Eagle Materials Quarterly Frac Sand Business Up 98 Percent


Eagle Materials Inc. reported financial results for fiscal year 2017 and the fiscal fourth quarter ended March 31, 2017. Notable items for the fiscal year and quarter include:

• Record annual revenues of $1.2 billion, up 6 percent.
• Cash flow from operations of $331.6 million, up 25 percent.
• Record net earnings per diluted share of $4.10, up 34 percent.
• Record quarterly revenues of $278.7 million, up 11 percent.
• Net earnings per diluted share of $0.75, down 6 percent.
• Eagle's fourth quarter financial results include approximately $9.4 million (pre-tax), or $0.13 per share, of costs associated with completing the acquisition of the Fairborn Business.

On Feb. 10, 2017, Eagle completed its previously announced acquisition of Cemex S.A.B. de C.V.'s Fairborn, Ohio, cement plant and related assets. Eagle used cash on-hand, along with borrowings under its bank credit facility, to fund the purchase. The results of operations of the Fairborn Business are included in the results disclosed for the period from February 10 through March 31, 2017.

Its fourth quarter results were impacted by non-routine acquisition-related expenses of approximately $4.4 million (pre-tax), or $0.06 per diluted share, directly associated with completing the acquisition of the Fairborn Business. Additionally, its fourth quarter cement earnings were impacted by expenses of approximately $5.0 million (pre-tax), or $0.07 per share, associated with annual maintenance costs at the Fairborn Business and the impact of purchase accounting on inventory costs.

Fiscal 2017 cash flow from operations improved 25 percent and was used to partially fund the acquisition of the Fairborn Business, invest in capital improvements, pay dividends and repurchase shares. Eagle ended the year with a net debt-to-capitalization ratio of 36 percent.

Eagle's Oil and Gas Proppants business reported fiscal 2017 revenues of $34.6 million, a decline of 40 percent, primarily reflecting lower average net sales prices and a 15 percent decline in frac sand sales volumes from the prior year. The fiscal 2017 operating loss was $14.6 million versus an operating loss of $68.5 million in the prior year.

Eagle's Oil and Gas Proppants business reported fourth quarter revenues of $15.8 million, an increase of 98 percent, primarily reflecting a 144 percent increase in frac sand sales volumes. The fourth quarter's operating loss of $2.9 million includes depreciation, depletion and amortization of $3.8 million.