Eagle Materials Inc. shared financial results for the second quarter of fiscal 2025 ended Sept. 30, 2024, reporting record revenue of $623.6 million, and net earnings of $143.5 million.
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, Joint Venture and intersegment Cement revenue, was $418.7 million, a 2% decrease.
Heavy Materials operating earnings were down 9% to $114.9 million. Both declines resulted from lower sales volume, partially offset by higher sales prices as well as the effects of the Aggregates acquisition described below.
Cement revenue for the quarter, including Joint Venture and intersegment revenue, was down 2% to $352.8 million, and operating earnings were down 5% to $115.9 million. These declines reflect lower Cement sales volume and a $7 million increase in Cement maintenance costs, partially offset by higher Cement net sales prices.
The average net sales price for the quarter was up 3% to $156.51 per ton, as a result of Cement price increases implemented earlier this calendar year. Cement sales volume decreased 5% to 2.0 million tons. Sales volume was affected by ongoing adverse weather during the quarter, particularly in Texas in July and in eastern markets during September.
Concrete and Aggregates revenue decreased slightly to $65.9 million, reflecting lower Concrete and Aggregates sales volume, partially offset by higher Concrete and Aggregates pricing.
The second quarter operating loss of $1.0 million reflects lower Concrete and Aggregates sales volume and approximately $0.7 million of expenses from the impact of the step-up in inventory values related to an Aggregates acquisition during the quarter.
The company acquired a small mine located near one of its existing mines in Kentucky. The acquisition was completed in August with a purchase price of $24.9 million.
Revenue in the Light Materials sector, which includes Gypsum Wallboard and Paperboard, increased 5% to $244.1 million, reflecting higher Wallboard and Paperboard sales volume and sales prices.
Commenting on the second quarter results, Michael Haack, president and CEO, said, “Eagle’s portfolio of businesses continued to perform well despite ongoing adverse weather during the quarter, which affected sales volumes primarily in our Cement and Concrete and Aggregates businesses. We generated record revenue of $624 million and increased cash flow from operations by 35% to $233 million. We used our strong cash flow to continue advancing our long-term growth and value-creation strategies: during the quarter, we completed a bolt-on aggregates acquisition, returned $69 million of cash to shareholders through share repurchases and dividends, and strengthened our balance sheet, ending the quarter with debt of $1.1 billion and a net leverage ratio (net debt to Adjusted EBITDA) of 1.2x.”
Haack continued, “We remain optimistic about our near-term and future opportunities and confident in our ability to execute on them. The current economic environment is constructive for our businesses. Employment is strong, recent inflation data should support a more accommodative monetary environment, spending from the Infrastructure Investment and Jobs Act (IIJA) is still in the beginning phases, and housing supply remains chronically short because of decade-long production deficits.
“We believe our well-positioned balance sheet should give us substantial financial flexibility and support our capital allocation priorities and long-term growth, and our consistent, disciplined operational and strategic approach should position us to continue to perform well through economic cycles and drive superior value for our shareholders,” Haack concluded.