Eagle Materials Reports Record Revenue

Eagle Materials Inc. reported financial results for fiscal year 2022 and the fiscal fourth quarter ended March 31. For fiscal year 2022, the company is reporting:

  • Record Revenue of $1.9 billion, up 15%.
  • Net Earnings of $374.2 million, up 10%.
  • Net Earnings from Continuing Operations of $374.2 million, up 12%.

In the fourth quarter the company is reporting:

  • Record Revenue of $413.1 million, up 20%.
  • Net Earnings of $74.3 million, up 13%.
  • Diluted earnings per share from continuing operations of $1.90, up 22%.

Fiscal 2022 revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, as well as Joint Venture and intersegment Cement revenue, was $1.2 billion, a 6% increase. Heavy Materials annual operating earnings increased 10% to $278.0 million primarily because of higher Cement net sales prices.

Fiscal 2022 Cement revenue, including Joint Venture and intersegment revenue, was up 7% to $1.0 billion, and Cement operating earnings increased 11% to $259.6 million. The annual revenue and earnings increases reflect higher net sales prices.

The average annual net Cement sales price for the year increased 7% to $119.13 per ton. Cement sales volume for the year was a record 7.5 million tons, up 1%.

Fourth quarter Cement revenue, including Joint Venture and intersegment revenue, was up 10% to $187.4 million. Operating earnings increased 23% to $28.4 million reflecting higher net sales prices, as well as lower operating costs. Prior-year operating expenses included a $6 million increase in energy costs primarily associated with the impact from Winter Storm Uri. The average net Cement sales price for the quarter increased 12% to $126.71 per ton. Cement sales volume for the quarter was down 2% to 1.3 million tons.

Fiscal 2022 revenue from Concrete and Aggregates increased 5% to $177.1 million driven by higher sales prices and increased Concrete volume. Concrete and Aggregates reported fiscal 2022 operating earnings of $18.5 million, down 3%, reflecting higher operating costs primarily related to diesel fuel.

Fourth quarter Concrete and Aggregates revenue was $37.2 million, an increase of 7%, due to higher pricing and improved Concrete sales volume. Fourth quarter operating earnings were $1.5 million, a 56% decrease, reflecting lower Aggregates sales volume and increased operating costs, primarily related to diesel fuel.
Commenting on the annual results, Michael Haack, president and CEO, said, “As we look back on another extraordinary year, I am extremely proud of our team’s ability to deliver record operating and financial results despite multiple external challenges, including transportation disruptions, supply chain constraints and, of course, continuing to navigate the COVID-19 pandemic. During the fiscal year, we expanded gross margins by 270 bps to 27.9%, reported record earnings per share of $9.14, generated operating cash flow of $517 million and repurchased nearly 4 million shares of our common stock for $590 million. Early in the year, we completed the refinancing of our capital structure, which included using cash on-hand and proceeds from a new $750 million 10-year bond with an interest rate of 2.50%, to repay existing loans. This refinancing resulted in a low-cost, long-dated capital structure with significant liquidity. At the end of the fiscal year, debt was $950 million, and our net leverage ratio (net debt to Adjusted EBITDA from Continuing Operations) was 1.4x, giving us substantial financial flexibility.

“As we begin our new fiscal year, Eagle is well-positioned, both financially and geographically, 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 expect that infrastructure investment should increase in the latter part of our fiscal year, as federal funding from the recently enacted Infrastructure Investment and Jobs Act begins in earnest. And, despite recent interest rate increases, housing demand remains strong across our geographies, outpacing the supply of homes. Nonresidential construction activity is also picking up.”

Haack concluded, “Employee health, safety and environmental stewardship remain core objectives, and we demonstrated meaningful progress in all areas over the year. Our safety performance outpaced the industry average, and we took significant steps to reduce our carbon footprint this year and over the next several years with the introduction of our new Portland Limestone Cement product. This product has lower carbon intensity than standard cement with similar performance attributes. A tremendous amount of effort went into this project, and we are beginning to realize the benefits.”

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