Record annual revenue of $2.1 billion, up
15%
Record annual EPS of $12.46, up 36%
Record fourth quarter revenue of $470.1
million, up 14%
Record fourth quarter EPS of $2.79, up 47%
Eagle Materials Inc. (NYSE: EXP) today reported financial
results for fiscal year 2023 and the fiscal fourth quarter ended
March 31, 2023. 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 2023 Highlights
- Record Revenue of $2.1 billion, up 15%
- Net Earnings of $461.5 million, up 23%
- Record diluted earnings per share of $12.46, up 36%
- Adjusted EBITDA of $781.5 million, up 19%
- 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 3.1 million shares of Eagle’s common stock for $388
million
Fourth Quarter Fiscal 2023 Highlights
- Record Revenue of $470.1 million, up 14%
- Net Earnings of $100.4 million, up 35%
- Record diluted earnings per share of $2.79, up 47%
- Adjusted EBITDA of $171.7 million, up 30%
- 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 528,000 shares of Eagle’s common stock for $74
million
Commenting on the annual results, Michael Haack, President and
CEO, said, “We are pleased to announce another exceptional quarter
and year at Eagle. We achieved record financial results and made
strong progress on all strategic priorities. During the fiscal
year, we expanded gross margins by 190 bps to 29.8%, reported
record earnings per share of $12.46, generated operating cash flow
of $542 million, and repurchased 3.1 million shares of our common
stock for $388 million. We also increased production of our
eco-friendly Portland Limestone Cement product and integrated
several acquisitions which should improve our already enviable
low-cost producer position. At the end of the fiscal year, debt was
$1.1 billion, and our net leverage ratio (net debt to Adjusted
EBITDA) was 1.4x, giving us substantial financial flexibility for
disciplined capital allocation.”
“Employee health, safety and environmental stewardship remain
core objectives, and we demonstrated meaningful progress in all
areas over the year. We released our updated Environmental and
Social Disclosure report, which is available on our website. In
fiscal 2023, our safety performance continued to outpace the
industry average, and we achieved the lowest recordable injury rate
in the company’s history. We also made significant progress in
reducing our carbon footprint with the increased production and
sale of our Portland Limestone Cement product, which has a lower
carbon intensity than standard cement with similar performance
attributes.”
Mr. Haack concluded, “Looking ahead, we anticipate continued
attractive fundamentals in our markets, despite headwinds relating
to higher interest rates and affordability constraints in
single-family residential construction. Among the favorable demand
factors we expect will affect our results in future periods are
projected funding increases for infrastructure projects and healthy
demand for heavy industrial projects and multi-family residential
construction. We remain well-positioned to capitalize on these
conditions given our geographical footprint across the US heartland
and fast-growing Sunbelt and our financial strength and
flexibility.”
Capital Allocation Priorities
Eagle remains dedicated to a disciplined capital allocation
process to enhance shareholder value. Consistent with our track
record, our allocation priorities remain unchanged, as follows: 1.
investing in growth opportunities that meet our strict financial
return standards and are consistent with our strategic focus; 2.
operating capital investments to maintain and strengthen our
low-cost producer positions; and 3. returning excess cash to
shareholders, primarily through our share repurchase program.
In the past five fiscal years, we have invested nearly $858
million in acquisitions, $478 million in organic capital
expenditures, and $1.7 billion in share repurchases and
dividends.
Segment Financial Results
Heavy Materials: Cement, Concrete and Aggregates
Fiscal 2023 revenue in the Heavy Materials sector, which
includes Cement, Concrete and Aggregates, as well as Joint Venture
and intersegment Cement revenue, was $1.3 billion, an 11% increase.
Heavy Materials annual operating earnings increased 7% to $297.0
million, primarily because of higher Cement net sales prices.
Fiscal 2023 Cement revenue, including Joint Venture and
intersegment revenue, was up 7% to $1.1 billion, and Cement
operating earnings increased 7% to $278.8 million. The annual
revenue and earnings increases reflect higher net sales prices, the
effect of which was partially offset by a decrease in the volume of
cement sold.
The average annual net Cement sales price for the year increased
13% to $134.36 per ton. Cement sales volume for the year was down
5% to 7.1 million tons.
Fourth quarter Cement revenue, including Joint Venture and
intersegment revenue, was up 14% to $213.8 million. Operating
earnings increased 59% to $45.3 million, reflecting higher net
sales prices, partially offset by higher operating costs, namely
energy. The average net Cement sales price for the quarter
increased 16% to $147.50 per ton. Cement sales volume for the
quarter was down 3% to 1.3 million tons.
Fiscal 2023 revenue from Concrete and Aggregates increased 35%
to $239.5 million, reflecting higher sales prices and Concrete
volume as well as the contribution of approximately $44.5 million
from the acquired business in northern Colorado. Concrete and
Aggregates reported fiscal 2023 operating earnings of $18.3
million, down 1%, reflecting higher operating costs primarily
related to diesel fuel.
Fourth quarter Concrete and Aggregates revenue was $53.1
million, an increase of 43%, due to higher pricing and Concrete
sales volume as well as the contribution of approximately $10
million from the acquired business in northern Colorado. Fourth
quarter operating earnings were $2.6 million, a 74% increase,
reflecting higher pricing and sales volume.
Light Materials: Gypsum Wallboard and Paperboard
Fiscal 2023 revenue in the Light Materials sector, which
includes Gypsum Wallboard and Paperboard, increased 22% to $980.9
million, reflecting improved Wallboard sales volume and pricing.
Gypsum Wallboard annual sales volume was a record 3.1 billion
square feet (BSF), up 4%, and the average Gypsum Wallboard net
sales price increased 22% to $232.31 per MSF. Paperboard annual
sales volume was down 2% to 326,000 tons.
Fiscal 2023 Light Materials operating earnings were $377.7
million, an increase of 38%, driven principally by higher Wallboard
pricing, the effects of which were partially offset by increased
operating costs primarily related to energy.
Fourth quarter Light Materials revenue increased 11% to $244.2
million, reflecting higher Wallboard pricing and a small increase
in Wallboard sales volume. Gypsum Wallboard sales volume increased
1% to 756 million square feet (MMSF), while the average Gypsum
Wallboard net sales price increased 17% to $239.39 per MSF.
Paperboard sales volume for the quarter was down 2% to 80,000 tons.
The average Paperboard net sales price for the fourth quarter was
$550.52 per ton, down 12%, consistent with the pricing provisions
in our long-term sales agreements.
Fourth quarter operating earnings in the sector were $99.4
million, an increase of 29%, reflecting higher Wallboard sales
volume and pricing as well as lower costs for recycled paper.
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. manufactures and distributes Portland
Cement, Gypsum Wallboard, Recycled Gypsum Paperboard, and Concrete
and Aggregates from more than 70 facilities across the US. Eagle’s
corporate headquarters is in Dallas, Texas.
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
Thursday, May 18, 2023. The conference call will be webcast on the
Eagle website, eaglematerials.com. 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; adverse weather conditions; the fact that our
products are commodities and that prices for our products are
subject to material fluctuation due to market conditions and other
factors beyond our control; the availability 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; inability to timely execute announced capacity
expansions; difficulties and delays in the development of new
business lines; governmental regulation and changes in governmental
and public policy (including, without limitation, climate change
and other environmental regulation); possible outcomes of 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; severe weather conditions (such as winter
storms, tornados and hurricanes) and their effects on our
facilities, operations and contractual arrangements with third
parties; competition; cyber-attacks or data security breaches;
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 could 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 result of operations. Finally, any
forward-looking statements made by the Company are subject to the
risks and impacts associated with natural disasters, 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 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, 2022 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 Consolidated Statement of Earnings Attachment 2
Revenue and Earnings by Lines of Business Attachment 3 Sales
Volume, Net Sales Prices and Intersegment and Cement Revenue
Attachment 4 Consolidated Balance Sheets Attachment 5 Depreciation,
Depletion and Amortization by Lines of Business Attachment 6
Reconciliation of EBITDA and Adjusted EBITDA Attachment 7
Reconciliation of Net Debt to Adjusted EBITDA
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,
2023
2022
2023
2022
Revenue
$
470,127
$
413,117
$
2,148,069
$
1,861,522
Cost of Goods Sold
334,736
313,941
1,508,803
1,341,908
Gross Profit
135,391
99,176
639,266
519,614
Equity in Earnings of Unconsolidated
JV
11,843
7,703
35,474
32,488
Corporate General and Administrative
Expenses
(15,686)
(13,815)
(53,630)
(46,801)
Loss on Early Retirement of Senior
Notes
-
-
-
(8,407)
Other Non-Operating Income
1,743
3,132
2,654
9,073
Earnings Before Interest and Income
Taxes
133,291
96,196
623,764
505,967
Interest Expense, net
(10,329)
(5,982)
(35,171)
(30,873)
Earnings Before Income Taxes
122,962
90,214
588,593
475,094
Income Tax Expense
(22,606)
(15,898)
(127,053)
(100,847)
Net Earnings
$
100,356
$
74,316
$
461,540
$
374,247
NET EARNINGS PER SHARE
Basic
$
2.81
$
1.91
$
12.54
$
9.23
Diluted
$
2.79
$
1.90
$
12.46
$
9.14
AVERAGE SHARES OUTSTANDING
Basic
35,724,101
38,867,550
36,798,354
40,547,048
Diluted
36,012,770
39,208,296
37,052,942
40,929,712
Attachment 2
Eagle Materials Inc.
Revenue and Earnings by Lines
of Business
(dollars in thousands)
(unaudited)
Quarter Ended March
31,
Fiscal Year Ended March
31,
2023
2022
2023
2022
Revenue*
Heavy Materials:
Cement (Wholly Owned)
$
172,784
$
155,926
$
927,637
$
880,280
Concrete and Aggregates
53,109
37,234
239,516
177,122
225,893
193,160
1,167,153
1,057,402
Light Materials:
Gypsum Wallboard
219,490
189,316
872,471
692,152
Gypsum Paperboard
24,744
30,641
108,445
111,968
244,234
219,957
980,916
804,120
Total Revenue
$
470,127
$
413,117
$
2,148,069
$
1,861,522
Segment Operating Earnings
Heavy Materials:
Cement (Wholly Owned)
$
33,477
$
20,720
$
243,288
$
227,068
Cement (Joint Venture)
11,843
7,703
35,474
32,488
Concrete and Aggregates
2,559
1,469
18,259
18,467
47,879
29,892
297,021
278,023
Light Materials:
Gypsum Wallboard
91,335
71,051
352,499
261,476
Gypsum Paperboard
8,020
5,936
25,220
12,603
99,355
76,987
377,719
274,079
Sub-total
147,234
106,879
674,740
552,102
Corporate General and Administrative
Expense
(15,686)
(13,815)
(53,630)
(46,801)
Loss on Early Retirement of Senior
Notes
-
-
-
(8,407)
Other Non-Operating Income
1,743
3,132
2,654
9,073
Earnings Before Interest and Income
Taxes
$
133,291
$
96,196
$
623,764
$
505,967
*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,
2023
2022
Change
2023
2022
Change
Cement (M Tons):
Wholly Owned
1,086
1,128
-4%
6,399
6,711
-5%
Joint Venture
210
209
0%
734
823
-11%
1,296
1,337
-3%
7,133
7,534
-5%
Concrete (M Cubic Yards)
335
270
+24%
1,545
1,333
+16%
Aggregates (M Tons)
576
342
+68%
2,909
1,525
+91%
Gypsum Wallboard (MMSFs)
756
750
+1%
3,065
2,944
+4%
Paperboard (M Tons):
Internal
37
35
+6%
152
144
+6%
External
43
47
-9%
174
190
-8%
80
82
-2%
326
334
-2%
Average Net Sales
Price*
Quarter Ended March 31,
Fiscal Year Ended March 31,
2023
2022
Change
2023
2022
Change
Cement (Ton)
$
147.50
$
126.71
+16%
$
134.36
$
119.13
+13%
Concrete (Cubic Yard)
$
136.51
$
124.13
+10%
$
133.34
$
120.97
+10%
Aggregates (Ton)
$
13.07
$
11.12
+18%
$
11.53
$
10.45
+10%
Gypsum Wallboard (MSF)
$
239.39
$
204.20
+17%
$
232.31
$
190.76
+22%
Paperboard (Ton)
$
550.52
$
628.96
-12%
$
590.67
$
558.28
+6%
*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,
2023
2022
2023
2022
Intersegment Revenue:
Cement
$
6,544
$
4,558
$
32,915
$
22,915
Paperboard
21,016
22,585
92,835
82,086
$
27,560
$
27,143
$
125,750
$
105,001
Cement Revenue:
Wholly Owned
$
172,784
$
155,926
$
927,637
$
880,280
Joint Venture
34,453
26,876
113,518
103,899
$
207,237
$
182,802
$
1,041,155
$
984,179
Attachment 4
Eagle Materials Inc.
Consolidated Balance
Sheets
(dollars in thousands)
(unaudited)
March 31,
2023
2022
ASSETS
Current Assets –
Cash and Cash Equivalents
$
15,242
$
19,416
Accounts and Notes Receivable, net
195,052
176,276
Inventories
291,882
236,661
Federal Income Tax Receivable
16,267
7,202
Prepaid and Other Assets
3,060
3,172
Total Current Assets
521,503
442,727
Property, Plant and Equipment, net
1,662,061
1,616,539
Investments in Joint Venture
89,111
80,637
Operating Lease Right of Use Asset
20,759
23,856
Notes Receivable
7,382
8,485
Goodwill and Intangibles
466,043
387,898
Other Assets
14,143
19,510
$
2,781,002
$
2,579,652
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current Liabilities –
Accounts Payable
$
110,408
$
113,679
Accrued Liabilities
86,472
86,754
Current Portion of Long-Term Debt
10,000
-
Operating Lease Liabilities
6,009
7,118
Total Current Liabilities
212,889
207,551
Long-Term Liabilities
66,543
67,911
Bank Credit Facility
157,000
200,000
Bank Term Loan
182,500
-
2.500% Senior Unsecured Notes due 2031
739,532
738,265
Deferred Income Taxes
236,844
232,369
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 35,768,376 and
38,710,929 Shares, respectively.
358
387
Capital in Excess of Par Value
-
-
Accumulated Other Comprehensive Losses
(3,547)
(3,175)
Retained Earnings
1,188,883
1,136,344
Total Stockholders’ Equity
1,185,694
1,133,556
$
2,781,002
$
2,579,652
Attachment 5
Eagle Materials Inc.
Depreciation, Depletion and
Amortization by Lines of Business
(dollars in thousands)
(unaudited)
The following table presents
depreciation, depletion and amortization by lines of business for
the quarters and fiscal years ended March 31, 2023 and
2022:
Depreciation, Depletion and
Amortization
Quarter Ended March 31,
Fiscal Year Ended March 31,
2023
2022
2023
2022
Cement
$
20,750
$
20,077
$
81,643
$
79,560
Concrete and Aggregates
4,459
2,314
17,413
9,656
Gypsum Wallboard
5,205
5,546
21,744
22,024
Paperboard
3,745
3,705
14,942
14,721
Corporate and Other
706
691
2,812
2,850
$
34,865
$
32,333
$
138,554
$
128,811
Attachment 6
Eagle Materials Inc.
Reconciliation of Non-GAAP
Financial Measures
(unaudited)
(dollars in thousands)
EBITDA and Adjusted EBITDA
We present Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA
to provide 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, such as purchase accounting on inventory
costs and losses on early retirement of Senior Notes (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
calculations of EBITDA and Adjusted EBITDA and reconciles them to
net earnings in accordance with GAAP for the quarters and fiscal
years ended March 31, 2023 and 2022:
Quarter Ended March 31,
Fiscal Year Ended March 31,
2023
2022
2023
2022
Net Earnings, as reported
$
100,356
$
74,316
$
461,540
$
374,247
Income Tax Expense
22,606
15,898
127,053
100,847
Interest Expense
10,329
5,982
35,171
30,873
Depreciation, Depletion and
Amortization
34,865
32,333
138,554
128,811
EBITDA
$
168,156
$
128,529
$
762,318
$
634,778
Northern Colorado purchase accounting
1
-
-
2,067
-
Loss on early Retirement of Senior
Notes
-
-
-
8,407
Stock-based Compensation 2
3,519
3,627
17,155
14,264
Adjusted EBITDA
$
171,675
$
132,156
$
781,540
$
657,449
1 Represents the cost impact of the fair
value markup of acquired inventory.
2 The increase in stock-based compensation
is due to the retirement of two senior executives during the first
quarter of fiscal 2023.
Attachment 7
Eagle Materials Inc.
Reconciliation of Net Debt to
Adjusted EBITDA
(unaudited)
(dollars in thousands)
GAAP does not define “Net Debt” and it
should not be considered as an alternative to cash flow or
liquidity measures 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 a metric of its current 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,
2023
2022
Total debt, excluding debt issuance
costs
$
1,099,500
$
950,000
Cash and cash equivalents
15,242
19,416
Net Debt
$
1,084,258
$
930,584
Adjusted EBITDA
781,540
657,449
Net Debt to Adjusted EBITDA
1.4x
1.4x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230518005049/en/
For additional information, contact at
214-432-2000.
Michael R. Haack President and Chief Executive
Officer
D. Craig Kesler Executive Vice President and Chief
Financial Officer
Robert S. Stewart Executive Vice President, Strategy,
Corporate Development and Communications
Eagle Materials (NYSE:EXP)
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