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): October 30, 2013
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 October 30, 2013, Eagle Materials Inc., a Delaware corporation (“Eagle”), announced its results of operations for the quarter ended September 30, 2013. 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 |
Description | |
| 99.1 | Earnings Press Release dated October 30, 2013 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: October 30, 2013
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Earnings Press Release dated October 30, 2013 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 CONTINUED
STRONG GROWTH IN SALES VOLUMES AND EARNINGS
IN THE SECOND QUARTER
DALLAS, TX (October 30, 2013) – Eagle Materials Inc. (NYSE: EXP) today reported financial results for the second quarter of fiscal 2014 which ended September 30, 2013. Notable items for the quarter in relation to the prior-year’s second quarter include:
| • | Revenues of $252.6 million, up 53% |
| • | Earnings before interest and income taxes of $63.5 million, up 114% |
| • | Net earnings per diluted share of $0.80, up 100% |
Sales volumes improved across all business lines, with cement volumes setting a quarterly record at 1.4 million tons. Net sales prices strengthened across nearly all businesses, with wallboard sales prices increasing 21% over the prior year’s second quarter. Quarterly revenue and earnings improvement also reflects the acquisition of assets, primarily two cement plants in Missouri and Oklahoma and the related aggregates and ready-mix businesses in Kansas City (the Acquired Assets) on November 30, 2012.
Cement, Concrete and Aggregates
Operating earnings from Cement for the second quarter were $32.4 million, an 86% increase from the same quarter a year ago. The earnings increase resulted from increased sales volumes and average net cement sales prices.
Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $133.2 million, 70% greater than the same quarter last year. The revenue improvement reflects a 66% increase in our second quarter Cement sales volume, including sales volumes attributable to the Acquired Assets. Our average net cement sales price this quarter was $85.34 per ton, 3% higher than the same quarter last year.
Concrete and Aggregates reported a small operating loss for the second quarter, an improvement from the same quarter a year ago.
Gypsum Wallboard and Paperboard
Gypsum Wallboard and Paperboard’s second quarter operating earnings of $36.8 million were up 52% compared to the 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 second quarter totaled $120.0 million, a 24% increase from the same quarter a year ago. The revenue increase reflects primarily higher wallboard average net sales prices and improved gypsum wallboard and paperboard sales volumes.
The average gypsum wallboard net sales price for the second quarter was $144.05 per MSF, 21% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 554 million square feet (MMSF) represents an 11% increase from the same quarter last year. The average Paperboard net sales price for this quarter was $507.28 per ton, 1% lower than the same quarter a year ago. Paperboard sales volumes for the quarter were 67,000 tons, 8% higher than the same quarter a year ago.
Details of Financial Results
For information regarding the results of operations for the Acquired Assets for certain periods prior to November 30, 2012, including pro forma financial information that combines the results of operations for Eagle and the Acquired Assets, please see our Form 8-K/A filed on April 26, 2013. The increase in our average shares outstanding at September 30, 2013 is primarily due to the impact of our follow-on equity offering related to the Acquired Assets, which was completed on October 3, 2012.
The prior year’s second quarter results include Acquisition and Litigation Expenses related primarily to the acquisition of the Acquired Assets and litigation costs related to our lawsuit against the IRS. The total impact from these non-routine items was $5.7 million (pre-tax), or $0.09 per diluted share (after-tax).
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 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 in the Company for making operating decisions and assessing performance. Attachment 3 shows the proportional consolidation of our Cement revenues.
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.
2
About Eagle Materials Inc.
Eagle Materials Inc. manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Frac Sand, Concrete and Aggregates from 40 facilities across the US. Eagle is headquartered in Dallas, Texas.
Eagle’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 Thursday, October 31, 2013. The conference call will be webcast simultaneously on the Eagle website http://www.eaglematerials.com. A replay of the webcast and the presentation will be archived on that site for one year.
###
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; 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; availability of raw materials; changes in energy costs including, without limitation, natural gas, coal and oil; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; 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 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, coal 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. With respect to our acquisition of the Acquired Assets 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, the risk that we may not be able to integrate the Acquired Assets in an efficient and cost-effective manner with our other assets and operations, the possible inability to realize synergies or other expected benefits of the transaction, the possibility that we may incur significant costs relating to transition or integration activities or repair and maintenance of the Acquired Assets, the discovery of undisclosed liabilities associated with the business, the need to repay the indebtedness incurred to fund the acquisition and the fact that increased debt may limit our ability to respond to any changes in general economic and business conditions that occur after the acquisition. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2013. 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.
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
3
Attachment 1 Statement of Consolidated Earnings
Attachment 2 Revenues and Earnings by Lines of Business (Quarter and Six Months)
Attachment 3 Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
Attachment 4 Consolidated Balance Sheets
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, |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues |
$ | 252,646 | $ | 164,659 | $ | 479,690 | $ | 318,701 | ||||||||
| Cost of Goods Sold |
193,167 | 132,170 | 373,607 | 263,315 | ||||||||||||
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| Gross Profit |
59,479 | 32,489 | 106,083 | 55,386 | ||||||||||||
| Equity in Earnings of Unconsolidated JV |
9,747 | 8,750 | 17,625 | 15,218 | ||||||||||||
| Other, net |
317 | 66 | 900 | (204 | ) | |||||||||||
| Acquisition and Litigation Expense |
— | (5,713 | ) | — | (6,374 | ) | ||||||||||
| Corporate General and Administrative Expenses |
(6,060 | ) | (5,919 | ) | (11,654 | ) | (10,674 | ) | ||||||||
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| Earnings before Interest and Income Taxes |
63,483 | 29,673 | 112,954 | 53,352 | ||||||||||||
| Interest Expense, net |
(4,795 | ) | (3,548 | ) | (9,750 | ) | (7,313 | ) | ||||||||
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| Earnings before Income Taxes |
58,688 | 26,125 | 103,204 | 46,039 | ||||||||||||
| Income Tax Expense |
(18,785 | ) | (8,172 | ) | (33,200 | ) | (14,108 | ) | ||||||||
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| Net Earnings |
$ | 39,903 | $ | 17,953 | $ | 70,004 | $ | 31,931 | ||||||||
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| EARNINGS PER SHARE |
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| Basic |
$ | 0.81 | $ | 0.40 | $ | 1.43 | $ | 0.71 | ||||||||
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| Diluted |
$ | 0.80 | $ | 0.40 | $ | 1.40 | $ | 0.71 | ||||||||
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| AVERAGE SHARES OUTSTANDING |
||||||||||||||||
| Basic |
49,012,045 | 44,746,225 | 48,984,038 | 44,708,499 | ||||||||||||
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| Diluted |
49,860,100 | 45,353,778 | 49,835,382 | 45,219,224 | ||||||||||||
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4
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, |
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues* |
||||||||||||||||
| Gypsum Wallboard and Paperboard: |
||||||||||||||||
| Gypsum Wallboard |
$ | 98,960 | $ | 77,327 | $ | 194,941 | $ | 147,547 | ||||||||
| Gypsum Paperboard |
20,992 | 19,215 | 39,943 | 38,622 | ||||||||||||
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| 119,952 | 96,542 | 234,884 | 186,169 | |||||||||||||
| Cement (Wholly Owned) |
102,871 | 54,105 | 190,175 | 105,855 | ||||||||||||
| Concrete and Aggregates |
29,823 | 14,012 | 54,631 | 26,677 | ||||||||||||
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| Total |
$ | 252,646 | $ | 164,659 | $ | 479,690 | $ | 318,701 | ||||||||
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| Segment Operating Earnings |
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| Gypsum Wallboard and Paperboard: |
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| Gypsum Wallboard |
$ | 29,868 | $ | 16,464 | $ | 59,504 | $ | 30,486 | ||||||||
| Gypsum Paperboard |
6,937 | 7,695 | 12,616 | 12,971 | ||||||||||||
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| 36,805 | 24,159 | 72,120 | 43,457 | |||||||||||||
| Cement: |
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| Wholly Owned |
22,683 | 8,692 | 33,815 | 12,090 | ||||||||||||
| Joint Venture |
9,747 | 8,750 | 17,625 | 15,218 | ||||||||||||
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| 32,430 | 17,442 | 51,440 | 27,308 | |||||||||||||
| Concrete and Aggregates |
(9 | ) | (362 | ) | 148 | (161 | ) | |||||||||
| Other, net |
317 | 66 | 900 | (204 | ) | |||||||||||
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| Sub-total |
69,543 | 41,305 | 124,608 | 70,400 | ||||||||||||
| Acquisition and Litigation Expenses |
— | (5,713 | ) | — | (6,374 | ) | ||||||||||
| Corporate General and Administrative Expenses |
(6,060 | ) | (5,919 | ) | (11,654 | ) | (10,674 | ) | ||||||||
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| Earnings Before Interest and Income Taxes |
$ | 63,483 | $ | 29,673 | $ | 112,954 | $ | 53,352 | ||||||||
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| * | Net of Intersegment and Joint Venture Revenues listed on Attachment 3 |
5
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, |
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| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||||
| Gypsum Wallboard (MMSF’s) |
554 | 500 | +11 | % | 1,086 | 957 | +13 | % | ||||||||||||||||
| Cement (M Tons): |
||||||||||||||||||||||||
| Wholly Owned |
1,182 | 639 | +85 | % | 2,161 | 1,260 | +72 | % | ||||||||||||||||
| Joint Venture |
252 | 225 | +12 | % | 514 | 452 | +14 | % | ||||||||||||||||
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| 1,434 | 864 | +66 | % | 2,675 | 1,712 | +56 | % | |||||||||||||||||
| Paperboard (M Tons): |
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| Internal |
26 | 23 | +13 | % | 52 | 43 | +21 | % | ||||||||||||||||
| External |
41 | 39 | +5 | % | 79 | 79 | 0 | % | ||||||||||||||||
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| 67 | 62 | +8 | % | 131 | 122 | +7 | % | |||||||||||||||||
| Concrete (M Cubic Yards) |
265 | 141 | +88 | % | 492 | 278 | +77 | % | ||||||||||||||||
| Aggregates (M Tons) |
1,006 | 810 | +24 | % | 1,915 | 1,462 | +31 | % | ||||||||||||||||
| Average Net Sales Price* | ||||||||||||||||||||||||
| Quarter Ended September 30, |
Six Months Ended September 30, |
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| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||||
| Gypsum Wallboard (MSF) |
$ | 144.05 | $ | 119.44 | +21 | % | $ | 145.15 | $ | 119.09 | +22 | % | ||||||||||||
| Cement (Ton) |
$ | 85.34 | $ | 82.77 | +3 | % | $ | 85.72 | $ | 81.92 | +5 | % | ||||||||||||
| Paperboard (Ton) |
$ | 507.28 | $ | 512.12 | -1 | % | $ | 504.92 | $ | 507.57 | -1 | % | ||||||||||||
| Concrete (Cubic Yard) |
$ | 82.15 | $ | 66.83 | +23 | % | $ | 80.68 | $ | 66.07 | +22 | % | ||||||||||||
| Aggregates (Ton) |
$ | 7.87 | $ | 6.01 | +31 | % | $ | 7.85 | $ | 6.00 | +31 | % | ||||||||||||
| * | Net of freight and delivery costs billed to customers. |
| Intersegment and Cement Revenues | ||||||||||||||||
| Quarter Ended September 30, |
Six Months Ended September 30, |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Intersegment Revenues: |
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| Cement |
$ | 2,955 | $ | 512 | $ | 4,947 | $ | 1,079 | ||||||||
| Paperboard |
13,650 | 12,515 | 26,862 | 23,437 | ||||||||||||
| Concrete and Aggregates |
274 | 245 | 672 | 457 | ||||||||||||
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| $ | 16,879 | $ | 13,272 | $ | 32,481 | $ | 24,973 | |||||||||
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| Cement Revenues: |
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| Wholly Owned |
$ | 102,871 | $ | 54,105 | $ | 190,175 | $ | 105,855 | ||||||||
| Joint Venture |
27,378 | 23,916 | 55,782 | 47,623 | ||||||||||||
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| $ | 130,249 | $ | 78,021 | $ | 245,957 | $ | 153,478 | |||||||||
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6
Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
| September 30, | March 31, | |||||||||||
| 2013 | 2012 | 2013* | ||||||||||
| ASSETS |
||||||||||||
| Current Assets – |
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| Cash and Cash Equivalents |
$ | 10,628 | $ | 8,149 | $ | 3,897 | ||||||
| Accounts and Notes Receivable, net |
119,748 | 74,066 | 87,543 | |||||||||
| Inventories |
162,094 | 109,004 | 156,380 | |||||||||
| Federal Income Tax Receivable |
— | — | 2,443 | |||||||||
| Prepaid and Other Assets |
8,235 | 2,588 | 11,008 | |||||||||
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| Total Current Assets |
300,705 | 193,807 | 261,271 | |||||||||
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| Property, Plant and Equipment – |
1,636,244 | 1,149,075 | 1,599,992 | |||||||||
| Less: Accumulated Depreciation |
(646,142 | ) | (584,773 | ) | (614,268 | ) | ||||||
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| Property, Plant and Equipment, net |
990,102 | 564,302 | 985,724 | |||||||||
| Investments in Joint Venture |
40,071 | 39,908 | 42,946 | |||||||||
| Notes Receivable |
3,488 | 3,316 | 3,893 | |||||||||
| Goodwill and Intangibles |
161,432 | 150,584 | 162,400 | |||||||||
| Other Assets |
14,377 | 22,971 | 19,999 | |||||||||
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| $ | 1,510,175 | $ | 974,888 | $ | 1,476,233 | |||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current Liabilities – |
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| Accounts Payable |
$ | 50,878 | $ | 34,730 | $ | 58,880 | ||||||
| Accrued Liabilities |
40,785 | 42,602 | 41,349 | |||||||||
| Federal Income Tax Payable |
10,028 | 11,455 | — | |||||||||
| Current Portion of Long-term Debt |
— | 4,677 | — | |||||||||
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| Total Current Liabilities |
101,691 | 93,464 | 100,229 | |||||||||
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| Long-term Liabilities |
53,334 | 39,747 | 51,547 | |||||||||
| Bank Credit Facility |
263,000 | 20,000 | 297,000 | |||||||||
| Senior Notes |
192,259 | 192,259 | 192,259 | |||||||||
| Deferred Income Taxes |
135,571 | 127,307 | 139,028 | |||||||||
| Stockholders’ Equity – |
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| 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 49,675,688; 45,438,711 and 49,503,496 Shares, respectively. |
497 | 454 | 495 | |||||||||
| Capital in Excess of Par Value |
231,836 | 44,208 | 224,053 | |||||||||
| Accumulated Other Comprehensive Losses |
(6,732 | ) | (5,284 | ) | (7,042 | ) | ||||||
| Retained Earnings |
538,719 | 462,733 | 478,664 | |||||||||
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| Total Stockholders’ Equity |
764,320 | 502,111 | 696,170 | |||||||||
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| $ | 1,510,175 | $ | 974,888 | $ | 1,476,233 | |||||||
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| * | From audited financial statements. |
7