Eagle Materials earns $462.2 million in revenue in FY 2011

| Published on May 6, 2011

Eagle Materials Inc. on May 5 reported financial results for fiscal year 2011 and the fiscal fourth quarter ended March 31, 2011. Notable items for the fiscal year and quarter include the following:

  • Fiscal year 2011 revenues of $462.2 million.
  • Fiscal year 2011 net earnings of $14.8 million, or $0.34 per diluted share.
  • Net debt-to-total capitalization ratio of 38 percent compared to 40 percent a year ago
  • Fourth quarter revenues of $95.4 million.
  • Fourth quarter net loss of $10.8 million, or $0.25 loss per diluted share.

An extended plant shutdown for maintenance and inventory control at its Illinois cement facility, combined with an exceptionally harsh winter in the Midwest, increased its fourth quarter cement operating costs by approximately $5.0 million (after-tax $0.08 per share). Additionally, fourth quarter results reflect $10.7 million (after-tax $0.17 per share) of non-operating expenses.

About $8.9 million of these non-operating expenses are associated with the write-off of deferred project costs as a result of the company’s decision not to proceed with the Nevada Cement modernization. The remaining non-operating expenses include the write down of unused aggregates equipment at the company’s Texas operation and other miscellaneous write downs.

Cement, Concrete and Aggregates

Fiscal 2011 operating earnings from Cement were $45.7 million, a decline of 21 percent compared to fiscal 2010. Revenues from Cement, including joint venture and intersegment sales, were $225.8 million for fiscal 2011, 1 percent lower than last year.

Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $40.6 million, 1 percent greater than the same quarter last year. Cement sales volumes for the quarter were 445,000 tons, 1 percent higher than the same quarter a year ago. The average net sales price for this quarter was $82.32 per ton, slightly higher than the same quarter last year. Operating earnings from Cement for the fourth quarter were $4.7 million, a 15 percent decline from the same quarter a year ago.

Fiscal 2011 operating earnings from Concrete and Aggregates were $0.8 million, a decrease of 57 percent compared to fiscal 2010. Revenues from Concrete and Aggregates were $43.7 million for fiscal 2011, 3 percent lower than last year.

Concrete and Aggregates reported an operating loss of $0.1 million for this quarter down from the $0.1 million operating profit for the same quarter last year, primarily due to lower net sales prices for both Concrete and Aggregates slightly offset by improved sales volumes.

Revenues from Concrete and Aggregates were $9.4 million for the quarter, 25 percent greater than the same quarter a year ago. Concrete sales volume increased 51 percent for the quarter to 122,000 cubic yards. The Concrete average net sales price for this quarter was $57.36 per cubic yard, 12 percent less than the same quarter a year ago. Aggregates sales volume of 466,000 tons for the quarter was 19 percent greater than the quarter a year ago. Aggregates average net sales price for the quarter was $5.40 per ton, down 9 percent compared to last year’s fourth quarter.

Gypsum Wallboard and Paperboard

Fiscal 2011 operating earnings from Gypsum Wallboard and Paperboard were $13.3 million, a decrease of 18 percent compared to fiscal 2010. Revenues from Gypsum Wallboard and Paperboard were $271.7 million for fiscal 2011, 3 percent higher than last year’s revenues.

Gypsum Wallboard and Paperboard had a fourth quarter operating loss of $0.4 million compared to operating earnings of $1.1 million in the same quarter last year. Lower net wallboard sales prices and higher recycled fiber costs were the primary drivers of the quarterly earnings decline.

Gypsum Wallboard and Paperboard revenues for the fourth quarter totaled $64.8 million, a 3 percent decrease from the same quarter a year ago. The quarterly comparative revenue decline reflects lower Gypsum Wallboard net sales prices and lower Gypsum Wallboard and Paperboard sales volumes. The average Gypsum Wallboard net sales price for this quarter was $85.68 per MSF, 1 percent less than the same quarter a year ago. Gypsum Wallboard sales volumes of 428 million square feet (MMSF) were down about 4 percent from the prior year’s fourth quarter. The average Paperboard net sales price this quarter was $501.00 per ton, 15 percent greater than the same quarter a year ago. Paperboard sales volumes for the quarter were 48,000 tons, 16 percent less than the same quarter a year ago.

Other Corporate Items

During the fourth quarter, Eagle determined that it will not move forward with its planned modernization of Nevada Cement. This decision was based on the adverse economic impact of new environmental regulations combined with the current challenging market conditions in Northern Nevada and Northern California. As a result of this decision, the company’s fiscal 2011 financial results reflect a non-cash charge of approximately $8.9 million associated with the write-off of the deferred project costs. This charge is reported in Other Non-Operating Expense.

Included in the prior year fourth quarter was a gain on sale of land at one of Eagle’s wallboard facilities of $2.5 million (after-tax $0.04 per share). The gain on sale of land was reported in Other Operating Income in the prior year.

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