Eagle Materials Inc. reported financial results for fiscal year 2020 and the fiscal fourth quarter ended March 31. The company is reporting record revenue of $1.5 billion, up 4% for fiscal year 2020 and record revenue of $315.4 million in the fiscal fourth quarter, up 11%.
On March 6, Eagle completed its acquisition of substantially all of the assets of Kosmos Cement Co., which includes a cement plant in Louisville, Ky., with annual capacity of 1.7 million tons, as well as seven distribution terminals and substantial raw-material reserves.
The purchase price paid by Eagle in the Kosmos acquisition was $665 million in cash, subject to a customary post-closing inventory adjustment. Eagle used cash on-hand, along with borrowings under a new term loan facility, to fund the purchase.
Fiscal 2020 revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, and joint venture and intersegment Cement revenue, was $933.3 million, a 17% increase. Heavy Materials annual operating earnings increased 12% to $198.9 million, primarily because of higher sales volume and net sales prices.
Fiscal 2020 revenue from Concrete and Aggregates increased 31% to $181.3 million. Concrete and Aggregates reported fiscal 2020 operating earnings of $17.6 million, up 36%, reflecting improved sales volume and pricing as well as the financial results of a concrete and aggregates business Eagle acquired in August 2019.
Concrete and Aggregates revenue for the quarter was $39.5 million, an increase of 39%. Fourth quarter operating earnings were $2.5 million, a 13% increase, reflecting improved sales volume and pricing as well as the financial results of a concrete and aggregates business Eagle acquired in August 2019.
Michael Haack, president and chief executive officer, commented, “In the face of the COVID-19 pandemic, our management team is focused first and foremost on protecting the safety and health of our employees, customers, and business partners. We’ve generally been deemed an essential business, and as we continue operations, we are enforcing health and safety protocols that meet or exceed CDC guidelines.”
Commenting on the financial results, Haack said, “Having achieved record results in fiscal 2020, we entered this crisis period in a strong financial position, and we are taking prudent actions to sustain the financial health of our business. In light of the risks posed by the COVID-19 pandemic and its possible future effects on our business, we are managing our balance sheet and cash flow for stability today and in the future. We are limiting capital spending to critical projects only, managing inventory levels to improve working capital, and taking additional steps such as suspending share repurchases and future dividends to maximize free cashflow. The sale of our concrete and aggregates business in Northern California announced on April 17, coupled with the carryback treatment of our net operating loss, will increase our near-term liquidity considerably.”
Haack concluded, “I want to thank our dedicated employees for their extraordinary efforts and focus during this unprecedented time. We have a long history of managing through challenging market conditions, and I am confident we will successfully navigate through this difficult period.”