Financial Data and Key Metrics Changes - The company achieved record revenue of $639 million, up 2% from the prior year, driven by higher cement sales volume and contributions from recently acquired aggregates businesses [10] - Earnings per share (EPS) was $4.23, down 1% from the second quarter of fiscal 2025, reflecting lower net earnings primarily due to reduced wallboard sales volume [10] - Operating cash flow decreased 12% to $205 million, primarily due to working capital changes [12] Business Line Data and Key Metrics Changes - In the heavy materials sector, revenue increased by 11%, driven by increased cement sales volume and a 24% increase in concrete and aggregates revenue [10] - Record aggregates sales volume was up 103%, including contributions from recently acquired businesses, with organic aggregates sales volume up 35% [11] - The light materials sector saw a revenue decrease of 13% to $213 million, reflecting lower wallboard sales volume and a 2% decrease in wallboard sales prices [11] Market Data and Key Metrics Changes - Cement and aggregates volumes increased for the second consecutive quarter, with a favorable outlook for the remainder of the fiscal year due to unspent funds from the Infrastructure Investment and Jobs Act [5] - Wallboard volumes were impacted by reduced demand due to high interest rates and affordability challenges, with a noted stability in wallboard pricing [6] Company Strategy and Development Direction - The company is focused on long-term growth investments, including a $430 million modernization and expansion project at the Laramie, Wyoming cement plant, expected to be completed by the end of calendar 2026 [7][8] - The company is also modernizing the Duke, Oklahoma wallboard facility, which will lower production costs by about 20% [9] - The company continues to seek high growth, high return projects and is open to M&A opportunities that meet return criteria [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding cement and aggregates volume recovery, supported by infrastructure spending and private non-residential construction [20] - The company remains focused on long-term growth despite short-term challenges in the residential construction market affecting wallboard demand [6][7] - Management highlighted the importance of maintaining a balance between price and volume, emphasizing a preference for price stability [18] Other Important Information - The company repurchased approximately 396,000 shares for $89 million during the quarter, returning a total of $97 million to shareholders [12] - The capital spending for fiscal 2026 is expected to be in the range of $475 million to $500 million, with a projected decrease in spending for fiscal 2027 [34] Q&A Session Summary Question: Wallboard volume performance and demand drivers - Management noted a significant pullback in production from builders during July and August, impacting wallboard demand, but emphasized a long-term positive outlook due to underconsumption of wallboard in the U.S. [15][16] Question: Cement volume drivers and future expectations - Management indicated that cement volume growth is driven by infrastructure spending and private non-residential construction, with cautious optimism for continued positive trends [19][20] Question: Organic aggregates volume growth - The 35% growth in organic aggregates volume was attributed to both acquisitions and capital improvements in existing operations, with a focus on growing this segment over time [22][23] Question: Cement pricing and competitive pressures - Management acknowledged some price degradation in Texas but noted overall pricing stability in the majority of their markets, with announced price increases effective January 1, 2026 [27][29] Question: Capital expenditures and tax implications - Capital spending for fiscal 2026 is expected to be $475 million to $500 million, with significant tax benefits from accelerated depreciation on new projects [33][36]

Financial Data and Key Metrics Changes - The company reported record first quarter revenue of $634.7 million, an increase of 4% year-over-year, primarily driven by higher cement and wallboard sales volume, as well as contributions from recently acquired aggregates businesses [4][14] - Diluted net earnings per share decreased by 5% to $3.76, attributed to lower earnings in cement due to higher operating costs, partially offset by a 3% reduction in fully diluted shares from the share buyback program [4][14] Business Line Data and Key Metrics Changes - In the heavy materials sector, revenue increased by 5%, driven by increased cement sales volume and a 21% increase in concrete and aggregates revenue. Aggregates sales volume surged by 117%, including contributions from recently acquired businesses, with organic aggregates sales volume up 29% [15] - The light materials sector saw a 1% increase in revenue, reflecting higher wallboard sales volume, but was partially offset by lower wallboard sales prices. Operating earnings in this sector decreased slightly due to lower net sales prices, despite lower input costs [16] Market Data and Key Metrics Changes - Aggregate volumes improved significantly year-over-year, aided by the integration of two recently acquired quarries and organic growth [8] - Cement volumes also improved year-over-year, marking the first quarter since December 2023 with an increase in cement sales volumes, despite weather disruptions in several markets [9] Company Strategy and Development Direction - The company continues to focus on operational improvement and sustainability initiatives, aiming to enhance its competitive advantage as a low-cost producer [5][6] - Strategic investments are being made in modernization and expansion projects, including the Laramie, Wyoming cement plant and the Duke, Oklahoma wallboard facility, with a total capital spending expectation of $475 million to $525 million for fiscal 2026 [12][17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding demand trends, noting stable order trends across major business lines despite macroeconomic uncertainties [8] - The company anticipates that high capacity utilization rates in the cement industry will lead to an improved pricing environment as cement sales volumes rebound [9][11] Other Important Information - The company generated operating cash flow of $137 million, reflecting improved working capital management, and repurchased 358,000 shares for $79 million during the first quarter [16][17] - The net debt to capitalization ratio remained at 46%, with a net debt to EBITDA leverage ratio of 1.6 times, indicating significant financial flexibility [18] Q&A Session Summary Question: Wallboard performance and demand drivers - Management noted that geographic positioning and trailing twelve-month volume analysis are key factors in outperforming the market, despite ongoing affordability issues in housing [20][21] Question: Cost expectations for wallboard - Natural gas prices have stabilized, and the company has sufficient natural gypsum reserves, indicating no immediate cost concerns [22][23] Question: Impact of ramp-up at new facilities - The ramp-up at the new facility has been a drag on earnings, but improvements are expected as operations stabilize [26][27] Question: Future wallboard margins - Margins are expected to have natural seasonality, but no one-time issues are anticipated moving forward [28][29] Question: Cement volume trends and regional dynamics - Cement volume trends have been consistent, driven by infrastructure spending, with no significant deviations noted across regions [34][36] Question: Outlook for wallboard volumes - Demand for wallboard is expected to remain under pressure due to housing affordability issues, but long-term prospects are viewed positively [41][42] Question: Cement pricing outlook - Management is optimistic about mid to long-term pricing potential as supply-demand dynamics tighten, although short-term price increases may be challenging [49][50]