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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended

December 31, 2023

Commission File Number 1-12984

 

https://cdn.kscope.io/0a05402703f10ab29586411d50c43011-img30469998_0.jpg 

EAGLE MATERIALS INC.

(Exact name of registrant as specified in its charter)

 

Delaware (State of Incorporation)

75-2520779 (I.R.S. Employer Identification No.)

5960 Berkshire Lane, Suite 900, Dallas, Texas 75225 (Address of principal executive offices)

(214) 432-2000 (Registrant’s telephone number, including area code)

 

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 (par value $.01 per share)

 

EXP

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes No

As of January 23, 2024, the number of outstanding shares of common stock was:

 

Class

Outstanding Shares

Common Stock, $.01 Par Value

34,450,244

 

 

 


TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION (unaudited)

 

 

 

 

Page

Item 1.

 

Consolidated Financial Statements

 

 

 

 

 

 

 

 

 

Consolidated Statements of Earnings for the Three and Nine Months Ended December 31, 2023 and 2022

 

1

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Earnings for the Three and Nine Months Ended December 31, 2023 and 2022

 

2

 

 

 

 

 

 

 

Consolidated Balance Sheets as of December 31, 2023, and March 31, 2023

 

3

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the Three and Nine Months Ended December 31, 2023 and 2022

 

4

 

 

 

 

 

 

 

Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended December 31, 2023 and 2022

 

5

 

 

 

 

 

 

 

Notes to Unaudited Consolidated Financial Statements

 

6

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

20

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

35

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

35

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

36

 

 

 

 

 

Item 1a.

 

Risk Factors

 

36

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

36

 

 

 

 

 

Item 4.

 

Mine Safety Information

 

36

 

 

 

 

 

Item 5.

 

Other Information

 

36

 

 

 

 

 

Item 6.

 

Exhibits

 

37

 

 

 

 

 

SIGNATURES

 

38

 

 

 

 


 

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)

 

 

 

For the Three Months Ended December 31,

 

 

For the Nine Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(dollars in thousands, except share and per share data)

 

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 Joint Venture

 

 

9,285

 

 

 

11,377

 

 

 

22,790

 

 

 

23,631

 

Corporate General and Administrative Expense

 

 

(14,201

)

 

 

(12,497

)

 

 

(42,456

)

 

 

(37,944

)

Other Non-Operating Income (Loss)

 

 

1,019

 

 

 

2,210

 

 

 

2,837

 

 

 

911

 

Interest Expense, net

 

 

(10,128

)

 

 

(8,932

)

 

 

(32,571

)

 

 

(24,842

)

Earnings before Income Taxes

 

 

166,603

 

 

 

150,928

 

 

 

516,241

 

 

 

465,631

 

Income Taxes

 

 

(37,465

)

 

 

(33,744

)

 

 

(115,701

)

 

 

(104,447

)

Net Earnings

 

 

129,138

 

 

 

117,184

 

 

 

400,540

 

 

 

361,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

CASH DIVIDENDS PER SHARE

 

$

0.25

 

 

$

0.25

 

 

$

0.75

 

 

$

0.75

 

See Notes to Unaudited Consolidated Financial Statements.

 

 

1


 

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited)

 

 

 

For the Three Months Ended December 31,

 

 

For the Nine Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(dollars in thousands)

 

Net Earnings

 

$

129,138

 

 

$

117,184

 

 

$

400,540

 

 

$

361,184

 

Net Actuarial Change in Defined Benefit Plans

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of Net Actuarial Loss

 

 

63

 

 

 

30

 

 

 

189

 

 

 

90

 

Tax Expense

 

 

(15

)

 

 

(7

)

 

 

(45

)

 

 

(20

)

Comprehensive Earnings

 

$

129,186

 

 

$

117,207

 

 

$

400,684

 

 

$

361,254

 

See Notes to Unaudited Consolidated Financial Statements.

 

 

2


 

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited)

 

 

 

December 31,

 

 

March 31,

 

 

 

2023

 

 

2023

 

 

 

(dollars in thousands)

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

48,912

 

 

$

15,242

 

Accounts and Notes Receivable, net

 

 

192,982

 

 

 

195,052

 

Inventories

 

 

333,828

 

 

 

291,882

 

Income Tax Receivable

 

 

2,917

 

 

 

16,267

 

Prepaid and Other Assets

 

 

9,092

 

 

 

3,060

 

Total Current Assets

 

 

587,731

 

 

 

521,503

 

Property, Plant, and Equipment, net

 

 

1,667,915

 

 

 

1,662,061

 

Notes Receivable

 

 

 

 

 

7,382

 

Investment in Joint Venture

 

 

104,822

 

 

 

89,111

 

Operating Lease Right-of-Use Assets

 

 

20,670

 

 

 

20,759

 

Goodwill and Intangible Assets, net

 

 

488,088

 

 

 

466,043

 

Other Assets

 

 

21,114

 

 

 

14,143

 

Total Assets

 

$

2,890,340

 

 

$

2,781,002

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts Payable

 

$

117,270

 

 

$

110,408

 

Accrued Liabilities

 

 

88,178

 

 

 

86,472

 

Income Tax Payable

 

 

1,848

 

 

 

 

Operating Lease Liabilities

 

 

8,217

 

 

 

6,009

 

Current Portion of Long-term Debt

 

 

10,000

 

 

 

10,000

 

Total Current Liabilities

 

 

225,513

 

 

 

212,889

 

Long-term Debt

 

 

1,022,482

 

 

 

1,079,032

 

Noncurrent Operating Lease Liabilities

 

 

20,685

 

 

 

24,940

 

Other Long-term Liabilities

 

 

42,331

 

 

 

41,603

 

Deferred Income Taxes

 

 

246,168

 

 

 

236,844

 

Total Liabilities

 

 

1,557,179

 

 

 

1,595,308

 

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 and 35,768,376 Shares, respectively

 

 

345

 

 

 

358

 

Capital in Excess of Par Value

 

 

 

 

 

 

Accumulated Other Comprehensive Losses

 

 

(3,403

)

 

 

(3,547

)

Retained Earnings

 

 

1,336,219

 

 

 

1,188,883

 

Total Stockholders’ Equity

 

 

1,333,161

 

 

 

1,185,694

 

Total Liabilities and Stockholders’ Equity

 

$

2,890,340

 

 

$

2,781,002

 

See Notes to Unaudited Consolidated Financial Statements.

 

3


 

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

 

For the Nine Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

 

(dollars in thousands)

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net Earnings

 

$

400,540

 

 

$

361,184

 

Adjustments to Reconcile Net Earnings to Net Cash Provided
by Operating Activities, Net of Effect of Non-Cash Activity

 

 

 

 

 

 

Depreciation, Depletion, and Amortization

 

 

111,347

 

 

 

103,689

 

Deferred Income Tax Provision

 

 

9,324

 

 

 

7,227

 

Stock Compensation Expense

 

 

15,356

 

 

 

13,636

 

Equity in Earnings of Unconsolidated Joint Venture

 

 

(22,790

)

 

 

(23,631

)

Distributions from Joint Venture

 

 

7,000

 

 

 

19,000

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

Accounts and Notes Receivable

 

 

9,452

 

 

 

9,300

 

Inventories

 

 

(27,137

)

 

 

(3,219

)

Accounts Payable and Accrued Liabilities

 

 

3,278

 

 

 

(13,959

)

Other Assets

 

 

(19,428

)

 

 

4,411

 

Income Taxes Payable (Receivable)

 

 

13,607

 

 

 

2,473

 

Net Cash Provided by Operating Activities

 

 

500,549

 

 

 

480,111

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Additions to Property, Plant, and Equipment

 

 

(87,848

)

 

 

(60,951

)

Acquisition Spending

 

 

(55,053

)

 

 

(158,451

)

Net Cash Used in Investing Activities

 

 

(142,901

)

 

 

(219,402

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Borrowings Under Revolving Credit Facility

 

 

222,000

 

 

 

200,000

 

Repayment of Borrowings Under Revolving Credit Facility

 

 

(272,000

)

 

 

(70,000

)

Repayment of Term Loan

 

 

(7,500

)

 

 

(5,000

)

Dividends Paid to Stockholders

 

 

(26,692

)

 

 

(28,421

)

Purchase and Retirement of Common Stock

 

 

(248,852

)

 

 

(313,898

)

Proceeds from Stock Option Exercises

 

 

11,560

 

 

 

840

 

Payment of Debt Issuance Costs

 

 

 

 

 

(903

)

Shares Redeemed to Settle Employee Taxes on Stock Compensation

 

 

(2,494

)

 

 

(1,806

)

Net Cash Used in Financing Activities

 

 

(323,978

)

 

 

(219,188

)

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

33,670

 

 

 

41,521

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

15,242

 

 

 

19,416

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

48,912

 

 

$

60,937

 

See Notes to Unaudited Consolidated Financial Statements.

 

 

4


 

EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

 

 

Common
Stock

 

 

Capital in
Excess of
Par Value

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
Losses

 

 

Total

 

 

 

(dollars in thousands)

 

Balance at March 31, 2022

 

$

387

 

 

$

 

 

$

1,136,344

 

 

$

(3,175

)

 

$

1,133,556

 

Net Earnings

 

 

 

 

 

 

 

 

105,005

 

 

 

 

 

 

105,005

 

Stock Compensation Expense

 

 

 

 

 

5,146

 

 

 

 

 

 

 

 

 

5,146

 

Stock Option Exercises and Restricted Share Issuances

 

 

1

 

 

 

666

 

 

 

 

 

 

 

 

 

667

 

Shares Redeemed to Settle Employee Taxes

 

 

 

 

 

(1,497

)

 

 

 

 

 

 

 

 

(1,497

)

Purchase and Retirement of Common Stock

 

 

(8

)

 

 

(4,315

)

 

 

(105,289

)

 

 

 

 

 

(109,612

)

Dividends to Shareholders

 

 

 

 

 

 

 

 

(9,507

)

 

 

 

 

 

(9,507

)

Unfunded Pension Liability, net of tax

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

23

 

Balance at June 30, 2022

 

$

380

 

 

$

 

 

$

1,126,553

 

 

$

(3,152

)

 

$

1,123,781

 

Net Earnings

 

 

 

 

 

 

 

 

138,995

 

 

 

 

 

 

138,995

 

Stock Compensation Expense

 

 

 

 

 

4,402

 

 

 

 

 

 

 

 

 

4,402

 

Stock Option Exercise and Restricted Share Issuances

 

 

 

 

 

68

 

 

 

 

 

 

 

 

 

68

 

Shares Redeemed to Settle Employee Taxes

 

 

 

 

 

(309

)

 

 

 

 

 

 

 

 

(309

)

Purchase and Retirement of Common Stock

 

 

(9

)

 

 

(4,161

)

 

 

(96,616

)

 

 

 

 

 

(100,786

)

Dividends to Shareholders

 

 

 

 

 

 

 

 

(9,471

)

 

 

 

 

 

(9,471

)

Unfunded Pension Liability, net of tax

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

24

 

Balance at September 30, 2022

 

$

371

 

 

$

 

 

$

1,159,461

 

 

$

(3,128

)

 

$

1,156,704

 

Net Earnings

 

 

 

 

 

 

 

 

117,184

 

 

 

 

 

 

117,184

 

Stock Compensation Expense

 

 

 

 

 

4,088

 

 

 

 

 

 

 

 

 

4,088

 

Stock Option Exercise and Restricted Share Issuances

 

 

 

 

 

105

 

 

 

 

 

 

 

 

 

105

 

Purchase and Retirement of Common Stock

 

 

(9

)

 

 

(4,193

)

 

 

(99,298

)

 

 

 

 

 

(103,500

)

Dividends to Shareholders

 

 

 

 

 

 

 

 

(9,090

)

 

 

 

 

 

(9,090

)

Unfunded Pension Liability, net of tax

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

23

 

Balance at December 31, 2022

 

$

362

 

 

$

 

 

$

1,168,257

 

 

$

(3,105

)

 

$

1,165,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common
Stock

 

 

Capital in
Excess of
Par Value

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
Losses

 

 

Total

 

 

 

(dollars in thousands)

 

Balance at March 31, 2023

 

$

358

 

 

$

 

 

$

1,188,883

 

 

$

(3,547

)

 

$

1,185,694

 

Net Earnings

 

 

 

 

 

 

 

 

120,849

 

 

 

 

 

 

120,849

 

Stock Compensation Expense

 

 

 

 

 

6,457

 

 

 

 

 

 

 

 

 

6,457

 

Stock Option Exercises and Restricted Share Issuances

 

 

2

 

 

 

10,383

 

 

 

 

 

 

 

 

 

10,385

 

Shares Redeemed to Settle Employee Taxes

 

 

(1

)

 

 

(1,359

)

 

 

 

 

 

 

 

 

(1,360

)

Purchase and Retirement of Common Stock

 

 

(5

)

 

 

(15,481

)

 

 

(59,313

)

 

 

 

 

 

(74,799

)

Dividends to Shareholders

 

 

 

 

 

 

 

 

(8,863

)

 

 

 

 

 

(8,863

)

Unfunded Pension Liability, net of tax

 

 

 

 

 

 

 

 

 

 

 

48

 

 

 

48

 

Balance at June 30, 2023

 

$

354

 

 

$

 

 

$

1,241,556

 

 

$

(3,499

)

 

$

1,238,411

 

Net Earnings

 

 

 

 

 

 

 

 

150,553

 

 

 

 

 

 

150,553

 

Stock Compensation Expense

 

 

 

 

 

4,542

 

 

 

 

 

 

 

 

 

4,542

 

Stock Option Exercise and Restricted Share Issuances

 

 

 

 

 

1,084

 

 

 

 

 

 

 

 

 

1,084

 

Shares Redeemed to Settle Employee Taxes

 

 

 

 

 

(1,134

)

 

 

 

 

 

 

 

 

(1,134

)

Purchase and Retirement of Common Stock

 

 

(4

)

 

 

(4,492

)

 

 

(73,541

)

 

 

 

 

 

(78,037

)

Dividends to Shareholders

 

 

 

 

 

 

 

 

(8,833

)

 

 

 

 

 

(8,833

)

Unfunded Pension Liability, net of tax

 

 

 

 

 

 

 

 

 

 

 

48

 

 

 

48

 

Balance at September 30, 2023

 

$

350

 

 

$

 

 

$

1,309,735

 

 

$

(3,451

)

 

$

1,306,634

 

Net Earnings

 

 

 

 

 

 

 

 

129,138

 

 

 

 

 

 

129,138

 

Stock Compensation Expense

 

 

 

 

 

4,357

 

 

 

 

 

 

 

 

 

4,357

 

Stock Option Exercise and Restricted Share Issuances

 

 

 

 

 

91

 

 

 

 

 

 

 

 

 

91

 

Purchase and Retirement of Common Stock

 

 

(5

)

 

 

(4,448

)

 

 

(94,051

)

 

 

 

 

 

(98,504

)

Dividends to Shareholders

 

 

 

 

 

 

 

 

(8,603

)

 

 

 

 

 

(8,603

)

Unfunded Pension Liability, net of tax

 

 

 

 

 

 

 

 

 

 

 

48

 

 

 

48

 

Balance at December 31, 2023

 

$

345

 

 

$

 

 

$