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): August 2, 2012
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.) | ||
| 3811 Turtle Creek Blvd., Suite 1100, Dallas, Texas | 75219 | |||
| (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 from 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)) |
Item 2.02 Results of Operations and Financial Condition
On August 2, 2012, Eagle Materials Inc., a Delaware corporation (“Eagle”), announced its results of operations for the quarter ended June 30, 2012. 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 August 2, 2012 issued by Eagle Materials Inc. (announcing quarterly operating results) | |
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: August 2, 2012
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Earnings Press Release dated August 2, 2012 issued by Eagle Materials Inc. (announcing quarterly operating results) | |
Exhibit 99.1
|
Contact at 214/432-2000 Steven R. Rowley President & CEO D. Craig Kesler Executive Vice President & CFO Robert S. Stewart Executive Vice President |
News For Immediate Release
EAGLE MATERIALS INC. REPORTS
STRONG VOLUME AND EARNINGS IMPROVEMENT
IN THE FIRST QUARTER
DALLAS, TX (August 2, 2012) – Eagle Materials Inc. (NYSE: EXP) today reported financial results for the first quarter of fiscal 2013 ended June 30, 2012. Notable items for the quarter include (all comparisons, unless noted, are with the prior-year’s first quarter):
| • | Revenues of $154.0 million, up 29% |
| • | Segment operating earnings of $29.1 million, up 198% |
| • | Net earnings per diluted share of $0.31 versus $0.02 |
Construction activity continued to improve during the quarter and Eagle’s low cost operations continued to execute well during the first quarter of fiscal 2013.
First quarter sales volumes improved across all business lines and wallboard net sales prices increased 32% as compared to the prior year’s first quarter. Eagle’s first quarter of fiscal 2013 cement operating earnings were negatively impacted by approximately $8 million, or $0.12 per diluted share, in increased maintenance costs associated with planned major maintenance at all of our cement facilities. Improved first 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 healthy net debt-to-capitalization ratio of 34%.
Cement, Concrete and Aggregates
Cement revenues for the first quarter, including joint venture and intersegment revenues, totaled $76.0 million, 26% greater than the same quarter last year. The revenue improvement reflects a 26% increase in our first quarter Cement sales volume. The average net sales price for this quarter was $81.06 per ton, comparable with the same quarter last year. Cement price increases were achieved in both the Texas and Mountain regions during the quarter but were offset by the increased pace of high-volume, lower-priced bid work in our other markets.
Operating earnings from Cement for the first quarter were $9.9 million, a 12% increase from the same quarter a year ago. The earnings impact from increased cement sales volumes was mostly offset by higher maintenance costs associated with scheduled maintenance at all of our cement facilities.
Concrete and Aggregates reported operating earnings of $0.2 million for the first quarter, up from the $0.2 million operating loss for the same quarter a year ago, primarily due to improved sales volumes and net sales prices in each business.
Gypsum Wallboard and Paperboard
Gypsum Wallboard and Paperboard’s first quarter operating earnings of $19.3 million increased 1,421% from $1.3 million in same quarter last year. Improved Gypsum Wallboard net sales prices were the primary driver of the quarterly earnings increase. Additional contribution came from improved sales volumes in both wallboard and paperboard.
Gypsum Wallboard and Paperboard revenues for the first quarter totaled $89.6 million, a 27% increase from the same quarter a year ago. The revenue increase reflects higher average Gypsum Wallboard net sales prices and higher Gypsum Wallboard and Paperboard sales volumes slightly offset by lower Paperboard net sales prices. The average Gypsum Wallboard net sales price this quarter was $118.70 per MSF, 32% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 457 million square feet (MMSF) represents an 11% increase from the same quarter last year. The average Paperboard net sales price this quarter was $502.89 per ton, 1% lower than the same quarter a year ago. Paperboard sales volume for the quarter was 60,000 tons, 5% higher than the same quarter a year ago.
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 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 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.
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Eagle’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 Standard Time (1:00 p.m. Central Standard Time) on Thursday, August 2, 2012. The conference call will be webcast simultaneously on the Eagle 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 Eagle 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, 2012. This report is 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.
Steven R. Rowley
President and Chief Executive Officer
D. Craig Kesler
Executive Vice President and Chief Financial Officer
Robert S. Stewart
Executive Vice President, Strategy, Corporate Development and Communications
Attachment 1 Summary of Consolidated Earnings
Attachment 2 Revenues and Earnings by Lines of Business (Quarter)
Attachment 3 Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
Attachment 4 Consolidated Balance Sheets
3
Eagle Materials Inc.
Attachment 1
Eagle Materials Inc.
Statement of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
| Quarter
Ended June 30, |
||||||||
| 2012 | 2011 | |||||||
| Revenues |
$ | 154,042 | $ | 119,807 | ||||
| Cost of Goods Sold |
131,145 | 115,434 | ||||||
|
|
|
|
|
|||||
| Gross Profit |
22,897 | 4,373 | ||||||
| Equity in Earnings of Unconsolidated Joint Venture |
6,468 | 5,448 | ||||||
| Corporate General and Administrative Expenses |
(5,416 | ) | (4,118 | ) | ||||
| Other Operating Expense, net |
(270 | ) | (79 | ) | ||||
|
|
|
|
|
|||||
| Earnings before Interest and Income Taxes |
23,679 | 5,624 | ||||||
| Interest Expense, Net |
(3,765 | ) | (4,585 | ) | ||||
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| Earnings before Income Taxes |
19,914 | 1,039 | ||||||
| Income Tax Expense |
(5,936 | ) | (232 | ) | ||||
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| Net Earnings |
$ | 13,978 | $ | 807 | ||||
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| EARNINGS PER SHARE |
||||||||
| Basic |
$ | 0.31 | $ | 0.02 | ||||
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| Diluted |
$ | 0.31 | $ | 0.02 | ||||
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| AVERAGE SHARES OUTSTANDING |
||||||||
| Basic |
44,670,359 | 44,180,039 | ||||||
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| Diluted |
45,078,734 | 44,709,262 | ||||||
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Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Earnings by Lines of Business
(dollars in thousands)
(unaudited)
| Quarter
Ended June 30, |
||||||||
| 2012 | 2011 | |||||||
| Revenues* |
||||||||
| Gypsum Wallboard and Paperboard: |
||||||||
| Gypsum Wallboard |
$ | 70,220 | $ | 51,342 | ||||
| Gypsum Paperboard |
19,407 | 18,994 | ||||||
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| 89,627 | 70,336 | |||||||
| Cement (Wholly Owned) |
51,750 | 37,711 | ||||||
| Concrete and Aggregates |
12,665 | 11,760 | ||||||
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| Total |
$ | 154,042 | $ | 119,807 | ||||
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| Segment Operating Earnings |
||||||||
| Gypsum Wallboard and Paperboard: |
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| Gypsum Wallboard |
$ | 14,022 | $ | (1,762 | ) | |||
| Gypsum Paperboard |
5,276 | 3,030 | ||||||
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| 19,298 | 1,268 | |||||||
| Cement: |
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| Wholly Owned |
3,398 | 3,340 | ||||||
| Joint Venture |
6,468 | 5,448 | ||||||
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| 9,866 | 8,788 | |||||||
| Concrete and Aggregates |
201 | (235 | ) | |||||
| Other Operating Expense, net |
(270 | ) | (79 | ) | ||||
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| Total Segment Operating Earnings |
$ | 29,095 | $ | 9,742 | ||||
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* Net of Intersegment and Joint Venture Revenues listed on Attachment 3. |
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Eagle Materials Inc.
Attachment 3
5
Eagle Materials Inc.
Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
(unaudited)
| Sales Volume | ||||||||||||
| Quarter Ended June 30, |
||||||||||||
| 2012 | 2011 | Change | ||||||||||
| Gypsum Wallboard (MMSF’s) |
457 | 412 | +11 | % | ||||||||
| Paperboard (M Tons): |
||||||||||||
| Internal |
20 | 17 | +18 | % | ||||||||
| External |
40 | 40 | 0 | % | ||||||||
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| 60 | 57 | +5 | % | |||||||||
| Cement (M Tons): |
||||||||||||
| Wholly Owned |
621 | 449 | +38 | % | ||||||||
| Joint Venture |
227 | 225 | +1 | % | ||||||||
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| 848 | 674 | +26 | % | |||||||||
| Concrete (M Cubic Yards) |
137 | 136 | +1 | % | ||||||||
| Aggregates (M Tons) |
652 | 612 | +7 | % | ||||||||
| Average Net Sales Price * | ||||||||||||
| Quarter Ended June 30, |
||||||||||||
| 2012 | 2011 | Change | ||||||||||
| Gypsum Wallboard (MSF) |
$ | 118.70 | $ | 90.03 | +32 | % | ||||||
| Paperboard (Ton) |
$ | 502.89 | $ | 505.61 | -1 | % | ||||||
| Cement (Ton) |
$ | 81.06 | $ | 81.25 | 0 | % | ||||||
| Concrete (Cubic Yard) |
$ | 65.29 | $ | 61.04 | +7 | % | ||||||
| Aggregates (Ton) |
$ | 5.98 | $ | 5.88 | +2 | % | ||||||
| * | Net of freight and delivery costs billed to customers. |
| Intersegment and
Cement Revenues ($ in thousands) |
||||||||
| Quarter Ended June 30, |
||||||||
| 2012 | 2011 | |||||||
| Intersegment Revenues: |
||||||||
| Cement |
$ | 567 | $ | 1,039 | ||||
| Paperboard |
10,922 | 9,682 | ||||||
| Concrete and Aggregates |
212 | 140 | ||||||
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| $ | 11,701 | $ | 10,861 | |||||
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| Cement Revenues: |
||||||||
| Wholly Owned |
$ | 51,750 | $ | 37,711 | ||||
| Joint Venture |
23,707 | 21,394 | ||||||
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| $ | 75,457 | $ | 59,105 | |||||
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6
Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
| June 30, | March 31, | |||||||||||
| 2012 | 2011 | 2012* | ||||||||||
| ASSETS |
||||||||||||
| Current Assets – |
||||||||||||
| Cash and Cash Equivalents |
$ | 3,707 | $ | 3,478 | $ | 6,481 | ||||||
| Accounts and Notes Receivable, net |
73,304 | 54,192 | 56,197 | |||||||||
| Inventories |
114,441 | 114,124 | 123,606 | |||||||||
| Federal Income Tax Receivable |
— | 5,374 | 1,133 | |||||||||
| Prepaid and Other Assets |
3,366 | 3,836 | 4,424 | |||||||||
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| Total Current Assets |
194,818 | 181,004 | 191,841 | |||||||||
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| Property, Plant and Equipment – |
1,145,195 | 1,119,346 | 1,140,744 | |||||||||
| Less: Accumulated Depreciation |
(572,351 | ) | (524,143 | ) | (560,236 | ) | ||||||
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| Property, Plant and Equipment, net |
572,844 | 595,203 | 580,508 | |||||||||
| Investments in Joint Venture |
39,407 | 34,109 | 38,939 | |||||||||
| Notes Receivable |
3,360 | 5,139 | 3,436 | |||||||||
| Goodwill and Intangibles |
150,743 | 151,380 | 150,902 | |||||||||
| Other Assets |
19,224 | 18,376 | 19,519 | |||||||||
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| $ | 980,396 | $ | 985,211 | $ | 985,145 | |||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Current Liabilities – |
||||||||||||
| Accounts Payable |
$ | 34,517 | $ | 31,472 | $ | 38,747 | ||||||
| Accrued Liabilities |
30,275 | 31,808 | 33,619 | |||||||||
| Federal Income Tax Payable |
8,192 | — | — | |||||||||
| Current Portion of Long-term Debt |
4,677 | — | 4,677 | |||||||||
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| Total Current Liabilities |
77,661 | 63,280 | 77,043 | |||||||||
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| Long-term Liabilities |
39,774 | 38,735 | 39,467 | |||||||||
| Bank Credit Facility |
57,000 | 11,000 | 70,000 | |||||||||
| Senior Notes |
192,259 | 285,000 | 192,259 | |||||||||
| Deferred Income Taxes |
129,760 | 128,739 | 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 45,362,170; 44,906,232 and 45,269,493 Shares, respectively. |
454 | 449 | 453 | |||||||||
| Capital in Excess of Par Value |
39,564 | 25,439 | 37,692 | |||||||||
| Accumulated Other Comprehensive Losses |
(5,400 | ) | (2,893 | ) | (5,516 | ) | ||||||
| Retained Earnings |
449,324 | 435,462 | 439,882 | |||||||||
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| Total Stockholders’ Equity |
483,942 | 458,457 | 472,511 | |||||||||
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| $ | 980,396 | $ | 985,211 | $ | 985,145 | |||||||
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| * | From audited financial statements. |
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