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21-05-2025
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Q4 2025 Eagle Materials Inc Earnings Call
Michael Haack; President, Chief Executive Officer, Director; Eagle Materials Inc D. Craig Kesler; Chief Financial Officer, Executive Vice President - Finance and Administration; Eagle Materials Inc Brian Brophy; Analyst; Stifel Nicolaus Trey Grooms; Analyst; Stephens Inc. Asher Sohnen; Analyst; Citigroup Inc Jerry Revich; Analyst; Goldman Sachs Adam Thalhimer; Analyst; Thompson Davis Philip Ng; Analyst; Jefferies Jonathan Bettenhausen; Analyst; Truist Securities, Inc. Operator Good day, everyone, and welcome to Eagle Materials fourth quarter and fiscal 2025 earnings conference call. This call is being recorded. And at this time, I'd like to turn the floor over to Eagle's President and Chief Executive Officer, Mr. Michael Haack. Mr. Haack, please go ahead, sir. Michael Haack Thank you, Jamie, and welcome, everyone. Joining me today are Craig Kesler, our Chief Financial Officer; and Alex Haddock, Senior Vice President of Investor Relations, Strategy and Corporate Development. There will be a slide presentation made in connection with this call. To access it, please go to and click on the link to the webcast. While you're accessing the slides, please note that the first slide covers our cautionary disclosure regarding forward-looking statements made during this call. These statements are subject to risks and uncertainties that could cause results to differ from those discussed during the call. For further information, please refer to this disclosure, which is also included at the end of our press release. As our fiscal year ends, it allows me some time to look back on our performance and reflect on the year in totality. There is no question that this year has had its challenges. The true measure of an individual or a company is how they respond to those challenges. I'm extremely grateful to lead a company that has dedicated employees that have made this company stronger. Without this dedication, Eagle would not have been successful. So I want to thank every Eagle employee for making Eagle a better company. I also want to spend a few minutes highlighting what Eagle was able to accomplish this past fiscal year. I want to start these comments with a topic that is Eagle's top priority, employee health and safety. You have heard me state in the past that we are proud of our industry-leading safety record. But this year, I am more impressed that we were able to achieve our lowest total recordable injury rate or TRIR in company history. This was coupled with a 25% increase in our hazard observation or near miss reporting, showing that our safety culture is well established and self-sustaining. Over this next year, we will continue to progress our safety culture with the rollout of a program called Eagle Safe, a series of standardized company-wide best practices and procedures to focus our efforts on critical safety issues. I'm a true believer that if you have diligence around safety, then you have a culture that strives for diligence around every other aspect in the business, leading to improved results holistically. This is the case for Eagle, where I am proud to say that this year marks our fourth consecutive year of record financial results, having generated record fiscal year revenue of $2.3 billion and record earnings per share of $13.77. This was accomplished with day-to-day headline noise surrounding the economy, but with focus, our businesses have continued to perform well and operate efficiently. Next, I want to talk about the efforts we have made with regards to sustainability. You will see a lot of information on the projects we have in process or that are completed in our sustainability report that will be published this summer. For now, let me share a few highlights. We are on track to complete an upgrade of our wastewater treatment facility at our paper mill this summer. This $22 million project, when completed, will reduce our water consumption by approximately 50% through a more closed-loop system. It will also allow us to return water that is already heated to the process, hence, reducing our energy consumption and improving our efficiency. In our Cement business, we completed our Illinois cement plant's alternative fuel feeder that will enable the plant to run more alternative fuels. We are also nearing completion of a project at Kosmos Cement facility to expand the use of recycled tires that would otherwise be landfilled. All our environmental projects are similar to these examples. They have meaningful economic benefits, driving efficiency and lowering costs as we reduce usage of water, solid fuels and other raw materials. Additionally, our deployment of capital in fiscal 2025 allowed us to strategically expand our ability to serve our customers across our geographic footprint. These investments are both acquisitions and organic investments. I will highlight a few of these. Within Aggregates, a key growth area for us, we acquired two pure-play aggregate operations, one in Kentucky and the other in Western Pennsylvania, enhancing our ability to serve these markets, which are complementary to our existing heavy side footprint. Integration of both operations is going well, and both businesses are already contributing to Eagle. These two additions will increase Eagle's aggregate production capacity by 50%. In Cement, we completed commissioning of our Texas Lehigh slag facility this winter, and production will ramp up throughout this upcoming fiscal year, providing additional cementitious tons to the Texas market. In Northern Colorado area, our Mountain Cement plant expansion continues to be on time and on budget. This next fiscal year, we'll see a major ramp-up in construction efforts and capital expenditure. Like the other projects I mentioned above, the Mountain Cement modernization will have meaningful economic benefits as well as environmental benefits, utilizing alternative fuels and lowering our CO2 intensity per ton. Lastly, we announced last week, we have initiated a project to modernize and expand our Duke, Oklahoma gypsum wallboard facility. The modernized plant takes advantage of our decades-long natural gypsum position at Duke and upgrades the facility with state-of-the-art technology, enhancing Eagle's low-cost producer position and strengthening our competitive advantage as the rest of the industry continues to struggle to source synthetic gypsum. Duke is advantaged geographically, allowing the plant to serve customers throughout the high-growth South and Southeast markets. The project is expected to cost about $330 million and start-up is scheduled for the second half of calendar 2027. Our ability to execute on these investment opportunities is underpinned by our capital allocation principles and our balance sheet strength. In fiscal 2025, we completed over $175 million of M&A transactions and increased our capital expenditure for the Mountain Cement project while ending the year with a net leverage ratio of 1.5 times. And even while investing our excess free cash flow in these high-return projects, we continue to return capital to shareholders, distributing $332 million of cash to shareholders through share repurchases and dividends. In summary, FY 2025 was a good year for Eagle. We held to our strategy that has always served us well and demonstrates that in periods of uncertainty like we're facing today, Eagle's steady focus on investing through cycles, not just for a point in the cycle, enables us to navigate through turbulence, continue to perform well and position ourselves for the future. In fact, as a 100% US domestic manufacturer, we feel well equipped to weather the variety of potential tariff outcomes and the uncertainty it has created for the US economy more broadly. Let me now give some color on our fourth quarter performance and outlook. Our fourth quarter results reflect the impact of adverse weather on our Cement and Concrete and Aggregates businesses, which was severe enough to cause production interruptions at some of our facilities. We made the decision to constructively use the downtime caused by the poor weather to pull forward the annual maintenance outage at our Texas Lehigh Cement facility. Despite the recent choppiness in our Heavy Materials financial performance, we believe the underlying fundamentals in the sector remain solid. Demand and supply dynamics remain favorable across all of our business lines, and we are positioned to benefit from these dynamics. In the Cement sector, we have seen no material disruption in award funding for public infrastructure projects. Our customers report healthy bidding activities and are anticipating a rebound from the softer 2023 and 2024 demand realization. Looking out further, there's continued bipartisan support for infrastructure funding, which should be additive to cement consumption for the next several years. Turning to the residential outlook, which is a primary end market driver for our Wallboard businesses. In many ways, we are in a similar place to where we've been for the last several years. While high mortgage rates and housing affordability challenges continue to exert downward pressure on single-family housing starts, this pressure is mitigated somewhat by the clear need for new housing and overall pent-up buyer demand. Ultimately, new home construction will be needed to address the affordability issue. Thus, we believe it's a matter of when, not if single-family housing starts will rebound. Turning to supply. We believe the outlook in both cement and Wallboard is unlikely to change in the medium term. Significant capacity constraints persist in both cement and wallboard. As a result, even in an environment like last year, where cement volumes were down and wallboard volumes remain subdued versus historical figures, both sectors continue to see relatively elevated utilization rates. As we look forward three to five years and beyond, we believe both the demand and supply dynamics will continue to support our business. Our strategy of steady investment through economic cycles and volatile market conditions positions us well to capture the benefits of these dynamics. We are committed to health, safety, sustainability, investing in every one of our plants to maintain our reserves position and keep them in like new condition, expanding our geographic and customer footprint through compelling organic and M&A investments and maintaining capital allocation discipline. Those are just some of the reasons why we've been able to outperform and provide value for our shareholders through varied economic cycles and why we continue to do so. Lastly, before I turn it over to Craig, I want to highlight a governance-related announcement we made earlier this month. On May 15, we announced the appointment of David Rush to our Board of Directors. Dave is the retired CEO of Builders FirstSource. And prior to being CEO at Builders, he held a variety of senior executive roles over his nearly 30-year career there. Dave brings a wealth of valuable industry and management experience, and we are thrilled to add him to the Board. With that, I'll turn it over to Craig. D. Craig Kesler Thank you, Michael. Fiscal year 2025 revenue was a record $2.3 billion, up slightly from the prior year. The increase primarily reflects higher prices across all of our business lines, partially offset by lower Cement and Concrete and Aggregate sales volume. Revenue for the fourth quarter was down 1% to $470 million, primarily reflecting lower cement and gypsum wallboard sales volumes, partially offset by higher cement and aggregate prices. Diluted earnings per share for the full fiscal year increased 1% to $13.77. The increase was due to the reduced share count resulting from our share repurchase program, which more than offset the net earnings decline. Fully diluted shares were down 4% from the prior year and are down 20% in the last five years. Fourth quarter earnings per share was down 11%, largely because of heavy materials results in the quarter when the Cement and Concrete and Aggregates businesses were affected by adverse weather and maintenance costs in the Cement business increased. Our quarterly results were also affected by approximately $3.4 million of acquisition accounting and related expenses. Adjusting for these items, fourth quarter diluted earnings per share were down 7%. Turning now to segment performance highlighted on the next slide. In our Heavy Materials sector, which includes our Cement and Concrete and Aggregates segments, annual revenue declined 2% to $1.4 billion. The decline reflects lower cement sales volume, which was down 5% and was partially offset by higher sales prices. The two aggregates businesses acquired during the year contributed approximately $12 million to annual revenue. Annual operating earnings in the heavy materials sector declined 11% to $311 million, again, reflecting lower sales volume, partially offset by higher cement prices. During the fourth quarter, Heavy Materials operating earnings declined 50% to $18.3 million. As Michael mentioned, adverse weather conditions during the fourth quarter, most notably in February, caused disruption to not only cement sales opportunities, but also to cement operations. We estimate the operational impact from equipment downtime to be $4 million to $5 million. In addition, we pulled forward our annual maintenance outage at the joint venture to March versus April in the prior year, and the joint venture started up its new slag cement facility in Houston. The combined impact on joint venture results from the timing change of the annual outage and the commissioning cost for the new facility was approximately $4 million. Our fourth quarter cement price was up 2%. Moving to the light materials sector on the next slide. Annual revenue in our Light Materials sector increased 3% to $969 million, driven by higher wallboard sales prices and record Recycled Paperboard sales volume. Annual operating earnings increased 3% to $389 million, also because of higher wallboard sales prices and record paperboard sales volume, plus lower energy and freight costs. Looking now at our cash flow. We continue to generate healthy cash flow and allocate capital in line with our strategic priorities and rigorous financial return criteria. Operating cash flow in fiscal 2025 totaled $549 million. Capital spending increased to $195 million as we continue to invest in and improve our operations. Most of the increase in capital spending was associated with the modernization and expansion of our Mountain Cement plant, which began construction in July. As a reminder, the plant is being upgraded from the existing two long dry kilns to a single modern precalciner kiln line, which will significantly improve energy efficiency and simplify maintenance programs, resulting in cost savings of approximately 25%. The project will also increase plant capacity by 50%, enhancing our ability to serve the growing Northern Colorado market. And as Michael mentioned, last week, we announced plans to modernize our Oklahoma Wallboard plant, which will further improve its competitive position. The total investment is $330 million, and construction is expected to start later this year. Considering these two projects as well as our sustaining capital spending, we expect total company capital spending in fiscal 2026 to increase to a range of $475 million to $525 million. During fiscal 2025, we acquired two aggregates businesses for approximately $175 million. The previously announced acquisition of Bullskin Stone & Lime was completed in early January and was funded with cash on hand and borrowings under our bank credit facility. Also, during the year, we paid $34 million in dividends and repurchased approximately 1.2 million shares of our common stock or 4% of the outstanding for $298 million. We have 4.7 million shares remaining under our current repurchase authorization. Finally, a look at our capital structure, which continues to give us significant financial flexibility. At March 31, 2025, our net debt-to-cap ratio was 46%, and our net debt-to-EBITDA leverage ratio was 1.5 times. We ended the year with $20 million of cash on hand. Total liquidity at the end of the fiscal year was approximately $560 million, and we have no meaningful near-term debt maturities, giving us substantial financial flexibility. Thank you for attending today's call. Jamie will now move to the question-and-answer session. D. Craig Kesler (Operator Instructions) Brian Brophy, Stifel. Brian Brophy So just at a high level, you guys have had a number of large modernization expansion efforts here recently. Can you remind us how you philosophically think about deploying capital into these projects? How do you think about return on capital hurdles, payback periods or anything else we should keep in mind? Michael Haack Yeah, I'll answer part of that, and Craig will probably jump in with some, is we've always been pretty open on how we look at our operations and how we keep them in as good a condition as possible and in favorable markets. We've run strategies on basically every single one of our facilities, and these two have just shown themselves as great investments for us. We like to invest in assets we know and markets we know, and we think both of these are high-return projects that will add significant value to our customers. D. Craig Kesler Yeah. And Brian, look, I'd add to that. Yeah, these are two significant projects, good returns. We have bogeys internal hurdle rates of 15% cash-on-cash after-tax type of returns. And these are projects, and we've done similar projects in our history that have been fantastic return projects for us, really improving the competitive position of both of these facilities in really good returning markets or growing markets. And then last but not least, given where the balance sheet sits today, right around 1.5 times, that also does -- these projects don't preclude us from continuing to explore M&A opportunities and continuing to return capital. So we positioned ourselves really well here. Brian Brophy Yeah, that's really helpful. And then in the deck, you talked about -- in your comments you talked about some expansion to utilize alternative fuels on the cement side of the business. Can you add any more color here? What type of alternative fuels are you able to utilize? And how should we be thinking about that impacting your ability to manage costs on the energy side? Michael Haack Yeah. So we look at all of our facilities for what we're burning as fuels. The two that mentioned today are really using tires at our Kosmos cement facility and an alternative fuel feeder at Illinois Cement. That feeder will allow us to burn multiple different products. Right now, we're burning tire chips at that facility with it. How we view these projects is for a CO2 benefit and also for flexibility in the fuel source themselves that we could switch from one fuel source to another opportunistically as the pricing looks beneficial for us at the facilities. We will continue to look for other alternative fuel source projects across our cement plants. That's really helpful. I'll pass it on. Operator Trey Grooms, Stephens. Trey Grooms So if we could maybe dive into the wallboard pricing down a few dollars sequentially in the quarter. You mentioned increased freight costs. And clearly, your wallboard prices reported net of freight, so that makes sense. But how did the like-for-like wallboard pricing trend through the quarter and maybe thus far through your fiscal 1Q? And should this higher kind of freight costs in the quarter, should that continue here? D. Craig Kesler Yeah. Look, Trey, I would tell you the kind of exit price was not that far off of what the quarterly average was. And we are moving forward on a price increase in Wallboard here this spring. And so I really won't talk much about kind of post the quarter pricing until we get to the next call in July where we can talk about the realization of that. But look, it's interesting. The freight cost being higher, that's at least half of the sequential decline. We've seen that in a couple of markets where things are a little busier than I think people expected, at least on the trucking side. So that was the majority of the change there. Trey Grooms Yeah. Okay. Got it. Makes sense. And then on that note with wallboard volume held in well in the quarter, maybe a little better than some of the industry numbers may have suggested through the quarter. Can you talk about maybe your expectations around volume here as we move into the seasonally busier season. Should it continue at this kind of level of change? Or should there be any shifts there? Or kind of what -- anything -- any update on kind of what you're seeing on the demand front? D. Craig Kesler Yeah. Trey, as we've said for years, I think we are well positioned geographically in better-than-average markets. So we look at the performance of our business, not just quarterly but over a trailing 12-month basis. And I think our markets maybe outperform slightly, but pretty much in line with the marketplace. Look, as it comes to the overall demand picture, it's been interesting. Homebuilding, which has been pretty tepid for the last three or four years and annual consumption of wallboard in the US has been pretty flat for several years now. Sitting here today, our outlook is homebuilding to kind of remain in the same level. Michael mentioned it, and we've talked a lot about interest rates and the sensitivities around homebuilding affordability. The demand is there. It's just how do you have people being able to afford getting to these homes. But the -- we're underbuilt in the US, and we've been underbuilt for quite some time. But until you can fix the interest rate and affordability issue, I think you're rangebound here for a while. Operator Anthony Pettinari, Citigroup. Asher Sohnen This is Asher Sohnen on for Anthony. I think you mentioned that there wasn't really any impact on like public demand from macro uncertainty. But I was wondering what that might look like for your private non-res or commercial end markets and what you're seeing there right now quarter-to-date? D. Craig Kesler Yeah. And good question. It really is a bigger driver on the cement side. Private non-res is not a big driver for wallboard, but it's probably, call it, 25% or so for the cement demand. And the private non-res has so many different subcategories, including data centers and warehouses and large manufacturing facilities in addition to hospitals and commercial office buildings and the like. So very different. And then geographically, the answer can be very different. But as we look at the overall picture, there's a large number of big projects that are multiyears in length. So again, it's been a growing market for us for a while. I think it remains a pretty steady business for us and especially in our geographic markets. Asher Sohnen Got it. That's helpful. And then just switching gears, and forgive me if I missed this, but how should we think about the cadence of spending for the Duke modernization. D. Craig Kesler As we said, we should start up construction sometime later this year, late summer, fall time frame. And the cadence will be pretty heavy here in fiscal '26 in the $475 million to $525 million level for total company capital spending. Obviously, that includes Mountain Cement plus the Duke Wallboard facility and our sustaining capital. And then I would expect to see that start to trail off a little bit into fiscal '27 as the Mountain Cement project will complete late calendar '26 or late fiscal '27. Operator Jerry Revich, Goldman Sachs. Jerry Revich I'm wondering if you could just talk about in cement, obviously, the cadence of pricing for the industry is slowing a bit. Can you folks just talk about based on the pricing and cost visibility that you see over the next three to six months, do you expect pricing to be ahead of inflation? I know we've got moving pieces in terms of maintenance timing, et cetera. But conceptually, how do you feel about price cost in cement over the next three to six months? D. Craig Kesler Yeah, Jerry, I think I would tell you rather than looking at just the next three to six months because our primary outage season is April and May. So the June quarter always has quite a bit of costs associated with that program. But as you look at the year, on the cost side, energy prices or costs have been pretty flat here for a little while. Electricity costs are up slightly. But on the balance, I think as we look across our network, we think we can continue to improve margins from here. The exact cadence of that over the next year or two years to be determined. And obviously, a lot of that is going to be driven by the volume outlook as well. The incrementals on additional volume is important. And whereas we've come off of two years in a row with lower volume across the country for the US Cement business. So a rebound in volumes would also go a long way towards improving the margins of the business. Jerry Revich Okay. And then in terms of the Wallboard business in Texas, there's a significant importer of wallboard from Mexico. Can you just talk about what impact you're seeing on pricing from tariffs in wallboard? And then in Cement, can you just talk about what benefits you could focus with (multiple speakers) Michael Haack Jerry, when we look at it for both Mexico and Canada, wallboard and cement are both excluded. So there is no tariff impact to any imports coming in from either of those countries. So really, the tariffs are very low impact to us as a domestic manufacturer, and there's not really a lot of other imports other than the cement side. When you look at the tariffs on cement, most of the countries right now are at a 10% tariff for their product. That's off of the -- really the cost loaded into the ship. So when you're looking at a large component of a cement ton landing in the United States is the shipping cost. So when you back that out, a lot of the cement coming into the US only has a $4 to $5, maybe $6 tariff associated with it. So it's not a substantial impact to the business one way or the other. Jerry Revich Appreciate it. And then lastly, can I ask in terms of wallboard really attractive margins considering we're sitting at just north of 1.3 million starts. As you folks think about price cost in that business over the next, call it, three to six months, can you just talk about the ebbs and flows? And how do you expect margins to play out on a year-over-year basis. You've got some tough comps coming up in the June quarter. D. Craig Kesler Yeah. Look, similar, Jerry, I would say, looking at it over a longer time period, I think we're very well positioned as a overall business, given the certainty that we have around our raw material reserves, notably on the Gypsum side. And so I think that is well positioned for us as homebuilding, when it does recover in a more meaningful way to continue to see some margin expansion from here. But I mean, look, in the immediate term, homebuilding, a lot of uncertainty, again, back around interest rates. And so the question is when does homebuilding recover? And that's when the real big opportunity to move pricing and therefore, margins. On the shorter end of the curve, natural gas has come down here recently. OCC prices are down recently. So those are all favorable from that perspective. But we're more focused on the longer term and when does homebuilding actually turn in our favor and therefore, wallboard demand really meaningfully move higher. I'd point out, Jerry, we've shipped in this country 36 billion square feet of product before, and we're shipping at an annual pace for the last four years around 28 billion square feet, plus or minus a couple of percent. So we're well off historical type of higher levels of shipments. Operator Adam Thalhimer, Thompson Davis. Adam Thalhimer Craig, the operating loss in Concrete and Aggregates in Q4, are you looking at that basically as a one-off? D. Craig Kesler Yeah. Good question, Adam. Look, we had an acquisition that closed during the fourth quarter. As I mentioned, you've got some purchase accounting that added some incremental additional costs there. Not to mention, you've got a full quarter of depreciation and amortization related to that business. So I would tell you, really look at the Concrete and Aggregates business on an EBITDA basis. And again, a lot of noise in this fourth quarter given the acquisition closing. But more broadly, look at it as a -- on an EBITDA basis. And once you peel through that, actually, we're pretty happy with where we are positioned with the aggregates business. And we've increased the production capacity there by 50% with these two acquisitions this year. So it's starting to really move the needle. Adam Thalhimer Okay. And then at the cement joint venture, are you looking at fiscal year '26 as a nice recovery year for that business? D. Craig Kesler Yeah. We've certainly put some investments into that business over the last 12 to 18 months. If you recall, we had a pretty large clinker cooler work done in the fall. We started up the slag business during the winter. That's been a drag on earnings as that business really starts to improve here with the paving season this summer, we would expect to see a meaningful improvement there. Adam Thalhimer And then just lastly, for modeling purposes, is there anything more to come from purchase accounting. So an impact there in the first half of '26? And then how much is left in the ERP costs you called out? D. Craig Kesler Yes. From a purchase accounting perspective, no, that was all contained really in our fourth quarter. And then on the IT side with our ERP system implementation, that will continue here into fiscal '26. So I would model the corporate SG&A at the same level. Operator Philip Ng, Jefferies. Philip Ng Cement volumes have been pretty muted the last few quarters, and part of that is weather related. So any update and color in terms of what activity you're seeing right now? Have you seen demand kind of bounce back with weather clearing out? Any color on orders, backlogs. Helpful to kind of get a little perspective on how demand is shaping up thus far on your heavy material side of things? D. Craig Kesler Yeah. No, you're right, Phil. It's been a slog for a couple of years, quite frankly, on the US cement side. Some of it's certainly weather, but there's no doubt, infrastructure spending has been very slow to materialize. We spent not quite even 35% of the infrastructure bill at this point. That's several years old. We would have expected those dollars to have benefited the business well before now. But encouragingly, as the weather has improved here in March and April, we've seen volumes start to improve. So that's been very encouraging from our perspective. Philip Ng Okay. So you're seeing positive year volumes at this point in April and March, correct? D. Craig Kesler That's right. Philip Ng Okay. Super. And then on the cement price increases, I believe you guys had some in the marketplace in April. Any update on how that has progressed? I know weather has been a little choppy. Cement is very regional in nature. So any color on how that's kind of shaping up across your portfolio? D. Craig Kesler Yeah. Most of those were slated for the April time frame. We try not to talk too much forward-looking around pricing. So we'll certainly give you that update as we get into -- on our July call as we talk about our first fiscal quarter. Philip Ng Okay. Helpful. And then from a wallboard demand standpoint, volumes were certainly down, call it, 3 points in the fourth quarter. Spring selling season has been pretty muted. Are you seeing choppy orders from your distributors? And any color on how we should think about inventory in the channel because we cover some other housing-related sectors like insulation, for example, order patterns do seem to be very choppy there. So curious if you're seeing any of that as well. D. Craig Kesler Yeah, Phil, I'd tell you, it's been choppy for a couple of years, just with a very muted single-family housing environment here in the US. And so not a lot of visibility. As you said, though, volumes have hung in there reasonably well in the grand scheme of things. So I would tell you, inventory in the channel, not as big of a thing in wallboard given that it's a perishable product, so you're not going to store it outside. And so not a lot of inventory in the grand scheme of things within the channel, either at the manufacturer level or even at the distributor level. But look, I think we're all waiting for the turnaround of affordability and interest rates to kind of move the needle. Operator Jonathan Bettenhausen, Truist. Jonathan Bettenhausen I'm on for Keith Hughes this morning. What kind of production downtimes, if any, do you expect from the existing lines at the Duke Wallboard facility while you work on that plant? D. Craig Kesler The existing lines will continue to operate as they have until the new line is complete. So very similar to the Mountain Cement project. Okay. Got it. And then what are your thoughts on the Aggregates deal pipeline? Are you guys going to target to do more of those acquisitions here in fiscal '26? Michael Haack Yes. So we always look at aggregate deals when they come around with it. The pipeline is pretty cyclical. We get a few every now and then that comes through. From our past history, you can see that we are a buyer in that space with it if it meets our criteria, which we will not stray from our criteria. We like them that -- tie into our network, have -- we feel we can get a great financial return from and that our entire network could benefit from those. So as they come available, we will continue to look in that space along with the other spaces we look in. Operator Ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Michael Haack for any closing comments. Michael Haack Thank you, Jamie, and thanks to all of you for joining the call today. Before we conclude, I want to acknowledge the hard work of our dedicated team members. It's their daily focus on operational excellence, safety and incremental efficiency gains that enables us to perform steadily in economic cycles. Regardless of the day-to-day and noise around us, we will continue to invest wisely in our businesses and capitalize on high value-enhancing opportunities in the year ahead and beyond. We look forward to talking to you in the summer. Operator Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
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Eagle Materials Inc. (EXP): A Bull Case Theory
We came across a bullish thesis on Eagle Materials Inc. (EXP) on Substack by Margin of Sanity. In this article, we will summarize the bulls' thesis on EXP. Eagle Materials Inc. (EXP)'s share was trading at $239.93 as of May 16th. EXP's trailing and forward P/E were 17.16 and 15.04 respectively according to Yahoo Finance. A long, winding concrete pump truck navigating a busy city street. Eagle Materials (EXP) represents a high-conviction position built around the unique structural advantages of the concrete industry. Concrete's defining feature—its weight—makes it uneconomical to ship over long distances, creating a highly localized, competition-insulated business. This results in natural regional monopolies where producers like Eagle dominate their markets. Over the past two decades, Eagle Materials has strategically acquired assets in fast-growing U.S. geographies, not only cornering key markets but also vertically integrating operations to become the lowest-cost producer in every area it serves. Alongside concrete, the company manufactures gypsum wallboard (sheetrock), further diversifying its product base while benefiting from overlapping demand drivers in construction. Financially, Eagle is exceptional: it trades at a modest ~16–17x P/E despite a ~30% return on equity and robust ~20% net margins. Its balance sheet is healthy, with enough cash and earnings power to pay off its debt in under three years. Management's discipline shows through consistent share buybacks, especially during stock dips—an encouraging sign for value investors. In times of industry stress, Eagle's financial strength enables it to acquire distressed competitors, further solidifying its market leadership. The company's strong competitive position, operational discipline, and attractive valuation make it a compelling investment. If Eagle Materials caught your interest, you might also appreciate our look at Vulcan Materials—a key player in the construction materials space. Eagle Materials Inc. (EXP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held EXP at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of EXP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EXP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
San Francisco Chronicle
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Eagle Materials: Fiscal Q4 Earnings Snapshot
DALLAS (AP) — DALLAS (AP) — Eagle Materials Inc. (EXP) on Tuesday reported fiscal fourth-quarter profit of $66.5 million. The Dallas-based company said it had net income of $2 per share. Earnings, adjusted for one-time gains and costs, were $2.08 per share. The results missed Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $2.34 per share. The maker of gypsum wallboard and cement posted revenue of $470.2 million in the period, also missing Street forecasts. Five analysts surveyed by Zacks expected $477.8 million. _____
Business Wire
20-05-2025
- Business
- Business Wire
Eagle Materials Announces Fourth Quarter and
DALLAS--(BUSINESS WIRE)--Eagle Materials Inc. (NYSE: EXP) today reported financial results for fiscal year 2025 and the fiscal fourth quarter ended March 31, 2025. Notable items for the fiscal year and quarter are highlighted below. (Unless otherwise noted, all comparisons are with the prior fiscal year or prior year's fiscal fourth quarter, as applicable.) Full Year Fiscal 2025 Highlights Record Revenue of $2.3 billion, up slightly from the prior year Net Earnings of $463.4 million, down 3% Record net earnings per diluted share of $13.77, up 1% Adjusted net earnings per diluted share (Adjusted EPS) of $13.94, up 2% Adjusted EPS is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 6 Adjusted EBITDA of $816.7 million, down 2% Adjusted EBITDA is a non-GAAP financial measure calculated by excluding non-routine items and certain non-cash expenses in the manner described in Attachment 6 Repurchased 1.2 million shares of Eagle's common stock for $298 million Fourth Quarter Fiscal 2025 Highlights Revenue of $470.2 million, down 1% Net earnings of $66.5 million, down 14% Net earnings per diluted share of $2.00, down 11% Adjusted net earnings per diluted share (Adjusted EPS) of $2.08, down 7% Adjusted EPS is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 6 Adjusted EBITDA of $141.2 million, down 9% Adjusted EBITDA is a non-GAAP financial measure calculated by excluding non-routine items and certain non-cash expenses in the manner described in Attachment 6 Repurchased approximately 418,000 shares of Eagle's common stock for $97 million Commenting on the annual results, Michael Haack, President and CEO, said, 'We are pleased to report another year of strong financial, strategic, and operational performance at Eagle. In fiscal 2025, we generated record revenue of $2.3 billion and gross profit margin of 29.8%, continued to advance our long-term growth and value-creation strategies, and achieved important milestones in employee health and safety. In addition, we returned $332 million of cash to shareholders through share repurchases and dividends and maintained our balance sheet strength, ending the year with debt of $1.2 billion and a net leverage ratio (net debt to Adjusted EBITDA) of 1.5x.' (Net debt is a non-GAAP financial measure calculated by subtracting cash and cash equivalents from debt as described in Attachment 6). 'On the strategic front, we expanded operationally within our existing geographic footprint and improved our ability to service customers in our growing markets. We completed the acquisition of two pure-play aggregates businesses – one in Kentucky and the other in Western Pennsylvania – for a combined investment of $175 million; began construction and made significant progress in expanding and modernizing our Wyoming cement plant; and started up a 500,000 ton slag-cement facility in Houston, which is operated through our Texas Lehigh Cement Company 50/50 joint venture. Last week, we announced a $330 million investment to modernize and expand our Duke, OK Gypsum Wallboard plant, which we expect will increase the annual plant capacity by 300 million square feet (mmsf), or 25%, lower the plant's operating cost, and take advantage of our nearby, low-cost natural gypsum reserves. Construction is expected to begin soon with startup scheduled for the second half of calendar year 2027.' 'Employee health, safety, and environmental stewardship remain paramount objectives, and I'm very proud of our team's efforts and results in these areas. In fiscal 2025, our safety performance continued to outpace the industry average, and our total recordable incident rate (TRIR) was the lowest since we began tracking this lagging indicator. More importantly, we had a 25% increase in hazard observation reporting, which is the most useful leading indicator to prevent incidents. As always, we continue to strive for zero safety incidents. We also invested in several projects that we expect will reduce the environmental impact of certain of our facilities and deliver meaningful economic benefits, most notably a project designed to reduce the water consumption of our Lawton, Oklahoma papermill by 50%.' With respect to fourth quarter results, Mr. Haack said, 'Our fourth quarter financial results reflect the impact of adverse weather on our Cement and Concrete and Aggregates businesses in the first two months of calendar 2025, with February being the most affected compared with the prior year. Fourth quarter results were also affected by higher production costs as we pulled forward the annual maintenance outage at our Texas Lehigh cement facility and experienced weather-related production interruptions at other facilities.' Mr. Haack concluded, 'Despite the recent volatility in the capital markets due to changing trade and fiscal policies, we remain optimistic about our business and focused on continuing to position Eagle for sustained performance through various economic cycles and uncertain times. Our financial strength and flexibility should continue to drive shareholder returns through shifting macroeconomic conditions.' Capital Allocation Priorities Eagle seeks to maintain a disciplined capital allocation process to enhance shareholder value. Our allocation priorities remain: 1. Investing in growth opportunities that are consistent with our strategic priorities and meet our strict financial return standards; 2. Making operating capital investments to maintain and strengthen our low-cost producer position; and 3. Returning excess cash to shareholders, primarily through our share repurchase program. Over the past five fiscal years, we have invested $388 million in acquisitions, $546 million in organic capital expenditures, and $1.8 billion in share repurchases and dividends. Segment Financial Results Heavy Materials: Cement, Concrete and Aggregates Fiscal 2025 revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was down 2% to $1.4 billion, and annual operating earnings decreased 11% to $310.7 million. Both declines were due primarily to lower sales volume, which was partially offset by higher Cement net sales prices. Fiscal 2025 Cement revenue, including Joint Venture and intersegment revenue, was down 2% to $1.2 billion, and Cement operating earnings declined 6% to $319.5 million. These declines reflect lower Cement sales volume, partially offset by higher net sales prices. While average annual net Cement sales price for the year increased 4% to $156.67 per ton, annual Cement sales volume was down 5% to 6.9 million tons. Fourth quarter Cement revenue, including Joint Venture and intersegment revenue, was down 6% to $214.0 million, reflecting lower sales volume, partially offset by higher Cement sales prices. Operating earnings declined 26% to $27.6 million, reflecting lower sales volume and higher operating costs, namely approximately $10 million in maintenance costs, partially offset by higher net sales prices. Our Joint Venture pulled forward its annual maintenance outage from April to March this year and started up a new cement slag facility in Houston during the winter, which will extend our ability to meet the demand needs of our customers in a fast-growing market. The combined impact from the timing change of the annual outage and the commissioning costs for the new facility affected our Joint Venture results by approximately $4 million. The average net Cement sales price for the quarter increased 2% to $157.62 per ton. Quarterly Cement sales volume was down 6% to 1.2 million tons, primarily because of adverse weather conditions, particularly in February. Fiscal 2025 Concrete and Aggregates revenue declined 1% to $237.7 million, as a result of lower sales volume, which was partially offset by higher sales prices. The acquired aggregates businesses in Kentucky (completed in August 2024) and Western Pennsylvania (completed in January 2025) contributed approximately $11.6 million of revenue during fiscal 2025. Concrete and Aggregates reported an operating loss of $8.8 million in fiscal 2025. The loss was due to lower sales volume and the $2.5 million impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Fourth quarter Concrete and Aggregates revenue was $54.3 million, an increase of 12%, driven by higher Aggregates sales volume and the contribution of $6.7 million from the two acquired aggregates businesses. The fourth quarter operating loss of $9.4 million, resulted from lower Concrete sales volume due to difficult weather conditions during the quarter and the $1.9 million impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Light Materials: Gypsum Wallboard and Recycled Paperboard Fiscal 2025 revenue in the Light Materials sector, which includes Gypsum Wallboard and Recycled Paperboard, increased 3% to $969.2 million, driven by record Recycled Paperboard sales volume and higher Gypsum Wallboard and Recycled Paperboard net sales prices. Gypsum Wallboard annual sales volume was 3.0 billion square feet (BSF) up slightly from the prior year, and the average net sales price was up 1% to $236.04 per MSF. Recycled Paperboard annual sales volume was up 5% to 350,000 tons. Fiscal 2025 Light Materials operating earnings were $388.8 million, an increase of 6%, driven principally by higher Gypsum Wallboard and Recycled Paperboard net sales prices and lower operating costs, namely lower energy and freight costs over the fiscal year. Fourth quarter Light Materials revenue declined 1% to $235.2 million, reflecting lower Gypsum Wallboard sales volume, which decreased 3% to 722 million square feet (MMSF), while the average net sales price was down slightly to $231.54 per MSF. Sequentially, the Gypsum Wallboard net sales price was down 2%, primarily because of increased freight costs in the quarter. Recycled Paperboard sales volume for the quarter was down 2% to 84,000 tons. The average Recycled Paperboard net sales price for the fourth quarter was $595.69 per ton, up 5%, consistent with the pricing provisions in our long-term sales agreements that factor in changes to input costs. Fourth quarter operating earnings in the sector were $90.7 million, a decrease of 2%, reflecting lower Gypsum Wallboard and Recycled Paperboard sales volume. Corporate General and Administrative Expenses Fiscal 2025 Corporate General and Administrative Expenses increased by approximately 24% compared with the prior year. The increase was primarily related to higher information technology spending of $3.2 million for ongoing technology upgrades to our enterprise resource planning systems, and $3.8 million of costs associated with business-development and transaction-related activities, primarily related to the acquisitions of the Kentucky and Western Pennsylvania aggregates operations. 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 use 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 revenue and operating earnings, which is consistent with the way management organizes the segments within Eagle for making operating decisions and assessing performance. In addition, for segment reporting purposes, we report intersegment revenue as a part of a segment's total revenue. Intersegment sales are eliminated on the Consolidated Statement of Earnings. Refer to Attachment 3 for a reconciliation of these amounts. About Eagle Materials Inc. Eagle Materials Inc. is a leading U.S. manufacturer of heavy construction products and light building materials. Eagle's primary products, Portland Cement and Gypsum Wallboard, are essential for building, expanding and repairing roads, highways, and residential, commercial and industrial structures across America. Headquartered in Dallas, Texas, Eagle manufactures and sells its products through a network of more than 70 facilities spanning 21 states. Visit for more information. Eagle's senior management will conduct a conference call to discuss the financial results, forward-looking information and other matters at 8:30 a.m. Eastern Time (7:30 a.m. Central Time) on Tuesday, May 20, 2025. The conference call will be webcast on the Eagle website, A replay of the webcast and the presentation will be archived on the 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 statements and generally arise when the Company is discussing its beliefs, estimates or expectations as to future events. 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 businesses; fluctuations in public infrastructure expenditures; the effects of adverse weather conditions on infrastructure and other construction projects as well as our facilities and operations; 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; the availability of and fluctuations in the cost of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil (including diesel), and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (for example, spot market prices), governmental orders and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; material nonpayment or non-performance by any of our key customers; consolidation of our customers; interruptions in our supply chain; inability to timely execute or realize capacity expansions or efficiency gains from capital improvement projects; difficulties and delays in the development of new business lines; governmental regulation and changes in governmental and public policy (including, without limitation, climate change and other environmental regulation); changes in trade policy, including tariffs and the effects of any increases in tariffs on our business, including increases in inputs used in our facility expansion and modernization projects; possible losses or other adverse outcomes from pending or future litigation or arbitration proceedings; changes in economic conditions or the nature or level of activity in any one or more of the markets or industries in which the Company or its customers are engaged; competition; cyber-attacks or data security breaches, together with the costs of protecting our systems against such incidents and the possible effects thereof on our operations; increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects undertaken by state or local governments; the availability of acquisitions or other growth opportunities that meet our financial return standards and fit our strategic focus; risks related to pursuit of acquisitions, joint ventures and other transactions or the execution or implementation of such transactions, including the integration of operations acquired by the Company; general economic conditions, including inflation and recessionary conditions; and changes in interest rates and the resulting effects on the Company and demand for our products. 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) or the cost of our raw materials can be expected to adversely affect the revenue 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 results of operations. Finally, any forward-looking statements made by the Company are subject to the risks and impacts associated with natural disasters, the outbreak, escalation or resurgence of health emergencies, pandemics or other unforeseen events, including, without limitation, the COVID-19 pandemic and responses thereto designed to contain its spread and mitigate its public health effects, as well as their impact on our operations and on economic conditions, capital and financial markets. These and other factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and subsequent quarterly and annual reports upon filing. 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 Earnings Attachment 2 Revenue and Earnings by Business Segment Attachment 3 Sales Volume, Average Net Sales Prices and Intersegment and Cement Revenue Attachment 4 Consolidated Balance Sheets Attachment 5 Depreciation, Depletion and Amortization by Business Segment Attachment 6 Reconciliation of Non-GAAP Financial Measures Expand Expand Attachment 4 Eagle Materials Inc. Consolidated Balance Sheets (dollars in thousands) (unaudited) March 31, 2025 2024 ASSETS Current Assets – Cash and Cash Equivalents $ 20,401 $ 34,925 Accounts and Notes Receivable, net 212,332 202,985 Inventories 415,175 373,923 Federal Income Tax Receivable 10,020 9,910 Prepaid and Other Assets 10,729 5,950 Total Current Assets 668,657 627,693 Property, Plant and Equipment, net 1,792,982 1,676,217 Investments in Joint Venture 140,089 113,478 Operating Lease Right-of-Use Assets 29,313 19,373 Goodwill and Intangibles 595,752 486,117 Other Assets 37,795 24,141 $ 3,264,588 $ 2,947,019 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities – Accounts Payable $ 129,895 $ 127,183 Accrued Liabilities 96,077 94,327 Current Portion of Long-Term Debt 15,000 10,000 Operating Lease Liabilities 4,032 7,899 Total Current Liabilities 245,004 239,409 Long-Term Liabilities 99,626 70,979 Bank Credit Facility 200,000 170,000 Bank Term Loan 281,250 172,500 2.500% Senior Unsecured Notes due 2031 742,066 740,799 Deferred Income Taxes 239,942 244,797 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 32,973,121 and 34,143,945 Shares, respectively. 330 341 Capital in Excess of Par Value - - Accumulated Other Comprehensive Losses (3,125 ) (3,373 ) Retained Earnings 1,459,495 1,311,567 Total Stockholders' Equity 1,456,700 1,308,535 $ 3,264,588 $ 2,947,019 Expand Attachment 6 Eagle Materials Inc. Reconciliation of Non-GAAP Financial Measures (unaudited) (dollars in thousands) Adjusted Earnings per Diluted Share (Adjusted EPS) Adjusted EPS is a non-GAAP financial measure and represents net earnings per diluted share excluding the impacts from non-routine items, such as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and business development costs and litigation losses (Non-routine Items). Management uses measures of earnings excluding the impact of Non-routine Items as a performance measure to compare operating results of the Company from period to period and for purposes of its budgeting and planning processes. Although management believes that Adjusted EPS is useful in evaluating the Company's business, this information should be considered as supplemental in nature and is not meant to be considered in isolation, or as a substitute for, earnings per diluted share and the related financial information prepared in accordance with GAAP. In addition, our presentation of Adjusted EPS may not be the same as similarly titled measures reported by other companies, limiting its usefulness as a comparative measure. The following shows the calculation of Adjusted EPS and reconciles Adjusted EPS to net earnings per diluted share in accordance with GAAP for the quarters and fiscal years ended March 31, 2025 and 2024: Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Net Earnings, as reported $ 66,480 $ 77,099 $ 463,416 $ 477,639 Non-routine Items: Acquisition accounting and related expenses 1 $ 3,359 $ - $ 6,318 $ 4,568 Litigation loss - - 700 - Total Non-routine Items before Taxes $ 3,359 $ - $ 7,018 $ 4,568 Tax Impact on Non-routine Items (601 ) - (1,523 ) (1,037 ) After-tax Impact of Non-routine Items $ 2,758 $ - $ 5,495 $ 3,531 Adjusted Net Earnings $ 69,238 $ 77,099 $ 468,911 $ 481,170 Net earnings per diluted share, as reported $ 2.00 $ 2.24 $ 13.77 $ 13.61 Adjusted net earnings per diluted share (Adjusted EPS) $ 2.08 $ 2.24 $ 13.94 $ 13.71 1 Represents the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and business development costs Expand Attachment 6, continued EBITDA and Adjusted EBITDA We present Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA to provide additional measures of operating performance and allow for more consistent comparison of operating performance from period to period. EBITDA is a non-GAAP financial measure that provides supplemental information regarding the operating performance of our business without regard to financing methods, capital structures or historical cost basis. Adjusted EBITDA is also a non-GAAP financial measure that further excludes the impact from Non-routine Items and stock-based compensation. Management uses EBITDA and Adjusted EBITDA as alternative bases for comparing the operating performance of Eagle from period to period and for purposes of its budgeting and planning processes. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as an alternative to net income, cash flow from operations or any other measure of financial performance or liquidity in accordance with GAAP. The following shows the calculation of EBITDA and Adjusted EBITDA and reconciles them to net earnings in accordance with GAAP for the quarters and fiscal years ended March 31, 2025 and 2024: 2025 2024 2025 2024 Net Earnings, as reported $ 66,480 $ 77,099 $ 463,416 $ 477,639 Income Tax Expense 14,518 24,597 128,069 140,298 Interest Expense 10,067 9,686 40,526 42,257 Depreciation, Depletion and Amortization 42,241 38,485 158,902 149,832 EBITDA $ 133,306 $ 149,867 $ 790,913 $ 810,026 Acquisition accounting and related expenses 1 3,359 - 6,318 4,568 Litigation Loss - - 700 - Stock-based Compensation 4,522 4,544 18,743 19,900 Adjusted EBITDA $ 141,187 $ 154,411 $ 816,674 $ 834,494 1 Represents the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and business development costs Expand Attachment 6, continued Reconciliation of Net Debt to Adjusted EBITDA GAAP does not define 'Net Debt' and it should not be considered as an alternative to debt as defined by GAAP. We define Net Debt as total debt minus cash and cash equivalents to indicate the amount of total debt that would remain if the Company applied the cash and cash equivalents held by it to the payment of outstanding debt. The Company also uses 'Net Debt to Adjusted EBITDA,' which it defines as Net Debt divided by Adjusted EBITDA for the trailing twelve months, as an alternative metric to assist it in understanding its leverage position. We present this metric for the convenience of the investment community and rating agencies who use such metrics in their analysis, and for investors who need to understand the metrics we use to assess performance and monitor our cash and liquidity positions. Fiscal Year Ended March 31, 2025 2024 Total debt, excluding debt issuance costs $ 1,246,250 $ 1,102,500 Cash and cash equivalents 20,401 34,925 Net Debt $ 1,225,849 $ 1,067,575 Adjusted EBITDA 816,674 834,494 Net Debt to Adjusted EBITDA 1.5x 1.3x Expand
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20-05-2025
- Business
- Yahoo
Eagle Materials Announces Fourth Quarter and Fiscal Year 2025 Results
Achieved Record Annual Revenue Made Considerable Progress on Growth Initiatives Maintained Flexible Capital Structure to Support Continued Growth and Disciplined Capital Allocation DALLAS, May 20, 2025--(BUSINESS WIRE)--Eagle Materials Inc. (NYSE: EXP) today reported financial results for fiscal year 2025 and the fiscal fourth quarter ended March 31, 2025. Notable items for the fiscal year and quarter are highlighted below. (Unless otherwise noted, all comparisons are with the prior fiscal year or prior year's fiscal fourth quarter, as applicable.) Full Year Fiscal 2025 Highlights Record Revenue of $2.3 billion, up slightly from the prior year Net Earnings of $463.4 million, down 3% Record net earnings per diluted share of $13.77, up 1% Adjusted net earnings per diluted share (Adjusted EPS) of $13.94, up 2% Adjusted EPS is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 6 Adjusted EBITDA of $816.7 million, down 2% Adjusted EBITDA is a non-GAAP financial measure calculated by excluding non-routine items and certain non-cash expenses in the manner described in Attachment 6 Repurchased 1.2 million shares of Eagle's common stock for $298 million Fourth Quarter Fiscal 2025 Highlights Revenue of $470.2 million, down 1% Net earnings of $66.5 million, down 14% Net earnings per diluted share of $2.00, down 11% Adjusted net earnings per diluted share (Adjusted EPS) of $2.08, down 7% Adjusted EPS is a non-GAAP financial measure calculated by excluding non-routine items in the manner described in Attachment 6 Adjusted EBITDA of $141.2 million, down 9% Adjusted EBITDA is a non-GAAP financial measure calculated by excluding non-routine items and certain non-cash expenses in the manner described in Attachment 6 Repurchased approximately 418,000 shares of Eagle's common stock for $97 million Commenting on the annual results, Michael Haack, President and CEO, said, "We are pleased to report another year of strong financial, strategic, and operational performance at Eagle. In fiscal 2025, we generated record revenue of $2.3 billion and gross profit margin of 29.8%, continued to advance our long-term growth and value-creation strategies, and achieved important milestones in employee health and safety. In addition, we returned $332 million of cash to shareholders through share repurchases and dividends and maintained our balance sheet strength, ending the year with debt of $1.2 billion and a net leverage ratio (net debt to Adjusted EBITDA) of 1.5x." (Net debt is a non-GAAP financial measure calculated by subtracting cash and cash equivalents from debt as described in Attachment 6). "On the strategic front, we expanded operationally within our existing geographic footprint and improved our ability to service customers in our growing markets. We completed the acquisition of two pure-play aggregates businesses – one in Kentucky and the other in Western Pennsylvania – for a combined investment of $175 million; began construction and made significant progress in expanding and modernizing our Wyoming cement plant; and started up a 500,000 ton slag-cement facility in Houston, which is operated through our Texas Lehigh Cement Company 50/50 joint venture. Last week, we announced a $330 million investment to modernize and expand our Duke, OK Gypsum Wallboard plant, which we expect will increase the annual plant capacity by 300 million square feet (mmsf), or 25%, lower the plant's operating cost, and take advantage of our nearby, low-cost natural gypsum reserves. Construction is expected to begin soon with startup scheduled for the second half of calendar year 2027." "Employee health, safety, and environmental stewardship remain paramount objectives, and I'm very proud of our team's efforts and results in these areas. In fiscal 2025, our safety performance continued to outpace the industry average, and our total recordable incident rate (TRIR) was the lowest since we began tracking this lagging indicator. More importantly, we had a 25% increase in hazard observation reporting, which is the most useful leading indicator to prevent incidents. As always, we continue to strive for zero safety incidents. We also invested in several projects that we expect will reduce the environmental impact of certain of our facilities and deliver meaningful economic benefits, most notably a project designed to reduce the water consumption of our Lawton, Oklahoma papermill by 50%." With respect to fourth quarter results, Mr. Haack said, "Our fourth quarter financial results reflect the impact of adverse weather on our Cement and Concrete and Aggregates businesses in the first two months of calendar 2025, with February being the most affected compared with the prior year. Fourth quarter results were also affected by higher production costs as we pulled forward the annual maintenance outage at our Texas Lehigh cement facility and experienced weather-related production interruptions at other facilities." Mr. Haack concluded, "Despite the recent volatility in the capital markets due to changing trade and fiscal policies, we remain optimistic about our business and focused on continuing to position Eagle for sustained performance through various economic cycles and uncertain times. Our financial strength and flexibility should continue to drive shareholder returns through shifting macroeconomic conditions." Capital Allocation Priorities Eagle seeks to maintain a disciplined capital allocation process to enhance shareholder value. Our allocation priorities remain: 1. Investing in growth opportunities that are consistent with our strategic priorities and meet our strict financial return standards; 2. Making operating capital investments to maintain and strengthen our low-cost producer position; and 3. Returning excess cash to shareholders, primarily through our share repurchase program. Over the past five fiscal years, we have invested $388 million in acquisitions, $546 million in organic capital expenditures, and $1.8 billion in share repurchases and dividends. Segment Financial Results Heavy Materials: Cement, Concrete and Aggregates Fiscal 2025 revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was down 2% to $1.4 billion, and annual operating earnings decreased 11% to $310.7 million. Both declines were due primarily to lower sales volume, which was partially offset by higher Cement net sales prices. Fiscal 2025 Cement revenue, including Joint Venture and intersegment revenue, was down 2% to $1.2 billion, and Cement operating earnings declined 6% to $319.5 million. These declines reflect lower Cement sales volume, partially offset by higher net sales prices. While average annual net Cement sales price for the year increased 4% to $156.67 per ton, annual Cement sales volume was down 5% to 6.9 million tons. Fourth quarter Cement revenue, including Joint Venture and intersegment revenue, was down 6% to $214.0 million, reflecting lower sales volume, partially offset by higher Cement sales prices. Operating earnings declined 26% to $27.6 million, reflecting lower sales volume and higher operating costs, namely approximately $10 million in maintenance costs, partially offset by higher net sales prices. Our Joint Venture pulled forward its annual maintenance outage from April to March this year and started up a new cement slag facility in Houston during the winter, which will extend our ability to meet the demand needs of our customers in a fast-growing market. The combined impact from the timing change of the annual outage and the commissioning costs for the new facility affected our Joint Venture results by approximately $4 million. The average net Cement sales price for the quarter increased 2% to $157.62 per ton. Quarterly Cement sales volume was down 6% to 1.2 million tons, primarily because of adverse weather conditions, particularly in February. Fiscal 2025 Concrete and Aggregates revenue declined 1% to $237.7 million, as a result of lower sales volume, which was partially offset by higher sales prices. The acquired aggregates businesses in Kentucky (completed in August 2024) and Western Pennsylvania (completed in January 2025) contributed approximately $11.6 million of revenue during fiscal 2025. Concrete and Aggregates reported an operating loss of $8.8 million in fiscal 2025. The loss was due to lower sales volume and the $2.5 million impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Fourth quarter Concrete and Aggregates revenue was $54.3 million, an increase of 12%, driven by higher Aggregates sales volume and the contribution of $6.7 million from the two acquired aggregates businesses. The fourth quarter operating loss of $9.4 million, resulted from lower Concrete sales volume due to difficult weather conditions during the quarter and the $1.9 million impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Light Materials: Gypsum Wallboard and Recycled Paperboard Fiscal 2025 revenue in the Light Materials sector, which includes Gypsum Wallboard and Recycled Paperboard, increased 3% to $969.2 million, driven by record Recycled Paperboard sales volume and higher Gypsum Wallboard and Recycled Paperboard net sales prices. Gypsum Wallboard annual sales volume was 3.0 billion square feet (BSF) up slightly from the prior year, and the average net sales price was up 1% to $236.04 per MSF. Recycled Paperboard annual sales volume was up 5% to 350,000 tons. Fiscal 2025 Light Materials operating earnings were $388.8 million, an increase of 6%, driven principally by higher Gypsum Wallboard and Recycled Paperboard net sales prices and lower operating costs, namely lower energy and freight costs over the fiscal year. Fourth quarter Light Materials revenue declined 1% to $235.2 million, reflecting lower Gypsum Wallboard sales volume, which decreased 3% to 722 million square feet (MMSF), while the average net sales price was down slightly to $231.54 per MSF. Sequentially, the Gypsum Wallboard net sales price was down 2%, primarily because of increased freight costs in the quarter. Recycled Paperboard sales volume for the quarter was down 2% to 84,000 tons. The average Recycled Paperboard net sales price for the fourth quarter was $595.69 per ton, up 5%, consistent with the pricing provisions in our long-term sales agreements that factor in changes to input costs. Fourth quarter operating earnings in the sector were $90.7 million, a decrease of 2%, reflecting lower Gypsum Wallboard and Recycled Paperboard sales volume. Corporate General and Administrative Expenses Fiscal 2025 Corporate General and Administrative Expenses increased by approximately 24% compared with the prior year. The increase was primarily related to higher information technology spending of $3.2 million for ongoing technology upgrades to our enterprise resource planning systems, and $3.8 million of costs associated with business-development and transaction-related activities, primarily related to the acquisitions of the Kentucky and Western Pennsylvania aggregates operations. 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 use 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 revenue and operating earnings, which is consistent with the way management organizes the segments within Eagle for making operating decisions and assessing performance. In addition, for segment reporting purposes, we report intersegment revenue as a part of a segment's total revenue. Intersegment sales are eliminated on the Consolidated Statement of Earnings. Refer to Attachment 3 for a reconciliation of these amounts. About Eagle Materials Inc. Eagle Materials Inc. is a leading U.S. manufacturer of heavy construction products and light building materials. Eagle's primary products, Portland Cement and Gypsum Wallboard, are essential for building, expanding and repairing roads, highways, and residential, commercial and industrial structures across America. Headquartered in Dallas, Texas, Eagle manufactures and sells its products through a network of more than 70 facilities spanning 21 states. Visit for more information. Eagle's senior management will conduct a conference call to discuss the financial results, forward-looking information and other matters at 8:30 a.m. Eastern Time (7:30 a.m. Central Time) on Tuesday, May 20, 2025. The conference call will be webcast on the Eagle website, A replay of the webcast and the presentation will be archived on the 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 statements and generally arise when the Company is discussing its beliefs, estimates or expectations as to future events. 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 businesses; fluctuations in public infrastructure expenditures; the effects of adverse weather conditions on infrastructure and other construction projects as well as our facilities and operations; 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; the availability of and fluctuations in the cost of raw materials; changes in the costs of energy, including, without limitation, natural gas, coal and oil (including diesel), and the nature of our obligations to counterparties under energy supply contracts, such as those related to market conditions (for example, spot market prices), governmental orders and other matters; changes in the cost and availability of transportation; unexpected operational difficulties, including unexpected maintenance costs, equipment downtime and interruption of production; material nonpayment or non-performance by any of our key customers; consolidation of our customers; interruptions in our supply chain; inability to timely execute or realize capacity expansions or efficiency gains from capital improvement projects; difficulties and delays in the development of new business lines; governmental regulation and changes in governmental and public policy (including, without limitation, climate change and other environmental regulation); changes in trade policy, including tariffs and the effects of any increases in tariffs on our business, including increases in inputs used in our facility expansion and modernization projects; possible losses or other adverse outcomes from pending or future litigation or arbitration proceedings; changes in economic conditions or the nature or level of activity in any one or more of the markets or industries in which the Company or its customers are engaged; competition; cyber-attacks or data security breaches, together with the costs of protecting our systems against such incidents and the possible effects thereof on our operations; increases in capacity in the gypsum wallboard and cement industries; changes in the demand for residential housing construction or commercial construction or construction projects undertaken by state or local governments; the availability of acquisitions or other growth opportunities that meet our financial return standards and fit our strategic focus; risks related to pursuit of acquisitions, joint ventures and other transactions or the execution or implementation of such transactions, including the integration of operations acquired by the Company; general economic conditions, including inflation and recessionary conditions; and changes in interest rates and the resulting effects on the Company and demand for our products. 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) or the cost of our raw materials can be expected to adversely affect the revenue 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 results of operations. Finally, any forward-looking statements made by the Company are subject to the risks and impacts associated with natural disasters, the outbreak, escalation or resurgence of health emergencies, pandemics or other unforeseen events, including, without limitation, the COVID-19 pandemic and responses thereto designed to contain its spread and mitigate its public health effects, as well as their impact on our operations and on economic conditions, capital and financial markets. These and other factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and subsequent quarterly and annual reports upon filing. 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 Revenue and Earnings by Business SegmentAttachment 3 Sales Volume, Average Net Sales Prices and Intersegment and Cement RevenueAttachment 4 Consolidated Balance SheetsAttachment 5 Depreciation, Depletion and Amortization by Business SegmentAttachment 6 Reconciliation of Non-GAAP Financial Measures Attachment 1 Eagle Materials Inc. Consolidated Statement of Earnings (dollars in thousands, except per share data) (unaudited) Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Revenue $ 470,175 $ 476,707 $ 2,260,508 $ 2,259,297 Cost of Goods Sold 365,563 357,027 1,587,371 1,573,976 Gross Profit 104,612 119,680 673,137 685,321 Equity in Earnings of Unconsolidated JV 4,417 8,791 26,396 31,581 Corporate General and Administrative Expenses (19,596 ) (17,339 ) (73,942 ) (59,795 ) Other Non-Operating Income 1,632 250 6,420 3,087 Earnings Before Interest and Income Taxes 91,065 111,382 632,011 660,194 Interest Expense, net (10,067 ) (9,686 ) (40,526 ) (42,257 ) Earnings Before Income Taxes 80,998 101,696 591,485 617,937 Income Tax Expense 14,518 24,597 128,069 140,298 Net Earnings $ 66,480 $ 77,099 $ 463,416 $ 477,639 NET EARNINGS PER SHARE Basic $ 2.01 $ 2.26 $ 13.88 $ 13.72 Diluted $ 2.00 $ 2.24 $ 13.77 $ 13.61 AVERAGE SHARES OUTSTANDING Basic 33,025,648 34,066,929 33,378,050 34,811,560 Diluted 33,264,197 34,391,722 33,646,395 35,097,871 Attachment 2 Eagle Materials Inc. Revenue and Earnings by Business Segment (dollars in thousands) (unaudited) Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Revenue* Heavy Materials: Cement (Wholly Owned) $ 180,587 $ 189,386 $ 1,053,620 $ 1,077,918 Concrete and Aggregates 54,350 48,721 237,723 240,012 234,937 238,107 1,291,343 1,317,930 Light Materials: Gypsum Wallboard 204,205 210,231 846,499 839,530 Recycled Paperboard 31,033 28,369 122,666 101,837 235,238 238,600 969,165 941,367 Total Revenue $ 470,175 $ 476,707 $ 2,260,508 $ 2,259,297 Segment Operating Earnings Heavy Materials: Cement (Wholly Owned) $ 23,218 $ 28,502 $ 293,060 $ 306,768 Cement (Joint Venture) 4,417 8,791 26,396 31,581 Concrete and Aggregates (9,353 ) (1,033 ) (8,765 ) 12,401 18,282 36,260 310,691 350,750 Light Materials: Gypsum Wallboard 80,254 82,911 350,764 334,536 Recycled Paperboard 10,493 9,300 38,078 31,616 90,747 92,211 388,842 366,152 Sub-total 109,029 128,471 699,533 716,902 Corporate General and Administrative Expense (19,596 ) (17,339 ) (73,942 ) (59,795 ) Other Non-Operating Income 1,632 250 6,420 3,087 Earnings Before Interest and Income Taxes $ 91,065 $ 111,382 $ 632,011 $ 660,194 *Excluding Intersegment and Joint Venture Revenue listed on Attachment 3 Attachment 3 Eagle Materials Inc. Sales Volume, Net Sales Prices and Intersegment and Cement Revenue (unaudited) Sales Volume Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 Change 2025 2024 Change Cement (M Tons): Wholly Owned 1,081 1,140 -5 % 6,237 6,610 -6 % Joint Venture 158 183 -14 % 675 679 -1 % 1,239 1,323 -6 % 6,912 7,289 -5 % Concrete (M Cubic Yards) 246 273 -10 % 1,235 1,328 -7 % Aggregates (M Tons) 1,183 702 +69 % 3,854 4,064 -5 % Gypsum Wallboard (MMSFs) 722 747 -3 % 2,968 2,965 0 % Recycled Paperboard (M Tons): Internal 31 35 -11 % 142 145 -2 % External 53 51 +4 % 208 188 +11 % 84 86 -2 % 350 333 +5 % Average Net Sales Price* Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 Change 2025 2024 Change Cement (Ton) $ 157.62 $ 154.59 +2% $ 156.67 $ 150.99 +4% Concrete (Cubic Yard) $ 148.56 $ 148.60 0% $ 148.48 $ 145.98 +2% Aggregates (Ton) $ 13.83 $ 11.53 +20% $ 13.09 $ 11.26 +16% Gypsum Wallboard (MSF) $ 231.54 $ 232.62 0% $ 236.04 $ 232.75 +1% Recycled Paperboard (Ton) $ 595.69 $ 567.55 +5% $ 604.02 $ 551.72 +9% *Net of freight and delivery costs billed to customers Intersegment and Cement Revenue (dollars in thousands) Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Intersegment Revenue: Cement $ 7,051 $ 8,171 $ 36,799 $ 35,363 Concrete and Aggregates 1,775 2,705 13,913 12,940 Recycled Paperboard 19,516 20,422 89,058 82,351 $ 28,342 $ 31,298 $ 139,770 $ 130,654 Cement Revenue: Wholly Owned $ 180,587 $ 189,386 $ 1,053,620 $ 1,077,918 Joint Venture 26,382 30,023 110,943 112,736 $ 206,969 $ 219,409 $ 1,164,563 $ 1,190,654 Attachment 4 Eagle Materials Inc. Consolidated Balance Sheets (dollars in thousands) (unaudited) March 31, 2025 2024 ASSETS Current Assets – Cash and Cash Equivalents $ 20,401 $ 34,925 Accounts and Notes Receivable, net 212,332 202,985 Inventories 415,175 373,923 Federal Income Tax Receivable 10,020 9,910 Prepaid and Other Assets 10,729 5,950 Total Current Assets 668,657 627,693 Property, Plant and Equipment, net 1,792,982 1,676,217 Investments in Joint Venture 140,089 113,478 Operating Lease Right-of-Use Assets 29,313 19,373 Goodwill and Intangibles 595,752 486,117 Other Assets 37,795 24,141 $ 3,264,588 $ 2,947,019 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities – Accounts Payable $ 129,895 $ 127,183 Accrued Liabilities 96,077 94,327 Current Portion of Long-Term Debt 15,000 10,000 Operating Lease Liabilities 4,032 7,899 Total Current Liabilities 245,004 239,409 Long-Term Liabilities 99,626 70,979 Bank Credit Facility 200,000 170,000 Bank Term Loan 281,250 172,500 2.500% Senior Unsecured Notes due 2031 742,066 740,799 Deferred Income Taxes 239,942 244,797 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 32,973,121 and 34,143,945 Shares, respectively. 330 341 Capital in Excess of Par Value - - Accumulated Other Comprehensive Losses (3,125 ) (3,373 ) Retained Earnings 1,459,495 1,311,567 Total Stockholders' Equity 1,456,700 1,308,535 $ 3,264,588 $ 2,947,019 Attachment 5 Eagle Materials Inc. Depreciation, Depletion and Amortization by Business Segment (dollars in thousands) (unaudited) The following table presents depreciation, depletion and amortization by business segment for the quarters and fiscal years ended March 31, 2025 and 2024: Depreciation, Depletion and Amortization Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Cement $ 22,964 $ 22,758 $ 91,817 $ 89,138 Concrete and Aggregates 8,173 4,877 23,247 19,728 Gypsum Wallboard 6,469 6,418 25,807 23,038 Recycled Paperboard 3,700 3,690 14,782 14,811 Corporate and Other 935 742 3,249 3,117 $ 42,241 $ 38,485 $ 158,902 $ 149,832 Attachment 6 Eagle Materials Inc. Reconciliation of Non-GAAP Financial Measures (unaudited) (dollars in thousands) Adjusted Earnings per Diluted Share (Adjusted EPS) Adjusted EPS is a non-GAAP financial measure and represents net earnings per diluted share excluding the impacts from non-routine items, such as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and business development costs and litigation losses (Non-routine Items). Management uses measures of earnings excluding the impact of Non-routine Items as a performance measure to compare operating results of the Company from period to period and for purposes of its budgeting and planning processes. Although management believes that Adjusted EPS is useful in evaluating the Company's business, this information should be considered as supplemental in nature and is not meant to be considered in isolation, or as a substitute for, earnings per diluted share and the related financial information prepared in accordance with GAAP. In addition, our presentation of Adjusted EPS may not be the same as similarly titled measures reported by other companies, limiting its usefulness as a comparative measure. The following shows the calculation of Adjusted EPS and reconciles Adjusted EPS to net earnings per diluted share in accordance with GAAP for the quarters and fiscal years ended March 31, 2025 and 2024: Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Net Earnings, as reported $ 66,480 $ 77,099 $ 463,416 $ 477,639 Non-routine Items: Acquisition accounting and related expenses 1 $ 3,359 $ - $ 6,318 $ 4,568 Litigation loss - - 700 - Total Non-routine Items before Taxes $ 3,359 $ - $ 7,018 $ 4,568 Tax Impact on Non-routine Items (601 ) - (1,523 ) (1,037 ) After-tax Impact of Non-routine Items $ 2,758 $ - $ 5,495 $ 3,531 Adjusted Net Earnings $ 69,238 $ 77,099 $ 468,911 $ 481,170 Diluted Average Shares Outstanding 33,264 34,392 33,646 35,098 Net earnings per diluted share, as reported $ 2.00 $ 2.24 $ 13.77 $ 13.61 Adjusted net earnings per diluted share (Adjusted EPS) $ 2.08 $ 2.24 $ 13.94 $ 13.71 1 Represents the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and business development costs Attachment 6, continued EBITDA and Adjusted EBITDA We present Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA to provide additional measures of operating performance and allow for more consistent comparison of operating performance from period to period. EBITDA is a non-GAAP financial measure that provides supplemental information regarding the operating performance of our business without regard to financing methods, capital structures or historical cost basis. Adjusted EBITDA is also a non-GAAP financial measure that further excludes the impact from Non-routine Items and stock-based compensation. Management uses EBITDA and Adjusted EBITDA as alternative bases for comparing the operating performance of Eagle from period to period and for purposes of its budgeting and planning processes. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as an alternative to net income, cash flow from operations or any other measure of financial performance or liquidity in accordance with GAAP. The following shows the calculation of EBITDA and Adjusted EBITDA and reconciles them to net earnings in accordance with GAAP for the quarters and fiscal years ended March 31, 2025 and 2024: Quarter Ended March 31, Fiscal Year Ended March 31, 2025 2024 2025 2024 Net Earnings, as reported $ 66,480 $ 77,099 $ 463,416 $ 477,639 Income Tax Expense 14,518 24,597 128,069 140,298 Interest Expense 10,067 9,686 40,526 42,257 Depreciation, Depletion and Amortization 42,241 38,485 158,902 149,832 EBITDA $ 133,306 $ 149,867 $ 790,913 $ 810,026 Acquisition accounting and related expenses 1 3,359 - 6,318 4,568 Litigation Loss - - 700 - Stock-based Compensation 4,522 4,544 18,743 19,900 Adjusted EBITDA $ 141,187 $ 154,411 $ 816,674 $ 834,494 1 Represents the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and business development costs Attachment 6, continued Reconciliation of Net Debt to Adjusted EBITDA GAAP does not define "Net Debt" and it should not be considered as an alternative to debt as defined by GAAP. We define Net Debt as total debt minus cash and cash equivalents to indicate the amount of total debt that would remain if the Company applied the cash and cash equivalents held by it to the payment of outstanding debt. The Company also uses "Net Debt to Adjusted EBITDA," which it defines as Net Debt divided by Adjusted EBITDA for the trailing twelve months, as an alternative metric to assist it in understanding its leverage position. We present this metric for the convenience of the investment community and rating agencies who use such metrics in their analysis, and for investors who need to understand the metrics we use to assess performance and monitor our cash and liquidity positions. Fiscal Year Ended March 31, 2025 2024 Total debt, excluding debt issuance costs $ 1,246,250 $ 1,102,500 Cash and cash equivalents 20,401 34,925 Net Debt $ 1,225,849 $ 1,067,575 Adjusted EBITDA 816,674 834,494 Net Debt to Adjusted EBITDA 1.5x 1.3x View source version on Contacts For additional information, contact at R. Haack President and Chief Executive Officer D. Craig Kesler Executive Vice President and Chief Financial Officer Alex Haddock Senior Vice President, Investor Relations, Strategy and Corporate Development
