Attached files

file filename
8-K - FORM 8-K - EAGLE MATERIALS INCd862057d8k.htm

Exhibit 99.1

 

LOGO

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 RECORD QUARTERLY RESULTS

DALLAS, TX (February 3, 2015) – Eagle Materials Inc. (NYSE: EXP) today reported financial results for the third quarter of fiscal 2015 which ended December 31, 2014. Notable items for the quarter in relation to the prior-year’s third quarter include:

 

    Record quarterly revenues of $292 million, up 27%
    Record third quarter cement earnings of $37.6 million, up 44%
    Record quarterly paperboard earnings of $9.1 million, up 37%
    Wallboard earnings of $40.0 million, up 30%
    Record third quarter earnings per diluted share of $1.03, up 63%

Sales volumes improved across all major business lines, with cement volumes setting a third quarter record of over 1.2 million tons sold. Net sales prices also strengthened across all businesses, with average wallboard and cement sales prices increasing 11% and 8%, respectively, over the prior year’s third quarter.

On November 14, 2014, Eagle completed its previously announced acquisition of CRS Proppants LLC and its subsidiaries, including Great Northern Sand LLC (CRS Proppants). Eagle used cash proceeds from borrowings under its bank credit facility to fund the purchase price of $237.2 million. The results of operations of CRS Proppants are included in the results disclosed in this press release for the period from November 14 through December 31, 2014.

Cement, Concrete and Aggregates

Operating earnings from Cement for the third quarter were $37.6 million, a 44% increase from the same quarter a year ago. The earnings increase resulted from record third quarter sales volumes and increased average net cement sales prices.

Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $124.0 million, 17% greater than the same quarter last year. The revenue improvement reflects an 8% increase in our third quarter Cement sales volume. Our average net cement sales price this quarter was $93.76 per ton, 8% higher than the same quarter last year.

Concrete and Aggregates reported operating earnings of $1.6 million for the third quarter, a $3.1 million improvement from the same quarter a year ago, reflecting improved concrete and aggregates pricing along with improved concrete sales volumes.


Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard’s third quarter operating earnings of $49.1 million were up 31% compared to the same quarter last year. Improved Gypsum Wallboard net sales prices and increased Gypsum Wallboard and Paperboard sales volumes were the primary drivers of the quarterly earnings increase.

Gypsum Wallboard and Paperboard revenues for the third quarter totaled $144.2 million, a 16% 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. The average gypsum wallboard net sales price for the third quarter was $158.95 per MSF, 11% greater than the same quarter a year ago. Gypsum Wallboard sales volume for the quarter of 610 million square feet (MMSF) represents a 4% increase from the same quarter last year. The average Paperboard net sales price for this quarter was $504.30 per ton, about flat with the same quarter a year ago. Record Paperboard sales volumes for the quarter were 77,000 tons, 17% higher than the same quarter a year ago.

Oil and Gas Proppants

Oil and Gas Proppants reported third quarter revenues of $31.7 million and operating earnings of $3.2 million. During this year’s third quarter, we continued to process and sell purchased sand while we built up inventory of our internally produced sand at our 1.5 million ton Corpus Christi facility.

Details of Financial Results

Beginning in our fiscal 2015, we have begun reporting our frac-sand business as a separately reportable segment – Oil and Gas Proppants. The results of this business were previously included in our Concrete and Aggregates segment during the start-up phase and have been reclassified to conform to the current year’s presentation.

Acquisition and Litigation Expense consists of costs related to our acquisition of CRS Proppants and certain legal fees. Direct acquisition costs were approximately $0.7 million (pre-tax) during the quarter ended December 31, 2014.

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.

 

2


About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates, and Oil and Gas Proppants from 40 facilities across the US. Eagle is headquartered in Dallas, Texas.

 

3


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 Wednesday, February 4, 2015. 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.

###

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; fluctuations in activity in the oil and gas industry, including the level of fracturing activities; 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. These and other factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014. These reports are filed with the Securities and Exchange Commission. With respect to our acquisition of CRS Proppants, 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, failure to realize the expected synergies or other benefits of the transaction, significant transaction costs or unknown liabilities, changes in market conditions in the frac sand and related industries and general economic and business conditions that may affect us after the acquisition. 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

 

Attachment 1 Statement of Consolidated Earnings
Attachment 2 Revenues and Earnings by Lines of Business (Quarter and Nine Months)
Attachment 3 Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
Attachment 4 Consolidated Balance Sheets

 

4


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,
 
  2014   2013   2014   2013  

Revenues

$ 291,529    $ 228,812    $ 842,588    $ 708,502   

Cost of Goods Sold

  212,380      178,964      631,977      552,571   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

  79,149      49,848      210,611      155,931   

Equity in Earnings of Unconsolidated JV

  12,423      9,856      34,274      27,481   

Other, net

  488      400      2,050      1,300   

Acquisition and Litigation Expenses

  (722        (2,825     

Corporate General and Administrative Expense

  (9,371   (6,796   (23,827   (18,450
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Interest and Income Taxes

  81,967      53,308      220,283      166,262   

Interest Expense, Net

  (4,101   (4,475   (12,054   (14,225
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before Income Taxes

  77,866      48,833      208,229      152,037   

Income Tax Expense

  (25,836   (17,212   (68,170   (50,412
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Earnings

$ 52,030    $ 31,621    $ 140,059    $ 101,625   
  

 

 

   

 

 

   

 

 

   

 

 

 

EARNINGS PER SHARE

Basic

$ 1.05    $ 0.64    $ 2.82    $ 2.07   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

$ 1.03    $ 0.63    $ 2.78    $ 2.03   
  

 

 

   

 

 

   

 

 

   

 

 

 

AVERAGE SHARES OUTSTANDING

Basic

  49,655,405      49,294,010      49,583,210      49,091,476   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  50,411,147      50,162,962      50,375,619      49,948,178   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5


Eagle Materials Inc.

Attachment 2

Eagle Materials Inc.

Revenues and Segment Operating Earnings by Lines of Business

(dollars in thousands)

(unaudited)

 

  Quarter Ended
December 31,
  Nine Months Ended
December 31,
 
  2014   2013   2014   2013  

Revenues*

Gypsum Wallboard and Paperboard:

Gypsum Wallboard

$ 118,573    $ 104,158    $ 342,905    $ 299,099   

Gypsum Paperboard

  25,631      19,703      70,349      59,646   
  

 

 

   

 

 

   

 

 

   

 

 

 
  144,204      123,861      413,254      358,745   

Cement (Wholly Owned)

  88,652      76,832      291,461      267,007   

Oil and Gas Proppants

  31,731      3,960      53,325      6,153   

Concrete and Aggregates

  26,942      24,159      84,548      76,597   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

$ 291,529    $ 228,812    $ 842,588    $ 708,502   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Operating Earnings

Gypsum Wallboard and Paperboard:

Gypsum Wallboard

$ 40,013    $ 30,730    $ 114,443    $ 90,234   

Gypsum Paperboard

  9,102      6,661      24,633      19,277   
  

 

 

   

 

 

   

 

 

   

 

 

 
  49,115      37,391      139,076      109,511   

Cement:

Wholly Owned

  25,155      16,155      62,261      49,970   

Joint Venture

  12,423      9,856      34,274      27,481   
  

 

 

   

 

 

   

 

 

   

 

 

 
  37,578      26,011      96,535      77,451   

Oil and Gas Proppants

  3,241      (2,161   3,315      (3,967

Concrete and Aggregates

  1,638      (1,537   5,959      417   

Other, net

  488      400      2,050      1,300   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

  92,060      60,104      246,935      184,712   

Acquisition and Litigation Expenses

  (722        (2,825     

Corporate General and Administrative Expense

  (9,371   (6,796   (23,827   (18,450
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Before Interest and Income Taxes

$ 81,967    $ 53,308    $ 220,283    $ 166,262   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

* Net of Intersegment and Joint Venture Revenues listed on Attachment 3

 

6


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,
 
  2014   2013   Change   2014   2013   Change  

Gypsum Wallboard (MMSF’s)

  610      584      +4   1,746      1,670      +5

Cement (M Tons):

Wholly Owned

  935      876      +7   3,135      3,037      +3

Joint Venture

  270      239      +13   837      753      +11
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
  1,205      1,115      +8   3,972      3,790      +5

Paperboard (M Tons):

Internal

  28      27      +4   83      79      +5

External

  49      39      +26   136      118      +15
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
  77      66      +17   219      197      +11

Concrete (M Cubic Yards)

  246      231      +6   767      723      +6

Aggregates (M Tons)

  682      709      -4   2,372      2,606      -9

 

                                                                                               
  Average Net Sales Price*  
  Quarter Ended
December 31,
  Nine Months Ended
December 31,
 
  2014   2013   Change   2014   2013   Change  

Gypsum Wallboard (MSF)

$ 158.95    $ 143.40      +11 $ 160.23    $ 144.54      +11

Cement (Ton)

$ 93.76    $ 87.01      +8 $ 91.43    $ 86.10      +6

Paperboard (Ton)

$ 504.30    $ 504.08      0 $ 505.09    $ 504.64      0

Concrete (Cubic Yard)

$ 89.00    $ 84.88      +5 $ 86.77    $ 82.02      +6

Aggregates (Ton)

$ 7.36    $ 6.46      +14 $ 7.54    $ 6.70      +13

 

* Net of freight and delivery costs billed to customers.

 

                                                                                       
  Intersegment and Cement Revenues  
  Quarter Ended
December 31,
  Nine Months Ended
December 31,
 
  2014   2013   2014   2013  

Intersegment Revenues:

Cement

$ 2,489    $ 2,556    $ 7,760    $ 7,503   

Paperboard

  14,305      13,993      42,645      40,855   

Concrete and Aggregates

  174      217      691      889   
  

 

 

    

 

 

    

 

 

    

 

 

 
$ 16,968    $ 16,766    $ 51,096    $ 49,247   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cement Revenues:

Wholly Owned

$ 88,652    $ 76,832    $ 291,461    $ 267,007   

Joint Venture

  32,907      26,190      98,624      81,972   
  

 

 

    

 

 

    

 

 

    

 

 

 
$ 121,559    $ 103,022    $ 390,085    $ 348,979   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

7


Eagle Materials Inc.

Attachment 4

Eagle Materials Inc.

Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 

  December 31,   March 31,
2014*
 
  2014   2013  

ASSETS

Current Assets –

Cash and Cash Equivalents

$ 13,697    $ 7,424    $ 6,482   

Accounts and Notes Receivable, net

  136,823      96,357      102,917   

Inventories

  207,043      173,871      187,096   

Federal Income Tax Receivable

              

Prepaid and Other Assets

  4,995      5,074      10,465   
  

 

 

   

 

 

   

 

 

 

Total Current Assets

  362,558      282,726      306,960   
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment –

  1,929,177      1,647,138      1,660,975   

Less: Accumulated Depreciation

  (724,351   (662,734   (676,924
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, net

  1,204,826      984,404      984,051   

Investments in Joint Venture

  47,167      41,178      43,008   

Notes Receivable

  2,890      3,208      3,063   

Goodwill and Intangibles

  206,208      161,117      160,690   

Other Assets

  34,402      14,631      13,757   
  

 

 

   

 

 

   

 

 

 
$ 1,858,051    $ 1,487,264    $ 1,511,529   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities –

Accounts Payable

$ 68,466    $ 47,586    $ 57,098   

Accrued Liabilities

  45,269      39,622      41,520   

Federal Income Tax Payable

  1,508      6,835      702   

Current Portion of Long-term Debt

  57,045      9,500      9,500   
  

 

 

   

 

 

   

 

 

 

Total Current Liabilities

  172,288      103,543      108,820   
  

 

 

   

 

 

   

 

 

 

Long-term Liabilities

  84,911      52,317      53,678   

Bank Credit Facility

  335,000      200,000      189,000   

Senior Notes

  125,714      182,759      182,759   

Deferred Income Taxes

  167,116      143,217      145,773   

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 50,277,425; 49,964,881 and 50,053,738 Shares, respectively

  503      500      501   

Capital in Excess of Par Value

  269,736      246,161      253,524   

Accumulated Other Comprehensive Losses

  (5,165   (6,577   (5,483

Retained Earnings

  707,948      565,344      582,957   
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

  973,022      805,428      831,499   
  

 

 

   

 

 

   

 

 

 
$ 1,858,051    $ 1,487,264    $ 1,511,529   
  

 

 

   

 

 

   

 

 

 

 

* From audited financial statements.

 

8