Eagle Materials(US:EXP)2026-01-29 21:34Revenue Performance - Revenue for the three months ended December 31, 2025, decreased by $2.0 million to $556.0 million, with a decline in sales volume primarily affecting the Gypsum Wallboard segment [110]. - Revenue for the nine months ended December 31, 2025, increased by $39.3 million, or 2%, to $1,829.6 million, with higher sales volumes contributing positively [122]. - Cement Revenue was $1,053.7 million, a 7% increase for the nine months ended December 31, 2025, driven by higher gross sales prices and Sales Volume [137]. - Concrete and Aggregates Revenue increased 21% to $236.9 million for the nine months ended December 31, 2025 [142]. - Gypsum Wallboard Revenue was $580.9 million, a 10% decrease for the nine months ended December 31, 2025, due to lower gross sales prices and Sales Volume [148]. - Recycled Paperboard Revenue decreased 15% to $47.8 million for the three months ended December 31, 2025, attributed to lower sales volume and gross sales prices [151]. - Recycled Paperboard Revenue decreased 8% to $147.5 million for the nine months ended December 31, 2025, driven by lower gross sales prices and sales volume [153]. Cost and Earnings Analysis - Cost of Goods Sold increased by $14.9 million, or 4%, to $395.1 million for the same period, driven by higher operating costs [111]. - Gross Profit decreased by 10% to $160.9 million, with a gross margin decline to 29% due to lower sales prices and increased operating costs [112]. - Net Earnings for the three months ended December 31, 2025, decreased by 14% to $102.9 million [120]. - Cost of Goods Sold for the nine months increased by $61.5 million, or 5%, to $1,283.3 million, primarily due to higher sales volume and operating costs [123]. - Gross Profit for the nine months decreased by 4% to $546.2 million, with a gross margin decline to 30% attributed to higher operating costs [124]. - Net Earnings decreased 8% to $363.6 million for the nine months ended December 31, 2025 [131]. - Operating Earnings decreased 18% to $221.3 million due to lower gross sales prices and sales volume, along with higher operating costs [149]. Operating Performance - Operating Earnings for Concrete and Aggregates were approximately $15.5 million, a 2,532% increase for the nine months ended December 31, 2025 [143]. - Cement Operating Earnings increased by $0.4 million to $292.2 million for the nine months ended December 31, 2025 [138]. - Operating Margin for Gypsum Wallboard decreased to 35% for the three months ended December 31, 2025, primarily due to lower gross sales prices and higher operating costs [147]. - Operating Earnings for the three months increased 2% to $11.2 million, primarily due to lower operating costs, which increased earnings by $4.3 million [152]. - Operating Earnings for the nine months increased 15% to $31.8 million, mainly due to lower operating costs, which increased earnings by $11.3 million [154]. Cash Flow and Capital Management - Net Cash Provided by Operating Activities increased by $26.3 million to $512.0 million during the nine months ended December 31, 2025 [160]. - Working Capital increased by $367.0 million to $790.6 million at December 31, 2025, primarily due to higher cash and lower accounts payable [161]. - Net Cash Used in Investing Activities was approximately $294.7 million, compared to $171.9 million during the same period in 2024, mainly for facility modernization [165]. - Net Cash Provided by Financing Activities was $181.2 million, a significant increase from a net cash used of $317.7 million in the prior year [166]. Debt and Share Repurchase - The debt-to-capitalization ratio increased to 54.4% at December 31, 2025, compared to 46.1% at March 31, 2025 [167]. - Share repurchases totaled 1,401,886 shares at an average price of $221.34 per share for the nine months ended December 31, 2025 [177]. - The company has repurchased approximately 52.6 million shares since becoming publicly held in April 1994, with a cumulative total of 55.9 million shares authorized for repurchase [177]. - The average price per share for repurchases in Quarter 1 was $219.64, in Quarter 2 was $225.24, and in Quarter 3 was $219.90 [177]. Capital Expenditures and Future Projections - Capital expenditures for the nine months ended December 31, 2025, amounted to $294.68 million, a significant increase from $146.98 million in the same period of 2024 [180]. - Estimated capital expenditures for fiscal 2026 are projected to range from $430.0 million to $450.0 million, focusing on facility expansions and modernization projects [180]. Risk Factors - A hypothetical 100 basis point increase in interest rates on $285.0 million of borrowings under the Term Loan would increase annual interest expense by approximately $2.9 million [184]. - The company is exposed to commodity price risks, particularly in coal, coke, natural gas, and power, and aims to mitigate this through contracts and alternative fuels [185]. - The company’s operations are subject to various risks, including fluctuations in public infrastructure expenditures and changes in economic conditions, which may impact future performance [182]. - The company has not utilized derivative financial instruments to manage interest rate risks as of December 31, 2025 [184].