on our operations and on economic conditions, capital and financial markets. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 and subsequent quarterly and annual reports upon filing. 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.

For additional information, contact at 214-432-2000.

Michael R. Haack

President and Chief Executive Officer

D. Craig Kesler

Executive Vice President and Chief Financial Officer

Alex Haddock

Vice President, Investor Relations, Strategy and Corporate Development

Attachment 1 Statement of Consolidated Earnings

Attachment 2 Revenue and Earnings by Lines of Business

Attachment 3 Sales Volume, Average Net Sales Prices and Intersegment and Cement Revenue

Attachment 4 Consolidated Balance Sheets

Attachment 5 Depreciation, Depletion and Amortization by Lines of Business

Attachment 6 Reconciliation of Non-GAAP Financial Measures

Attachment 7 Reconciliation of Net Debt to Adjusted EBITDA

 

4


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,
 
                          
     2023     2022     2023     2022  

Revenue

   $ 558,833     $ 511,487     $ 1,782,590     $ 1,677,942  

Cost of Goods Sold

     378,205       352,717       1,216,949       1,174,067  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

     180,628       158,770       565,641       503,875  

Equity in Earnings of Unconsolidated JV

     9,285       11,377       22,790       23,631  

Corporate General and Administrative Expenses

     (14,201     (12,497     (42,456     (37,944

Other Non-Operating Income

     1,019       2,210       2,837       911  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Interest and Income Taxes

     176,731       159,860       548,812       490,473  

Interest Expense, net

     (10,128     (8,932     (32,571     (24,842
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Income Taxes

     166,603       150,928       516,241       465,631  

Income Tax Expense

     (37,465     (33,744     (115,701     (104,447
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Earnings

   $ 129,138     $ 117,184     $ 400,540     $ 361,184  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET EARNINGS PER SHARE

        

Basic

   $ 3.75     $ 3.23     $ 11.47     $ 9.72  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 3.72     $ 3.20     $ 11.38     $ 9.66  
  

 

 

   

 

 

   

 

 

   

 

 

 

AVERAGE SHARES OUTSTANDING

        

Basic

     34,466,141       36,336,056       34,931,378       37,149,927  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     34,749,721       36,605,982       35,201,658       37,395,586  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5


Attachment 2

Eagle Materials Inc.

Revenue and Earnings by Lines of Business

(dollars in thousands)

(unaudited)

 

     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
                          
     2023     2022     2023     2022  
                          

Revenue*

        

Heavy Materials:

        

Cement (Wholly Owned)

   $ 274,167     $ 220,974     $ 888,532     $ 754,853  

Concrete and Aggregates

     57,772       55,176       191,291       186,407  
  

 

 

   

 

 

   

 

 

   

 

 

 
     331,939       276,150       1,079,823       941,260  

Light Materials:

        

Gypsum Wallboard

     200,969       212,016       629,299       652,981  

Recycled Paperboard

     25,925       23,321       73,468       83,701  
  

 

 

   

 

 

   

 

 

   

 

 

 
     226,894       235,337       702,767       736,682  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenue

   $ 558,833     $ 511,487     $ 1,782,590     $ 1,677,942  
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Earnings

        

Heavy Materials:

        

Cement (Wholly Owned)

   $ 96,281     $ 60,938     $ 278,266     $ 209,811  

Cement (Joint Venture)

     9,285       11,377       22,790       23,631  

Concrete and Aggregates

     1,760       2,692       13,434       15,700  
  

 

 

   

 

 

   

 

 

   

 

 

 
     107,326       75,007       314,490       249,142  

Light Materials:

        

Gypsum Wallboard

     75,063       87,335       251,625       261,164  

Recycled Paperboard

     7,524       7,805       22,316       17,200  
  

 

 

   

 

 

   

 

 

   

 

 

 
     82,587       95,140       273,941       278,364  
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     189,913       170,147       588,431       527,506  

Corporate General and Administrative Expense

     (14,201     (12,497     (42,456     (37,944

Other Non-Operating Income

     1,019       2,210       2,837       911  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Interest and Income Taxes

   $ 176,731     $ 159,860     $ 548,812     $ 490,473  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Excluding Intersegment and Joint Venture Revenue listed on Attachment 3

 

6


Attachment 3

Eagle Materials Inc.

Sales Volume, Average Net Sales Prices and Intersegment and Cement Revenue

(unaudited)

 

     Sales Volume  
                                          
     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
                                          
     2023      2022      Change     2023      2022      Change  
                                          

Cement (M Tons):

                

Wholly Owned

     1,663        1,527        +9     5,470        5,313        +3

Joint Venture

     161        172        -6     496        524        -5
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
     1,824        1,699        +7     5,966        5,837        +2

Concrete (M Cubic Yards)

     308        353        -13     1,055        1,210        -13

Aggregates (M Tons)

     1,034        626        +65     3,362        2,333        +44

Gypsum Wallboard (MMSFs)

     722        728        -1     2,218        2,309        -4

Recycled Paperboard (M Tons):

                

Internal

     37        39        -5     110        115        -4

External

     47        38        +24     137        131        +5
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
     84        77        +9     247        246        0

 

     Average Net Sales Price*  
                                          
     Quarter Ended
December 31,
    Nine Months Ended
December 31,
 
                                          
     2023      2022      Change     2023      2022      Change  
                                          

Cement (Ton)

   $ 151.32      $ 134.36        +13   $ 150.20      $ 131.44        +14

Concrete (Cubic Yard)

   $ 149.54      $ 134.42        +11   $ 145.29      $ 132.46        +10

Aggregates (Ton)

   $ 11.18      $ 11.70        -4   $ 11.20      $ 11.21        0

Gypsum Wallboard (MSF)

   $ 227.78      $ 238.51        -4   $ 232.79      $ 230.01        +1

Recycled Paperboard (Ton)

   $ 559.49      $ 594.93        -6   $ 546.21      $ 603.73        -10

 

*

Net of freight and delivery costs billed to customers.

 

     Intersegment and Cement Revenue  
                             
     Quarter Ended
December 31,
     Nine Months Ended
December 31,
 
                             
     2023      2022      2023      2022  
                             

Intersegment Revenue:

           

Cement

   $ 7,804      $ 7,719      $ 27,192      $ 26,371  

Concrete and Aggregates

     3,414        —         10,235        —   

Recycled Paperboard

     21,128        24,453        61,929        71,819  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 32,346      $ 32,172      $ 99,356      $ 98,190  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cement Revenue:

           

Wholly Owned

   $ 274,167      $ 220,974      $ 888,532      $ 754,853  

Joint Venture

     26,683        27,620        82,713        79,065  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 300,850      $ 248,594      $ 971,245      $ 833,918  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

7


Attachment 4

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 

     December 31,     March 31,
2023*
 
     2023     2022  

ASSETS

      

Current Assets –

      

Cash and Cash Equivalents

   $ 48,912     $ 60,937     $ 15,242  

Accounts and Notes Receivable, net

     192,982       172,543       195,052  

Inventories

     333,828       247,155       291,882  

Federal Income Tax Receivable

     2,917       5,466       16,267  

Prepaid and Other Assets

     9,092       5,177       3,060  
  

 

 

   

 

 

   

 

 

 

Total Current Assets

     587,731       491,278       521,503  
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, net

     1,667,915       1,641,638       1,662,061  

Investments in Joint Venture

     104,822       85,268       89,111  

Operating Lease Right-of-Use Assets

     20,670       20,651       20,759  

Notes Receivable

     —        8,556       7,382  

Goodwill and Intangibles

     488,088       467,703       466,043  

Other Assets

     21,114       15,076       14,143  
  

 

 

   

 

 

   

 

 

 
   $ 2,890,340     $ 2,730,170     $ 2,781,002  
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current Liabilities –

      

Accounts Payable

   $ 117,270     $ 106,571     $ 110,408  

Accrued Liabilities

     88,178       83,759       86,472  

Income Taxes Payable

     1,848       1,964       —   

Current Portion of Long-Term Debt

     10,000       10,000       10,000  

Operating Lease Liabilities

     8,217       6,006       6,009  
  

 

 

   

 

 

   

 

 

 

Total Current Liabilities

     225,513       208,300       212,889  
  

 

 

   

 

 

   

 

 

 

Long-term Liabilities

     63,016       62,545       66,543  

Bank Credit Facility

     107,000       130,000       157,000  

Bank Term Loan

     175,000       185,000       182,500  

2.500% Senior Unsecured Notes due 2031

     740,482       739,215       739,532  

Deferred Income Taxes

     246,168       239,596       236,844  

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 34,474,435; 36,242,274 and 35,768,376 Shares, respectively

     345       362       358  

Capital in Excess of Par Value

     —        —        —   

Accumulated Other Comprehensive Losses

     (3,403     (3,105     (3,547

Retained Earnings

     1,336,219       1,168,257       1,188,883  
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

     1,333,161       1,165,514       1,185,694  
  

 

 

   

 

 

   

 

 

 
   $ 2,890,340     $ 2,730,170     $ 2,781,002  
  

 

 

   

 

 

   

 

 

 

 

*

From audited financial statements

 

8


Attachment 5

Eagle Materials Inc.

Depreciation, Depletion and Amortization by Lines of Business

(dollars in thousands)

(unaudited)

The following table presents Depreciation, Depletion and Amortization by lines of business for the quarters ended December 31, 2023 and 2022:

 

     Depreciation, Depletion and Amortization  
     Quarter Ended
December 31,
 
     2023      2022  

Cement

   $ 22,514      $ 20,582  

Concrete and Aggregates

     4,857        4,402  

Gypsum Wallboard

     5,611        5,387  

Paperboard

     3,694        3,738  

Corporate and Other

     792        706  
  

 

 

    

 

 

 
   $ 37,468      $ 34,815  
  

 

 

    

 

 

 

 

9


Attachment 6

Eagle Materials Inc.

Reconciliation of Non-GAAP Financial Measures

(dollars in thousands)

(unaudited)

EBITDA and Adjusted EBITDA

We present Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA to provide additional measures of operating performance and allow for more consistent comparison of operating performance from period to period. EBITDA is a non-GAAP financial measure that provides supplemental information regarding the operating performance of our business without regard to financing methods, capital structures or historical cost basis. Adjusted EBITDA is also a non-GAAP financial measure that further excludes the impact from non-routine items and stock-based compensation. Management uses EBITDA and Adjusted EBITDA as alternative bases for comparing the operating performance of Eagle from period to period and for purposes of its budgeting and planning processes. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as an alternative to net income, cash flow from operations or any other measure of financial performance or liquidity in accordance with GAAP. The following shows the calculation of EBITDA and Adjusted EBITDA and reconciles them to net earnings in accordance with GAAP for the quarters and nine months ended December 31, 2023 and 2022, and the trailing twelve months ended December 31, 2023 and March 31, 2023:

 

     Quarter Ended      Nine Months Ended  
     December 31,      December 31,  
     2023      2022      2023      2022  

Net Earnings, as reported

   $ 129,138      $ 117,184      $ 400,540      $ 361,184  

Income Tax Expense

     37,465        33,744        115,701        104,447  

Interest Expense

     10,128        8,932        32,571        24,842  

Depreciation, Depletion and Amortization

     37,468        34,815        111,347        103,689  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 214,199      $ 194,675      $ 660,159      $ 594,162  

Purchase accounting 1

     —         —         4,568        2,067  

Stock-based Compensation

     4,357        4,088        15,356        13,636  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 218,556      $ 198,763      $ 680,083      $ 609,865  

 

     Twelve Months Ended  
     December 31,      March 31,  
     2023      2023  

Net Earnings, as reported

   $ 500,896      $ 461,540  

Income Tax Expense

     138,307        127,053  

Interest Expense

     42,900        35,171  

Depreciation, Depletion and Amortization

     146,212        138,554  
  

 

 

    

 

 

 

EBITDA

   $ 828,315      $ 762,318  

Purchase accounting 1

     4,568        2,067  

Stock-based Compensation

     18,875        17,155  
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 851,758      $ 781,540  

 

1 

Represents the impact of purchase accounting on inventory costs and related business development costs

 

10


Attachment 7

Eagle Materials Inc.

Reconciliation of Net Debt to Adjusted EBITDA

(unaudited)

(dollars in thousands)

GAAP does not define “Net Debt” and it should not be considered as an alternative to cash flow or liquidity measures defined by GAAP. We define Net Debt as total debt minus cash and cash equivalents to indicate the amount of total debt that would remain if the Company applied the cash and cash equivalents held by it to the payment of outstanding debt. The Company also uses “Net Debt to Adjusted EBITDA,” which it defines as Net Debt divided by Adjusted EBITDA for the trailing twelve months, as a metric of its current leverage position. We present this metric for the convenience of the investment community and rating agencies who use such metrics in their analysis, and for investors who need to understand the metrics we use to assess performance and monitor our cash and liquidity positions.

 

     As of      As of  
     December 31, 2023      March 31, 2023  

Total debt, excluding debt issuance costs

   $ 1,042,000      $ 1,099,500  

Cash and cash equivalents

     48,912        15,242  
  

 

 

    

 

 

 

Net Debt

   $ 993,088      $ 1,084,258  

Trailing Twelve Months Adjusted EBITDA

   $ 851,758      $ 781,540  
  

 

 

    

 

 

 

Net Debt to Adjusted EBITDA

     1.2x        1.4x  
  

 

 

    

 

 

 

 

11