Eagle Materials Inc. reported financial results for the first quarter of fiscal 2022 ended June 30, 2021. The company reported record revenue of $476 million, up 11%.
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, Joint Venture and intersegment Cement revenue, was $315.0 million, a 3% improvement. Heavy Materials operating earnings also increased 3% to $67.9 million primarily because of improved Cement sales prices.
Concrete and Aggregates revenue increased 2% to $44.8 million, reflecting improved Concrete and Aggregates prices, partially offset by lower Aggregates sales volume. First quarter operating earnings decreased 1% to $5.3 million, reflecting lower Aggregates sales volume partially offset by improved Concrete and Aggregates net sales prices.
Cement revenue, including Joint Venture and intersegment revenue, was up 3% to $270.3 million. Operating earnings were also up 3% to a record $62.5 million. These increases reflect improved Cement quarterly sales prices, partially offset by lower Cement sales volume.
The average net Cement sales price for the quarter was up 7% to $116.34 per ton. Cement sales volume for the quarter was down 2% to 2.0 million tons, mainly because of heavy rainfall in Texas during the quarter.
Revenue in the company’s Light Materials sector, which includes Gypsum Wallboard and Paperboard, increased 25% to $191.3 million, reflecting higher Wallboard sales volume and prices. Gypsum Wallboard sales volume increased 8% to 763 million sq. ft. (MMSF), while the average Gypsum Wallboard net sales price increased 21% to $176.79 per MSF.
Paperboard sales volume increased 9% to a record 84,000 tons. The average Paperboard net sales price in the quarter was $498.49 per ton, up 8%, consistent with the pricing provisions in our long-term sales agreements.
Commenting on the first quarter results, Michael Haack, president and CEO, said, “Fiscal 2022 is off to a good start for Eagle. In the first quarter we achieved record revenue of $476 million and net earnings per diluted share of $2.25. These results reflect strong market demand in both of our major business lines and exceptional operational execution by our team. Our Wallboard business continues to benefit from robust residential construction activity across our markets, and our Cement business benefited from sustained high levels of infrastructure spending. Gross margin increased to 26.6%, an improvement of 260 basis points over the prior year, in spite of heavy rainfall in our Texas markets, which resulted in lower Cement sales volume, and additional Cement maintenance costs this quarter compared with a year ago.”
Haack concluded, “We expect underlying market conditions to remain strong as the U.S. economy recovers, and we are well-positioned to continue to benefit from this growth. On July 1, 2021, we completed the issuance of $750 million of 10-year senior notes with an interest rate of 2.50%, which further strengthened our capital structure. We also restarted our share repurchase program and repurchased approximately 426,000 shares of our common stock during the quarter. With Eagle’s excellent balance sheet and steadfast execution of our operating strategies, we are extremely well-positioned for a strong fiscal 2022.”