Eagle Materials Inc. reported financial results for the first quarter of fiscal 2021 ended June 30. The company is reporting record revenue of $428.0 million, up 15%.
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates and Joint Venture and intersegment Cement revenue, was $305.5 million, a 30% improvement. Heavy Materials operating earnings increased 62% to $65.9 million primarily because of improved Cement sales volume and earnings from the recently acquired Kosmos Cement Business.
Concrete and Aggregates revenue increased 12% to $44.1 million. The revenue improvement was due to the results of the concrete and aggregates business the company acquired in August 2019, partially offset by the $52.0 million (pre-tax) sale of its northern California concrete and aggregates businesses during the first quarter of fiscal 2021.
Commenting on the first quarter results, Michael Haack, president and CEO, said, “Against the backdrop of a global health crisis and unprecedented business disruption, our company continued to perform well during the quarter, and our markets have proven to be resilient in the current environment. The integration of the Kosmos Cement Business proceeded on schedule and for the first time in Eagle’s history, we sold more than 2 million tons of cement during a quarter. Market demand for our wallboard also remained healthy with shipments up 7%. Our low-cost operations continued to generate meaningful cashflow during the quarter, which, combined with the proceeds from the sale of our northern California businesses, significantly improved our balance sheet and liquidity position.”
Haack continued, “While we are very pleased with our first-quarter performance, we recognize a high level of uncertainty persists in our markets and the overall economy: despite the decline in jobless claims from the March peak, total unemployment remains historically high; state and local governments face ongoing revenue pressure, which could have the potential to constrain infrastructure budgets; and, in some geographic areas important to our business, COVID-19 case numbers continue to escalate. We are closely monitoring the disruptions caused by the COVID-19 pandemic and their possible impact on our business in current and future periods. With this in mind, we continue to enforce strict health and safety protocols to protect our employees, customers and business partners, and we will continue to manage our cash flow prudently and protect our balance sheet.”
Cement revenue for the quarter, including Joint Venture and intersegment revenue, was up 34% to $261.4 million, and operating earnings were a record $60.5 million, up 67%. These increases reflect record Cement quarterly sales volume and the contribution of the recently acquired Kosmos Cement Business, which accounted for approximately $47.6 million of revenue and $10.5 million of operating earnings during the quarter. Cement operating earnings were also affected by expenses of approximately $3.7 million associated with the impact of purchase accounting on inventory costs at the Kosmos Cement Business.
The average net Cement sales price for the quarter was down 1% to $109.10 per ton. Excluding the impact from the Kosmos Cement Business, the average net sales price improved 1%. Cement sales volume for the quarter was a record 2.1million tons, up 35%. Excluding sales volume from the recently acquired Kosmos Cement Business, Cement sales volume increased 7%.