Eagle Materials Reports Second Quarter Results

Eagle Materials Inc. (NYSE: EXP) today reported financial results for
the second quarter of fiscal 2016 ended September 30, 2015. Notable
items for the quarter include (all comparisons, unless otherwise noted,
are with the prior fiscal year’s second quarter):

Total Company Highlights

• Record quarterly revenues of $329.0 million, up 16%
• Net earnings of $29.8 million, down 41%
  • Net earnings were reduced by $26.2 million (after-tax) of
    Non-Routine Items related to our Oil and Gas Proppants Segment.
    See attachment 5.
• Adjusted EBITDA⁽¹⁾ of $109.7 million, up 14%
• Net earnings per diluted share of $0.59, down 41%
  • Net earnings per diluted share were reduced by $0.52 per share
    (after-tax) of Non-Routine Items related to our Oil and Gas
    Proppants Segment. See attachment 5.

Other Notable Highlights

• Record Cement earnings of $48.6 million, up 26%
• Wallboard and Paperboard combined earnings of $48.1 million, up 7%
• Net debt-to-capitalization ratio of 32%
• The Company repurchased 384,000 shares of common stock from August 10,
  2015 through October 6, 2015
• Completed the acquisition of the Skyway slag cement facility from
  Holcim (US) Inc.

Eagle’s construction products and building materials businesses
continued to perform exceptionally well during the second quarter, with
the Cement and Paperboard businesses reporting record quarterly
operating earnings and our wallboard and concrete and aggregates
businesses reporting year-over-year improvements. Demand for our
building materials and construction products remains strong in each of
our regional markets.

Cash flow from operations improved 12% and was used to fund the Skyway
acquisition, make capital improvements, pay dividends, reduce debt and
repurchase shares. Eagle ended the quarter with a net
debt-to-capitalization ratio of 32%.

The decline in oil prices during the summer adversely impacted U.S. oil
and gas drilling activity leading to further reductions in demand and
pricing for proppants. As a result, we recorded impairments to several
intangible assets originally booked in connection with our acquisition
of CRS Proppants and revalued downward certain raw sand inventory
values. The impairments and inventory revaluation charges totaled
approximately $37.8 million (pre-tax) and are recorded in Cost of Goods
Sold within our Oil and Gas Proppants segment.

(1) Adjusted EBITDA is a non-GAAP financial measure. See attachment 5
for a reconciliation to the relevant GAAP measure.

Cement, Concrete and Aggregates

Operating earnings from Cement for the second quarter were a record
$48.6 million, and 26% higher than the same quarter a year ago. The
earnings increase was driven primarily by an 8% increase in average net
cement sales prices and record quarterly cement sales volumes.

Cement revenues for the second quarter, including joint venture and
intersegment revenues, totaled $164.8 million, 13% greater than the same
quarter last year. Our average net cement sales price for this quarter
was $97.21 per ton, 8% higher than the same quarter last year. Cement
sales volumes were a quarterly record 1.5 million tons, 1% higher than
the same quarter a year ago.

Concrete and Aggregates reported operating earnings of $3.9 million for
the second quarter, a 30% improvement from the same quarter a year ago,
reflecting improved concrete and aggregates pricing along with improved
concrete sales volumes.

Gypsum Wallboard and Paperboard

Gypsum Wallboard and Paperboard reported second quarter operating
earnings of $48.1 million, up 7% from the same quarter last year.
Improved Gypsum Wallboard and Paperboard sales volumes were the primary
drivers of the quarterly earnings increase.

Gypsum Wallboard and Paperboard revenues for the second quarter totaled
$143.3 million, an 8% increase from the same quarter a year ago. The
revenue increase reflects higher Gypsum Wallboard and Paperboard sales
volumes slightly offset by a 1% decline in the average Gypsum Wallboard
net sales price. The average Gypsum Wallboard net sales price this
quarter was $157.88 per MSF, 1% less than the same quarter a year ago.
Gypsum Wallboard sales volume for the quarter of 619 million square feet
(MMSF) represents a 9% increase from the same quarter last year.

Paperboard sales volumes were a second quarter record 75,000 tons, 7%
higher than the same quarter a year ago. The average Paperboard net
sales price this quarter was $505.12 per ton, 1% higher than the same
quarter a year ago.

Oil and Gas Proppants

Oil and Gas Proppants reported second quarter revenues of $18.3 million,
a 76% increase from the prior year, which reflects the impact of the
acquisition of CRS Proppants during the third quarter of the prior
fiscal year partially offset by lower second quarter frac sand sales
volumes and sales prices at our legacy business, which declined 36% and
13%, respectively. The second quarter’s loss of $44.6 million compares
to operating income of $0.7 million in the same quarter a year ago. Our
second quarter operating loss includes an impairment charge of $28.4
million related to intangible assets (customer contracts) generated from
our acquisition of CRS Proppants and a write-down of $9.4 million in raw
sand inventory values associated primarily with a downward revaluation
of raw sand inventory that CRS Proppants purchased from a third party
pursuant to a purchase contract entered into in connection with the
plant expansion. We have fulfilled our obligations under this purchase
contract.

Details of Financial Results

In the prior year’s second quarter, the Acquisition and Litigation
Expenses consist of direct costs related to the acquisition of CRS
Proppants and certain legal fees. Direct acquisition costs were
approximately $0.4 million (pre-tax) and legal fees were approximately
$1.7 million (pre-tax).

We conduct one of our cement plant operations, Texas Lehigh Cement
Company LP, through a 50/50 joint venture (the “Joint Venture”). We
utilize the equity method of accounting for our 50% interest in the
Joint Venture. For segment reporting purposes only, we proportionately
consolidate our 50% share of the Joint Venture’s revenues and operating
earnings, which is consistent with the way management organizes the
segments within the Company for making operating decisions and assessing
performance.

In addition, for segment reporting purposes, we report intersegment
revenues as a part of a segment’s total revenues. Intersegment sales are
eliminated on the income statement. Refer to Attachment 3 for a
reconciliation of the amounts referred to above.

About Eagle Materials Inc.

Eagle Materials Inc. manufactures and distributes Cement, Gypsum
Wallboard, Recycled Paperboard, Concrete and Aggregates, and Oil and Gas
Proppants from 40 facilities across the US. Eagle is headquartered in
Dallas, Texas.

Eagle’s senior management will conduct a conference call to
discuss the financial results, forward-looking information and other
matters at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Tuesday,
October 27, 2015. The conference call will be webcast
simultaneously on the Eagle Web site http://www.eaglematerials.com.
A replay of the webcast and the presentation will be archived on
that site for one year. For more information, contact
Eagle at (214) 432-2000.

Forward-Looking Statements. This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the context of the
statement and generally arise when the Company is discussing its
beliefs, estimates or expectations. These statements are not historical
facts or guarantees of future performance but instead represent only the
Company's belief at the time the statements were made regarding future
events which are subject to certain risks, uncertainties and other
factors many of which are outside the Company's control. Actual results
and outcomes may differ materially from what is expressed or forecast in
such forward-looking statements. The principal risks and uncertainties
that may affect the Company’s actual performance include the following:
the cyclical and seasonal nature of the Company’s business; public
infrastructure expenditures; adverse weather conditions; the fact that
our products are commodities and that prices for our products are
subject to material fluctuation due to market conditions and other
factors beyond our control; availability of raw materials; changes in
energy costs including, without limitation, natural gas, coal and oil;
changes in the cost and availability of transportation; unexpected
operational difficulties, including unexpected maintenance costs,
equipment downtime and interruption of production; fluctuations in
activity in the oil and gas industry, including the level of drilling
and fracturing activity and demand for frac sand; inability to timely
execute announced capacity expansions; difficulties and delays in the
development of new business lines; governmental regulation and changes
in governmental and public policy (including, without limitation,
climate change regulation); possible outcomes of pending or future
litigation or arbitration proceedings or governmental audits, inquiries
or investigations; changes in economic conditions specific to any one or
more of the Company’s markets; competition; announced increases in
capacity in the gypsum wallboard and cement industries; changes in the
demand for residential housing construction or commercial construction;
general economic conditions; and interest rates. For example,
increases in interest rates, decreases in demand for construction
materials or increases in the cost of energy (including, without
limitation, natural gas, coal and oil) could affect the revenues and
operating earnings of our operations. In addition, changes in
national or regional economic conditions and levels of infrastructure
and construction spending could also adversely affect the Company's
result of operations. These and other factors are described in the
Company’s Annual Report on Form 10-K for the fiscal year ended March 31,
2015 and in its Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2015. These reports are filed with the Securities
and Exchange Commission. With respect to our acquisition of CRS
Proppants and the Skyway facility, factors, risks and uncertainties that
may cause actual events and developments to vary materially from those
anticipated in forward-looking statements include, but are not limited
to, failure to realize the expected synergies or other benefits of the
transaction, significant transaction costs or unknown liabilities,
changes in market conditions and general economic and business
conditions that may affect us after the acquisitions. All
forward-looking statements made herein are made as of the date hereof,
and the risk that actual results will differ materially from
expectations expressed herein will increase with the passage of time.
The Company undertakes no duty to update any forward-looking
statement to reflect future events or changes in the Company's
expectations.

Attachment 1 Statement of Consolidated Earnings
Attachment 2
Revenues and Earnings by Lines of Business (Quarter and Six Months)
Attachment
3 Sales Volume, Net Sales Prices and Intersegment and Cement Revenues
Attachment
4 Consolidated Balance Sheets
Attachment 5 Non-GAAP Financial
Measures and Depreciation, Depletion and Amortization

Eagle Materials Inc.
Attachment 1
Eagle Materials Inc.
Statement of Consolidated Earnings
(dollars in thousands, except per share data)
(unaudited)
			Quarter Ended September 30,												Six Months Ended September 30,
			2015						2014						2015					2014
Revenues			$	328,988					$	284,808					$	613,951				$	551,059
Cost of Goods Sold				284,694		(1)				209,747						508,560					419,597
Gross Profit				44,294						75,061						105,391					131,462
Equity in Earnings of Unconsolidated JV				11,680						12,051						19,510					21,851
Other, net				572						883						1,007					1,562
Acquisition and Litigation Expense				-						(2,103	)					-					(2,103	)
Corporate General and Administrative Expenses				(9,364	)					(7,414	)					(18,355	)				(14,456	)
Earnings before Interest and Income Taxes				47,182						78,478						107,553					138,316
Interest Expense, net				(4,342	)					(3,901	)					(8,828	)				(7,953	)
Earnings before Income Taxes				42,840						74,577						98,725					130,363
Income Tax Expense				(13,021	)					(24,258	)					(31,144	)				(42,334	)
Net Earnings			$	29,819					$	50,319					$	67,581				$	88,029
EARNINGS PER SHARE
Basic			$	0.60					$	1.01					$	1.36				$	1.78
Diluted			$	0.59					$	1.00					$	1.34				$	1.75
AVERAGE SHARES OUTSTANDING
Basic				49,828,189						49,591,495						49,797,972					49,546,916
Diluted				50,470,151						50,427,286						50,460,947					50,357,914
(1) Includes $37.8 million (pre-tax) of Non-Routine Items listed on Attachment 5

Eagle Materials Inc.
Attachment 2
Eagle Materials Inc.
Revenues and Segment Operating Earnings by Lines of Business
(dollars in thousands)
(unaudited)
			Quarter Ended September 30,													Six Months Ended September 30,
			2015							2014						2015					2014
Revenues*
Gypsum Wallboard and Paperboard:
Gypsum Wallboard			$	119,701						$	111,655					$	234,753				$	224,332
Gypsum Paperboard				23,549							21,255						44,316					44,718
				143,250							132,910						279,069					269,050
Cement (Wholly Owned)				131,022							109,811						229,061					202,809
Oil and Gas Proppants				18,307							10,414						41,132					21,594
Concrete and Aggregates				36,409							31,673						64,689					57,606
Total			$	328,988						$	284,808					$	613,951				$	551,059
Segment Operating Earnings
Gypsum Wallboard and Paperboard:
Gypsum Wallboard			$	40,002						$	37,002					$	80,896				$	74,430
Gypsum Paperboard				8,138							7,984						14,168					15,531
				48,140							44,986						95,064					89,961
Cement:
Wholly Owned				36,897							26,399						54,780					37,106
Joint Venture				11,680							12,051						19,510					21,851
				48,577							38,450						74,290					58,957
Oil and Gas Proppants				(44,600	)		(1)				711						(50,236	)				74
Concrete and Aggregates				3,857							2,965						5,783					4,321
Other, net				572							883						1,007					1,562
Sub-total				56,546							87,995						125,908					154,875
Acquisition and Litigation Expenses				-							(2,103	)					-					(2,103	)
Corporate General and Administrative Expenses				(9,364	)						(7,414	)					(18,355	)				(14,456	)
Earnings Before Interest and Income Taxes			$	47,182						$	78,478					$	107,553				$	138,316
* Net of Intersegment and Joint Venture Revenues listed on Attachment 3
(1) Includes $37.8 million (pre-tax) of Non-Routine Items listed on Attachment 5

Eagle Materials Inc.
Attachment 3
Eagle Materials Inc.
Sales Volume, Net Sales Prices and Intersegment and Joint Venture Revenues
(unaudited)
			Sales Volume
			Quarter Ended September 30,										Six Months Ended September 30,
			2015			2014			Change				2015			2014			Change
Gypsum Wallboard (MMSF’s)			619			567			+9%				1,196			1,136			+5%
Cement (M Tons):
Wholly Owned			1,248			1,193			+5%				2,239			2,200			+2%
Joint Venture			236			283			-17%				448			567			-21%
			1,484			1,476			+1%				2,687			2,767			-3%
Paperboard (M Tons):
Internal			30			28			+7%				58			55			+5%
External			45			42			+7%				86			87			-1%
			75			70			+7%				144			142			+1%
Concrete (M Cubic Yards)			324			286			+13%				573			521			+10%
Aggregates (M Tons)			764			872			-12%				1,431			1,690			-15%

			Average Net Sales Price*
			Quarter Ended September 30,													Six Months Ended September 30,
			2015				2014				Change					2015				2014				Change
Gypsum Wallboard (MSF)			$	157.88			$	160.09			-1	%				$	160.57			$	160.92			0	%
Cement (Ton)			$	97.21			$	90.20			+8	%				$	97.74			$	90.42			+8	%
Paperboard (Ton)			$	505.12			$	501.27			+1	%				$	504.49			$	505.52			0	%
Concrete (Cubic Yard)			$	92.07			$	86.74			+6	%				$	92.06			$	85.73			+7	%
Aggregates (Ton)			$	8.50			$	7.82			+9	%				$	8.24			$	7.61			+8	%
*Net of freight and delivery costs billed to customers.

			Intersegment and Cement Revenues
			Quarter Ended September 30,									Six Months Ended September 30,
			2015				2014					2015				2014
Intersegment Revenues:
Cement			$	4,232			$	2,911				$	7,358			$	5,271
Paperboard				15,596				14,324					30,147				28,340
Concrete and Aggregates				262				288					514				517
			$	20,090			$	17,523				$	38,019			$	34,128
Cement Revenues:
Wholly Owned			$	131,022			$	109,811				$	229,061			$	202,809
Joint Venture				29,536				33,139					56,547				65,717
			$	160,558			$	142,950				$	285,608			$	268,526

Eagle Materials Inc.
Attachment 4
Eagle Materials Inc.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
			September 30,										March 31,
			2015					2014					2015*
ASSETS
Current Assets –
Cash and Cash Equivalents			$	6,348				$	11,063				$	7,514
Accounts and Notes Receivable, net				154,959					132,823					113,577
Inventories				224,667					190,711					235,464
Prepaid and Other Assets				9,026					6,309					10,080
Total Current Assets				395,000					340,906					366,635
Property, Plant and Equipment –				2,041,242					1,698,495					1,962,215
Less: Accumulated Depreciation				(779,010	)				(708,311	)				(740,396	)
Property, Plant and Equipment, net				1,262,232					990,184					1,221,819
Investments in Joint Venture				49,883					45,489					47,614
Notes Receivable				2,760					2,966					2,847
Goodwill and Intangibles				177,069					159,835					211,167
Other Assets				33,306					15,007					32,509
			$	1,920,250				$	1,554,387				$	1,882,591
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities –
Accounts Payable			$	70,584				$	66,953				$	77,749
Accrued Liabilities				50,066					47,845					46,830
Federal Income Tax Payable				5,108					8,610					2,952
Current Portion of Long-term Debt				57,045					9,500					57,045
Total Current Liabilities				182,803					132,908					184,576
Long-term Liabilities				70,425					54,070					69,055
Bank Credit Facility				327,000					120,000					330,000
Senior Notes				125,714					182,759					125,714
Deferred Income Taxes				144,617					142,259					162,653
Stockholders’ Equity –
Preferred Stock, Par Value $0.01; Authorized 5,000,000
Shares; None Issued				-					-					-
Common Stock, Par Value $0.01; Authorized 100,000,000
Shares; Issued and Outstanding 50,286,652; 50,265,957 and
50,245,364 Shares, respectively.				503					503					502
Capital in Excess of Par Value				273,372					266,212					272,441
Accumulated Other Comprehensive Losses				(11,428	)				(5,271	)				(12,067	)
Retained Earnings				807,244					660,947					749,717
Total Stockholders’ Equity				1,069,691					922,391					1,010,593
			$	1,920,250				$	1,554,387				$	1,882,591
*From audited financial statements.

Eagle Materials Inc.
Attachment 5

Eagle Materials Inc.
Non-GAAP Financial Measures and
Depreciation, Depletion and Amortization
(unaudited)

A reconciliation of Net Earnings to Adjusted EBITDA for the quarter
ended September 30, 2015 and 2014 is as follows:

Adjusted EBITDA represents earnings before income taxes, interest,
depreciation, depletion and amortization and non-routine items including
impairment charges and working capital revaluation. Adjusted EBITDA is a
non-GAAP financial measure that provides supplemental information
regarding the operating performance of our business without regard to
financing methods, capital structures or historical cost basis.
Management uses Adjusted EBITDA as an alternative basis for comparing
operating results of the Company from period to period, for purposes of
its budgeting and planning processes and for purposes of monitoring
compliance with specific requirements of its credit agreement and other
debt instruments. Management believes Adjusted EBITDA is a useful
alternative measure that allows comparison of operating results without
regard to fluctuations from period to period in tax rates, interest
rates, depreciation schedules and other factors. Adjusted EBITDA may not
be comparable to similarly titled measures of other companies because
other companies may not calculate Adjusted EBITDA in the same manner.
Adjusted EBITDA should not be considered in isolation or as an
alternative to net income, cash flow from operations or any other
measure of financial performance in accordance with GAAP.

$ in thousands			Quarter Ended September 30,
			2015				2014
Net Earnings			$	29,819			$	50,319
Add back:
Income Tax Expense				13,021				24,258
Interest Expense				4,342				3,901
Depreciation, Depletion and Amortization				24,770				17,574
Intangible Impairment				28,354				-
Inventory Writedown				9,405				-
Adjusted EBITDA – Non-GAAP Measure			$	109,711			$	96,052

The following presents depreciation, depletion and amortization by
segment for the quarters ended September 30, 2015 and 2014:

$ in thousands			Depreciation, Depletion and Amortization ($ in thousands)
			Quarter Ended September 30,
			2015				2014
Cement			$	8,629			$	7,987
Gypsum Wallboard				4,819				5,031
Paperboard				2,063				2,058
Oil and Gas Proppants				7,205				684
Concrete and Aggregates				1,565				1,369
Other				489				445
			$	24,770			$	17,574

Eagle Materials Inc.
Attachment 5 (continued)

Eagle Materials Inc.
Non-GAAP Financial Measures
(unaudited)

The following reflects the itemization of Non-Routine Items included
in net earnings for the quarter ended September 30, 2015 and was
determined using our effective tax rate for of 30.4% for the quarter:

$ in millions, except per share data			Quarter Ended September 30,
			2015
After-tax impact of the Intangible Impairment			$	19.7
After-tax impact of the Inventory Writedown				6.5
Total Non-Routine Items Impact, net			$	26.2
Diluted Shares outstanding				50.5
Diluted earnings per share impact from Non-Routine Items			$	0.52

View source version on businesswire.com: http://www.businesswire.com/news/home/20151026005801/en/

Source: Business Wire
(October 26, 2015 - 4:15 PM EDT)

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