Eagle Materials(US:EXP)2025-01-29 21:54Revenue and Earnings - Revenue for the three months ended December 31, 2024, decreased by $0.8 million to $558.0 million, with lower sales volume adversely affecting revenue by approximately $18.1 million[98] - Net earnings for the three months ended December 31, 2024, decreased by 7% to $119.6 million[108] - Revenue for the nine months ended December 31, 2024, increased by $7.7 million to $1,790.3 million, driven by higher gross sales prices[111] - Net Earnings decreased by 1% to $396.9 million for the nine months ended December 31, 2024[120] Gross Profit and Operating Earnings - Gross profit for the same period decreased by 2% to $177.8 million, primarily due to higher operating costs and lower sales volume[100] - Gross profit for the nine months ended December 31, 2024, increased by 1% to $568.5 million, with a consistent gross margin of 32%[113] - Cement Operating Earnings decreased by 18% to $86.8 million for the three months ended December 31, 2024, attributed to lower Sales Volume and higher operating costs[126] - Gypsum Wallboard Operating Earnings increased by 8% to $270.5 million for the nine months ended December 31, 2024, supported by higher gross sales prices and lower operating costs[138] - Operating Earnings rose 47% to $11.0 million, primarily due to higher gross sales prices and sales volume, despite a $3.1 million increase in operating costs[142] - Operating Earnings for the nine months increased 24% to $27.6 million, with higher gross sales prices and sales volume contributing $15.5 million and $1.7 million, respectively[144] Revenue by Segment - Cement Revenue for the three months ended December 31, 2024, was $295.4 million, a 4% decrease from the prior-year period, primarily due to lower Sales Volume[125] - Concrete and Aggregates Revenue declined by 1% to $60.7 million for the three months ended December 31, 2024, with a notable decrease in Sales Volume[130] - Gypsum Wallboard Revenue increased by 4% to $209.5 million for the three months ended December 31, 2024, driven by higher gross sales prices and Sales Volume[135] - Concrete and Aggregates Revenue for the nine months ended December 31, 2024, declined by 3% to $195.5 million, primarily due to lower Sales Volume[132] - Recycled Paperboard Revenue increased 19% to $56.2 million for the three months ended December 31, 2024, driven by higher gross sales prices and sales volume[141] - For the nine months ended December 31, 2024, Recycled Paperboard Revenue also increased 19% to $161.2 million, with gross sales prices contributing $15.5 million and sales volume contributing $10.3 million[143] Expenses and Tax - Corporate general and administrative expenses increased by approximately $11.8 million, or 28%, for the nine months ended December 31, 2024[115] - Income Tax Expense for the nine months ended December 31, 2024, was $113.6 million, a slight decrease from $115.7 million in the prior-year period, with an effective tax rate of 22% remaining consistent[119] Cash Flow and Capital Expenditures - Net Cash Provided by Operating Activities decreased by $14.7 million to $485.8 million during the nine months ended December 31, 2024[152] - Net Cash Used in Investing Activities was approximately $171.9 million, an increase of $29.0 million compared to the same period in fiscal 2024, mainly due to higher capital expenditures[156] - Capital expenditures for the nine months ended December 31, 2024, totaled $146.975 million, a significant increase from $60.951 million in the same period of 2023[171] - The company expects capital expenditures for fiscal 2025 to range from $215.0 million to $235.0 million, reflecting ongoing construction of the Mountain Cement facility[171] Share Repurchases and Dividends - Dividends paid were $25.4 million for the nine months ended December 31, 2024, compared to $26.7 million for the same period in 2023[166] - Total share repurchases for the nine months ended December 31, 2024, amounted to 795,719 shares at an average price of $252.95 per share[168] - Approximately 50.8 million shares have been repurchased since the company became publicly held in April 1994, with a cumulative total of 55.9 million shares authorized for repurchase[168] Debt and Financial Ratios - The debt-to-capitalization ratio improved to 40.3% at December 31, 2024, down from 45.7% at March 31, 2024[158] - A hypothetical 100 basis point increase in interest rates would increase annual interest expense by approximately $2.6 million on existing borrowings[174] Risks and Economic Environment - The macroeconomic environment remains constructive for cement demand, with only approximately 25% of federal funding from the Infrastructure Investment and Jobs Act spent to date[90] - The company faces various risks including fluctuations in public infrastructure expenditures and changes in economic conditions that could adversely affect revenue and operating earnings[172] - The company is exposed to commodity price risks, particularly in coal, coke, natural gas, and power, and attempts to mitigate this through contracts and alternative fuels[175] Acquisitions - The company finalized the acquisition of an aggregates operation in Battletown, Kentucky, for approximately $24.9 million on August 9, 2024[86] - The company purchased Bullskin Stone & Lime, LLC for approximately $152.5 million on January 7, 2025, which will be included in the Concrete and Aggregates business segment[87] Stock and Employee Compensation - The company withheld 5,636 shares from employees for tax withholding upon the vesting of Restricted Shares during the nine months ended December 31, 2024[170] - The average price paid for shares repurchased in Quarter 3 was $282.56, with a total of 194,986 shares repurchased[168] - The company has utilized derivative instruments, including interest rate swaps, to manage debt subject to interest rate fluctuations[174]