Eagle Materials(US:EXP)2025-07-29 21:42PART I. FINANCIAL INFORMATION (Unaudited) This section presents Eagle Materials Inc.'s unaudited consolidated financial statements and management's discussion for the three months ended June 30, 2025 Item 1. Consolidated Financial Statements This section presents Eagle Materials Inc.'s unaudited consolidated financial statements for Q1 FY2026, including earnings, balance sheets, cash flows, and detailed notes Consolidated Statements of Earnings This section provides the consolidated statements of earnings for the three months ended June 30, 2025, and 2024 Consolidated Statements of Earnings (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | Change (%) | | :--------------------------------- | :--------------- | :--------------- | :--------- | | Revenue | $634,690 | $608,689 | 4.27% | | Cost of Goods Sold | $449,091 | $421,821 | 6.46% | | Gross Profit | $185,599 | $186,868 | -0.68% | | Equity in Earnings of Unconsolidated Joint Venture | $3,804 | $7,716 | -50.70% | | Corporate General and Administrative Expense | $(20,783) | $(15,649) | 32.81% | | Interest Expense, net | $(11,716) | $(10,684) | 9.66% | | Earnings Before Income Taxes | $157,858 | $170,934 | -7.65% | | Net Earnings | $123,362 | $133,842 | -7.83% | | Basic EPS | $3.78 | $3.97 | -4.79% | | Diluted EPS | $3.76 | $3.94 | -4.57% | | Cash Dividends Per Share | $0.25 | $0.25 | 0.00% | Consolidated Statements of Comprehensive Earnings This section presents the consolidated statements of comprehensive earnings for the three months ended June 30, 2025, and 2024 Consolidated Statements of Comprehensive Earnings (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Net Earnings | $123,362 | $133,842 | | Net Actuarial Change in Defined Benefit Plans: Amortization of Net Actuarial Loss | $53 | $60 | | Net Actuarial Change in Defined Benefit Plans: Tax Expense | $(12) | $(15) | | Comprehensive Earnings | $123,403 | $133,887 | Consolidated Balance Sheets This section details the consolidated balance sheets as of June 30, 2025, and March 31, 2025 Consolidated Balance Sheets (as of): | Metric | June 30, 2025 (thousands) | March 31, 2025 (thousands) | | :--------------------------------- | :------------------------ | :----------------------- | | ASSETS | | | | Cash and Cash Equivalents | $59,739 | $20,401 | | Accounts Receivable, net | $263,398 | $212,332 | | Inventories | $393,401 | $415,175 | | Total Current Assets | $732,365 | $668,657 | | Property, Plant, and Equipment, net | $1,840,845 | $1,792,982 | | Total Assets | $3,397,314 | $3,264,588 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total Current Liabilities | $268,358 | $245,004 | | Long-Term Debt | $1,294,883 | $1,223,316 | | Total Liabilities | $1,905,540 | $1,807,888 | | Total Stockholders' Equity | $1,491,774 | $1,456,700 | Consolidated Statements of Cash Flows This section outlines the consolidated statements of cash flows for the three months ended June 30, 2025, and 2024 Consolidated Statements of Cash Flows (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Net Cash Provided by Operating Activities | $136,634 | $132,636 | | Net Cash Used in Investing Activities | $(76,097) | $(33,128) | | Net Cash Used in Financing Activities | $(21,199) | $(87,893) | | Net Increase in Cash and Cash Equivalents | $39,338 | $11,615 | | Cash and Cash Equivalents at End of Period | $59,739 | $46,540 | Consolidated Statements of Stockholders' Equity This section presents the changes in consolidated stockholders' equity for the three months ended June 30, 2025, and 2024 Changes in Stockholders' Equity (Three Months Ended June 30, 2025): | Item | Amount (thousands) | | :--------------------------------- | :--------------- | | Balance at March 31, 2025 | $1,456,700 | | Net Earnings | $123,362 | | Stock Compensation Expense | $4,822 | | Shares Redeemed to Settle Employee Taxes | $(5,579) | | Purchase and Retirement of Common Stock | $(79,403) | | Dividends to Stockholders | $(8,169) | | Unfunded Pension Liability, net of tax | $41 | | Balance at June 30, 2025 | $1,491,774 | Changes in Stockholders' Equity (Three Months Ended June 30, 2024): | Item | Amount (thousands) | | :--------------------------------- | :--------------- | | Balance at March 31, 2024 | $1,308,535 | | Net Earnings | $133,842 | | Stock Option Exercises and Restricted Share Vesting | $56 | | Stock Compensation Expense | $4,539 | | Shares Redeemed to Settle Employee Taxes | $(1,421) | | Purchase and Retirement of Common Stock | $(86,345) | | Dividends to Stockholders | $(8,453) | | Unfunded Pension Liability, net of tax | $45 | | Balance at June 30, 2024 | $1,350,798 | Notes to Unaudited Consolidated Financial Statements This section provides detailed notes explaining accounting policies, acquisitions, revenue recognition, and other financial details - The financial statements are unaudited and prepared in accordance with SEC rules, condensing or omitting certain GAAP disclosures16[17](index=17&type=chunk] - Management makes estimates and assumptions, and actual results may differ[18](index=18&type=chunk] - Two recent FASB ASUs (2023-09 on Income Tax Disclosures and 2024-03 on Expense Disaggregation) are pending adoption, with ASU 2023-09 having no impact on financial results and ASU 2024-03 currently being evaluated19[20](index=20&type=chunk] Supplemental Cash Flow Information (Three Months Ended June 30): | Item | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Cash Payments: Interest | $7,948 | $3,678 | | Cash Payments: Income Taxes | $734 | $780 | | Cash Payments: Operating Leases | $1,498 | $2,287 | | Noncash Financing Activities: Right-of-Use Assets Obtained for Capitalized Operating Leases | $3,325 | $855 | | Noncash Financing Activities: Excise Tax on Share Repurchases | $787 | $719 | - On January 7, 2025, Eagle Materials acquired Bullskin Stone & Lime, LLC, an aggregates business in Western Pennsylvania, for approximately $150.0 million, funded by its Revolving Credit Facility[22](index=22&type=chunk] - The acquisition contributed $7.2 million in revenue and $1.6 million in operating earnings for the three months ended June 30, 2025[27](index=27&type=chunk] Preliminary Purchase Price Allocation for Bullskin Stone & Lime, LLC (as of June 30, 2025): | Asset/Liability | Fair Value (thousands) | | :--------------------------------- | :--------------------- | | Accounts Receivable | $1,443 | | Inventories | $3,354 | | Property, Plant, and Equipment | $35,097 | | Intangible Assets | $39,400 | | Total Net Assets Acquired | $78,404 | | Goodwill | $71,543 | | Total Purchase Price | $149,947 | - Revenue is primarily from product sales (cement, concrete, aggregates, gypsum wallboard, recycled paperboard), recognized upon shipment or transfer of control[28](index=28&type=chunk] - Rebates and incentives are treated as variable consideration[29](index=29&type=chunk] - Freight and delivery charges are fulfillment activities, with billed fees recorded as revenue and costs as Cost of Goods Sold30[31](index=31&type=chunk] - Other Non-Operating Income includes lease/rental income, asset sales, and trucking income[32](index=32&type=chunk] - Accounts Receivable, net of a $6.6 million allowance for doubtful accounts at June 30, 2025, are subject to ongoing credit evaluations with no significant credit risk concentration[33](index=33&type=chunk] - Inventories are valued at the lower of average cost or net realizable value, totaling $393.4 million at June 30, 2025, down from $415.2 million at March 31, 2025[34](index=34&type=chunk] Accrued Expenses (as of): | Item | June 30, 2025 (thousands) | March 31, 2025 (thousands) | | :--------------------------------- | :------------------------ | :----------------------- | | Payroll and Incentive Compensation | $20,083 | $31,918 | | Benefits | $16,724 | $16,950 | | Interest | $12,541 | $7,689 | | Dividends | $8,378 | $8,463 | | Property Taxes | $8,399 | $5,836 | | Total Accrued Expenses | $87,677 | $96,077 | - Total lease cost for operating and short-term leases increased to $2.8 million for the three months ended June 30, 2025, from $2.4 million in the prior year[37](index=37&type=chunk] - Operating Lease Right-of-Use Assets were $31.9 million and Total Operating Lease Liabilities were $39.8 million at June 30, 2025, with a weighted-average remaining lease term of 11.8 years and a discount rate of 4.42%[38](index=38&type=chunk] - The 2023 Equity Incentive Plan reserves 1,425,000 shares for awards[39](index=39&type=chunk] - In May 2025, 29,273 performance stock units and 14,712 performance stock options were awarded, vesting based on return on equity and total stockholder return over three years[40](index=40&type=chunk] - Additionally, 14,712 time-vesting stock options and 29,273 time-vesting restricted stock units were granted, vesting ratably over three years[41](index=41&type=chunk] - Total unrecognized compensation cost for stock options was $3.7 million (2.4 years weighted-average period) and for restricted stock units/shares was $30.2 million (1.8 years weighted-average period) at June 30, 202543[45](index=45&type=chunk][50](index=50&type=chunk] Stock Option Activity (Three Months Ended June 30, 2025): | Item | Number of Shares | Weighted Average Exercise Price | | :--------------------------------- | :--------------- | :---------------------------- | | Outstanding Options at March 31, 2025 | 184,233 | $95.75 | | Granted | 29,424 | $213.66 | | Outstanding Options at June 30, 2025 | 213,657 | $111.99 | | Options Exercisable at June 30, 2025 | 164,778 | $88.26 | | Weighted-Average Fair Value of Options Granted During the Year | N/A | $90.94 | Restricted Stock Units and Nonvested Restricted Stock Activity (Three Months Ended June 30, 2025): | Item | Number of Shares | Weighted Average Grant Date Fair Value | | :--------------------------------- | :--------------- | :----------------------------------- | | At March 31, 2025 | 194,099 | $150.56 | | Granted | 58,546 | $213.66 | | Vested | (62,204) | $91.22 | | At June 30, 2025 | 190,441 | $126.88 | Earnings Per Share Calculation (Three Months Ended June 30): | Item | 2025 | 2024 | | :--------------------------------- | :--------------- | :--------------- | | Weighted-Average Shares of Common Stock Outstanding | 32,624,075 | 33,734,280 | | Weighted-Average Common Stock and Dilutive Securities Outstanding | 32,808,568 | 33,993,023 | | Shares Excluded Due to Anti-Dilution Effects | 64,216 | 56,641 | - The company sponsors fully funded defined benefit and defined contribution plans, with defined benefit plans frozen to new participants and benefits[53](index=53&type=chunk] - Expected pension expense for fiscal 2026 is less than $0.1 million[54](index=54&type=chunk] - The effective income tax rate for the three months ended June 30, 2025, was approximately 22%, consistent with the prior year, primarily due to state income taxes partially offset by percentage depletion[55](index=55&type=chunk] - The company is assessing the impact of the One Big Beautiful Bill Act (OBBBA) signed on July 4, 2025[56](index=56&type=chunk] Long-Term Debt (as of): | Item | June 30, 2025 (thousands) | March 31, 2025 (thousands) | | :--------------------------------- | :------------------------ | :----------------------- | | Revolving Credit Facility | $275,000 | $200,000 | | 2.500% Senior Unsecured Notes Due 2031 | $750,000 | $750,000 | | Term Loan | $292,500 | $296,250 | | Total Debt | $1,317,500 | $1,246,250 | | Long-term Debt (net of current portion, discount, and costs) | $1,294,883 | $1,223,316 | - The company has a $750.0 million Revolving Credit Facility (expiring Feb 2030) with $275.0 million outstanding and $9.9 million in letters of credit, leaving $465.1 million available[58](index=58&type=chunk][63](index=63&type=chunk] - It also has a $300.0 million Term Loan (expiring Feb 2030) with $292.5 million outstanding[64](index=64&type=chunk] - The 2.500% Senior Unsecured Notes ($750.0 million principal) are due July 2031[65](index=65&type=chunk] - The company was in compliance with all financial covenants at June 30, 2025[65](index=65&type=chunk] - Eagle Materials operates in two sectors: Heavy Materials (Cement, Concrete and Aggregates) and Light Materials (Gypsum Wallboard, Recycled Paperboard), across 70+ facilities in 21 states[67](index=67&type=chunk][68](index=68&type=chunk] - Segment performance is assessed based on operating earnings[69](index=69&type=chunk] - The company proportionately consolidates its 50% share of the Texas Lehigh Cement Company LP joint venture for segment reporting[70](index=70&type=chunk][71](index=71&type=chunk] Segment Revenue from External Customers (Three Months Ended June 30): | Segment | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Cement | $310,326 | $299,572 | | Concrete and Aggregates | $73,716 | $61,038 | | Gypsum Wallboard | $221,516 | $217,826 | | Recycled Paperboard | $29,132 | $30,253 | | Total Consolidated Revenue | $634,690 | $608,689 | Segment Profit (Three Months Ended June 30): | Segment | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Cement | $81,084 | $89,125 | | Concrete and Aggregates | $6,175 | $2,980 | | Gypsum Wallboard | $92,641 | $93,976 | | Recycled Paperboard | $9,503 | $8,503 | | Total Segment Profit | $189,403 | $194,584 | Capital Expenditures by Segment (Three Months Ended June 30): | Segment | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Cement | $45,995 | $18,794 | | Concrete and Aggregates | $5,603 | $6,589 | | Gypsum Wallboard | $21,995 | $3,280 | | Recycled Paperboard | $1,315 | $3,561 | | Corporate and Other | $1,189 | $904 | | Total Capital Expenditures | $76,097 | $33,128 | Joint Venture Summarized Financial Information (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | | :--------------------------------- | :--------------- | :--------------- | | Revenue | $54,567 | $58,620 | | Gross Margin | $10,942 | $16,424 | | Earnings Before Income Taxes | $7,608 | $15,548 | - Net interest expense increased by 10% to $11.7 million for the three months ended June 30, 2025, primarily due to higher interest on the Revolving Credit Facility[79](index=79&type=chunk] - The company has contingent liabilities of $9.9 million under outstanding letters of credit and $47.9 million in performance bonds, but management believes these will not have a material adverse effect[80](index=80&type=chunk][82](index=82&type=chunk] - The fair value of the 2.500% Senior Unsecured Notes Due 2031 was $664.0 million at June 30, 2025, based on quoted prices of similar debt instruments[84](index=84&type=chunk] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, market conditions, and operational results for Q1 FY2026 EXECUTIVE SUMMARY This section provides an overview of Eagle Materials Inc.'s business, product segments, and recent strategic acquisitions - Eagle Materials Inc. is a leading U.S. manufacturer of heavy construction products (Cement, Concrete and Aggregates) and light building materials (Gypsum Wallboard, Recycled Paperboard), operating over 70 facilities in 21 states86[87](index=87&type=chunk] - The company accounts for its 50% interest in the Texas Lehigh Cement Company LP joint venture using proportionate consolidation for segment reporting[88](index=88&type=chunk] - Recent acquisitions include an aggregates business in Northern Kentucky (August 2024 for $24.9 million) and Bullskin Stone & Lime LLC (January 2025 for $150.0 million), both integrated into the Concrete and Aggregates segment89[90](index=90&type=chunk][91](index=91&type=chunk] MARKET CONDITIONS AND OUTLOOK This section discusses the macroeconomic environment, product demand, and cost management strategies for the company's segments - The macroeconomic environment supports product demand, with steady cement demand expected from public infrastructure projects (Infrastructure Investment and Jobs Act funds yet to be spent) and continued construction spending93[94](index=94&type=chunk] - Residential construction remains steady despite higher interest rates, supported by a chronic housing shortage and aging housing stock, with a full recovery tied to declining mortgage rates[95](index=95&type=chunk] - The company's geographic footprint in the U.S. heartland and Sun Belt positions it to capitalize on market dynamics[96](index=96&type=chunk] - The company is well-positioned to manage costs due to substantial raw material reserves near manufacturing facilities[97](index=97&type=chunk] - Energy costs are expected to remain stable, while freight costs for Gypsum Wallboard and Cement segments increased slightly in Q1 fiscal 2026 and are expected to remain at current levels[98](index=98&type=chunk] - Labor constraints could affect Concrete and Aggregates[99](index=99&type=chunk] - Recycled fiber prices for paperboard are subject to fluctuation, with contractual price adjustments partially offsetting changes[100](index=100&type=chunk] - Maintenance costs are expected to see a low single-digit increase due to high equipment and contractor costs[100](index=100&type=chunk] RESULTS OF OPERATIONS This section analyzes the consolidated and segment-specific financial performance for the three months ended June 30, 2025 Consolidated Financial Performance (Three Months Ended June 30, 2025 vs. 2024): | Metric | 2025 (thousands) | 2024 (thousands) | Change ($) | Change (%) | | :--------------------------------- | :--------------- | :--------------- | :--------- | :--------- | | Revenue | $634,690 | $608,689 | $26,001 | 4% | | Cost of Goods Sold | $(449,091) | $(421,821) | $(27,270) | 6% | | Gross Profit | $185,599 | $186,868 | $(1,269) | (1)% | | Equity in Earnings of Unconsolidated Joint Venture | $3,804 | $7,716 | $(3,912) | (51)% | | Corporate General and Administrative | $(20,783) | $(15,649) | $(5,134) | 33% | | Other Non-Operating Income | $954 | $2,683 | $(1,729) | (64)% | | Interest Expense, net | $(11,716) | $(10,684) | $(1,032) | 10% | | Earnings Before Income Taxes | $157,858 | $170,934 | $(13,076) | (8)% | | Net Earnings | $123,362 | $133,842 | $(10,480) | (8)% | | Diluted Earnings per Share | $3.76 | $3.94 | $(0.18) | (5)% | - Consolidated Revenue increased 4% to $634.7 million, driven by higher sales volumes ($19.1 million) partially offset by lower gross sales prices ($4.5 million)[102](index=102&type=chunk] - Excluding acquisitions, revenue increased 2%[103](index=103&type=chunk] - Cost of Goods Sold increased 6% to $449.1 million, primarily due to higher sales volume and operating costs in the Cement business[104](index=104&type=chunk] - Gross Profit decreased 1% to $185.6 million, with gross margin declining to 29% due to lower gross sales prices and higher operating costs[105](index=105&type=chunk] - Equity in Earnings of Unconsolidated Joint Venture decreased 51% due to lower sales volume, average gross sales prices, and increased operating costs (energy, freight, fixed costs)[106](index=106&type=chunk] - Corporate General and Administrative expenses rose 33% due to higher salary, incentive compensation, professional fees, and IT costs[108](index=108&type=chunk] - Net Interest Expense increased 10% due to higher average outstanding borrowings on the Revolving Credit Facility[109](index=109&type=chunk] - Net Earnings decreased 8% to $123.4 million[110](index=110&type=chunk][111](index=111&type=chunk] Cement Segment Performance (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | Change (%) | | :--------------------------------- | :--------------- | :--------------- | :--------- | | Revenue (including Intersegment and Joint Venture) | $347,622 | $339,162 | 2% | | Revenue (External) | $310,326 | $299,572 | 4% | | Sales Volume (M Tons) | 1,993 | 1,947 | 2% | | Average Net Sales Price, per ton | $156.72 | $156.10 | 0% | | Operating Earnings | $81,084 | $89,125 | (9)% | | Operating Margin, per ton | $40.68 | $45.78 | (11)% | - Cement Revenue increased 2% to $347.6 million due to higher gross sales prices ($0.8 million) and sales volume ($7.6 million)[114](index=114&type=chunk] - Operating Earnings decreased 9% to $81.1 million, primarily due to higher operating costs ($11.0 million) from increased freight, energy, labor, fixed costs, and purchased raw materials, partially offset by higher sales volume and gross sales prices[115](index=115&type=chunk] - Operating Margin declined from 26% to 23%[115](index=115&type=chunk] Concrete and Aggregates Segment Performance (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | Change (%) | | :--------------------------------- | :--------------- | :--------------- | :--------- | | Revenue (including Intersegment) | $77,568 | $64,815 | 20% | | Revenue (External) | $73,716 | $61,038 | 21% | | Concrete Sales Volume (M Cubic Yards) | 322 | 343 | (6)% | | Aggregate Sales Volume (M Tons) | 1,731 | 799 | 117% | | Average Net Sales Price, Concrete (Per Cubic Yard) | $150.43 | $148.56 | 1% | | Average Net Sales Price, Aggregates (Per Ton) | $14.24 | $12.61 | 13% | | Operating Earnings | $6,175 | $2,980 | 107% | - Concrete and Aggregates Revenue increased 20% to $77.6 million, driven by higher gross sales prices ($1.4 million) and higher Aggregates Sales Volume ($3.1 million), partially offset by lower Concrete Sales Volume ($3.1 million)[116](index=116&type=chunk] - Excluding acquisitions, revenue increased 2%[117](index=117&type=chunk] - Operating Earnings surged 107% to $6.2 million, primarily due to higher gross sales prices and Aggregates Sales Volume, partially offset by increased operating costs (materials and maintenance)[117](index=117&type=chunk] Gypsum Wallboard Segment Performance (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | Change (%) | | :--------------------------------- | :--------------- | :--------------- | :--------- | | Revenue | $221,516 | $217,826 | 2% | | Sales Volume (MMSF) | 784 | 757 | 4% | | Average Net Sales Price, per MSF | $232.40 | $239.43 | (3)% | | Operating Earnings | $92,641 | $93,976 | (1)% | | Operating Margin, per MSF | $118.16 | $124.14 | (5)% | - Gypsum Wallboard Revenue increased 2% to $221.5 million, driven by higher sales volume ($7.8 million) partially offset by lower gross sales prices ($4.1 million)[119](index=119&type=chunk] - Operating Earnings decreased 1% to $92.6 million due to lower gross sales prices and higher operating costs (freight, energy), partially offset by higher sales volume and lower input costs (fiber)[120](index=120&type=chunk] - Operating Margin decreased to 42%[120](index=120&type=chunk] Recycled Paperboard Segment Performance (Three Months Ended June 30): | Metric | 2025 (thousands) | 2024 (thousands) | Change (%) | | :--------------------------------- | :--------------- | :--------------- | :--------- | | Revenue (including Intersegment) | $51,104 | $54,240 | (6)% | | Revenue (External) | $29,132 | $30,253 | (4)% | | Sales Volume (M Tons) | 90 | 91 | (1)% | | Average Net Sales Price, per ton | $566.33 | $597.41 | (5)% | | Operating Earnings | $9,503 | $8,503 | 12% | | Operating Margin, per ton | $105.59 | $93.44 | 13% | - Recycled Paperboard Revenue decreased 6% to $51.1 million due to lower gross sales prices ($2.8 million) and sales volume ($0.3 million)[123](index=123&type=chunk] - Operating Earnings increased 12% to $9.5 million, primarily due to lower operating costs ($3.8 million), mainly from reduced fiber input costs, partially offset by lower gross sales prices[124](index=124&type=chunk] - Operating Margin increased to 19%[124](index=124&type=chunk] CRITICAL ACCOUNTING POLICIES AND ESTIMATES This section outlines the company's key accounting policies requiring significant judgment and estimates, including long-lived assets and goodwill - The company's critical accounting policies, requiring significant judgment and estimates, relate to long-lived assets, goodwill, and business combinations[126](index=126&type=chunk] - These policies are reviewed with the Audit Committee[127](index=127&type=chunk] - Information on recently issued accounting pronouncements is detailed in Note (A) to the Unaudited Consolidated Financial Statements[128](index=128&type=chunk] LIQUIDITY AND CAPITAL RESOURCES This section details the company's financial resources, cash flow, debt, dividends, and capital expenditure plans - The company believes it has sufficient financial resources to fund operations, capital expenditures, and debt service for at least the next twelve months, monitoring potential economic disruptions[129](index=129&type=chunk] - Net cash provided by operating activities increased by $4.0 million to $136.6 million, primarily due to higher cash flows from changes in working capital and noncash activity, partially offset by lower operating earnings[131](index=131&type=chunk] - Working Capital increased by $40.3 million to $464.0 million at June 30, 2025, driven by higher cash and accounts receivable, partially offset by lower inventories and higher income tax payable[132](index=132&type=chunk] - Accounts Receivable increased due to higher June revenue, but collectability remains strong[133](index=133&type=chunk] - Inventory decreased by $21.8 million, consistent with seasonal business cycles and completion of scheduled outages[134](index=134&type=chunk] - Net cash used in investing activities increased by $43.0 million to $76.1 million, mainly due to the modernization and expansion of the Mountain Cement facility[135](index=135&type=chunk] - Net cash used in financing activities decreased by $66.7 million to $21.2 million, primarily due to higher net borrowings and lower common stock repurchases, partially offset by increased shares redeemed for employee taxes[136](index=136&type=chunk] - The debt-to-capitalization ratio was 46.9% and net-debt-to-capitalization ratio was 45.7% at June 30, 2025[137](index=137&type=chunk] - The company has $465.1 million of available borrowings under its $750.0 million Revolving Credit Facility and $47.9 million in performance bonds[138](index=138&type=chunk][139](index=139&type=chunk] - There is no off-balance sheet debt or outstanding debt guarantees[140](index=140&type=chunk] - The company may purchase or repay outstanding debt securities as market conditions warrant[141](index=141&type=chunk] - Future liquidity depends on market conditions, compliance with debt covenants, competition, and economic factors[142](index=142&type=chunk] - Dividends paid were $8.3 million for the three months ended June 30, 2025, with quarterly payments subject to Board approval[144](index=144&type=chunk] - The company repurchased 357,938 shares of common stock for approximately $78.6 million during the quarter at an average price of $219.64 per share, with 4,311,559 shares remaining under authorization[145](index=145&type=chunk][146](index=146&type=chunk] - Capital expenditures for fiscal 2026 are projected to be $475.0 million to $525.0 million, including major projects at Mountain Cement and a gypsum wallboard plant in Oklahoma[149](index=149&type=chunk] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from interest rate fluctuations on its variable-rate debt and commodity price changes for key inputs - A hypothetical 100 basis point increase in interest rates on the $275.0 million Revolving Credit Facility and $292.5 million Term Loan would increase annual interest expense by approximately $5.7 million[153](index=153&type=chunk] - The company currently does not use derivative financial instruments[153](index=153&type=chunk] - Commodity risk from price changes in coal, coke, natural gas, and power is managed by entering into contracts or increasing the use of alternative fuels[154](index=154&type=chunk] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[155](index=155&type=chunk] - No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025[156](index=156&type=chunk] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, mine safety, other information, and exhibits Item 1. Legal Proceedings The company is involved in various legal proceedings in the ordinary course of business, but management believes the ultimate outcome will not have a material adverse effect - Management does not believe that the ultimate outcome of any currently pending legal proceeding will have a material effect on the company's consolidated financial condition, results of operations, or liquidity[158](index=158&type=chunk] Item 1A. Risk Factors This section references the detailed risk factors affecting the company's operations, financial condition, and liquidity - Risk factors are detailed in Part 1, Item 1A of the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025[160](index=160&type=chunk] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section refers to the disclosure on unregistered equity sales and proceeds within the Management's Discussion and Analysis - Information on unregistered sales of equity securities and use of proceeds is provided in the 'Share Repurchases' section of the MD&A[161](index=161&type=chunk] Item 4. Mine Safety Disclosures This section indicates where information regarding mine safety violations and regulatory matters can be found - Mine safety disclosures are included in Exhibit 95 of this report[162](index=162&type=chunk] Item 5. Other Information This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter[163](index=163&type=chunk] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents and certifications - Exhibits include Restated Certificate of Incorporation, Bylaws, various forms of Management Restricted Stock Unit and Stock Option Agreements, Salaried Incentive Compensation Programs for Fiscal 2026, CEO and CFO certifications (pursuant to Rules 13a-14/15d-14 and 18 U.S.C. Section 1350), Mine Safety Disclosure, and Inline XBRL documents[165](index=165&type=chunk] SIGNATURES This section confirms the report's official signing by key executives of Eagle Materials Inc. as of July 29, 2025 - The report was signed on July 29, 2025, by Michael R. Haack (President and CEO), D. Craig Kesler (EVP – Finance and Administration and CFO), and William R. Devlin (SVP – Controller and Chief Accounting Officer)[169](index=169&type=chunk]