Eagle materials inc. reports continued strong growth in sales volumes
and earnings in the second quarter
Dallas--(business wire)--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. 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. attachment 1 statement of consolidated earningsattachment 2 revenues and earnings by lines of business (quarter and six months)attachment 3 sales volume, net sales prices and intersegment and cement revenuesattachment 4 consolidated balance sheets eagle materials inc. september 30, september 30, interest expense, net income tax expense eagle materials inc. september 30, september 30, eagle materials inc. september 30, september 30, september 30, september 30, *net of freight and delivery costs billed to customers. september 30, september 30, cement eagle materials inc. eagle materials inc. consolidated balance sheets (dollars in thousands) (unaudited) september 30, march 31, 2013 2012 2013* assets 8,149 $ - liabilities and stockholders’ equity - -
