Eagle Materials Reports Record Revenue

Eagle Materials Inc. reported financial results for fiscal year 2021 and the fiscal fourth quarter ended March 31, noting record full year revenue of $1.6 billion, up 16%, and net earnings of $339 million, up 379%.

Fiscal 2021 revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was $1.1 billion, a 19% improvement. Heavy Materials annual operating earnings increased 27% to $253.0 million primarily because of improved Cement net sales prices and earnings from the recently acquired Kosmos Cement business.

Fiscal 2021 Cement revenue, including Joint Venture and intersegment revenue, was up 26% to $944.6 million, and Cement operating earnings increased 29% to $234.0 million. The annual revenue and earnings improvements reflect higher sales volume and net sales prices as well as the significant contribution of the recently acquired Kosmos Cement business, which added approximately $176 million of revenue and $34 million of operating earnings during the year.

The average annual net Cement sales price for the year increased 1% to $111.19 per ton. Organic (not including the recently acquired Kosmos Cement Business) average net Cement sales prices increased 3%. Cement sales volume for the year was a record 7.5 million tons, up 26%. Organic annual Cement sales volume increased 1%.

Fiscal 2021 revenue from Concrete and Aggregates decreased 7% to $168.7 million because of the divestiture of our northern California concrete and aggregates businesses during the first quarter of fiscal 2021. Concrete and Aggregates reported fiscal 2021 operating earnings of $19.1 million, up 9%, reflecting improved organic sales volume and pricing as well as operating efficiencies, including lower diesel fuel costs.

Fourth quarter Concrete and Aggregates revenue was $34.8 million, a decrease of 12%, because of the divestiture of Eagle’s northern California concrete and aggregates businesses. Fourth quarter operating earnings were $3.3 million, a 30% increase, reflecting improved sales volume and pricing and improved operating efficiencies.

Fourth quarter Cement revenue, including Joint Venture and intersegment revenue, was up 17% to $171.0 million. Excluding the results of the recently acquired Kosmos Cement business, revenue was down 1%. Operating earnings decreased 6% to $23.2 million. Eagle’s fourth quarter Cement earnings were affected by a severe winter storm during February 2021 which had a significant impact on Texas and the broader Southern United States. Its cement facilities in Texas, Missouri and Oklahoma were forced to curtail production during the storm and energy prices spiked during this time period. Eagle estimates the storm’s impact on Cement operating earnings was approximately $6 million primarily due to higher costs during the quarter. The company said it is still engaged in discussions with contractual counterparties regarding the responsibility for certain charges and obligations arising as a result of the storm, and therefore, it is not possible at the present time to make a final determination as to the storm’s impact on its financial results.

The average net Cement sales price for the quarter increased 2% to $112.77 per ton. Organic average net Cement sales prices increased 3%. Cement sales volume for the quarter was up 17% to a record 1.4 million tons. Organic quarterly Cement sales volume declined 2% to 1.1 million tons.

Commenting on the annual results, Michael Haack, president and CEO, said, “Across all measures, fiscal 2021 was extraordinary for Eagle as we met and overcame challenges that were inconceivable just a year earlier. The resilience of our business model, our financial discipline and our team’s operational and strategic execution allowed us to deliver record financial results, integrate the largest acquisition in the company’s history and further streamline our business portfolio by divesting several non-core businesses, all while achieving industry leading safety performance. Our strong operating cash flow enabled us to reduce leverage to under 1.5 times net debt-to-EBITDA, providing us with significant liquidity and increased financial flexibility.”

Haack continued, “As we begin our new fiscal year, Eagle is well-positioned, both geographically and financially, with ample raw material reserves to capitalize on the underlying demand fundamentals that are expected to support steady and sustainable construction activity growth over the near and long-term. We remain confident in Eagle’s prospects for continued growth and sustainable value creation for all shareholders.”

Haack concluded, “I want to thank our dedicated employees for their exceptional efforts and focus during this unprecedented time. We have a long history of managing through challenging market conditions, and we have once again shown the benefits of our business model as we navigated through this unpredictable year.”

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