Eagle Materials Inc. reported financial results for the first quarter of its fiscal 2019 ended June 30. Notable items for the quarter are:
- Record revenue of $393.8 million, up 8 percent.
- Net earnings per diluted share of $1.38, up 22 percent.
First quarter fiscal 2019 results were affected by the following items:
- A $6.5 million (pre-tax) increase in maintenance expenses primarily due to the timing of the annual maintenance outage at its Fairborn cement plant; the previous outage occurred at Fairborn in the fourth quarter of fiscal 2017, shortly after the company purchased the plant.
- A $1.8 million litigation loss at its Paperboard subsidiary.
- $1.6 million of start-up costs at our new frac sand plant in Illinois.
- New frac sand drying plant in Illinois started up on-time, on-budget and began production in late June.
- Approximately 500,000 shares were repurchased for $52 million.
Commenting on the first quarter results, Dave Powers, president and CEO, said, “We are pleased to report another quarter of record revenue and net earnings. We saw strong margin improvement in our Light Materials sector and pricing improved across nearly all businesses during the quarter. We were also pleased to announce the start-up of our new frac sand drying plant in Illinois and we began loading railcars in late June. Tight freight markets continued to limit our ability to move product and led to higher freight costs, which impacted net sales prices in both cement and wallboard this quarter. Looking ahead, we anticipate another strong year, as the backlog of work in our markets continues to drive demand for our products.”
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates and Joint Venture and intersegment Cement revenue, was $227.3 million, a slight improvement from the first quarter of fiscal 2018.
Heavy Materials operating earnings decreased 13 percent to $42.8 million primarily due to increased maintenance costs resulting from the timing of the annual maintenance outage at its Fairborn Cement plant.
Cement revenue for the quarter, including Joint Venture and intersegment revenue, was up 2 percent to $186.8 million, reflecting higher sales prices. The average net sales price for the quarter improved 2 percent to $108.69 per ton. Higher freight costs impacted net cement prices by approximately $1.50 per ton during the quarter. Cement sales volume for the quarter was 1.5 million tons, flat with the prior year.
Operating earnings from Cement for the first quarter were $37.3 million, 14 percent below the same quarter a year ago. The earnings decline was primarily due to the timing of the aforementioned planned maintenance outage.
Concrete and Aggregates revenue for the first quarter of 2019 was $40.5 million, a decrease of 7 percent. First-quarter operating earnings were $5.5 million, a 9 percent decline, reflecting lower sales volumes partially offset by improved pricing.
Eagle’s Oil and Gas Proppants segment reported revenue of $21.8 million, an increase of 15 percent, primarily resulting from a 16 percent rise in frac sand sales volume. The first quarter’s operating loss of $2.7 million includes $7.1 million of depreciation, depletion and amortization and $1.6 million of start-up costs at its new frac sand facility in Illinois.